Clark Howard vs Dave Ramsey - What a difference!

[punkin]

And there lies the biggest problem with his program... He says NO credit cards regardless of your financial responsibility, makes no sense..

No credit ever even though his website takes credit cards;
No debt even though my mortgage rate is lower than my investment gains;
Snowball the smallest debt first (how does that make sense instead of snowballing largest rate first?);
and best of all, a one size fits all approach with no dissent allowed.

 

[maxiesmom]

No credit ever even though his website takes credit cards;
No debt even though my mortgage rate is lower than my investment gains;
Snowball the smallest debt first (how does that make sense instead of snowballing largest rate first?);
and best of all, a one size fits all approach with no dissent allowed.

It sounds like you have never read a DR book. And are not even bothering to read what other posters are saying. Why are you so determined to hate on someone you don't know, and who has advice that works for some people. I don't get it.

 

[mrodgers]

No credit ever even though his website takes credit cards;
No debt even though my mortgage rate is lower than my investment gains;
Snowball the smallest debt first (how does that make sense instead of snowballing largest rate first?);
and best of all, a one size fits all approach with no dissent allowed.

The last point, like I said, pay off 3 debts for motivation the first year rather than spending 2 years paying off the single larger interest rate.

The first two, you (general, not you specific) have a $250,000 mortgage at a low interest. Great. You can get a better interest rate putting $1000 into an investment than putting towards the mortgage. Great again. You save up $100,000 in your investments, Fantastic! The housing market crashes, your $250,000 mortgage is being paid on a house worth $150,000 and you lose your job and can't find another one.

What now? I guess just be like everyone else and stiff the bank?

 

[Colleen27]

And there lies the biggest problem with his program... He says NO credit cards regardless of your financial responsibility, makes no sense..

Exactly. Rewards and other perks of credit aside, few Americans are really in a position to take his "credit rating be damned" advice. I understand where he's coming from - we personally don't use credit at all - but there are real risks involved in letting your credit rating decline from disuse and I don't think it is terribly good advice for an expert to advocate doing just that. It might work out for some listeners, but there are undoubtedly others who are looking ahead to buying a home or needing a business loan or taking out loans for their kids' college educations who will regret following advice that makes them look like a bad risk on paper despite all their frugality and financial responsibility.

 

[punkin]

The last point, like I said, pay off 3 debts for motivation the first year rather than spending 2 years paying off the single larger interest rate.

The first two, you (general, not you specific) have a $250,000 mortgage at a low interest. Great. You can get a better interest rate putting $1000 into an investment than putting towards the mortgage. Great again. You save up $100,000 in your investments, Fantastic! The housing market crashes, your $250,000 mortgage is being paid on a house worth $150,000 and you lose your job and can't find another one.

What now? I guess just be like everyone else and stiff the bank?

In the situation you are proposing in your example, I would rather have $100K to tide me over rather than have a worthless house with no ready cash.

 

[crisi]

In the situation you are proposing in your example, I would rather have $100K to tide me over rather than have a worthless house with no ready cash.

Cash is king in a down economy.

We had no mortgage. With mortgage rates so low, we got one. We made investments with the cash (in real estate as well as the stock market). My mortgage is 4% with the tax write off. My stock was bought with dividends paying between 6-8%.

 

[Padstack]

I am thinking. I have not been brainwashed by Ramsey.

Apparently you did not understand my previous posts where I said I do not follow his advice to a tee. But don't let facts cloud your judgement.

 

[punkin]

Cash is king in a down economy.

We had no mortgage. With mortgage rates so low, we got one. We made investments with the cash (in real estate as well as the stock market). My mortgage is 4% with the tax write off. My stock was bought with dividends paying between 6-8%.

Your course of action is exactly what Dave Ramsey would disapprove of, despite the fact that it makes perfect economic sense. That is my point. Cookie cutter advice for disparate situations.

 

[maxiesmom]

Your course of action is exactly what Dave Ramsey would disapprove of, despite the fact that it makes perfect economic sense. That is my point. Cookie cutter advice for disparate situations.

The only way to get advice that is not "cookie cutter" is to go see a financial advisor live and in person. While Dave Ramsey may not give out advice to fit each person as an individual, it is sound, general, advice.

If you don't like his advice, then don't follow it. That doesn't make people who do follow it "brain washed". Just as those who follow Clark Howard are not "brain washed". Do what works for you in your situation. And stop judging others and calling them names for doing what works for them.

It is beginning to sound like you have a grudge against DR for some reason.

 

[Padstack]

Cash is king in a down economy.

We had no mortgage. With mortgage rates so low, we got one. We made investments with the cash (in real estate as well as the stock market). My mortgage is 4% with the tax write off. My stock was bought with dividends paying between 6-8%.

Over the last ten years, the COLA has averaged 2.5%. With your loan, you would have made anywhere from -0.5% to 1.5% on the money you took out. Not sure the tax write-off would make it that much more attractive, but to each his own.

 

[HHSTigerFan]

The only way to get advice that is not "cookie cutter" is to go see a financial advisor live and in person. While Dave Ramsey may not give out advice to fit each person as an individual, it is sound, general, advice.

If you don't like his advice, then don't follow it. That doesn't make people who do follow it "brain washed". Just as those who follow Clark Howard are not "brain washed". Do what works for you in your situation. And stop judging others and calling them names for doing what works for them.

It is beginning to sound like you have a grudge against DR for some reason.

Would Clark Howard (or any other financial person) call you a moron or an idiot if you didn't listen to their advice? Person I see having a grudge is Dave Ramsey towards anyone that doesn't agree with him..

 

[TangaroaTiki]

Never heard of Clark Howard. Thanks for posting!

