Dave Ramsey is WRONG About The 4% Rule

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Dave Ramsey is wrong about the 4% rule. In fact, he is DANGEROUSLY WRONG, assuming you can pull out 8% per year and still GROW your portfolio assuming a 12% annual rate of return.
Dave Ramsey went on a rant stating that the 4% safe withdrawal rate for retirement is wrong. In this video, I show you why he simply isn't correct.
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If we haven’t met before - Hey 👋 I’m Marko, and I’ve been investing since 2006, and I got my finance degree in 2010. My mission is to provide my viewers with actionable content that enables them to create financial wealth. My videos reflect my real-world experience as a real estate investor, stock market investor, student of finance, and entrepreneur.
DISCLAIMER: I am not a financial adviser. These videos are for educational purposes only. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. It is imperative that you conduct your own research. I am merely sharing my opinion with no guarantee of gains or losses on investments.
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[@WhiteBoardFinance]

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[@jmfu]

Content idea: Run Dave's scenario with much more conservative withdrawal rates to show that the success rate will be higher, but still fails because its in equities. 90% success means 10% bust and are homeless. Not exactly a good strategy. A retirement strategy needs to be 99% or better...my 2 cents, but it's only worth 0.86 cents because of Biden.

[@missy217]

I love that his daughter is questioning him

[@Daniel-jm1yr]

I was thinking this same thing… He is most combative when they are on the same show, he constantly trys to interject on her mid thought. I love it… she knows how to push his buttons. The other personalities never challenge him on air.

[@michaelb.8953]

@@Daniel-jm1yr Dave isn't going to fire his own daughter so she has way more latitude to speak up than the other show personalities.

[@nicodimus2222]

She started to say "wouldn't you rather..." before he cut her off. I think what she was going to say is "have EXTRA money because you took out less for a few years?" The worst outcome of taking out 3-4% instead of 8% is that you have a larger nest egg than you expected. How is this a terrible thing, Dave? It errs on the side of having too much money.

[@aaronbrown5631]

Ah Dave Ramsey, the Dr. Phil of finance.

[@larsvargas]

🤣😹

[@jeroldstokes6065]

THANKS. Just what I needed to watch. My wife and I got a 400k HELOC from our 780k primary home which we are still paying a mortgage for. I want to only use 200k for this new duplex down payment. I realized that the secret to making millions is making better investments and staying out of debt. I'm grateful to GOD for the internet space, we were able to join the credit repair program, we payed up our debt and now we are back to being the administrators of our farming business and our own properties, as well as small pensions. I am almost 50, my wife is 48. We have started saving for retirement from the farm and maybe live off rental income, I would really appreciate it if you would do a video on how to earn using Airbnb and retire comfortably.

[@d.i.yinvesting7678]

This is exactly how I wish to get my finances coordinated ahead of retirement.

[@d.i.yinvesting7678]

You talked about a "credit repair program" how do I join? I took out a 200k heloc from my primary home 2 years ago which I'm still paying....I find it challenging to invest elsewhere because I'm still paying the mortgage and I got bills. to pay.

[@jeroldstokes6065]

"Laura Gilbert CFA " is the licensed fiduciary i use. She lead me to join the program, Just research the name you'd find necessary details to work with a correspondence to set up an appointment.

[@d.i.yinvesting7678]

I just googled her and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get.

[@jeffclifford5731]

Why no one talked about this program when I was in debt

[@cloudstrife7840]

Dave's 12% return on undisclosed mutual funds makes him the youtube finance equivalent of a fake natty

[@Dan-cm9ow]

Um, he does tell you what they are. They're "good growth" mutual funds. What were you expecting, things that actually exist? Dadgum millennials...

[@thud9797]

American Funds Investment Company of America® Class A MUTF: AIVSX That's his fund. It usually runs about even with the S&P but last couple years has beaten the S&P.

[@themaestro5338]

He's the 2017 Central Florida

[@Tmoises58]

@@Dan-cm9ow😅

[@I_like_turtles_67]

For legal reasons, he can't say on air what funds he owns. There's information out there explaining WHAT mutual funds Dave is holding.

[@quietearthMT78]

Dave Ramsey is good for people who are terrible with basic finances and are lost in debt.... that said, he knows next to nothing about investing.

[@TheDriller100]

says that's guy that's worth 50 cents vs 400 million 😂

[@quietearthMT78]

@@TheDriller100 Says the guy who doesn't know how Dave got his millions... it was through real estate sport, not stocks.

