The Truth About "Good Debt"

[@CalebHammer]

I'll fight ya

[@GarzaL91]

😂😂😂

[@jenmal898]

I smell a video coming on 😊

[@zimmerMAN5050]

Im with ya Caleb

[@bubblegodanimation4915]

I'm with you.

[@bubblegodanimation4915]

You really need to fight the absurd numbers and assumptions that end up functioning as flat out lies that George is telling here.

[@Krinbo]

_Caleb Hammer is typing_

[@trebmaster]

He most certainly was!

[@austinbar]

Invest judiciously, keep a stop loss figure. Shuffle between debt and equity wherever the ratio goes too off your target. As for the target, I recommend a Ratio like this Debt % should be equal to your age in years. If you are 20, debt is 20%, reset in equity. If the market falls or rises drastically, your debt % will change, which you should rebalance to 20% and bring back equity to 80%. Thus you would have bought low or booked profit depending on if it was a crash or a bull run.

[@rogerwheelers4322]

Effective personal finance management is more important than the amount of money saved, regardless of whether income is earned through job or investment. Individuals can seek counsel from a certified financial advisor to optimize financial outcomes, who can provide specialized advice and methods to decrease expenses and maximize income.

[@joshbarney114]

I completely agree; I am in my mid 40s, approaching retirement, and have approximately over 2million dollars in external retirement funds. I am debt free and have very little money in retirement funds compared to the total value of my portfolio over the past three years. To be honest, the Fin-advisor can only be neglected, not rejected. Just do your due diligence to identify a fiduciary one.

[@FabioOdelega876]

This is exactly how i wish to get my finances coordinated ahead of retirement. Can you recommend the financial advisor you used to get ahead?

[@joshbarney114]

Certainly, there are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with ‘’Marisa Michelle Litwinsky’’ for about three years now, and her performance has been consistently impressive. She’s quite known in her field, look-her up.

[@FabioOdelega876]

Thank you for this tip. it was easy to find your coach. and I conducted thorough research on her credentials before scheduling a call with her. Based on her résumé, she appears to possess a high level of proficiency, and I am grateful for the opportunity to speak with her.

[@CrazyMedic220]

I graduated school with 54k in student loans at a 10% interest, thanks Sallie Mae. Refinanced through Navy Fed for a 4% interest rate. I ended up paying it all off in 2.5 years

[@raygarasich6152]

What was your income during that time?

[@bubblegodanimation4915]

Navy Fed is great!

[@gibblespascack1418]

Congratulations! That is a tough road to go down. My first loan out of college was a car loan. (I worked through college and paid as I went). For my car loan, I paid 1/2 my monthly income into the loan($823 which was 3 car payments a month) and lived on the other half. It took 18 months to pay off the car(ate lots of kraft M&C). After I was done, 500/mo went into a brokerage account and the rest into 401K. As I got raises, that additional percentage went into 401K until I hit 16% the max. So have a plan and execute that plan with the money that you are now not paying into the college loan program... Good luck.

[@xaldath4265]

If you paid it off in 2 years, that refinance didn't make much difference. Good move on both accounts, though.

[@witherspa]

I graduated from medical school with $250k in student loan debt. Once I got my first job out of residency, I hammered down and paid it off in 3 years. Now I have a well paying job and secure employment for the rest of my career. Without student loan debt, the only people who could become doctors would be those already wealthy. There’s no other way to pay $50k a year in tuition as well as living expenses.

[@kvgolfa]

No Dave would tell you to save for 20 years to pay cash for school 😂😂

[@pnwflipper2089]

@@kvgolfano he wouldn’t- he frequently makes the exception for doctors. I’ve heard him say “unless you’re a doctor” etc etc many times.

[@kvgolfa]

@@pnwflipper2089 never heard that once. He still says to save for it. Or the fictitious "ask a hospital to see if they'll pay for it if you work for them"

[@tashatestino]

You're part of the very few lucky ones.

[@niebieskimotyl3308]

In Poland public Universities are free, and private ones are not expensive either, around 1500$ a year. That's the case in most European countries. School shouldn't cost a fortune.

[@gibblespascack1418]

Paying off the house? Just could not do that..... Why? The rate in 2003 was 2.5% at 290K. So we did not pay it off early, but on the other hand, over the 19 years that we had the mortgage, we added to our 401K, and built a brokerage account. By the time that mortgage was paid off, we had a portfolio that grew out to $4 million. So yea, math worked for us. It would not work so well at a mortgage rate of 7%. That 7% rate changes the equation.

[@jeremybarton7903]

this is why the ramsey way of one shoe fits all doenst work. do whats best for your family , as we all should.

[@pdxmusl1510]

So... the issue is in maybe what math you used. You cannot compare two percentages of interest paid and interest earned and determine the outcome. You can have the largest spread possible and i can show you examples of situations where its more advantageous to pay off the mortgage first.. invest first.. or its break even and doesn't matter. As example of my case. I have a 2.875% loan as I recall. But.. in my situation the break even point is 20 years. It doesn't matter which one i choose. In 20 years my net worth would be the same. What will be more influential is basically luck & time. Not which one i choose. There's technically a 20k advantage to paying it off early. But the final numbers are so close, I could make 25k additional just by one good lucky market timing. Or loose 25k. So in my case I've chosen to pay it off early because it makes no difference and it will be nice not having the payment. The issue is in the slope of interest payments and how you realistically would pay. Vrs the alternative plan. If you lay out the amortized schedule fo all these, theres large sections where your litterly making tiny amounts like.. $1 if that off this plan a month. Where just choosing to not take the guacamole once is a better financial decision than leveraging your home. In some situations it's goes negative. I don't disagree in that leveraging a loan can be a good thing and I disagree with Ramseys hard line stance. I recently just got done with one loan. I paid it off early because the return rate in a few months would become so tiny it no longer made sense. But you have to do a break even analysis. Not compare percentages.

