Ramsey tells it like he isTalk-show host brings message to Lowcountry BY JOHN P. McDERMOTT
The Post and Courier
Saturday, August 23, 2008
The Dave Ramsey Show Radio talk show host Dave Ramsey snips a credit card in half. He's bringing his message that 'debt is dumb' to the North Charleston Coliseum on Saturday. He's the scold and scourge of lenders of all stripes —well, almost all — and he's taking his one-man financial road show to the Lowcountry today to preach a singular message: Debt is dumb; cash is king. It's an attitude that syndicated radio talk-show host and best-selling author Dave Ramsey honed from a deeply humbling personal experience. He and wife, Sharon, went broke twice in the 1980s, after his debt-laden real estate business suddenly crumbled. The couple vowed never again to borrow money and become what he sometimes calls "a slave to the lender." "I'm not going to get into a mess again. I'm not going to go there," he said. An estimated 5,000 people are expected to take in Ramsey's five-hour marathon on money matters today at the North Charleston Coliseum, with many looking for ways to put their financial houses in order. He describes his live show as a mix of no-nonsense advice and stand-up comedy. "The medicine I'm delivering is strong enough that it needs to have some humor with it," he said. Ramsey began his second career as a debt counselor in the early 1990s, starting at his local church and eventually parlaying his quick wit, candor and knack for financial plain-speaking into a multimedia empire. His Nashville-based call-in show has been on the air for more than 15 years and is carried on more than 325 radio stations, including WSC-94.3 FM in Charleston. He's also a regular commentator on the Fox Business Network and the author of more than a dozen books, all of which offer his Christian faith-based perspective. Ramsey spoke with The Post and Courier this week from his headquarters in Brentwood, Tenn., to offer his take on the state of the economy and personal finance. Here are some edited excerpts: Q: The news is full of gloom and doom stories about the economy — soaring gas prices, rising unemployment, bank failures, the housing crisis, the mortgage meltdown. How concerned should we be about all of this when it comes to our personal finances? A: I think the only time you would need to be concerned is if you were trying to sell a house in one of these markets that are struggling. The numbers I've got on Charleston — Charleston is doing pretty well. The real estate market's not anywhere near the gloom and doom stuff. It's not as good as it was two years ago. It's certainly slowed down. And it's harder to sell a house than it was, and they aren't bringing as much as they used to bring. But it sure hasn't crashed versus Florida or Michigan. I mean, thank God you aren't in that mess. Q: What is the worst financial mess that someone has brought to you and how did they get out of debt? If you goDave Ramsey Live is from 1-6 p.m. today at the North Charleston Coliseum. Tickets are available only online at www.daveramsey.com/hope/events/ and they are $38 and $68. The $202 "platinum" seats are sold out. A: I've done so many calls on the air now and so many counseling sessions over the years that I don't even register that one single story that is that bad. It almost ends up being more anecdotal or almost a metaphor of just the ratios. A single mom making $17,000 or $20,000 a year with two kids and she's got an $8,000 car payment — that's huge. That's an unbelievable mess. Or another guy called me up and he's making $200,000 a year, and he's got $200,000 in credit card debt. Well, that's huge too. In other words it's kind of relative to what we always call the 'shovel-to-hole' ratio: how much income they have versus the hole that they're in, and how quickly you can dig your way out that way. We've certainly seen bizarre amounts of credit card debt plenty of times, and we've certainly heard all kinds of perverted stories that got people into messes. Q: You urge people to avoid debt for the most part, especially credit card debt. In what cases do you make exceptions? A: The only time I make an exception to it on the air and in our teachings is with a mortgage. And I tell people, don't buy a home unless you're out of debt and you have an emergency fund. And if you're going to take out a mortgage I won't yell at you, but don't do more than a 15-year mortgage and don't do a payment more than a fourth of your take-home pay on a 15-year fixed rate. That's very conservative. And then I have the idea that I'll pay that off in seven or 10 years. Now as far as Sharon and I, we don't borrow money. From the time we went broke 20 years ago we quit. I'd had it. There's nothing I want that bad. I'm not going to get into a mess again. I'm not going to go there. I love the freedom of not having a ... banker anywhere in my life except a checking account. Q: What types of financial products should the average consumers steer clear of? A: That probably a pretty long list. ... I think they change a little bit depending on the neighborhood you're in ... I mean, in the lower income setting, you've got to stay away from title