[@Krynale]

@@quietearthMT78 "He knows next to nothing about investing"...so real estate doesn't count as "investing" anymore, only stocks count?

[@felipeoliveira2219]

That's basically 90% of population 🤣🤣🤣

[@quietearthMT78]

@@Krynale Real estate does count as investing... however the topic of the conversation was a withdraw rate for retirement FUNDS... i.e. retirement funds that are invested in the stock market. Dave invested in whole houses and then sold them for a profit. it's not the same thing. Pay attention.

[@PatriciaMary11]

*I wasn't financial free until my 40’s and I’m still in my 40’s, bought my third house already, earn on a monthly through passive income, and got 4 out of 5 goals, just hope it encourages someone's that it doesn’t matter if you don’t have any of them right now, you can start TODAY regardless your age INVEST and change your future! Investing in the financial market is a grand choice I made.*

[@JohnMichael007]

Sure, investing is essential for maintaining your financial stability, but making any kind of legitimate investment without the correct advice of a professional can result in a significant loss as well.

[@johnwilliam8061]

It's really not easy trading this market. I read a lot of books, tried to study, watch some tutorial videos, did a little demo before funding my account and I still lost a lot. The financial market could be very tricky

[@RobertDavid212]

wanted to trade, but | got discouraged with the market price fluctuations~>

[@ChristineElliott-jw7cn]

Trading under the guidance of a professional is the best strategy for beginners.

[@Russelbobby45]

Please who is the professional guiding you? I have lost so much as a beginner Investing into stock and crypto without a proper guidance.

[@MSBJJ]

We did some of the Ramsey plan to get out of debt and everything, but we def made logical adjustments. It's great for those who are financially illiterate, but as you learn you can do better.

[@WhiteBoardFinance]

he is great for getting people out of debt!

[@geewee1geewee197]

@@WhiteBoardFinance Apparently, also for getting them back in debt...

[@veeo987]

Even his plan to get out of debt isn't the best. Anyone who has a math geared brain will pay off debts that have the highest interest rate first. Not the smallest one necessarily.

[@MSBJJ]

@@veeo987 Right, but I understand his reasoning. It's for financially illiterate people who need the gratification of paying something off as fast as they can or they lose hope. That is one of the changes I made. I built out an excel sheet comparing both models of payoff and saw it would save me ~$700 to pay off highest interest first.

[@mplslawnguy3389]

@@veeo987 I have no clue why people find that "psychologically" beneficial. If you're an adult, and can't wrap your head around the fact that eliminating high interest debt first is better, then you probably shouldn't have money and should stay in your parent's garage for the rest of your life.

[@AnnaFed015]

Building steady income is quite difficult for newbies...

[@Karenlisa1]

John Desmond Heppolette has been a significant step in my financial life journey, providing valuable knowledge actionable advice and motivational content. His supportive community has boosted my confidence, work engagement and and has inspired me to strive for excellence

[@Windarti30]

I just discovered his exceptional resume when I searched his name online, I consider it a blessing that I discovered this comment area

[@matthewsemenuk8953]

12% Average every year. Ya, okay Ramsey. Last I checked, we aren't 12% higher, each year, than the top of the market. And if we were, we'd be in a lot of trouble with a worthless currency.

[@republicunited2183]

My workplace 401k has been averaging 13-15% per year.

[@felipeoliveira2219]

Even his daughter question his stupidity but he completely cut and ignore her

[@brussell328]

I think most level headed investors regard Dave as the bloviating kid in the room who speaks the loudest while having little to actually say. Thank you for being a rational and level-headed source of investment advice as always, Marko.

[@mplslawnguy3389]

That clip of Dave is nauseatingly stupid. His argument is childish. He is the perfect example of an adult bully.

[@blairkinsman3477]

Most level headed investors wouldn’t comment. Some might.

[@blaquopaque]

5% annual return is easily thrown out there for illustrative purposes, but not so easy to achieve! Where do i put £500k cash holding in to keep cash safe for next 4 years? My concern is insolvency

[@Curbalnk]

I think you're better off with majority investment in S&P500 and uprising equities cos they always outperform. Alternatively speaking to a certified market strategist can help with pointers on equities to acquire

[@kashkat987]

That's why I've entrusted a fiduciary CFP with my daily investment decisions. Many underestimate advisors until emotions lead to losses. My CFP crafted a tailored strategy aligning with my long-term goals, guiding entry and exit points for the equities I focus on. This has grown my portfolio to $700k, generating sufficient dividends for my household's needs.