[@gibblespascack1418]

@@pdxmusl1510 In 2004 the calculations went like this. My mortgage at 2.5% on 290k was kind of normal for that times(we had 20% down payment, so equity was fine). The calculation involved an estimated go forward fund growth rate of 6%(It is actually ~12%, but that is now historical). We ran through a 50% decrease in portfolio value in 2008 but held and added during the dip, then it came out stronger. After 2009 the fund growth was more than the total remaining mortgage for the first time. From then on, the only time fund growth was less than the value of the mortgage was in 2011, 2015, and 2018. 2018 was almost a recession, but the Taxes and Jobs act kicked in and averted it. So math worked for us. Fortunately the lost decade(2000-2010) was only a paper exercise, but for us investors is was not a lost decade. If I did not have that early start, I might not have ended up with the same net worth. Starting early has a lot of advantages, which is lost in the "debt is bad" at all costs approach. Sometimes, selling an investment, can cause more harm than letting it ride. That was the case when we purchased a personnel agency in 2013. Yes it has provided 10 years of dividends(the Romney plan), but not value growth with the management team. So it has been good from a tax perspective, but not great for the portfolio increase value. (it is kind of like a boar anchor or a cash cow). Good luck with your plan.

[@andresprieto3323]

Sounds like you did a little bit of both paying down the house early (since you mentioned 19 years) and invested a very healthy amount throughout the years! I think that's the root of what they're trying to teach, being able to get to the freedom to use your margin towards the goal you choose to pursue; i.e. investing more, paying down the house faster, or both if possible! Either way, you've set yourself up pretty nicely and hopefully more people can understand that they can do the same.

[@gibblespascack1418]

@@andresprieto3323 Yes, The Money Guys talk about this too. "This beer cost me $88. It is the advantage of starting early with building the portfolio. But the only way a portfolio grows faster than a house is if it is larger than a house value. In my case it is like buying 2 houses at once.

[@TammyMayCormier]

My student loans have been paid off for years and I still feel nauseous when people talk about student loan interest rates. It took me 9 years to pay of $70 000.

[@nandojuace]

The right choice of an investment has always been a big problem for me I know picking a wrong investment will leave a big scar in the future.

[@LolMan-qy9cc]

It’s really heartbreaking to see how inflation and recession impact low-income families. The cost of living keeps rising, and many struggle just to meet basic needs, let alone save or invest. It’s a reminder of the importance of finding ways to create financial opportunities. You've helped me a lot sir Brian! Imagine i invested $50,000 and received $190,500 after 14 days

[@bombasticlove76]

Absolutely! Profits are possible, especially now, but complex transactions should be handled by experienced market professionals.

[@quantarrow]

Finding yourself a good broker is as same as finding a good wife, which you go less stress, you get just enough with so much little effort at things

[@IshrakHossain-rt8is]

Brian demonstrates an excellent understanding of market trends, making well informed decisions that leads to consistent profit

[@icucmerc]

I'm surprised that you just mentioned and recommend Mr Brian Nelson. I met him at a conference in 2018 and we have been working together ever since.

[@chrisbaker2669]

My favorite type of debt is “Debt Free”

[@roythousand13]

💪

[@CentsibleLivingWithMoneyMom]

I really like the peace of mind of having zero debt. I can live below my means this way. BTW George, I just made a home made key lime pie. I wish I could mail you one.

[@phelps078q]

Hit 200k today. Thank you for all the knowledge and nuggets you had thrown my way over the last months. Started with 14k in last month 2024. .......

[@JeffreyScott-zg1wj]

This seems like the worst period.Even the market are now very unpredictable. Started investing recently when the market prices were a bit high,today I am more than 60% down!

[@phelps078q]

Christen wilburn was my hope during the 'bear summer' last year. I did so many mistakes but also learned so much from it, and of course from christen wilburn.

[@SmithNatasha-hc7mq]

Don’t be confuse buying the dip in a bear market, with guaranteed future returns. Just because that company is down 60%+ from ATH does NOT make it a sound long-term investment. Make sure you’re investing in great companies. kudos to Christen wilburn

[@JohnsonCory-ym3cr9075]

I'm a born christian but sometimes I feel so down of myself because of low finance but I still believe in God.

[@Chioma-cz5ud]

This summer is making me poor, please I want to join the moving train. Much appreciated!

[@freedomring3022]

Yes for the type of people the Ramsey team are trying to help, all debt is bad. They are helping the person that is buying a $300 TV and then paying for it over 5 credit cards because all the cards are near maxed out. So yes, these people should stay as far away from debt as possible.

[@jpoppinga8417]

Agreed

[@LoyalSol]

Yes you're the hero who is perfect, and everyone else is stupid. Thus only you are special enough to handle debt.