pawn and you've got to stay away from these payday lenders. They're a total rip-off. They're bottom-feeding scum-sucking parasites. Hope I wasn't unclear. But you don't see those in the rich end of town. The products over there get more sophisticated that rip you off. And that would be the credit card, the car lease — it's the most expensive way to operate a vehicle, according to Consumer Report, SmartMoney Magazine and my calculator. The whole whole-life insurance product. ... It's an antique product that's built the skylines of a lot of cities. Lots of life insurance buildings in those towers, and that's how they pay for them is off the backs of consumers. So there are lots different ways to get ripped off. Some of it's aimed at folks who are not making a big income and some of it's aimed at folks who are making a big income. Q: So where should people be putting their money? A: As far as investing goes, I always think five years and longer. So I don't day trade. I'm not buying and selling stocks to brag when you're playing golf with your buddies. I'm not doing 'Flip This House.' We're investing long term. The tortoise wins the race; every time I read the book he beats the hare. ... And really the wealthy people I meet with and I teach and so forth, the normative among them is a very simple, clean, unsophisticated investment program. So I buy good growth stock-type mutual funds with long track records. And I put money in there all the time when the market's going down and all the time when the market's going up. And I always seem to make some money over the years. Same thing with real estate. I love buying real estate. I'm an old real estate guy, and I just buy real estate with no mortgages. What a wonderful investment. I mean the office building our business is in is a 64,000-square-foot office building with prime real estate in one of the most expensive counties in our state, and we own it lock, stock and barrel. |
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Comments
This article has 13 comment(s)
Posted by CharlestonJim on August 23, 2008 at 1:42 a.m. (Suggest removal)
Dave is my idol. nuff said.
Posted by common_sense_plz on August 23, 2008 at 8:09 a.m. (Suggest removal)
Mine too!!! I can't wait to hear him today!!
Posted by disco on August 23, 2008 at 9:03 a.m. (Suggest removal)
I wish I would have known he was coming.... I took his Financial Peace University class and it was awesome!
Posted by iceman1978 on August 23, 2008 at 10:05 a.m. (Suggest removal)
I listen to this guy on the way home from work. It's something the amount of debt that people can get themselves into. This would be my advise:
-A mortage is largely unavailable because how many people can really pay cash for their primary home? Plus you at least get a deduction on your taxes.
-A car is kind of a mixed bag. Some would say that you're better to pay cash and others (including myself) would say the opposite in that you're better off to get a newer vehicle with a good warranty, but hold on to it a few years after it's paid for.
-Credit cards: When you're younger you can expect to take on some credit card debt since you're acquiring the things you need in your adult life. In your twenties you're putting together your entertainment center, home furnishings, work wardrobe, kitchen supplies, etc. The key is to only buy something on credit if you're able to pay it off within a three month time frame.
Also, get an American Express card. Take bills that you previously paid for with cash. (gas, cell phone, grocery, utilities) and put them on your Amex card. Save all receipts and deduct the charge from your checking account. This way you will pay off the balance each month, earn bonus points and boost your credit score.
Sorry to sound like an ad for Amex but this is how I take care of my bills. Over a two-year time frame I earned enough bonus points to get a Bose iPod speaker.
Posted by Lenny on August 23, 2008 at 10:42 a.m. (Suggest removal)
First of P&C made a mistake dave only went broke once... iceman, i'm guessing that you just started listening to dave b/c any of dave's listeners are laughing at you right now... sorry but as dave would say I don't know any one who got rich with credit card points... also I don't want to have a fico score because I don't borrow money so I don't need the boost... keep listening and disco tickets are still available, venue opens at 1130
Posted by KnowAllSeeAll on August 23, 2008 at 11:15 a.m. (Suggest removal)
Great guy, much better than the shock jocks that dominate talk radio. Seriously, he's doing the world a great service with what he does. If only more of us, myself included, had the discipline to live the way he does. Most of us can only dream of the day that we have NO DEBT. Think about it: no home mortgage to pay off, no car payment, no student loans, no credit card bills...whew!! But that's the goal that he tries to get people to live by. Put a name on every dollar you earn every month, live on a budget, and you can do it. Once you get past the 'Debt Snowball' and get your emergency fund together, you're set. As he says it, Live Like No One Else, so later on you really can Live Like No One Else.
