Why Shouldn't I Keep a Low Payment Loan and Invest the Rest?

Why Shouldn't I Keep a Low Payment Loan and Invest the Rest?
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[@foxhound34]

When you lose your job unexpectedly say, I don't know from a pandemic, the bank still wants their money each month and doesn't care is if you have low interest or no interest loan. That's why.

[@minkekj]

@@DK-mc7mp but, forbearance doesn't mean forgiveness. That money is still owed. And I think we're gonna aee a massive surge of evictions and foreclosures here soon because of that.

[@kirbyrules55]

at that point use your investments to make the payments. If you made more % then you were being charged. You should have the same payments you were going to make and more. typical dave ramsey thing

[@bindingcurve]

@@kirbyrules55 Do you calculate the risk into your equation? Or is that something for the other guy?

[@radix3d]

If you are putting your money in an account that pays more than your debt, then you will have more money to pay back your debt with. So you're actually in a better financial spot if you lose your job by not following Dave.

[@minkekj]

@@radix3d tell me you didn't watch the video, nor understand math, without telling me you didn't watch the video nor understand math...

[@doclocke]

I love when Dave slams the mute button on the caller and just casually keeps going. Hysterical.

[@toeknee5565]

They also tried hiding it with a graphic haha

[@AndreOliveira-cu3fy]

:D ! hahaha yes :D! woooo

[@jialiang4197]

Finally, it makes sense now, lol. at 4:55

[@ryugurena3327]

Kinda rude

[@JamesWilson-sb9iq]

@@ryugurena3327 I think it's awesome!

[@stephenshapiro8404]

Hmm. Love this lesson! Very Happy I listened to Dave, ditched the debt, and been debt free for decades. Debt has hidden traps that are non-intuitive. Respects.

[@LifeofKairo]

For people who struggle with their finances it might be better to pay off the debt. Businesses however, leverage debt all of the time. I wouldn't have been able to start my Airbnb business without taking a small loan. I knew my numbers though and based the loan on the worst case scenario so that I was sure that I would be able to repay it.

[@stevenporter863]

You nailed it.

[@blackworldtraveler3711]

Yup. There’s a reason why debt free,paying off my home quickly, and paying cash for my rental was priority. Many don’t pay off debt and rationalize the low interest rate to extend there payments to invest. They have no savings,emergency fund,or backup plan. Then there’s a crisis or “stuff happens” and they go deeper into the hole. You question their actions and they get angry like they do in comment section of these videos. This financial epiphany wanting to save and invest should have happened before getting in debt to begin with.

[@nic_ccc3366]

@@blackworldtraveler3711 This is exactly why Dave can't bring himself to advise people to keep on their debt. He knows that once you're in that mindset that "debt is ok", most people will fall further and further into the debt snowball.

[@jimroscovius]

Businesses leverage debt all of the time. They also go out of business all of the time. Watch Company Man videos and notice how many businesses have gone bankrupt because of debt.

[@LifeofKairo]

@@stevenporter863 Thanks Michael :)

[@JA-zh5xi]

This question comes up a lot. For people with a fair amount of financial literacy what this guy wants to do isn’t crazy. There is risk involved and I personally don’t like taking on that risk - it assumes the way things are will continue in the future. When they change you get into trouble.

[@MR3DDev]

I would like to see that study on millionaires he keeps citing. I do know plenty of millionaires that leverage debt to buy real state. That being said, most millionaires did not become wealthy just investing, most of them have a high paying skill or sell a product that people want in mass quantities.

[@williammall3117]

He basically conducted it himself

[@stevenporter863]

Yea, I would like to see it too. How old is the data?

[@betterhomesnc2437]

It is probably only people that have followed his program that he interviewed. How many people do you know that are wealthy that take surveys diving into their finances?

[@terrencetucker6354]

Research Mark Cuban. One of things he tells ppl that wants to be wealthy is to pay off debt

[@terrencetucker6354]

@@saulgoodman2018 bro the question above was to site millionaires and billionaires who say pay off debt. That was what I answered. You can do whatever you want. I wasn’t picking sides so go on with that foolishness

[@loomsmcgooms824]

Concept of Net Interest Margin. Mathematically it works, for banks and other institutions, but consider the wisdom Dave is saying. Remove the shackles of debt to run free, rather than running with shackles and potentially trip.