[@ThatGuysGuitars]

A mortgage isn’t “front loaded” It’s simply debt, and you’re paying interest on the amount you owe. “More goes to interest” in the beginning, because you aren’t paying much in principal. That’s why you pay more, or have a shorter term loan

[@danieljohnson4418]

Correct. And this is why I laugh when Kamel, et al. claim to be "money experts."

[@jayc4715]

@@ThatGuysGuitars it is from loaded..most of the front is loaded with interest then it tapers off

[@channell11]

You're right, debt is debt. There are just a variety of ways in how debt is structured and terminology to describe them. Like you have fully amortizing, variable rate, balloon payment, interest only, etc. "Front-loaded" is just a term to describe the very situation you said-that in the beginning of the loan more of the payment goes to interest. So yes, mortgages, auto loans, etc. are front-loaded by this definition. It's like investing in reverse-an investment account grows faster as the balance increases, and debt principal pays down slower the higher it is. It's just the inherent reality of fully-amortizing loans with a fixed interest rate and consistent monthly payment terms. This is why people advocate making extra "principal only" payments, particularly early on in the mortgage because it reduces the balance you pay interest on before it can accrue.

[@ThatGuysGuitars]

@@jayc4715 no, it’s not. And Dave Ramsey himself has debunked it. Loans are “amortized” - meaning, the amount your default payment is set to, is based on the amount of your loan, and paying it off over X years. Saying it’s “front loaded” is a misconception. If you suddenly drop a massive chunk of money towards the loan, in month (2) of a 30 year loan, it makes a massive difference in your principal/interest split, because the amount your paying interest on, suddenly went down. The amount of interest you pay, is based on the total amount owed on the loan at the time you’re paying it. Period. It doesn’t matter if it’s a 1 year loan, or 15 year loan. It’s just extrapolated over that amount of time

[@andresprieto3323]

I think he's just explaining it very simply for those that don't understand how amortizations schedules work. Most people just see the monthly payment determine if they can afford it or not without knowing how much is going towards interest in the beginning or throughout the lifetime of the loan.

[@Zatchwen]

I love the way you brought up the sponsor tello haha

[@nmccw3245]

The ONLY good debt is the money other people owe you. Bonds, T-Bills, and Preferred Stocks are a few of my favorite.

[@rockinroland0]

What are preferred stocks? ETFs?

[@Sexy40baby1]

Explain what a preferred stock is

[@JOEY-HUFF]

I'm 56 and my wife and I are VERY worried about our future, gas and food prices rising daily. We have had our savings dwindle with the cost of living into the stratosphere, and we are finding it impossible to replace them. We can get by, but can't seem to get ahead. My condolences to anyone retiring in this crisis, 30 years nonstop just for a crooked system to take all you worked for.

[@NadeemRene]

I feel your pain mate, as a fellow retiree, I'd suggest you look into passive index fund investing and learn some more. For me, I had my share of ups and downs when I first started looking for a consistent passive income so I hired an expert advisor for aid, and following her advice, I poured $30k in value stocks and digital assets, Up to 200k so far and pretty sure I'm ready for whatever comes.

[@CollinsShappell]

In the 80's my Dad worked a modest job, Mom stayed at home and raised the kids, and they lived a nice middle class lifestyle including owning a home. Nowadays both I and my partner works and can barely afford to make ends meet. Soon the kids and family dog will need to work to keep this household going. It's the destruction of the American dream right before our eyes.

[@MartinesGuziczek]

If you are not in the financial market space right now, you are making a huge mistake. I understand that it could be due to ignorance, but if you want to make your money work for you...prevent inflation

[@DavidMoore987]

I was a late bloomer,but Mary Callahan Erdoes Services, my financial advisor helped me bring it all together and got me into crypto. Now retired for 6 years at 72, my managed portfolio with Tracy generates about 9k a month on average more than my RMD on my retirement accounts. Not real big, but together with SS we're able to live reasonably with 160k a year. While being mortgage free.

[@DavidMoore987]

She is really a good investment advisor. Was privileged to attend some of her seminars.that's how I started my own crypto investment

[@niebieskimotyl3308]

Fun fact, in Poland mortgage payments also change, it was always close to impossible to get a mortgage with fixed rate. In 2012 it went from 1,75% up to 5% in 6 months. I had to pay 50% higher amount. Thankfully I didn't take huge mortgage, but there were lots of people in trouble back then. Just like today, when rate went from 0% (during plandemic) to 7,5% 3 years later.

[@nukeawaynukeaway3466]

Soooooo Student Loans: 40K in debt. 80k job. Paid off in 2 years. Yes, dual income. Point being, the degree allowed for a job that paid for itself. Have a plan. Heloc pretty much bad. Agree. Mortgage is good debt, so long as you dont over extend. 30 yr mortgage allows you to buy more house at same price. 15 year mortgage isn't realistic following your own rules. Times have changed. George, stop drinking the Ramsey Kool-Aid.

[@tecreates2384]

My “good debt” is using my CC rewards to buy gift cards on 10% off sale gift cards ($100 gc for $90 rewards). Which I use exclusively for to supplement a regular quarterly expense (already planned in my “personal” expense). It doesn’t supplement every quarter, but every year I get a freebie (and savings treat) a bit of a boost to splurge on emergency supplies (savings) or an upgrade for comfort (beneficial saving rewards (budget item + rewards) cuz I have no debt).

[@kevin_segura]

“I love you” to your carrier is wild 😂

[@christianbaer2897]

Don't kid yourself. He is not using tello...