Posted by walleyedwoman1215 on August 23, 2008 at 11:37 a.m. (Suggest removal)
"Most of us can only dream of the day that we have NO DEBT. Think about it: no home mortgage to pay off, no car payment, no student loans, no credit card bills...whew!!"
Keep dreaming and working towards that goal and you WILL do it!! I'm 47, my husband is 51. We own three houses (one historic, one riverfront, one condo) w/no mortgage payments. We have 1 car payment, no credit debt and plenty of $$ for retirement. We don't make big money, we just decided that happiness is not about big-screen TVs, designer clothing, acrylic nails, gourmet restaurants, golf carts, country club, book club or movie club memberships. Happiness is saying, we sleep great at night! If we can do it, anyone can do it!
P.S. Our big luxury is an annual vacation; this year it's New England.)
Posted by KnowAllSeeAll on August 23, 2008 at 11:54 a.m. (Suggest removal)
You're absolutely right, walleyed. There's no reason it cannot happen, it's just a matter of getting the plan into place and having the discipline to carry it out. He talks long and loud about forgoing life's pleasures now to be able to enjoy them carefree later. I have taken what he said to heart about credit card debt and eliminated mine in only a few short months...just a matter of planning right!! I don't have multiple homes right now, and I don't go on vacations (New England in the fall sounds quite nice, though!!), but I know I CAN do it. It's a question of doing the right planning and then maintaining it. Even with my income (state employee, wife is a food server), I know that any goal is attainable.
His book will be required reading in my home. I don't want my son to fall for the same traps I did when I reached adulthood.
Posted by IPFreely on August 23, 2008 at 3:17 p.m. (Suggest removal)
sounds like a waste of money. It's all just common sense. Save more spend less duh!!
Posted by jammer on August 23, 2008 at 7:26 p.m. (Suggest removal)
yes he was excellent today, just got back...
makes tons of sense, simple stuff organized in a proved fashion
the wife and I will have our "meeting" tomorrow, as she brings this free spirit to the table... lol
I bought the program and will be attending the classes at a local church, even though our finaces are in decent shape this will boost us to a better completely debt free life much sooner
glad we went...
Posted by TL on August 23, 2008 at 9:04 p.m. (Suggest removal)
Iceman, with all due respect, you're not even reading the article since your first point is inaccurate, so why would we believe your following points? Dave uses data to soundly refute your points, especially the most convincing one, a calculator. I mean no disrespect, but anyone who has heard him is snickering at your argument.
I have tried his system before and it works, exactly as he says it will. He provides the most sound and tried personal financial advise I've even seen or heard.
Posted by jammer on August 23, 2008 at 10:30 p.m. (Suggest removal)
yea TL iceman obviously didn't pay attention and just stuck his text in his mouth...
your house is a deduction you say? so lets say you get a $2500 deduction on a $200K house a year, sound about right?
but that after paying the bank atleast 10K in interest in that same amount of time
so you pay 10K in interest to get a 2.5K deduction...
so lets reverse these numbers and take a look, if you want a 2.5K tax deduction all you have to do is PAY the bank 10K in pure interest???
ahemmm what's wrong with that picture?? duhhhuhhuhhh...
Posted by scottchopchop on September 3, 2008 at 11:57 a.m. (Suggest removal)
I just settled my $120,000 of credit card debt for just $24,980.
I did it all by myself.
You can too. It was really easy and quite painless in the end.
I know that people searching this site would be interested to read my story:
http://sites.google.com/site/settleyourc...
Thanks so much,
Scott Stiller
scottchopchop@gmail.com