[@korn111685]

RISK.. Too much debt = too much risk. When life is good and money is plenty you float the debt. Life happens. Plans changes. No debt, low risk, options, freedom. At some point you realize it’s more than math.

[@FURYCHAOS184]

You need some risk to get rich. Nothing is binary. Getting a fixed long-term low-interest loan to invest in high-growth businesses is a no-brainer if you’re young with a stable career. You need to think like a business. Would a productive business do that? Yes.

[@edd06001]

The Risk adjustment is a valid part of the equation. But there is a huge difference between risk management and risk elimination. Risk Elimination is what Dave proposes, but unless you can pay off your debt instantly or within a short period of time, you are losing cash flow towards more promising returns. Risk management is about understanding given your life situation (Income, Expenses, Lifestyle) and then determining what is an appropriate amount of risk to leverage yourself. I think Dave understands that too but only allows it for appreciating assets such as mortgages.

[@tcgtpl]

Ramsey Solutions doesn’t make a difference between high interest / consumer debt versus low interest debt. It’s debt, and an easy message for his target audience who are emotional-based when it comes to finances. Those who have a grasp of basic math & can compare interest rates aren’t in his target demographic. I agree with 80% of what he promotes, but this is where he’s wrong.

[@Jon-nz3dm]

@@tcgtpl I'm with you on this. His target audience have horrendous decision making skills and need a simple but strict plan to get out of debt. For people with more common sense and discipline, there are better options.

[@MikeThePike316]

How is eliminating unnecessary risk not a form of risk management? I don't think the two are mutually exclusive.

[@MikeThePike316]

@@tcgtpl - If ppl could grasp basic math, they wouldn't be in debt to begin with. I don't think telling ppl to avoid debt is for purposes of reaching an emotional audience. I think it's exactly as he says: millionaires who built wealth did it without debt. Why prolong the inevitability of paying off a debt and racking up more interest when you could just pay it off and use that former debt payment to invest? Moreover, why expose yourself to the risk of getting laid off and being unable to make those payments?

[@gottesma]

@@MikeThePike316 Mortgage rates are lower than the CPI right now. I could pay mine off with about 12 mouse clicks, but why on earth would I when I can pay it back over time with cheaper money? I'd have to have rocks in my head.

[@pfeiffdog0811]

I realize why Dave takes these stances. He deals with those of us that have already proven to make mistakes and are bad with finances. But the truth is that this caller is right and is exactly what one warren buffet did. He purposely took a mortgage so that he could take what would of paid off his house and invest it. The rest is history. The issue though is most Dave Ramsey callers can’t be this disciplined and Dave instructs them accordingly.

[@TheFirstRealChewy]

Nothing wrong with using a low interest loan to invest and get a higher rate of return. The issue some people run into is when they rely too much on leverage while not accounting for the risk. Some people don't even try to get out of debt (good or bad). There are people who intent to use debt indefinitely and just die without ever paying it off. Just make sure that you accept the risk. It's nice that you can use debt to make more money, but what's is even better is if you borrowed money from yourself to invest for yourself. Since the lender (yourself) and borrower (yourself) are making money, it makes you that much more money. Plus the lender (yourself) is more forgiving should you fall on hard times.

[@dslunsford1]

I think his strategy is solid. Make a plan that anyone can follow. If you are disciplined and have a different strategy, cool-but don’t call Dave for advice. Because someone else hears the logic and thinks, “This credit card has zero interest, so if I buy a soda today and take a cash advance to invest… when those 12% returns come in I’ll pay off the debt and it’s like I got a free soda.”

[@nic_ccc3366]

Dave will never advocate for people hanging onto their debt. This is probably the only thing I don't really agree with him on; I think there are cases where investing instead of paying off low interest debt might be worth the risk, but you have to ensure you have very stable income. Dave is right though that what tends to happen is that people keep increasing the risk (ie taking on more and more debt) and you then find yourself in the debt snowball. It is hard to see when you've become over-leveraged.

[@AliasProductions801]

Also Dave really needs to start stating that he was taking 90 day loans that could be called at any time. 30 year fixed rate mortgages are no where near as high risk as what he was doing.

[@perotal]

But that doesn't fit his narrative

[@epicgaming4946]

@@perotal literally

[@23liltuck]

Forreal

[@MsWorldMine]

Yes I don't see why people listen to him

[@ashermitchell2794]

Exactly. Dave swam with sharks, got bitten, and now scares people away from swimming pools.

