It hurts me to write this....
For years I was the guy who just have to buy a new car, when I turned 16 I bought a new car and a few years later I sold this car and bough another new one. This trend continued until I was 34 and had purchased 4 new vehicles.
Now on the plus side I have never had any other debt, but to this of all the money I wasted almost makes me sick!
I've known this was wrong for years, but I really couldn't bring myself to not buy a new car.
Shortly after purchasing my last car I discovered Dave Ramsey. After listening to this first episode of this Podcast I downloaded something like 234 episodes and listened to them in the car, while I was working out, and work and even sometimes before bed.
I was hooked!
I have done a lot of things right financially in my life but some things wrong as well. Dave Ramsey took my financial strength to another level.
5 Things I Learned From Dave Ramsey - Non Financial
Lets talk about what I have learned from Dave Ramsey after listening to hundreds of hours of podcasts. Something things are financial based as that is the focus of his show, but other things are not financial based but still valuable lessons to me and may serve you well too.
1) Treat Everyone With Respect
Dave Ramsey talks about financial matters, these are often not easy. Dave himself says how life matters intertwine into the show because they are often what causes financial issues. Dave is always respectful of people (although he may not always agree with them), and understands people are coming from a variety of situations.?
2) Be Blunt When You Need To Be
Dave often talks with compassion and understanding. Sometimes callers who call into his show are not in the right frame of mind. In these cases Dave will often be blunt and to the point. In select instances this is needed and we could all learn a thing or two from it.?
3) Always Remember Where You Came From
If you listen to Dave's show at all you will realize he is never shy to share that he came from common roots. He was born to a middle class family and he started his business on a "card table in his living room." Being modest and not forgetting your roots helps Dave's customers related to him.
4) Always Have A Plan On Where You Are Going
Remembering where you came from is one thing but Dave always has a plan in mind. Dave Ramsey's Baby Steps system walks you step by step on how to become debt free. After you become debt free you can build wealth and give money to charities of your choice. You can apply this step by step mentality to just about anything within your life.
Simply break any large task down into the simplest steps and work through the plan one by one.?
5) Value Family and Friends
Dave tells many stories about his family, whether it is his parents, his children or stories about Dave and his wife Sharon. Being financially free means nothing if you do not have a good relationship with your family and can use that newly built wealth to better the long term position of your family.
5 Financial Things I Learned From Dave Ramsey?
1) Do Not Buy A New Car (unless you can afford to)
I told my story above and learned a lesson, I currently would have a much higher net worth if I did not buy so many new cars. Overall I understand that but I also understand that I recognized my errors at a fairly early age and I have time to recover from such mistakes.
2) Invest For Retirement
?Retirement savings is key, in today's world it is a must, pensions are nearly a thing of the past and you are on your own if you want to live well in your retirement years. We are in a retirement crisis, the average 30 year old has $34,000 saved for retirement. While still you this isn't nearly enough. Social Security will either not be around, be of a delayed age requiring people to work longer thus delaying retirement.
With medical advances people are also living longer and longer. In the 1940's living into your 60s was old, now many people are living into their 80s and 90s and it is likely to continue to climb in the future.
3) Invest Outside of Retirement
Retirement investing is well and good but you should invest any money you have outside of retirement that isn't needed in the short term. This should be outside of accounts like bank CDs and or savings accounts, these accounts pay dismal interest and are likely losing money due to inflation.
4) Build Wealth
?Building wealth is one of the most important tasks, wealth can change life for you and for your family generations to come. It also allows you to do things such as donate money to charities or help those less fortunate.
Reading some of Dave’s other books will teach you what is necessary to ensure generational wealth will be a blessing to your children’s lives and not a curse.
5) Save For Kids College
My wife and I were extremely lucky, both of our parents were fairly frugal and paid for are undergraduate college education. This taught us two important lessons as youngsters, frugality is important and became a way of life for us, it also as we graduated and our friends were worrying about paying off their student loans we were able to take jobs that paid less money but had a better long term outlook.
This allowed us to make more money (and save more in the long run).
If I Had To Do It All Over Again
Believe it or not I wouldn’t change much if I had to do it over again. Yes I wouldn’t likely buy new cars and I would save the extra money to invest and grow. Overall you have to remember you can’t do it over again you can only start today and make changes today that will improve your tomorrow.
Another item I would have started earlier would be investing, I had roughly $30,000 just sitting in a bank account not even keeping pace with inflation (this was above the emergency fund). I wasted numerous years of potential appreciation.
The Single Most Important Lesson
For me the most important lesson is it is never too late to start moving in the right direction financially. Often people think well I didn’t start saving for retirement when I was in my 30s so I might as well not save at all. If you start today you will save more money than if you start tomorrow. Often time just taking action will set things into motion and you will be able to save a considerable amount off money.
Who Are Dave Ramsey's Teachings Good For?
Overall, if you have consumer debt and feel like you need an easy to follow, step by step plan then Dave Ramsey’s program may be best for you.
Overall I would recommend Dave Ramsey’s teachings for just about everyone. If I had to narrow it down to whom it may be most useful for I would have to say young people who are just getting out of college, starting their first job and have some debt to pay off. Dave’s program will get you on a sound footing and get you going in the right direction.
Why Dave Ramsey's Teachings Might Not Be For You
If you cannot bare thinking about cutting up your credit card or you just love having a long mortgage on your house then Dave Ramsey’s teachings may not be for you.
If you have an MBA in Finance and little to no consumer debt then Dave’s programs may be overkill for your goals.
Some find Dave’s advice about investing a little overly simplistic, which might be true, but it also may be a good thing. Sometimes with investing simpler is better.
Some Of My Favorite Dave Ramsey Quotes
You never cash out a 401k or IRA to pay off debt, unless it is to avoid foreclosure or bankruptcy
I believe that through knowledge and discipline, financial peace is possible for all of us.
Resources To Get Your Started Following Dave
Resource #1 - The Total Money Makeover - This is the playbook to Dave Ramsey, it will get you pumped up, understanding the basics of Dave's philosophy and get you started on the right track.
Resource #2 - Every Dollar Budgeting App - This is a free budgeting application for the iPhone that Dave developed that follows his methodology. ?
Some Must Watch Dave Ramsey Videos
The following is a live video where Dave Ramsey discusses each of his seven baby steps to getting out of debt and building wealth.