[@greekbarrios]

@@kashkat987 could you be kind enough with info on the professional guiding you? my retirement plans are going down the drain, and my 401k particularly has lost everything it's gained since 2019.

[@kashkat987]

I'm being guided by “Monica Selena Park’’ who is widely recognized for her competence and expertise in the financial market. She has a thorough understanding of portfolio diversification and is regarded as an authority in this field. i highly recommend looking her up to locate her online if you are internet-savvy.

[@j.borchard2208]

You’re right, Ramsey is incredible at Debt reduction and cutting the fat out of any budget, but when it comes investments, he’s wrong mostly!

[@mplslawnguy3389]

He's not even great at that. You can have a basic High School education and know that eliminating high interest debt first, is the most efficient way to get out of debt. He appeals to emotional morons.

[@geraldt331]

After a massive rally in stocks came and yields collapsed, bond yields and the major averages are higher on Wednesday. How do we deal with such market conditions? Typically my $2m worth of holdings go up 8% then lose 20% right after and the cycle continues.

[@lucaswilliams9992]

Investors embracing the idea that abruptly cooling inflation will put interest rate hikes on ice. During recessions your dividend gains or income reduces. Speaking to a certified market strategist can help with navigating this downturn.

[@Jadechurch-ql3do]

A colleague once proposed the idea of diversification to me, hopefully for positive results to offset any negative performance. At once, I backed it up using an advisor in order to avoid any fiasco. As of today, my portfolio has yielded over $450k in profits, from an initial $180k this year alone.

[@yeslahykcim]

@Jadechurch-ql3do impressive gains! how can I get your advisor please, if you dont mind me asking? I could really use a help as of now

[@Jadechurch-ql3do]

I'm being guided by “Leila Simoes Pinto’’ who is widely recognized for her competence and expertise in the financial market. She has a thorough understanding of portfolio diversification and is regarded as an authority in this field.

[@Tonyham198]

I just googled her and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get. I just scheduled a caII.

[@Dan-cm9ow]

Its sad that someone who'd listened to as widely as Dave Ramsey is such an easy punching bag for youtubers. So many people listen to him... I used to until I starting actually having money to invest and realized his return claims were lies and the products he shills are awful. Even non-finance guys like Joshua Fluke regularly expose him for the insane stuff he tells people about the workplace.

[@DadinWA]

I wonder how much longer is George going to be employed under Dave Ramsey. Dave has old school values. Thanks for breaking down the graphs. for most of us, we need to be conservative when withdrawing during retirement. 8% is ridiculous. I can see 4-5% depending on how much you have saved during retirement but 3-4% is reality for most of us. thanks for sharing.

[@JohnHobitakis]

I'm with Dave on this one.. it's incredibly difficult to save $1mm, and for what.. to live on rice and beans on a 40k income. 6% withdrawal rate, collect social security and side gig for me.

[@bb5808]

The sad part is many won't have anywhere near 1million in retirement.

[@tugboat2030]

The video is very revealing about why Dave promotes such a high withdrawal rate. It's not that 8% is going to be realistic if you want to keep your nest egg for 30 years. But it WILL motivate you to have SOMETHING in retirement, rather than having nothing.

[@JustinPratt1]

This is why when you retire you leave the US and live somewhere with high quality of life at a fraction of the price. There are places you can sip drinks by the beach in a nice condo for 40k a year. but people dont want to leave their McMansion and 3 cars and dog.

[@stephkent2736]

@@JustinPratt1I don’t want to live where healthcare sucks and I get to see my friends once a year

[@deanmaxbrooks]

Thanks for making this video. What I could never understand with Ramsey is he's always saying his mutual funds make 12-14% or so. Yet we know most of the stock returns are coming from the Big 7 (Apple, Tesla, etc) , without which stock returns would only bev3-4% . So if SPY and VOO are only giving 11% like avg, what are these magical other funds Dave is talking about? Maybe he has access toi accredited investor stiff most people don't, but 12-14% seems unrealistic, unless you're maybe investing in those Big 7 directly.

[@Varnzy20]

Also, if you think inflation is only 4%…

[@amireallythatgrumpy6508]

On average, yes. It was 0.1% between 2000 and 2020.

[@NWforager]

ha , co-host is Dave's daughter too . She's the only 1 that questions Dave . i always get portfolio envy when Ramsey says "oh ,12% or gtfo" i'm like 👀 i want specifics bruh . Eh Marko , Call in the Dave's Show 📞😎

[@Quanic2000]

Nobody I know who is financially successful and independent even knows who Ramsey is. But people I know who are bad with money definitely know Ramsey, but are still bad with money 😂

[@christopherbaumgardner5004]

When I saw Dave's video, I wondered if he was in an initial cognitive decline. He knows there is no way that math is mathing.

