6 Things Dave Ramsey Gets Wrong (Financial Advisor Perspective)

[@BillCatesReferralCoach]

Great advice. The Dave Ramsey model is not a one-fits-all model. With investing - time is your biggest friend. Get started early. Yes - you must be super careful about your debt - what debt you have and how much of it.

[@TKopelman]

Well said!

[@JoshuaHarper]

The whole point about holding off on the investments until the debt is paid is that you can put more towards the payoff of the debt. Even if you attack the 8% debt like you suggested it might be a difference of 200 to 600.00 depending on how much you would have otherwise invested every month that goes now going towards the debt Regarding the 12% received on mutual funds it's very simple to see this results. You can simply look at the history of a fund over the last 30 years of average at 12 to 15% return

[@TKopelman]

Well a couple things here. First one, yes. But if you’re missing out on a 100% match on a 401k, you’re giving up way more. You could literally cash out your 401k and pay the taxes after getting the match and pay off the debt and be further ahead. On the second, yes agree. I’m a financial advisor, I know that. But the average consumers return is 2%. Plus no one holds one high risk high equity fund in retirement. You’ll see a 30%+ drop 2x every 10 years. People don’t hold onto that when they watch their life savings drop and also need income. That’s not realistic retirement planning at all

[@StayInTheWord]

Can you point me to three (3) mutual funds (closed or open ended) that have returned 12%+ over the last 5, 10, 20, and 30 years (net of fees) please?

[@TKopelman]

@@StayInTheWord net of fees is huge. Plus that’s pre inflation. Also start time matters, holding matters, taxes matter.

[@StayInTheWord]

I’m hopeful @JoshuaHarper can point me to just one (1) fund with these type returns. Keep doing what you’re doing Thomas!!

[@mlharfulm4243]

​@@TKopelman Please share the great list of companies giving a 100% match for a 401k.

[@coreyburke3493]

People need to understand the "terrible" mortgage rates are actually NORMAL. We are hovering around historically normal rates. People were spoiled by the historically low rates, but those rates were low not normal. I'm not old enough to remember but ask anyone who is about rates in the 70-80s lol THOSE are high rates.

[@TKopelman]

Absolutely agree. I can’t tell you how many times a week I say this. Everyone counts on refinancing but we have no clue if that’s this year, next year, in 5 years, or never

[@coreyburke3493]

@@TKopelman yeah I live in the SF Bay Area and was told by an older person that it's possible to get a house on a normal income. When I mentioned that the lowest mortgage on the cheapest condo with 20% down was $4500 or so and even at $100k+ it would basically make me house poor they basically said "get a roommate and refinance in a few months.... trust me" lol

[@TKopelman]

@@coreyburke3493 yeah I have lots of clients in Cali. You need to be making $400kish right now to afford it really

[@shiningwaters9469]

I think the idea of not taking on debt such as for rental properties or business loan is because it's risky. What happens when you can't rent out the house? What happens when you don't sell enough product to pay back your business loan? Now your in deep poop and your stressed and you'll have to take on more jobs just to work your way out of debt and put food on the table.

[@TKopelman]

Yeah that is true. Definitely risk exists when you leverage debt. A huge reason you need to run it like a business, have emergency funds built up, savings for capex, etc.

[@scabbydogmess]

Your points are in a very similar direction to Ramsey and I think you're using his popularity to gain access to views, mine included. Your logic is solid and you're clearly smart and I'd be happy to have you as an advisor. That said there is a psychology to attacking debt that is undergirding Dave's point of view. He's seen how the culture leans so he's more of a counter balance to a debt loving society. Your math and logic reasons but Dave attacks the direction of the human heart as much as he does the financial element. There is a seen and unseen part of financial planning and I think a closer look at people's intuitive longings would make you close the gap between your points of view. Good video Thomas

[@TKopelman]

I don’t disagree. Like I said in another comment and video, he’s great for that specific audience. People further along, more income, etc. not so much

[@chibichibi7554]

Well, I subscribed to this young man's channel! While I'm a Gen Jones (later Boomer), I appreciate learning things from young people and listening to their perspective. Always keep an open mind is my moto. Good luck with your channel, Mr Kopelman.

[@TKopelman]

Appreciate you man!

[@cosmomontanaro5759]

(1) If you've been around long enough to have a good credit score, you should have enough saved up to buy a car for cash and then you'll pay 0% in interest. (2) The same applies to getting an apartment: just live with your parents until you naturally get a good credit score by simply paying off your daily purchases within 30 days. (3) A 401(k) _match_ is not what Dave is talking about. A match is _free money._ Dave is talking about ordinary investments, as in putting your money into stocks, bonds, etc... Yes of course if you're getting free money from your employer then you should generally maximize investment. (4) If you have a car loan that magically has a below market interest rate that's lower than what you can get from a safe investment, then chances are you were overcharged for the car to begin with. I've seen 0% interest rates on cars and even had someone brag to me about them. It was a luxury model costing many times what this guy should have spent on his commuter.