[@augustinerubio2004]

Seems like more callers today are trying to do their version of the Ramsey plan while getting Dave's approval 😂Not going to happen

[@mph5896]

They can do whatever they want. BUT Don't call it the Dave Ramsey plan or ask for his approval.

[@InvestToLive]

Agree. "but I would rather..."

[@philipmeisterl]

I have noticed that too because the interest is weird right now people think its better to play with borrowed money Which i dont get because corona really showed that having a job doesnt mean a lot and having things to pay off means you have no matter what (Also hes once been kicked out by the military its not so unlikely it might happen again or he gets hurt or gets ill or or or or)

[@mph5896]

Philip Meisterl i have plenty of friends and family that try stuff like this to game the system. One friend in particular shows the illusion everything is great when in reality he couldn’t come up with $1k without borrowing it.

[@ahuman5150]

@@mph5896 Im doing the Dave-ish plan. No way on God's green earth will I call Dave with a question!

[@BrandonMinguez]

Mathematically, it does make more sense to invest more with a loan at that low of an interest rate. HOWEVER, most people handle large debt as an "I can make the monthly payment" and that's why getting rid of the debt is still important. Too many people have a $500 / month car payment on a $40k income because "they can handle the debt". Same thing will happen when they go to by a house they can't afford. Once you get rid of your debt, you will be much better off.

[@NoRegertsHere]

Did you run the numbers on the actual interest paid (not the interest rate)? Loans are front loaded with interest. Investing is back loaded with earnings

[@dylanktravis]

If you use X for “risk” in said formula, in theory doesn’t that mean there would be certain situations where the “mathematical” best option would be to keep the debt and invest the spread? I never feel like this question gets fully answered by Dave because I think it comes down to peace of mind/ financial psychology and frankly religious reasons (Bible saying you shouldn’t have debt). There are plenty of situations where the math (including a risk factor) does favor keeping debt at a low interest rate. This doesn’t mean it’s the right option for every person or situation just saying the math itself will not always prove that paying off debt in every situation is the best long term option. In many cases the math will show keeping the debt is beneficial.

[@JosephDickson]

Making minimum payments on anything is a trap. I would pay that debt down and invest 15% of my net income. Compound interest at that age should not be ignored.

[@prkzoomin6994]

Great Quote, Nothing is permanent in this world, not even your troubles.

[@angryox3102]

Amputation is permanent.

[@angryox3102]

@davidhindu come back and talk to me when humans start growing amputated limbs back. And prosthetics don’t count.

[@AliasProductions801]

If you can earn more in interest than the interest being charged, mathematically it always makes more sense to keep the debt and invest.

[@kellyy9349]

Until you go bankrupt. Because you forgot to factor in risk.

[@AliasProductions801]

@@kellyy9349 there’s risk in a 401k. Nothing is guaranteed money.

[@BobbyMucka]

@@kellyy9349 The risk on a loan of 0.75% interest? Come on now, that's lower than the rate of inflation. USAA is losing money on that loan. You could put the full 36k into municipal bonds and earn like 3-4% tax free and come out ahead by a good margin. He could've even put it into some good mutual funds and could've made an extra 5-6k/yr. I invested the same exact loan and made about 50k in profits my first year. Note that I was in his exact position but from the Naval Academy.

[@CaseyBurnsInvesting]

Financial Peace means you have no worries.

[@komrobert]

I think Dave is looking at too many scenarios through the lens of his old millionaire survey. The current world does not work the same way, so what he references is simply irrelevant now. There are people such as Meet Kevin and Graham Stephan who started from huge real estate debt and have since amassed net worth over $10M. The debt allowed them to do this with RE, though they do also have KZbin channels now and bring in a lot of revenue from those. The callers on this show are rarely of the same business mindset that Kevin and Graham have, but that doesn't mean using debt to become wealthy is impossible.

[@Bestfriend-650]

Let me tell you, having no debt feels AMAZING. I have been debt-free (except mortgage) for the past two years and I can not imagine having any sort of payments whatso ever.

[@Mehwhatevr]

This is the first time I have ever heard Dave actually answer this question. Usually he says something like, will you have more money to invest in 20 years if you pay off the debt or not. or something like that. as for me, I'm willing to take the risk.