[@yob_woc]

Thanks for making this video , its important to check the information people present as facts!

[@InTheMoneyAdam]

Good video!

[@WhiteBoardFinance]

Thanks Adam hope you're doing well!

[@joshr.5199]

Dave has been getting crapped on ever since he said that and I’m loving every bit of it. He has good advice for people who are in trouble but if you’re somewhat competent with money head over to the money guy or white board finance

[@zzzarkka]

The Money Guys even got a hit in to. This is like the 5th I’ve seen where people calling him out.

[@dougz2855]

Marko, thanks for your educational videos! Keep them coming, your advice is the best👏

[@WhiteBoardFinance]

Glad you like them!

[@rpitneyjr]

Always great content but at least for me, your most valuable vid yet. Thanks, Marko.

[@Robertgriffinne]

Getting 3.38% on both I-bonds. Not getting the 1.30% fixed rate. Just sold both. Looking to move them to something better. Any suggestions? I'm regarding whether or not to liquidate my $138k

[@PhilipMurray251]

i agree with you. I started out with investing on my own, but I lost a lot of money. I was able to pull out about $200k after the 2020 crash. I invested the money using an analyst, and in seven months, I raked in almost $673,000

[@BenjaminMcLeod815]

agree with you. I started out with investing on my own, but I lost a lot of money. I was able to pull out about $200k after the 2020 crash. I invested the money using an analyst, and in seven months, I raked in almost $673,000

[@Robertgriffinne]

Please, could you recommend the FA you work with? I could really use some help right now.

[@BenjaminMcLeod815]

Credits to Nicole Desiree Simon one of the best portfolio manager;s out there. she;s well known, you should check her out

[@Robertgriffinne]

I just came across her web page, I went through her resume and I must say it was quite impressive. I reached out to her and I have booked a session with her.

[@nekto34]

I'm now more worried for George. Hope he isn't getting steamrolled by Dave.

[@zzzarkka]

He 100% is.

[@mplslawnguy3389]

Remember he fired that black dude for cheating on his wife. What a strange place to work where you get fired for your personal life. Cheating on your wife is scummy, but has nothing to do with your job and should be none of their business.

[@genxx2724]

@@mplslawnguy3389 I heard he cheated on his wife with another Ramsey employee. Would that change your opinion?

[@mplslawnguy3389]

@@genxx2724 I suppose if she works directly under him, no pun intended. Still, I don’t think your love life is any of your employers business. Maybe if it directly affects the workplace dynamic, but I have no idea in his case.

[@genxx2724]

@@mplslawnguy3389 That situation would affect the workplace. But apparently he only fired the woman initially. Some kind of uproar about the hypocrisy led him to fire Chris Hogan. I believe Ramsey is being sued for firing an unmarried employee for becoming pregnant. Their company policy is no fornication.

[@bigchief113]

As always. Great insight Marko.

[@ambbb4691]

Yo the Metal Gear Solid sound effect at the end had me dying.

[@brianjames9832]

He also never seems to factor in taxes which boggles my mind.

[@miked412]

0.04% expense for a mutual fund! - That's a generous expense ratio! I may have to drive to mom's house, go in her basement and use a calculator - but, that appears to be over an order of magnitude less than the average low end.

[@DEEZEEMTB]

He is an evangelical Christian and that is why he has an audience. People take financial advice from him based on his faith.

[@greggpurviance7252]

He has helped many thousands who don't share his faith.

[@JustinPratt1]

@@greggpurviance7252 His entire advice for getting out of debt could be summed up on a single index card. He made millions off the dumbing down of the US and easy money policy. His 'advice' is pretty simple and basic personal finance. He just marketed basic principles of paying off debt and saving. Once you get out of the hole, everyone should stop listening to him because then it involves investment and Dave is pretty terrible with that topic.

[@ram_bam]

These thumbnails keep getting me 😂. "Dave Ramsey is the devil!" - Mama Boucher

[@anvvalo]

Hey Marko, could you make a video on velocity banking? This seems to be far from your reasonable and relatively hassle-free approach to build wealth, but this topic would really benefit from nice clear explanation and comparison with, say, investment in stocks instead of paying the mortgage faster this way. There are a few videos on KZbin kind of promoting this approach, but they do it so confusing ("you need to watch this video 10 times to understand what is happening" is often one of the top comments) that it looks more like selling of their consulting services.