[@TKopelman]

I don’t disagree with anything you said

[@zachmelloh]

Great post Thomas! It’s funny how much Dave loves mutual funds, I don’t know if he even understands the differences and similarities between them and etfs

[@TKopelman]

Yeah not sure why honestly. His reasonings don’t typically make sense on why

[@hondafannn]

Hey you should debate Dave. I’d love to hear him respond to your criticisms.

[@TKopelman]

lol. I’d love that. I don’t hate Dave. I think he gets a lot right for people with lower incomes and a lot of debt. But he’s not great for people beyond that.

[@Evadingmoto]

3% car loan!?! This isn’t 2015 man

[@TKopelman]

Lol, 3% car loans were 2020-2022 so people still have existing loans at those rates

[@BrianW211]

Dave Ramsey's advice is designed for the lowest common denominator at the behavioral level. If you don't have bad financial behavior issues, following Dave's advice to the letter will be sub-optimal, but Dave's simple plan was easier to create and is easier to follow. BTW, another thing that Dave gets "wrong" is debt snowball instead of avalanche, and of course, he advocates snowball for behavioral reasons.

[@TKopelman]

Yeah I totally agree with you

[@eatpigsnot]

debt avalanche only attacks math, debt snowball does indeed attack the underlying behavior. you guys are only doing math, and there is so much more to money, and especially financial peace which is what Dave is teaching, than math

[@TKopelman]

@@eatpigsnot I don’t disagree. And that’s important for people with little income and a lot of debt. Which is why I said he’s great for that segment of people.

[@MrJimmy3459]

Dave has addresses all these issues, you're not saying anything i haven't heard already.

[@chuckiedavidson719]

It’s really not a bad idea to stay out of debt.

[@TKopelman]

Yeah I don’t disagree here in many situations. Staying out of all consumer debt especially is a great goal. You’ll need it for a mortgage though

[@dougwilkinson-uq3xr]

Credit score also is used in the car insrance market. I got a big savings when my agent saw i had a 815 credit score.

[@TKopelman]

True!

[@MrJimmy3459]

How much? Probably a few dollars a month......

[@Heroe-com]

While I appreciate your effort, I think it's better to learn from someone with a TON of experience like Dave. Is his advice for everyone? No. But I already own several properties and have zero debt because I started listening to him years ago. Everyone reading this, go with what's proven over what some random guy has to say. Note: I'm an entrepreneur myself and I really appreciate hard work of others, but something as sensible as finances, it's better to just go with what works.

[@TKopelman]

You can go that route for sure, but before you say in someone random and don’t know about finance, google me. Check out my media presence, the firm I’ve built, The following and education I’ve given out. I work with 7 figure entrepreneurs for a living and have tons of experience doing that

[@Heroe-com]

@@TKopelman Good luck!

[@TKopelman]

@@Heroe-com appreciate that

[@kylejorris]

A) You can get an apartment without a credit score or co-signer. That’s a fact. B) If you pay off your debt you can invest MORE. And get MORE money later. If you pause investing it motivates getting out of debt. C) I get 12% or more with my mutual funds. D) Depending on your nest egg size you can definitely take out 8%. E) You are taking a majority of his points out of his context. Out of context it is crazy advice. Inside the whole picture it’s the best advice.

[@iKaisse]

Blud's beefing with a senior citizen 💀

[@TKopelman]

Hahahah this has my dying.

[@chuckiedavidson719]

I feel like people use Dave Ramsey to boost their own subscribers.

[@TKopelman]

It’s not a bad topic to talk about as many have heard his leanings. I think he’s great for the right person

[@SeanWisbey]

Great video! Lot of good insights from a sharp guy. Thanks TK and AllStreet!

[@TKopelman]

Appreciate you!

[@drewmantia]

You lost the plot in less than 30 seconds. Ramsey doesn’t say credit score doesn’t matter, he says if you don’t use debt then a credit score is irrelevant. There’s a difference

[@TKopelman]

But thats not true. Your mortgage will be impacted by a low credit score. You car insurance will as well.

[@econocarr]

@TKopelman Dave offers a get out of debt lifestyle. For many of the callers you can tell they are not good with credit cards so Dave tells them stop using them. He never tells the people with 100 of thousand of dollars of net worth to stop using it since it not the root of the problem. People who are in baby step 7 can finally spend some of the money cars houses etc.

[@TKopelman]

@@econocarr I totally agree with you on this. Thats why I stated in the beginning hes right for the right people.

[@StayInTheWord]

SPOT ON! 👊

[@TKopelman]

Thank you!

[@steven320]

Yeah I am going to take advice from a kid with 400 followers over a guy who has actually lived a life longer than 20 years. My piece of advice for you and your generation: Experience matters. Learn.

[@TKopelman]

Haha going to hate on me for having 400 followers on here? I just started. I have 26k on twitter, have been named a top 100 advisor the last 2 years, work with 80 households, many of which are 7 figure earners, etc. Instead of trying to use that, why don't you actually try and point out what is or isn't right here.