[@eatpigsnot]

KZbin search the subject and several videos come up

[@BrendanEvan]

It’s a sliding scale too. If you’re making very little and have debt, keeping the debt around to invest makes less sense than if you’ve got no debt, $1MM invested and you’re going to buy a rental property with “only” 50% down. Worst case, you sell some investments and pay it off. I personally hate the risk so I may not even do that 😆

[@jordanumphress9555]

Finally discussing actively discussing Risk.. and risk adjusted returns. love it. Keep talking about risk. Most investors especially young retail investors do not understand that you can't manage returns... its impossible. you can only manage risk.

[@lmelior]

Dave loves to tell his own story about the time he lost everything and went broke, but that was due to him taking very large, very risky loans that could get called at any time. That's not the kind of debt this guy is in. Dave's words about risk are valid, but let's not pretend the situations are the same. If this guy has $618 minimum payments on a $10,500 balance at < 1% interest, he'll be done in 18 months and pay less than $80 in interest total. That is absolutely not worth paying off early. Put that extra money in a Roth IRA instead. You can still contribute until May 17th this year, but you don't get to go back and contribute once that window closes!

[@Mehwhatevr]

and you can always withdraw the original money without penalty. Maybe it's worth a bit less, but that's a risk I accept since I don't expect to lose my job anytime soon without easily being able to find another, and the longer my money is in the account, the more likely there will be money left in the account if I have to withdraw my investments.

[@M_D0s]

Dave- "Because, The Baby Steps."

[@Imhere12345]

Lol I was thinking that

[@Rennsportmx]

We've done the largest poll of millionaires, over 10000 of them.......

[@patrickmorency]

@@Rennsportmx I wonder what the answer would be to those millionaires if asked “have you ever borrowed money?” Dave says he didn’t consider the beta, but immediately the answer was, “so don’t borrow money”

[@patrickmorency]

Still agree debt is bad, there are just always outliers to an all-size-fits-all approach, and this caller was the outlier

[@Ratkill9000]

This is why now that I'm buying a house, the payment (mortgage, mortgage insurance, property taxes) are within my budget.

[@Vicarivss]

You should be living in a tent until you can afford to pay cash for a house. Big mistake.

[@Ratkill9000]

@@Vicarivss Can't subject my wife and cats to the elements of the midwest in a tent for several years.

[@MambaMental1ty24]

If I were to ever call Dave, I’m never gonna ask him how’s he doing. We all know the answer. Lol

[@darktimber117]

When he asks how you are doing, reply "poorer than I deserve" 😂

[@ohnoitsohno9767]

What if he’s really not better then he deserves...

[@3Skeet]

😂

[@jacobfreeman5054]

Tim Buschmann that is golden!

[@fsmoura]

_"Do you understand?"_ _"Yeah, I do und-"_ *_*mutes*_* _"THEN DON'T BORROW MONEY."_

[@jongolden4855]

lol run this through a formula then Dave. You’d see that he should invest

[@kimmywimmy7305]

Also the risk of losing your income. You get in trouble when you can’t make the debt payment. You don’t get into trouble when you can’t make deposits into your investment accounts. Get the debt paid off, put that risk out of the picture.

[@inertiaforce7846]

Bingo. I screenshotted this. When you default on debt you can get your head taken off. When they foreclose you lose all the equity built up in your house. You don't have that problem if you have to suspend investing because you don't have the money.

[@ucaerospace8553]

The soon to be Inflation boom is a killer. Keep the fixed rate house debt, invest the rest.

[@Day-in-our-Lives]

There are always so many great questions that come on this show!

[@InvestToLive]

Agree!

[@cb4354]

The question about borrowing 50 million to invest at a low interest rate sounds like a dream to me.

[@inertiaforce7846]

Until you have to make the payment. Then it sounds like a nightmare.

[@act318]

Well if the minimum payments are interest only and you can easily cover them, then you have yourself a bargain. Also, if you can deduct the interest from your revenue, another added bonus !

[@WorldinRooView]

As soon as you pay off that debt, then you have more income to put more money into your investments per month, with less risk as well.

[@LifeWithAlliDaily]

Perfect Timing! I needed to hear this!💜💜

[@zachhawkins5005]

Caller: "I have couple of questions..." Dave: "You get one sucka"

[@misaelarredondo7933]

I think for the average person in debt Dave is right on the money. But for investing lots of millionaires have solid track records of leveraging debt. Kevin O Leary has stated this multiple times. I’m not saying Dave is completely wrong people often don’t account for risk but mathematically it does make sense to leverage debt.