[@syamim040]

10 years later: I'm broke rn Dave Ramsey: Cause u r wrong!!!

[@GreenBoiler]

Great Breakdown!

[@tomdriscoll7041]

Amen...Dave advice does work for people...for getting out of debt...basic rules of spending less than you make..save and invest...truly not that complicated.... But his investment strategy lacks reality... George was siding on the side of caution 4%... Something Dave Ramsey doesn't have to deal with anymore...he has millions...he tells everyone that all the time . Calling George stupid, it's very disappointing and disrespectful ...I've lost alot of respect for Dave.

[@NWforager]

Dave missed the context of course . this was for FIRE folks trying to retire at like 40 yo , so they might have to live off the money for like 50 years or so . i mean it was a Live show so Dave didn't have time to call George or check the numbers lol

[@LegDayLas]

Dave calls every caller stupid lol

[@JustinPratt1]

@@NWforager But the 4% does not come from the FIRE movement. the 4% rule is a common retirement rule even the most seasoned financial advisors know about and suggest for most common retirements. The idea of advising anyone of any age to withdraw 7-8% a year is dangerous and can destroy a lot of peoples retirement.

[@BarbellFinancial]

How are you not at 1 million subs yet!?

[@WhiteBoardFinance]

No clue lol

[@mbrownie22]

Soon

[@maxthefrenchie-productions]

Dave is so rude. Calling everybody stupid!!!! Chill out Dave. I’d rather listen to Marko!!!!

[@ryanraines1469]

I think it’s known that his simple mutual funds over everything strategy he preaches would be out performed by a total stock market index fund/etf and or plus S&P index fund/etf in long run when you factor in expense ratios, fees and under performing securities in the fund but a lot of people need guidance to get out of debt and to avoid goin into debt his advice probably pretty good for that stuff

[@JasonAuger-gs4ve]

Nice thumbnail Marko LOL

[@mechengineer4life]

I'll echo what others say, Dave is good for people who can't stop getting into debt and don't want to learn the in's and out's of how money works, inflation works, stocks and bonds work, but otherwise I definitely recommend changes besides his debt snowball method which is very powerful and helped my wife and I when I got out of college with 60K in student plus car debt.

[@derekcole4197]

Great point Marko, Dave should show us the portfolio, he's hiding behind a curtain

[@RouRoro]

Ramsey creates lots content for other KZbinrs 😂

[@WhiteBoardFinance]

Because a lot of his takes are terrible lol

[@windexman]

Dave's "diversifying his income stream"

[@mikeknape7064]

Your first illustration with investor 1 and investor 2 was absolutely perfect. Shows perfectly why the 4% rule is commonly excepted. Would love to show Dave that illustration.

[@jimmaynard]

he had me at dadgum

[@greggpurviance7252]

Don't agree with 8% or 4, both suck. But that is not the big point. What Ramsey is arguing, childishly, is that many "advisors" suggest way too much for retirement, which demotivates people from saving in the first place. Ramsey & his critics got sidetracked on the 4/8 withdrawl rate, neither of which is helpful. Everyone is diffrent & a focus on withdrawal rates is dumb

[@bobbytheblade2550]

4% withdrawal rate is too low for those who retire early and have the means to grow the asset way beyond that. My wife has managed growth in our investment net worth an average of 12% which is crazy good, and we both retired in our 50's. Our withdrawal rate is right at 8% which allows us to index inflation and experience some real growth though slight. And we are prepared for cutting back in hard times. This works well for us, but is everybody going to be able to grow this well in retirement? Most folk should follow a safer, less aggressive route.

[@amireallythatgrumpy6508]

Retiring before the age of 80 is asinine no matter how you look at it.

[@michaelday6987]

Every single finance KZbinr is making this video. Dave sure hit a nerve.

[@WhiteBoardFinance]

Because he’s dangerously incorrect

[@michaelday6987]

@@WhiteBoardFinance I don't disagree. I just noticed the volume of these videos. Keep up the good work!

[@awborgman]

More brand awareness than he could even buy, now.

[@Buggu3]

Naah😂😂.. ppl feel bad for poor George … hope he’s ok over there a Ramsey Solutions 😂😂😂

[@USMC6976]

@@WhiteBoardFinance No, you do it hoping for clicks. If you're so right, you don't have to point out he's wrong, because no one would listen to him. When you have to tear someone else down, you are not building yourself up. My experience with people that do the tearing down is they are peddling something that isn't worth the price they are asking. The one thing for sure, the 4% rule maximizes an advisor's income on that portfolio.