[@BridgetMiller-]

Since the debt crisis could unleash carnage on the stock market leading to economic downturns. We need to be prepared for potential market volatility. how can I secure my $80K stock portfolio against declining?

[@Thompson-e7h]

It's a good idea to seek advice at the moment, unless you're an expert yourself. As someone who runs a service business and sells products on eBay, I can tell you that the economy is struggling and many people are struggling financially.

[@Grace.h-t8o]

Agreed, I’ve been investing in the market for 11 years now, last 4 years with the help of a fiduciary advisor apparently due to the covid-19 pandemic crash. Throughout these years of guidance, I've been fortunate enough to 10x my return as a DIY investor, summing up nearly $1m ROI as of today.

[@berniceburgos-]

I've been looking to get one, but have been kind of relaxed about it. Could you recommend your advisor? I'll be happy to use some help

[@Grace.h-t8o]

Jessica Dawn Walters is the licensed coach I use. Just research the name. You'd find necessary details to work with a correspondence to set up an appointment

[@Steven-u2u]

I just looked up your coach and she seems very rich. Need to change the trajectory of my finances, will definitely work with her

[@bubblegodanimation4915]

Given the fact that half of people don't even graduate I would understand why half regret the debt.

[@dominileather764]

Not sure, we took 1.05% fixed mortgage rate for 25 yeas in France 5 years ago, and no matter how I try to convince myself to follow your recommendations, it just does not make any sense what so ever.

[@justinsawatsky9431]

In canada, good debt is referring to debt that you can tax deduct. So converting your nondeductable mortgage into a deductable one (ie Smith Maneuver) is converting a bad debt to good debt

[@scaled-daddy22]

15 year fixed but someone loses job and cant cover what do they do then

[@tomaszp2027]

Use emergency fund, find new job, sublet, sell the house?

[@rhaythe]

If you've paid 20% down on the house on a 15-year fixed, then you have equity. You can always sell and walk away with principle for the next place in a crisis like the one you mention.

[@vincent8900]

​@@rhaytheif you hit hard times your supposed to just sell your house? That's casual and sound money advice 🤡

[@Captaine_Crunche]

@@rhaythe usually one loses a job in a recession, where housing prices dip down and you could go underwater.

[@Captaine_Crunche]

you dont buy a 15 year, you buy a 30 year to minimize your risk, ideally put 20 down or have a high income that would afford you to pay it off in 15 years or less

[@jnewby74]

The logic doesn’t follow when talking about paying off the house early. If it’s a low interest rate3.5 or less, you can make more than that in a HYSA and still come out ahead if you don’t want the risk of the market. Also, you can’t dump your mortgage payment into investing once the house is paid off, you can only dump the P+I portion of your mortgage. You still need to pay property tax and in a lot of cases Home Insurance. They always mislead with that piece.

[@pdxmusl1510]

Nope. You absolutely cannot compare percentages and determine which one is better. Its based off of bad math. You have to project further into the future. Both approaches converge at a break even point. That point will help you decide which approach is better.

[@NiceGuyDan08]

​@@pdxmusl1510You also need to factor in that mortgage interest is simple interest and investing interest, even HYSA, is compounding interest.

[@azemodeuslphd5292]

@@pdxmusl1510you don’t know what you’re talking about.

[@BrooklynHarlow21]

*Thank you😊 for this video, do you offer account management or have any recommendations?*

[@KelvinAnthony5]

If you’re using a good manager, it’s easier to earn from the market

[@JeffJason-]

That's true. a lot of people today have been having lots of disappointments in trading in light of helpless direction and awful consultants

[@JessicaWilson7w]

@@JeffJason-I've been trying to trade but I keep making losses and it's frustrating

[@JessicaWilson7w]

Could you suggest a consultant for me?

[@Russelbobby45]

VICTORIA WALTERS HAYWARD is exceptionally good, i believe you should give her a try

[@roburb73]

We all have opinions, just like this is an opinion. Yes, for the majority of people it doesn't work. However, when it comes to my 30 year 2.25% mortgage that accounts for 6% of our income, that’s good debt. we invest upwards of 30% of our income. admittedly, even if I paid off our house, I wouldn’t take that money and invest it because we invest above what our goal is. I agree with you on student loans, credit card debt, and a HELOC. I can't with the low-interest mortgage 🤣

[@rebeltheharem7028]

Good debt: Mortgage to pay for a home you'll live in for 15+ years with a 20% down. Good debt: Student loan for a career with high demand (so basically all medical, some stem, and no liberal arts besides accounting or finance). The above two are always investments into benefiting your life in the future as an inflation protection and forced savings, or improved future earning potential. Everything else is a mixed bag, and more often than not, bad debt.

[@channell11]

"Good" debt is merely debt that has a potential upside-like an appreciating physical asset (house) or that can drive future earnings (business/student loan), etc. Debt is still risk, you just have to determine whether the reward outweighs it.

[@Thurgor_Supreme]

When rates are low enough that you can rationalize arbitrage, the debt junkies buy everything in sight and create out of control inflation. There's no such thing as good debt

[@laundrygoddess4]

I had a Manulife one account. It's like a giant line of credit instead of a traditional mortgage. They don't front load interest. Paid my house off in 7 years with minimal interest. Mortgage debt is still good debt as long as your house is increasing in value.