[@David-wo9un]

I can’t count how many times Dave Ramsey has answered this same question.

[@cutlerylover]

well really how many different conversations about wasting money can one have lol...

[@Corpsecreate]

Thats because its the point that Dave is most incorrect about. The logical option is to invest.

[@shola7987]

Yes and he gives the same answer.

[@bushmonster1702]

@@Corpsecreate better to be debt free first though. It’s rule number one of investing.

[@Corpsecreate]

@@bushmonster1702 Incorrect.

[@benb2856]

Taking out a 50 million unsecured loan =/= a low interest secured loan (such as a mortgage)

[@cutlerylover]

lol so why would I worry about paying someone back who I owe money when they dont want much each month, I can just owe them forever...

[@eatpigsnot]

that's a childish answer. Dave is speaking to adults

[@sitiwrattz]

Grahm Stephan became a millionaire by not pay off his low interest debt and investing his income.

[@andyleo8418]

I think Dave wants people to pay off debt because he knows the majority of people out there can't handle their money well. They invest poorly, spend frivolously and don't pay their bills. So, in essence he is trying to save them from themselves. Yes, there are plenty of people who are smart with money and can handle leverage debt. But generally those are not the people who call in his show. He has to preach to the lowest rung. All you guys who are great with money don't need his advice.

[@andyleo8418]

@@thetecshow5114 F off

[@MohamedAhmed-wc3pw]

Exactly what I was thinking.

[@savvageorge]

Dave makes some excellent points. Dave's courses should be mandatory for people who work in national governments who think unlimited amounts of debt is a smart idea.

[@vincentortega4284]

Just follow the baby steps; they work perfectly.

[@hkmamacmd428]

the dude got kicked out of the Academy. He doesn't know how to follow directions lol

[@vincentortega4284]

@@hkmamacmd428 unfortunately many people fail to follow instructions.

[@kellyy9349]

When you payoff debt, you are actually paying yourself 1st instead of the bank. Even thru the interest is very low, how much are you paying the bank in interest?

[@jesussaves5141]

Well Said Sam.many people love being slaves to banks and fleece companies and they don’t think anything of it because they have been programmed to think it’s normal to owe money.

[@nic_ccc3366]

This is the other side of the equation I didn’t appreciate much until I started listening to Dave. He isn’t just about money management or building wealth, he tries to teach financial peace. And I don’t think anyone would disagree that the best way to achieve financial peace and freedom is to be debt free.

[@kingali1606]

I think as long as you have a relatively stable income, an emergency fund, and are not overleveraged, you should be fine.

[@stephenwood533]

Interesting to hear dave’s opinion on this because i have student loans where the interest rate is the inflation rate around 1-2%. I had this guys opinion of why not invest it. Cant say i am sold to pay it sooner

[@nic_ccc3366]

If your risk tolerance is pretty high, have stable income and no/little other debt, then it might make sense for you.

[@nic_ccc3366]

@@rishid71 Not at 1-2% interest but some loans have much higher than that. This is exactly the mindset that Dave doesn’t advocate for though - that debt is “okay”. You keep on a student loan (even at low interest) for a while, get a mortgage a few years down the track, maybe a car...

[@insideoutsideupsidedown2218]

Or have no debt and everything you make goes to expenses and investments.

[@asdax8311]

Because a penny of debt weighs more than a penny earned.

[@NCKyle1980]

About those millionaires: They didn't talk to Graham Stephan.

[@doclocke]

Different generation, style, and audience

[@MinerMovie]

Graham is very responsible with debt. Meet Kevin is a different story

[@afonsosalbrecht]

Graham didn't become a milionaire with real estate, but with youtube. he can say what he wants, but he made his fortune with youtube and then now he buys a lot of real estate, so that's why the rightfully do not mention Graham Stephan!