[@frankw7266]

Dave was great at motivating me a LONG time ago to grow up and get my butt in gear to get rid of debt and quit living check-to-check.... beyond that, I haven't watched him in years.

[@LegDayLas]

If you care about your brain cells don’t start.

[@TrevForPresident]

Why’s he attacking his own staff, though? You can have some vulnerability and sympathy to being wrong if you don’t go on the attack.

[@LegDayLas]

Because he is a worm and refuses to let anyone that works for him express information contrary to his one size fits all financial advise.

[@julieburkhardt61]

The average of our stock and bond portfolio is 5%!!! Yes, there were good, double digit years but mostly not. This is a moderately aggressive portfolio and trending toward conservative now that we are retired. To assume a 12% return is pie in the sky, and I wold never do stocks only!! 2008, anyone??? We took a bath but we have also bounced back far better than people who took theirs out altogether!! I agree, Dave is good to show people how to get out of debt, but he’s not the guy to tell you how to invest wisely!!

[@blackvx]

Marko, Hey....are you doing this video from your basement? Cause, I don't know if I should trust you or that guy who calls everyone else "Stupid" without real data.🤔 😜 Thanks for your educational videos! You're the best!

[@WhiteBoardFinance]

LOL!

[@user-xl6wh1dz4z]

😂 “You getting a whooping, this is my show!”

[@JosephDickson]

Kamal's video was strictly for a 45 year FIRE retirement. DR doesn't even know what editorial content they put out. Big surprise Dave's a jerk to his fans, employees and his co-host daughter sitting next to him. 🤣

[@patriotsforegolf9859]

I have to push back here, Ramsey isn't a jerk to his fans, he comes off a little brash but in the end it's to get them fired up. His employees? He paid off Millions of dollars for them during one christmas and got them all out of debt upwards $8Million. Just saying, Kamel? I don't like him at all

[@Peoriahiker]

Dave Ramsey does a great job helping people get out of debt. However, he should not be giving investment advice. As everyone, his advice should be limited to his field of expertise.

[@republicunited2183]

He has an event coming up where he shares his investment and real estate investing plan.

[@user-cj1ce6vy9r]

My financial plan for retirement is to only take money out of the markets when they do good, if we have a down market I’m gonna use our savings. Thank God we have enough savings for several years (maybe 6). Our social security and my small pension should pay most of our bills. My wife’s Vanguard 500 Roth IRA has averaged 13% since inception but with our other stock holdings we have averaged around 10%. I think I’m comfortable with a 5% withdraw rate.

[@eduardocruz7987]

the biggest issue is Ramsey keeps insisting you can make 12% yoy using mutual funds...

[@victorbaird8220]

7:36 to skip the ad 😊

[@lillyalejandro6921]

I couldn’t agree with you more. I did follow Dave Ramseys advice on how to get out of debt and it really worked. His investment advice is horrible

[@ericalafollette5475]

Same! He was so motivation when getting out of debt, but the way he talks to people with reasonable questions about investing is absurd.

[@kobielee5339]

First off, thank you for these videos, I find them very educational. However, in this particular video I have to point out the simulation used for the 1 mil/80k looks to be misinterpreted. 1) It doesn't really do future projections right, so you can only look backwards. There is a pretty successful run between 1975 and 2000. The majority of the failures are during years where the stock market was very volatile do to several major wars including the Civil War, both World Wars, Korea, and Vietnam. It includes the crash of 1929 as well. What I'm saying is that he never promised this would have worked during any point in history. He is saying this should work well in the present time. I'm just saying it may have been better to run the simulation projected forward instead of going back 200 years. I still believe you have many valid points, just wanted to point this out. Again, thank you for the content.

[@JustinPratt1]

I think you miss the point that no one knows what the future will bring. You can only backtest as no one knows he future. But I would go with a proven amount that has a >95% chance of me not running out of money even through terrible times in the past vs the method that I have a less than 50% chance of making it until I die. This 4% thing is not something George made up. Financial advisors have been going by this rate for decades. Also, they predict returns on the US are to slow over the next few decades and there are talks of it being closer to 3.5% to account for lower forecasted returns over the next few decades.

[@kobielee5339]

@@JustinPratt1 How is the point "that no one knows what the future brings"? We are talking about forecasting, projections, and analysis; and I simply made an observation that there may have been a different way to do that.

[@bigsnacks2350]

Dave is good for people who can't understand finance, if you do understand finance, then you don't need him, beyond his advice about debt.