[@commonsense-og1gz]

i disagree with the mortgage subjects. for the basic mortgage, don't buy a 15 year mortgage over a 30, because the costs per month will be higher, and early on people will have lower earnings than later, so getting a standard 30 year fixed rate, then throwing more into the payment later on will be better. as for a heloc, not everything on a house is about design changes. one must consider maintenance issues with the house. cost of electrician if there is faulty system, septic replacement for more rural settings, water and structural damage, roof replacement, siding replacement...etc. there are a lot of possible issues that would require immediate liquidity

[@ryandefranco7740]

I've never seen anyone who is doing well financially who has taken out a HELOC before.

[@LuisRivera-tt2ub]

That’s cause real adults won’t talk to you about their personal finances and business

[@NiceGuyDan08]

I talked with a multi-millionaire real estate investor last week that took out a HELOC for an investment property a month ago.

[@Drew458]

@@NiceGuyDan08 It's very possible, but it's also much more leveraged in risk. You could make the argument to invest in crypto given its high ROI in recent years- yeah you can earn big, but you can also lose big. Same for taking out a HELOC on an investment property. If you can barely make the payments, and suddenly your tenant moves out and trashes the place, it could cost you the property, potentially losing hundreds of thousands of dollars. It's high risk, high reward.

[@Thurgor_Supreme]

I'll probably be doing a HELOC as a down payment for whenever I move into my new home. Contingent offers are almost impossible in my state and the consumer protections are trash if the contract falls through

[@dog7881]

Same

[@bvoyelr]

Thank God publicly traded corporations don't listen to this advice, because "buying a share of a company" is a semantic leap away from "the company taking out a loan from you." The fact that most retirements are funded by growth driven by this kind of debt suggests that there is, in fact, good debt: debt incurred in pursuit of growth beyond what you're paying to service the debt. That's the key. The debt has to be funding growth, not just buying neat widgets. In your examples, student loans are the only ones that might fit into this category, though that situation is currently way more complicated than that. (i.e., college isn't necessarily a driver of growth anymore. Gotta make sure you're getting the correct education)

[@cristianomarinelli3252]

This is only really applicable for personal finances. Many cash-intensive businesses require debt to expand, take advantage of situations and run the business efficiently. Debt is only good when it is able to make you more money.

[@mhodge0890]

Idc George for us average people it’s 30 year fix rate mortgage

[@ssdskully]

Can't wait to pay off my mortgage in the next 2-3 years. The first thing I'm going to do is invest that cash in the stock market to save for a rental property or purchase a business in full in a couple of years... rinse and repeat until I can get the next thing faster and faster, like Dave said.

[@pnwflipper2089]

George-we need a video about 529s. I’m feeling overwhelmed by all the different states’ plans- Which one is best ( there are likely going to be different answers for different people)- so if I am in Washington state should I go with my own state or another one? and how do you even go about opening one?

[@SylviaLaidlow-Petersen]

George, what would be your view on the British student loan where they loan you the cost of your college fees, but you only start paying back when/if you earn above a certain salary threshold. So most graduates never pay off their loans and when they reach the age of 60 the loans get written off. It sounds crazy doesn't it. My view is that graduates have no incentive to earn above a certain threshold and they often tell each other - hey, this is great! We will never have to pay it all back! But it is there all the time, hovering and haunting them. Which is why my daughter has decided to pay off her college fees whilst she is a student, with the money she earned before starting college.

[@JewelJones-u2s]

My loan qualified for public service forgiveness was paid off in full

[@RishabhJain-pw3rx]

As long as you have a plan to earn more than interest without losing principal loan amount you are good to go let's not make it complicated.

[@CutterGuard]

Love you George

[@VirginiaHapa]

The Ramsey group confuses me, on the one hand, you poo poo on the idea of folks taking advantage of interest arbitrage- pay off that house, etc etc. instead on using the extra money to invest- but then you have Ramsey himself advocating for a strangely high retirement withdrawal based on historical market performance. Those two things are not in alignment, IMO.

[@Noneya-b7t]

I dont get the correlation unless retirement money is borrowwd money ie money that is NOT YOURS.

[@VirginiaHapa]

@@Noneya-b7t my point is if one uses historical market performance to make one argument -in this case Ramseys suggestion of a higher withdrawal rate- then it should be used in the case where folks are taking advantage of interest arbitrage. That would be consistent, IMO.

[@bhaalgorn]

The point is is that ramsey constantly says 8% withdrawal rate is good for 30 years of retirement when the modern research is showing its now much closer to 2.7%.​@Noneya-b7t

[@nickstark8479]

To me, seems like the Ramsey crew is more interested in minimizing financial risk than becoming "wealthy". If you have near zero risk tollerance, then maybe their baby steps are the right path for you.

[@Krinbo]

I don’t get the OP’s point either. And btw, those rules exist for the goal of financial peace, not financial optimization. To Ramsey, the pathway to peace is in part through eliminating your debt and maximizing your margin because margin equals choice when shit hits the fan. That pathway is also through living and giving like no one else: even if I don’t personally agree with Dave’s 8% rule, I understand where he’s coming from on the basis of this “live and give” mentality.

[@edartis]

I feel like good debt or bad debt depends solely on the interest rate.

[@IrisP989]

Our debt is 2.49% (car), 2.99% (mortgage), 3% (another mortgage).. My husband doesn't view these as bad debt. Still reached a 7 figure net worth with it.

[@edartis]

@@IrisP989 because they're not bad debt. No need to use additional funds to pay it off. Invest that money instead

[@pdxmusl1510]

Nope. Not mathematically at least.