[@republicunited2183]

I live Dave Ramsey. And my dad is 82, never had a credit card, always bought in cash. Also illegals have non of these things, but find a way.

[@vickieclark5931]

@@TKopelman What the op is stating is that you know the old saying "A man with experience is never at the mercy of a man with an opinion". Although I don't agree with 100% of what Dave teaches, he does have experience that you don't have. When Dave was young, he did all the things that you are doing now, which is what lead to his bankruptcy. Check out his story from the past and see if it sounds like yours. It's fine to do what you want to do, but be careful on what you are teaching. I paid a lot more in the past because of debt that I am making right now in investments. Investing is good, but it's only good if you aren't chained to so much debt and risk losing everything. I can now invest because I don't all the debt that I used to have. There really is no good debt. Even a mortgage is not good debt because unless you can pay your home off in less than 10 years, which most don't, you really don't make any money from it because the interest doubled or tripled the cost of the home. I do agree with it being harder for people to get descent deals on things like insurance and renting an apartment without a credit score. That is one of the few things that I do disagree with Dave on. But you can still have a good credit score without having debt up to your eyeballs. I'm not 100% against credit cards. I use one myself. But unless you can pay it in full when the bill comes in, you are not financially responsible and you aren't in a position to invest or buy a home. As I said, do you what you want to do, but please don't stir people away from common sense and good judgement because people are already struggling financially and don't need someone to help them get further in the hole than they already are.

[@coreyburke3493]

Experience matters but age can also be a liability. If experience is the only thing that matters why do old people often struggle to do basic tasks with new technology? Surely their experience should help right? And someone who built their wealth and went through their struggles in a COMPLETELY different economy and time with different rules and circumstances will often give outdated advice. Like a grandma telling kids to look for a job in the newspaper or explaining how it's possible to work your way through college flipping burgers lol.

[@kentloar2175]

I mean Thomas may be young and only have 400 followers, but I'm subscribing today... because his advice is sound and correct. If you disagree, maybe you could lay out what you actually disagree with?

[@zekeporter205]

dave is wrong....and then says cheaper loans multiple times. silly

[@coreyburke3493]

The problem i have with Dave is 1. Please keep religion out of it I'm not looking for religious videos or advice in any way. 2. He makes people who are in a rough spot sound like they are morons if they spend a single dollar on anything enjoyable until they are out of debt. This is not feasible for most people. Just like being on a 1500 calorie diet and going to the gym 7 days a week isn't feasible for people trying to lose weight. Sure both ways are technically the fastest way to fix the issue. But humans are.... human. When your trying to be extreme at anything you're more likely to rebound than trying to improve moderately. If you haven't spent a single dollar on anything fun in a year you'll get burned out. Now you just chopped off $5k in credit card debt and because your burned out you do something stupid like drop a new TV ir something on your credit card.

[@MRT-xq8wd]

True, but it is frustrating to watch someone who is in debt and living paycheck to paycheck spend $10 on lattes every morning, have 5-6 streaming subscriptions at $15/each, order doordash every other evening, and take multiple beach vacations every year then say that they "don't like Dave Ramsey... he is out of touch."

[@coreyburke3493]

@@MRT-xq8wd what you described is the extreme. There's nothing wrong with telling people not to do what you just described. So in your example id say make your own coffee and only grab a Starbucks or whatever once or twice a month as a treat. Cut your streaming services to one MAYBE two instead of 4. Try not to eat out more than once or twice a month and DEFINITELY don't door dash the food. And hold off on the beach vacations. The difference between what I suggested and not spending ANY money on entertainment until your debt free is huge. One allows someone to spend a little so they don't feel like their whole life is about working and paying bills, the other makes someone feel like they are fucking up hugely simply by being human. Listen to someone like Ramit Setti. He's also all about financial responsibility. But he doesn't call people idiots for wanting to spend SOME of their money on enjoyable things.

[@MRT-xq8wd]

@@coreyburke3493 What I just described is my girlfriend. The most frustrating part of it is not that she believes on "living a little" but that she rejects Dave Ramsey outright as out of touch and has disdain for him. He may be mean, but he is not wrong. She is choosing to spend money on these things believing that these small purchases aren't that big of a deal. It's only an $8 coffee, it makes me happy etc. It is painful to see this. It is such a fixable problem in my eyes. Work more, spend less. It's not hard calculus. Yes, working 120 hours a week, sleeping in your car, and eating PB&J sandwiches is unreasonable. But where do we set the line?

[@TKopelman]

I can agree with that for sure

[@eatpigsnot]

the religion thing i can go either way on. his beliefs about money and debt, and therefore his teachings about those, come from scripture, so it makes sense that faith, god, etc... will come up now and then. that being said, his shows and books are nothing like a televangelist sermon or gathering, and people who run away from amazing financial advice with a bit of faith and scripture thrown in the mix because they despise religion and / or god, are wound too tight and not doing as well as they could be

[@ericolens3]

1st

[@joeystabile658]

Thomas is a fantastic advisor and anyone commenting about age/experience is completely illogical. All his advice is sound and well thought out. That’s all that matters