[@blairkinsman3477]

In Canada 🇨🇦 this argument doesn’t happen .. our RRSP (Canadian version of a 401k) has a regulated mandatory minimum withdrawl rate from ~4% (65) to 20% (95+), regardless of the rate of return

[@yipchitaywonga]

Does WBFU have an email? I don't use social media, I have a few questions about membership. Thanks

[@camerontempleton8898]

You can withdraw 8 percent all day long if you keep cash for downturns and don’t have debt… This 3-4 percent rule is only for robots that can’t balance and adjust as things change…Everyone that I know that retired in the last 10 years net worth has gone way up from 60-70 years old… Now they are slowing down they will probably die with more money they they started with in retirement…3-4 percent rule is for people that can’t adjust, change things up or have a lot of debt…

[@chrisknoblock]

I'm a lay person, but considering his influence and his interest in the stocks his disclosure of what stock he holds could cause the SEC to accuse him of market manipulation.

[@papapickett7267]

12% annual returns… FOREVER! Sounds great Bernie, where do I sign?

[@LV-1969]

12% return over 100 years is great but if it's 10% over the last 40 years then you need to readjust your numbers to be safe

[@buffetline2605]

Dave is losing touch with reality. Is he still dealing with his time share scams too?

[@NWforager]

yes , he's got a guy telling him "hell yeah , you're profiting 12% forever and ever ..amen " lol

[@themaestro5338]

He pulled a gun on an employee once

[@amireallythatgrumpy6508]

No American has EVER had touch with reality.

[@richbarrett]

Well done.

[@LegDayLas]

Dave has helped allot of people with their finances. Those are all people who only found Dave once they dug themselves into a hole. If you are smart enough to have not dug that hole all on your own… you should NOT listen to him. His advise is good for getting out of debt and only for getting out of debt. Once you have basic financially literacy start looking for advise that applies to someone like you.

[@tomstoeckle]

You can’t argue against Monte Carlo simulations. And Mario is correct. Asset allocation for retired folks should never exceed 20% of total assets.

[@Mens-Wisdom]

Dave is talking about % of portfolio spending. So reduce spending if the portfolio value drops. Try running this.

[@danielj3010]

Rachel is cute.

[@michaelb.8953]

She definitely is.

[@cgranero1]

Agreed, 100%. Dave’s investment advice is not great. His baby steps got me down the personal finance rabbit hole, and I’m grateful for that, but once you’re looking to start investing, he’s not the guy to listen to. I’ve also never heard him disclose his investments. He has claimed for years that his mutual funds beat the market by at least 2% per year. If that’s true, tell us what funds those are so we can all invest in them.

[@manydreams1life315]

So the caller is right... No one can retire...

[@MD-pz3cn]

Well let's not go that far. Would you have said the same thing 5 years ago?

[@manydreams1life315]

@@MD-pz3cn To be honest - since we passed 14 trillion debt ceiling ... It just seems like it really is heading right over a cliff ... Clips like this just help to support the reality that there is something definitely wrong ... I could be wrong - of course - and hopefully so...

[@rightwingsafetysquad9872]

I hope to only take the required minimum distributions. Ideally I'd like a 0% withdrawal rate. Some of us aren't boomers and want to set our family up for multi generational wealth. Also, the only person who can pull off the word 'goober' is Super Lutheren.

[@whatsupwithsteve]

so us "boomers" aren't interested in doing the same? I hate when people blindly put people in groups so it's easier to attack them

[@rightwingsafetysquad9872]

@@whatsupwithsteve Correct. The Boomer generation is the most self-centered in human history. You’ve consumed the entirety of the wealth both you and your parents produced leaving little but a destroyed social fabric to your children and grandchildren. Obviously it’s not 100%, nothing ever is. But getting defensive about it rather than addressing it or at least claiming to be “one of the good ones” tells me you fit the stereotype exactly.

[@languagepassion-divulgata2475]

Anyway you are referring to average ROI and not real return on your money. The real return tends to be less if you just compound taking into account the average ROI.

[@dustybeat]

Maybe Dave is not considering that under a strict SWR, the percentage is only set for the first year and then the withdrawal amount is adjusted for inflation every year going forward. If you just take 8% annually based on your current investment balance, of course you can draw 8% every year for eternity. Heck, you can draw more than that. However the withdrawal amount may not be sufficient to cover your expenses in a down year.