[@channell11]

Not really, it's more about what the debt finances. Property that appreciates in value or investments that generate income are generally seen as good. Consumer debt or debt on depreciating assets generally isn't. Regardless, debt is risk. The math in play is whether the potential reward exceeds the risk of debt.

[@nicpadilla9836]

I love your advice for people in bad debt but it's horrible for growth. We have 650k in debt but our gross worth is 2.5 million at 37yrs old. Sure we could sell 2-3 buildings and be debt free but our cash flow would drop 5-7k per month. At the rate we are moving by 45-50 we will be debt free or we could sell now and instead of working/living off the cash flow of our buildings I would have to go work for someone else.

[@odez180]

Why is a mortgage acceptable but student loans aren’t. Both can be beneficial and at the same time risky

[@Krueger444]

45 seconds in - the debt you'll let us get away with is a 15 year mortgage whose payments are less than 25% of take home. Idk how gambling plays on Ramsey, but who wants that bet?

[@pdxmusl1510]

Ramsey discourages gambling. Investmentingv is in no way gambling.

[@channell11]

A mortgage that is less than 25% of take-home and minimizes interest is pretty low risk, since you've got a cushion if anything happens. These folks that are spending 50%+ of their take home on housing are just asking for trouble since that's stretching pretty thin.

[@DDDD-of3hv]

15 year loan is one thing to think about, but a 30 year also gves you the breathing space, like loss of a job, medical bills, etc.... but.... BUT..... you need to be responsible and get it paid off as fast as possible. just something to think about as it may/may not help..... always think down the road and throw out what if scenarios...... Risk Anaylsis 101..... but then again, if you are borrowing money, chances are you can't afford it......

[@channell11]

A lot of people aren't responsible, that's the idea. They go in with the intention of paying extra but that doesn't happen in reality. This is why they recommend the 15 year mortgage but also 25% or less of take home income-which means you've got breathing room if something happens.

[@DarthKalkillus]

Ok, the whole pay off the mortage or invest argument. If you decide to invest for 4-6 months...or put the extra into house payments. Pay off the house first. If you die, there is less of a mortage to have your kids/spouse pay off...and that investment egg isn't all that big. So, in opinion, you have to think of others in this case first...you may die tomorrow. Or invest, but die tomorrow...and you've helped no one.

[@MrLordUltimate]

George: People are putting off things like saving for a home or retirement Ramsey Solutions: Pay off your debt before saving for a house Also Ramsey Solutions: Pay off your debt before putting money in your 401k This probably wasn't the best argument to make

[@channell11]

It's mathematics. It makes sense to plug the leaks before bailing out the boat. Since debt generally has a significantly higher interest rate than investments or savings, you're not maximizing your potential by continuing to service debt at 25% in hopes of gaining 8-10% in the stock market.

[@doomy_doomy2225]

I got a 15 Year at 3%. I pay $50 extra each payment. Credit karma says I should pay off my home a year early.

[@danayarbrough1494]

Let’s be honest. Student loans are not bad, however if a student chooses a degree with no ROI for a career, the debt from that loan could be bad and have long term negative consequences. Many people took loans, got great degrees leading to high paying CAREERS for which they wouldn’t get without the loan. Can you do it different? Yes, there are always exceptions but a blanket statement that student loans are bad is not factual.

[@danieljohnson4418]

I know someone with $300,000 in student loans (undergraduate studies and law school). He is also making approximately $250,000 per year. Sounds like "good" debt to me. P.S. - Your first argument against HELOCs is weak, as those qualities are also true of a mortgage (secured by the real property and if you fail to make your payments as agreed, you subject said real property to foreclosure proceedings).

[@jeffgomes98]

Nice Segway

[@barnabusdoyle4930]

Am I the only one wanting to comment how the examples of debt George gives in this video are in no way good debt. Good debt would be debt that gains you income in return for that debt, not even student loans really fall into this category. Good debt is mortgage on a rental property, taking out a loan for a large piece of equipment to better build on or expand your business to heavily increase your revenue. Sure there is some risk in all of this, but that’s why you should have your emergency fund handy.

[@sims398]

Fashionable Crocs😂

[@Destide]

Crocs are always good debt

[@1129402]

The only good debt is a paid off debt.

[@TJ-Stackin]

No, good debt produces cash flow.

[@IrisP989]

So our rental with a mortgage is bad debt even though it produces us money every month and we have money left in our pocket after paying the mortgage, HOA, property tax, etc.?

[@TJ-Stackin]

@IrisP989 that's considered good debt. An asset that puts money in your pocket. Dave Ramsey doesn't like risk with his assets that's why he preaches no debt at all.

[@CHENTIA4735]

@@IrisP989I have more than $2 millions bad debts that generates $80k cash flow. I guess it is not that bad😊

[@damemethief]

If this statement was true, the bond market wouldn't exist.

[@SilentSputnik]

Good isn't a great adjective. You should pay off bad debt with a vengeance and pay minimum payments on good debt so you can invest more.

[@CHILLknowsfootball]

George doesn't want to uoset daddy. I will always take out low interest debt to buy appreciating assets.