[@Mehwhatevr]

@@afonsosalbrecht Lol, Graham and Dave have a lot in common then. Dave became a millionaire writing books and hosting a radio show. Graham is the Millennial Dave

[@eatpigsnot]

@@Mehwhatevr Dave made a lot of money doing those things, but he kept the money, grew it, and did not go bankrupt again because he learned how to manage the money. the biggest part of successful finance, and especially financial peace which is what Dave teaches, is no debt

[@tuscanollie1242]

Dave you were taking out 30 day mortgages. Don’t even act like anyone calling is being as risky as you

[@inertiaforce7846]

It has nothing to do with 30-day mortgages. Only a fool would borrow against a paid off house to go invest. If something happens and you lose that money, enjoy the foreclosure and the loss of equity in the house. But if the house is paid for and something happens to your investments you don't lose the house.

[@TheWealthyIdiots]

Dave’s argument is basically, “I drove a car at 100mph and almost killed my self in an accident, so nobody should drive anymore” The logical leaps between his failure and not having debt takes some pretty extreme mental gymnastics.

[@erikrohr4396]

Is he saying not a single millionaire carried a mortgage while investing? There's no way that's true.

[@tonemeister2318]

I find it hard to believe that the majority of millionaires have never had a mortgage. This guy is not increasing his risk by paying the minimum on a low interest (risk) debt as long as it is affordable with his cash flow. To quantify the risk in this scenario I would think would have little sway in a decision.

[@inertiaforce7846]

Dave is okay with keeping a mortgage debt and investing. Look at his baby steps he specifically says in there pay off all debt except the house. Once all debt with the exception of the house is paid off then invest 15% of your income. Any additional money you make beyond the 15% invested should go toward paying the house off.

[@insideoutsideupsidedown2218]

He cited the study as the millionaires paid off their mortgages early, in 7-10 years.

[@nickcostello361]

Alcoholics Anonymous is not for everyone. However, everyone could benefit from a health perspective by being sober. Dave Ramsey is not for everyone. However, we all are in a good spot without debt. Neither alcohol or debt are 100% bad in all aspects.

[@insideoutsideupsidedown2218]

If it is debt owed on your primary mortgage, i agree. Anything else, nope.

[@ClaxtonBay123]

It's a great question. And there's nothing wrong with the caller thinking like this. But that's not Dave's plan. So what's the point of asking him?

[@insideoutsideupsidedown2218]

Where are these savings accounts with high returns?

[@tdot8398]

Listen to Del wamsley.

[@JTDyer21]

Really doesn't matter either way if you don't have the income to make progress. Personally I wish Dave would discuss more ways to increase your income.

[@rubenve79]

Dave fails to mention the opportunity cost of paying off the low interest debt vs investing it. Especially in a high inflation environment like the one we're in now it makes zero sense to pay off low interest debt.

[@kashfortheking]

So what about the

[@mikeathan2489]

It's all about risk!!When all is sunshine and rainbows it doesn't matter BUT when things get rough then you will find 100% of the foreclosures is on houses that are not paid for.

[@inertiaforce7846]

Bingo

[@aolvaar8792]

some foreclosures will be from liens, not 100%

[@inertiaforce7846]

@@aolvaar8792 This is a lot lower risk than a bank foreclosure.

[@chrisforker7487]

If debt is so bad, why is it ok to borrow money to buy a house? It’s either ok or not, period You should have as little debt as possible, but some is ok.

[@insideoutsideupsidedown2218]

Because the majority of the time you home gains value, not looses it.

[@eatpigsnot]

it is not ok to borrow money to buy a house, it is just impractical for most people to pay cash for a house. and when you do get a mortgage following Daves plan there are specific guidelines to follow

[@bigpete1014]

The easiest way to become a millionaire is to get people to pay you for advice. There's a reason Ramsey went broke in the real world.

[@MikeThePike316]

Didn't he make millions from real estate?

[@bigpete1014]

@@MikeThePike316 he went bankrupt from real estate in 1988. Later the same year he started lampo, a financial counseling company. Never paid back his debts.

[@MikeThePike316]

@@bigpete1014 - I know he lost it all, but he also mentioned that he built it back up. I dunno that it was solely from financial advice. Either way, you pay attorneys and financial advisors for advice. I don't see how that's a bad thing.

[@eatpigsnot]

@@bigpete1014 he paid back all his debts, even the ones he declared bankruptcy on

[@TheStivers1]

Probably because they won’t be out of DEBT!! They will move on to the next purchase of low interest financing. And keep with their motivation. Yeah they may become millionaires based on the size of the shovel or the mathematical returns, but they won’t be out of debt.

[@patty109109]

I don’t believe him that not a single person of 10k did not become a millionaire by borrowing money and leveraging it-which btw is how many business grow.