[@Oiwiwidh]

I encourage you to watch the clip. He very specifically explained that 8% was a SWR including inflation raises each year. He is very, very wrong. More KZbinrs need to come out with videos like this so more of the public doesn't follow this advice.

[@felipeoliveira2219]

Marko, Why don't you call the Ramsey show and ask that question? That would be amazing if you can prove he's wrong on that one....

[@tirevelation777]

Does the 4% rule touch principal?

[@roberthuff3122]

But it does suck! It the the best rate for the worst case scenario. The median rate in the Bengen paper was 6.5%. And from an actuary perspective, very few people will live 30 years in retirement.

[@WhiteBoardFinance]

The person calling in is 30 years old trying to fire in the near future

[@nickgeorgiou7770]

Dave Ramsey is for people who need to eliminate debt. The withdrawal rate is tied to your age and life expectancy. 60’s - 3% Withdrawal Rate 70’s - 4% Withdrawal Rate 80’s - 5% - 7% Withdrawal Rate 90’s - 7%+ Withdrawal Rate These rates are not a hard rule but it gives a roadmap

[@zachmamrol7934]

If you're debt free by retirement, move to a low income tax state, and only pull 3% on just a million that's over $2500 a month. Besides perhaps medical cost what would you need to spend that much on?

[@michaelb.8953]

Exactly!!! I haven't seen Suze Orman in years, but she would always say you need XXXX amount of multiple millions of dollars to retire so you have that multiple six figure salary when you retire. Why would someone need a higher salary in retirement at 80 years old than when they were working a full time job?

[@alexreyes7237]

He doesn’t assume flat 12 percent return you’re the one assuming withdrawal rates should be flat in the first place if the market goes down withdraw less if it did well withdraw more it doesn’t make sense to stay withdrawing 4 percent in a year you made 22 percent, if you don’t need the extra income then reinvest or save.

[@moneycessity]

There is not a one-size-fits-all rule for withdrawal percentage! The earlier you retire, the smaller your percentage. The original research on the 4% rule is assuming a 30-year retirement. The amount that you rely on your portfolio also changes as you gain access to social security.

[@WhiteBoardFinance]

The person calling in is 30 years old.

[@moneycessity]

8% is way too high if he plans to continually scale up his withdrawal by inflation. Maybe the caller has a plan to reduce his spending during tough times? He will need one...@@WhiteBoardFinance

[@andyparcell9236]

I like Dave but he is assuming a perfect world of returns being linear. Where he bashes that thinking when it comes to leveraging debt at a lower rate and investing the spread/buying real estate.

[@hisagisan]

Ramsey hasn’t pressed play on his own accounts. He says he doesn’t need it because he’s still working so with just that I’m not sure why he’s so confident about his ideology.

[@neaton14]

They are American funds

[@isaiahfronning5157]

We do need to remember that mutual funds have around 2% annual dividends…

[@LuigiFan1305]

Dave is not wrong on all things. He teaches good basic financial literacy for beginners. Anything outside beginner level already know his advise is outdated. His mutual funds with high fees is dudu 🤦🏾‍♂️🤦🏾‍♂️

[@RickJone-kd5lr]

The problem with all these models is they assume a lot of things. Also, these may have worked in a stable currency system in the 80' to early 2000's but the future is going to be way different. Most people will not be prepared because everyone is preparing for the last financial crisis not something they haven't seen in generations, if ever. Unbacked Fiat will crash completely within the next 10 years. Those digits on a screen will not mean anything.

[@agpablo2885]

Well said! There's a term for that kind of thinking most people have.....RECENCY BIAS. They can't fathom something that hasn't happened in their own lifetimes even if history, logic, facts, and math show otherwise.

[@antimatter2380]

Wait, so even if everything is perfect at 12 return, 4 inflation, and 8 withdraw, using "stupid math" there is nothing left over to even maintain your portfolio. So each year your portfolio goes down, inflation eats away more money, which leaves your 8% a year being a smaller amount to use to live.

[@jaredbills72]

Who thinks in 6 months George will not be working for Ramsey solutions and will make a business with his own channel, name, image and likeness?

[@zzzarkka]

Kinda doubt it. He’s been groomed to be a big part of Ramsey Solutions when Dave retired. Jade to. George even said it himself that he’d rather work for someone else.

[@jaredbills72]

@@zzzarkka confused by your statement. At first it seemed like you were making a point as to why he would stay and then you were saying he would work for someone else?

[@BardWannabe]

I love the thumbnail.

[@martinlord5969]

Wow. New fangled things like calculators. I wonder how he would react to people using Excel in their basements!!!