[@phykios]

The math does NOT add up for paying off your mortgage early vs investing, especially if you have mortgage rates of less than 4%. The opportunity cost of paying off that mortgage early will cost you thousands down the road. That house you live in will not fund your retirement like investments will. Your primary house shouldnt even be an investment. You're not just going to sell that and go homeless? Terrible "financial advise"

[@timlemmon2332]

Good debt is debt that brings you income. Financing a rental property that brings in more than you pay is good debt. Buying a reliable car so you can get to work and not lose your job bec5your old car keeps breaking down on you is good debt. A car at least 2 years old so you don't get hit with major depreciation. A loan ro start a business is good debt. Student loans can be good or bad. You must work in an industry where you will be able to easily afford to pay it back. Have realistic ways to eatn money from your education.

[@jeremybarton7903]

thats not true about student loans. i paid 1/8th for my teaching degree as my coworkers and we all make the same..

[@sanauj15]

There are many reliable used cars that you can buy cheap in cash. No need to finance one.

[@timlemmon2332]

@@jeremybarton7903 First of all, congratulations on being able to pay cash for your education. It is something many people cannot do. This does not disqualify them from getting an education and improving their lives. Second, since you are a teacher, please learn proper sentence structure and how to use capital letters.

[@timlemmon2332]

@@sanauj15 It would depend on your budget. Some people may not have thousands of dollars available to pay cash for a car, but they may be able to afford a couple of hundred dollars a month for payments. Making those payments is a better option than losing your job for not being able to make it to work.

[@reviewsbygen5591]

I have heard people call credit card debt “good debt” because some did a balance transfer to another card. 😂 people are so quickly satisfied with their decisions

[@channell11]

Satisfied with their delusions more like. That's just kicking the can down the road. The credit card company offering that "0% balance transfer for 6 months" knows they'll be collecting that 29.99% interest on the balance and new purchases soon enough.

[@reviewsbygen5591]

@@channell11 yup the banks and credit companies aren’t our friends who look out for us! They’re the first ones making you homeless and your kids hungry.

[@jpoppinga8417]

Two types of debt. Bad debt and worse debt.

[@ddff5242]

You can move" Whereever you want....." ehhhh. I love ya george but that's a stretch.....

[@withonestonechannel]

Bro, you’ve been pushing that 15 year mortgage like it’s going out of style. All the KZbinrs you’ve collaborated with all disagreed with you and went for the 30 year. A 30 year is more flexible for the average Joe.

[@metaltera86]

Always go for the 30 year and pay extra like it’s a 15. And when life hits you hard then go back to the standard 30 year payment for a season

[@reviewsbygen5591]

Average Joe is broke af

[@nickstark8479]

​@@reviewsbygen5591Meaning they would be screwed if they got laid of during their 15 year mortgage and were forced to pay nearly double for their mortgage payment than what it could have otherwise been.

[@reviewsbygen5591]

@@nickstark8479 I think anyone who buys a house needs to have a large emergency fund. Not just 1 month of survival. At least 6 months of mortgage, utilities and other needs. Otherwise you’re house poor and it’s just waiting for stuff to go wrong. Things like a broken hvac system has ruined homeowners, which is so sad.

[@nickstark8479]

@@reviewsbygen5591 This is absolutely true. If you're minimum mortgage payments are higher your emergency fund would also need to be higher as well. In principle, I like the idea of locking in and forcing yourself to pay down the mortgage twice as fast, but it's definitely not the right move for everyone and does increase their "risk" within those 15 years.

[@TomEdwardi]

!I recently sold some of my long-term position and currently sitting on about 250k, do you think Nvidia is a good buy right now or I have I missed out on a crucial buy period, any good stock recommendation on great performing stocks or Crypto will be appreciated

[@FederickLeo]

As a beginner investor, it’s essential for you to have a mentor to keep you accountable. Kristine Lynn Weber is my trade analyst, she has guided me to identify key market trends, pinpointed strategic entry points, and provided risk assessments, ensuring my trades decisions align with market dynamics for optimal returns.

[@DerickSams]

I managed to grow a nest egg of around 120k to over a Million. I'm especially grateful to Adviser Kristine Lynn Weber, for her expertise and exposure to different areas of the market.

[@FederickLeo]

I don't really blame people who panic. Lack of information can be a big hurdle. I've been making more than $100k passively by just investing through an advisor, and I don't have to do much work. Inflation or no inflation, my finances remain secure. So I really don't blame people who panic.

[@DerickSams]

Without a doubt! Kristine Lynn Weber is a trader who goes above and beyond. she has an exceptional skill for analyzing market movements and spotting profitable opportunities. Her strategies are meticulously crafted based on thorough research and years of practical experience.

[@TomEdwardi]

nice! once you hit a big milestone, the next comes easier. How can i reach her, if you don't mind me asking?

[@andrewlangelaar]

You did not come after Crocs 😤

[@BitOfSaltAndPepper]

Kamel Kamel Kamel!!!

[@aas55]

George mentions that investments generate capital gains taxes but neglects to mention that mortgage interest is tax deductible. Why?

[@NiceGuyDan08]

Because they aren't trying to give viewers an unbiased full look at situations. They are trying to give you what they believe is the singular best way to go about things financially and only choosing to talk about things that support that.

[@personnesenki4521]

Never take more than 10 years to pay back your student loans. You're just going to hose yourself.

[@getinthespace7715]

There is no such thing as good debt. Debt is like a parasite sucking life out of you. The more debt you go in, the more of your life you are giving up.