[@insideoutsideupsidedown2218]

The generational wealth families did not borrow money go make wealth.

[@patty109109]

@@insideoutsideupsidedown2218 Why would you say such a thing? It's so clearly incorrect. try googling "rockefeller loan" or "walton familiy loan" and it's clear these families started off with...can you guess?

[@Itsvicu]

He’s saying there’s a risk when doing this kind of thing but life comes with many risks. A lot of people wouldn’t have gotten as far as they did without taking risks.

[@inertiaforce7846]

He is saying the risk is not just a small risk it's an extraordinary risk. A lot of people wouldn't have gone bankrupt without this extraordinary risk.

[@josephminder7366]

What dave gets wrong is that personal finance is not one size fits all.

[@eatpigsnot]

to a point, but debt being bad does fit all. healthy living is not one size fits all but smoking is unhealthy for all

[@josephminder7366]

@@eatpigsnot taking out debt to buy assets that go up in value and produce cash is good as opposed to taking out debt for a car which sucks up money and goes down in value.

[@eatpigsnot]

@@josephminder7366 it's not good because it's a risk that puts everything at risk. owning and not owing is good, stable, and most of all peaceful

[@Zatoichinisanyon]

I'd like the 10% savings account and Roth IRA.

[@Qwuiet]

All the businesses in the mutual funds are in debt lol.

[@DriverDude100]

Some of my partners want to borrow big big money for a long term investment. I am not interested. Thanks Dave.

[@ESPPsycho]

Practically, it just makes me sick to hand over the cash paycheck after paycheck.

[@AnupamVivekOSU]

it's about the mental strength either way.

[@xsgtxbigboy1655]

Why do ppl call Dave for stuff, if you believe you like your plan go with ur plan instead of listening to another guy tell you what to do if you don’t like it?

[@AndrewPL5]

having "faith in god" won't help you financially. The will to be debt free will help you financially.

[@jimroscovius]

Would you borrow money to invest it? That's what you are doing.

[@ucaerospace8553]

Depends on the interest rate.

[@miagraceespiritu8511]

Motivation and Momentum. In debt with a risk - lossing your power, control, and options.When you are debt free, you will have more power, control, and options. Thank you for sharing 😃

[@jongolden4855]

Do the math on one person investing while paying off low interest debt and one who only pays off the debt and invests after. YIKES

[@pep590]

Dave must be thinking to himself...How many 1000's of times must I answer this SAME question? Lolololol!!!!

[@Mehwhatevr]

this is the first time I've ever actually heard him answer it. Everytime I've ever heard this question asked, he gives a non-answer like "look at it this way, if you pay off your debt and then invest, or if you invest while paying the debt, in 20 years which will give you more money. ah you se, because I put it that way, you can see it now because you're factoring in risk." and you can tell nobody knows what he's trying to say, but the caller doesn't want to annoy him. Otherwise he mutes the caller, so that the caller can't express confusion. He mentions risk, but he never really explains what it is. to a layman, he's just throwing out jargon and telling you to accept his word on it. For some people, that's fine. But intelligent people don't want to just accept your word on something, they want to understand. This is the first time I've ever heard him actually explain what risk is. That if you invest money, overtime it will grow, but when you need it, you might be in the red. Maybe he's explained it before, but those explanations have never popped up when I googled this question with Dave Ramsey or happened to be tuned into the radio. :)

[@pep590]

@@Mehwhatevr Dave has asked more people times than I can count after their question, "If your house was paid off, would you take out a large loan on it, so that you could invest the money?" Then the person answers no and Dave says..."Same thing". He answered it a little different this time. So I get your point.

[@Mehwhatevr]

@@pep590 yes, I agree, he's done that a lot of times. And it's a helpful way of looking at things. while that kind of thinking is helpful, it doesn't completely answer the question. Some people out there might borrow against there house for an investment. like turning it into a rental or something. Dave is always promising the 12% and a lot of people are not familiar with risk. and might be thinking... yeah I would mortgage my house and invest it for guaranteed 12% returns. I use that flip around thinking myself when making decisions, but I don't think it's a complete answer. it's just a helpful way of reframing the question. I wouldn't borrow money to invest. but depending on other factors in my life, like job security, I wouldn't necessarily stop investing. To illustrate: Would Dave Ramsey borrow money to buy groceries? No. would he stop buying groceries until he paid of his debt? lol. it's a helpful way of reframing the problem, but it isn't foolproof. btw, I thought paying of your house was something you do while investing.