[@jaybah836]

There is no such thing as good debt. Debt is terrible

[@Poindexter2291]

They should stop calling it "good debt" and call it "necessary debt." It's never good to go into debt but sometimes the payoff is worth it. Individuals educated in finance can make those decisions for themselves. Problem is, most people know VERY LITTLE about finance, because its not taught in school. And parents dont teach it because the parents often dont know either.

[@BTrain-is8ch]

Debt is a tool. It's not innately good or bad. You either use it productively or not. Student debt can be used productively. A mortgage can be used unproductively. A credit card... ehhh.

[@desiv1170]

It's true that almost half of people taking out student loans said they regretted it. But you do need to take that in context... How many of those people would also have regretted not going to school because they didn't take out a student loan? Or would they have said they regretted not going to the school they wanted to go to, because they didn't take out those loans. Not saying those choices were good or bad, just that some people will always say they regret their choice. ;-) While I agree, a LOT of student loan debt is bad debt, I'm not sure it might not be like a mortgage... Bad to have any debt, but possibly a net plus on your life in general. For example, I made a lot of bad decisions financially growing up. I like to say I was an intelligent but stupid kid/guy growing up. ;-) I loved reading and I decided while I was growing up that I was going to be an English major. So I did that. Went to school as an English major. I realized in my junior year that it wasn't what I wanted to do in my life... That I had no idea... I basically flamed out in my senior year, realizing I hadn't thought about what I REALLY wanted to do with my future (beyond "being an English major") and now I had debt and no future... It was a very melodramatic period in my life. Current me would like to go back and slap past me a bit. ;-) So I didn't get any degree and floundered for a few years thinking I had wasted my life... Then I grew up (finally) and realized that I was good with these computer things... Got a job at a small telco (back then, you didn't need a degree to get a computer job, you just needed to convince them you were good with the tech stuff), and got my life back on track. Eventually paid off my defaulted student loans, and I'm now about to retire and I've had a great life. I think college was important for me, in that it was my introduction to "real life" that I apparently hadn't clicked with before. So I made mistakes (a lot of them), but don't regret the student loans. That said, I didn't take out HUGE student loans. They were painful, but not an albatross ruining my future, and school can be CRAZY expensive now. I would seriously caution about taking out HUGE student loans. But for me, I look back at it as a $40k (with interest) life lesson. Painful, but still positive in the grand scheme of things. Wow, that was supposed to be a short comment... Now you can see why writing/editor wouldn't have worked for me if I had continued with the English major path. ;-)

[@kabauny]

Wait, did I do this backwards? Was I supposed to get a new job, get married, have kids, travel, and save retirement before I gat a college degree? You’re so right, horse before the cart.

[@pdxmusl1510]

No. But you have college choices. You also can choose more or less debt with your behavior. You also need to choose a degree that can lead you somewhere. You are not choicless to end up with 100k student loans. You got there by choice. To your point.. sometimes yes. Maybe that means you don't go to college right away. You have choices.

[@DDDD-of3hv]

buy only what you can afford to pay off and you wont have to worry about debt...... NO debt is good... if you don't have the $ don't buy it, don't borrow it live within your means, and you wont have to worry about empty politican promises....

[@PapaMarioNZ]

Why do you always tell people to get a mortgage on your show and when you're co hosting live and glaze over a plan to buy a home in cash, is it because it's secretly a .... good debt!?

[@stevensalazar6296]

45 years! Might as well not pay and invest what you would've paid in student loans.

[@reviewsbygen5591]

Student loans are so not worth it. The government will come for them and they will find your account, tax returns, home, etc. If there is anyone I would never want to owe to, it’s the government

[@foxa08]

Usually good debt is debt that makes you money, like a business loan. A mortgage is a liability (vs an asset), unless you're renting it out and whatnot. So, it's also a bad debt.

[@shelbyren]

Even a business loan is a liability. What’s to say your business will be profitable?

[@scaled-daddy22]

Truth is there isnt any good debt!

[@RalphNorton-x9p]

debt is financial cancer. some is worse than others but there is none that is good

[@pete5691]

Student loans are necessary for most who attend college.

[@mattcollins4550]

A 15 year mortgage is not possible for most people.

[@tylersimmons909]

I get Ramsey just want to help people but the bad faith in these videos is getting out of hand. And they act like we can’t do math when their math is just feelings.

[@GeorgeKamel]

Bad faith? Come with receipts or don’t come knockin

[@tylersimmons909]

⁠@@GeorgeKamel In the video with Caleb it was bad faith when the 8% withdrawal rate was brought up with an example then when the example proved you wrong it you said the hypothetical is insane big numbers. And in this video it almost always mathematically makes more sense to not pay off your mortgage early, even if after you pay it off you have more to invest earlier, you would’ve made more letting your money compound. If you have a 10+year investing horizon who cares if you can get a 4-5% guaranteed return if you can get 10-12 in the market.

[@evijade1]

Fashionable crocs ARE a thing!

[@bubblegodanimation4915]

Who the hell is not getting a better job because of debt?

[@guiltyred6144]

8:06 sounds like you were in, wait for it,bad debt. 🙃

[@danayarbrough1494]

Let’s be honest. Student loans are not bad, however if a student chooses a degree with no ROI for a career, the debt from that loan could be bad and have long term negative consequences. Many people took loans, got great degrees leading to high paying CAREERS for which they wouldn’t get without the loan. Can you do it different? Yes, there are always exceptions but a blanket statement that student loans are bad is not factual.