[@universalservicetechust3578]

Rice and beans keep some Fideo around as well 😊 for the next 12 months 🤣

[@claytonbensmiller7515]

Maturity is having money and not spending it

[@jmoney9494]

Daves baby steps actually have to invest before paying down the mortgage, and I would classify this loan as similar to a mortgage with such a low interest rate. I have to wonder how he got such a low rate though unless its a cars introductory rate. Then he should make sure go pay the car off in time to not have the rate raised

[@silverstar4289]

Because he pad a higher price on the purchase price. They got their “interest “ at the beginning.

[@uni_versetones]

He didn't talk to Graham in those surveys.

[@naaman1848]

Classic Dave making assumptions and cutting people off so they cannot correct him so that he can continue to push his narrative. Just because the guy didn't give you a calculated Beta value in his 13 seconds on the air doesn't mean there was not risk consideration. You want to give me a $50M loan @ 0%? I'd do that in a heartbeat. How does that not scale?

[@insideoutsideupsidedown2218]

You will never find a loan like that.

[@naaman1848]

@@insideoutsideupsidedown2218 Of course not, because everyone would take it. I was using Dave's hypothetical

[@eatpigsnot]

why would anyone want to owe money? or anything else for that matter?

[@brad9092]

Don’t be a hard head, Johnny! LOL

[@hmj8469]

He would have gotten a very different answer if he had called 'The Kiyosaki Show'

[@andrewsherman2398]

I love your show and your program but I have one problem and that is you continue to make mention of millionaires the average millionaire has way more money than they need to live comfortably and definitely way more than they need to survive so you're not referencing people who make four grand a month and need thirty eight hundred to keep the bills paid you're talking about people who have ten to twelve grand a month and need thirty eight hundred to keep the bills paid

[@epicgaming4946]

I agree with this guy depending on what the debt is, this is were I disagree with Dave

[@NoRegertsHere]

There’s a mathematical time frame to pay down debt v invest money. Especially if someone is younger

[@blakejackson4483]

Best KZbin channel ever

[@utube2008utube]

really wish he would let his guests speak more and without interruption. what’s the point of having guests if you won’t let them contribute?

[@28goldenboy]

There's other people waiting to ask a question. If you notice, he cuts off the mic when the question has been understood and there's an answer lined up. If not, then it would turn into a conversation and run longer than planned.

[@ReadeMilner]

Plenty of millionaires used debt to make their money.

[@JamesGettingFit]

Would love to be debt free

[@DebtFreeDad]

Dave's answer no. Lol.

[@djpuplex]

Sounds like he was kicked out of somewhere as soon as he started talking.

[@mrgoldy7532]

He reaches for that cutoff button every call. They love to have control of not being interrupted to end the call on their talking point. Imagine trying to have a conversation with someone who can mute you and go off on their own tangent

[@Dbzman-69]

I love dave but I dont know which data he is looking at when he talks about millionaires that dont use debt, all the top millionairesi see have used or use debt leverave in some form or another, also he could not comd up with mathematically logical answer for the guys question

[@Daniel-sl5jq]

Christy looks miserable

[@perotal]

😔

[@mph5896]

Yup. Same dumb calls coming in all day long.

[@jacobfreeman5054]

I guess you never heard of MeetKevin?? Oh wait nvm you sued him 😂

[@basicboomer519]

Did he? Jeez.

[@jacobfreeman5054]

Yeah I think it was defacement or something

[@basicboomer519]

@@jacobfreeman5054 yes, should really be listening to meet Kevin. The idea of working 45years then retiring without mobility is incredibly stupid. Who cares if you are a millionaire at 70yo.

[@UliSwag]

I remember that

[@areaj8006]

Fort Bragg Babyyy!

[@steve03260]

Calling from the center of the known universe ...... Ft Bragg.

[@financewithian2052]

Graham Stephan has a different approach 😅

[@ClaxtonBay123]

Yes his approach is to repost the same content over and over and get wealthy off KZbin

[@sluggingbread]

@@ClaxtonBay123 facts

[@insideoutsideupsidedown2218]

Yeah, watched his videos. He reminds me of someone who tries to convince you to just drink the kool-aid.

[@camillo6788]

same thing over and over :D