 

[HHSTigerFan]

Over the last ten years, the COLA has averaged 2.5%. With your loan, you would have made anywhere from -0.5% to 1.5% on the money you took out. Not sure the tax write-off would make it that much more attractive, but to each his own.

Is that a sound, financial statement?

 

[crisi]

Over the last ten years, the COLA has averaged 2.5%. With your loan, you would have made anywhere from -0.5% to 1.5% on the money you took out. Not sure the tax write-off would make it that much more attractive, but to each his own.

COLA is stable whether I have a mortgage or have it invested. The difference is that with the mortgage, I'm getting at least 2-4% a year MORE on that money with a risk profile I'm willing to take (on the stocks - the real estate is a personal thing - my brother in law had cancer and was going to end up on the street - so I have an investment home ). That's $3,000 a year in income differential OVER the amount I pay in interest. I'd need to work 10 hours a week at Target to get that. And its real income - its $3,000 a year in dividends I get in my pocket - which I then reinvest because I don't need the cash.

And since we did a lot of investing in early 2009, its been a much better overall yield than just the dividend yield.

 

[brerrabbit]

I don't listen to either one. I know more about DR because our church offers his Financial Peace course. I have never taken it. At the end of the day I am very wary of anyone who wants to sell you something to improve your life, finances, etc. Look at how that individual makes their money and pretty quickly you will understand where they are coming from, the examples are endless. There was a site I looked at and for the life of me I can't remember the name of it but essentially a guy who had made okay money (in other words a nice return, but not millions and millions) in rental properties, real estate and flipping some houses looked into all of the guys selling programs. What he found was after extensive research of thousands of property records these guru's had never done what they said. They had never bought or sold any real estate other than their personal homes. They made all their money selling their systems. The A&E show Flip this House had to stop showing episodes filmed in Atlanta when it was discovered that their flipper of choice in Atlanta had never flipped a house in his life and was using other peoples properties to film his segments of the show.

People who come off to preachy or too forceful turn me off quickly. I guess I am fortunate in that I manage my own finances fairly well and even with some economic setbacks have faired okay over the years. I personally think that common sense dictates most of your choices but in the world we live in I guess common sense is a sometimes overlooked commodity.

 

[Colleen27]

The last point, like I said, pay off 3 debts for motivation the first year rather than spending 2 years paying off the single larger interest rate.

The first two, you (general, not you specific) have a $250,000 mortgage at a low interest. Great. You can get a better interest rate putting $1000 into an investment than putting towards the mortgage. Great again. You save up $100,000 in your investments, Fantastic! The housing market crashes, your $250,000 mortgage is being paid on a house worth $150,000 and you lose your job and can't find another one.

What now? I guess just be like everyone else and stiff the bank?

There are risks to either approach. You have a 250K mortgage that you're paying off aggressively. You have the recommended $1000 emergency fund and 3 to 6 months living expenses in the bank, and you've paid down the mortgage to 200K. Then you lose your job and can't find another in the 3 to 6 months you're prepared for. The housing market crashes and the house is worth $150K. Now what?

We have friends who had that backfire on them - they went gung-ho at paying off their mortgage, only to lose the home and all the extra payments they'd made on it due to an extended period of unemployment beyond what they had saved for. They'd absolutely have been better off investing until they had the cash on hand to pay off their home in a lump sum, because they'd have had those investments to get by on while looking for work.

That 100K in investments from your example buys more time to find work before having to resort to attempting a short sale or falling into foreclosure, while the additional payments toward principle become meaningless when the loan goes into default.

 

[EMHDad]

My wife and I are DR fans. We have read his books and taken FPU at the church. We have paid off $34,000 in debt. We have $6000 to go and then we are debt free. We have not used credit cards in 3 years and will not be getting another car loan in our life. Our current financial plan is a blessing to our life.

 

[crisi]

My wife and I are DR fans. We have read his books and taken FPU at the church. We have paid off $34,000 in debt. We have $6000 to go and then we are debt free. We have not used credit cards in 3 years and will not be getting another car loan in our life. Our current financial plan is a blessing to our life.

And that is what I love about Dave Ramsey. As much as I dislike HIM, he inspires people to take steps that are life changing. Congrats.

 

[cwlunn]

I listen to both dave and clark every day (they are the only reason i would listen to those stations). once i get past personality and attitudes and look at the raw information i find they have very little over-lap.

dave has a specific plan and a specific goal, that is to be debt free and wealthy at any cost (no pun intended).

clark also has a specific goal, to help people, "spend less, save more and not get ripped off".

i follow ramsey's plan. I am working the baby steps which involves not spending on much of anything. I also take clark's advice so when i do spend and invest i am not getting ripped off.

the only point of contention i have found between them is credit card vs debit card. clark says debit cards do not have the same protection as credit cards. dave says there are debit cards with the same protections.

for me it is not a dave or clark situation. i think they deal with very different topics but both topics deal with finance.

i have very little in common with dave or clark. both of them can get on my nerves, but i focus on the information they provide.

as for dave ripping people off, i got his book on cd for christmas, and listen to him on the radio. i am following the plan and have spent $0.00 of my money to do so. quite frankly i see no reason to spend money for a dave rally when i get it for free on the radio.

one last point. dave seems to be quite conservative politically. me, i am a liberal. i find dave,s message is very useful to a liberal in that me and my liberal friends want to defund banks (not pay interest to them by being in debt) and we want financial liberty (liberal). i find that it is easy to point out all the differences, but it is more useful to point out the similarities. so, i wish both of my conservative friends in radio the best of health, wealth, and wisdom.

Clint

 

[mrodgers]

the only point of contention i have found between them is credit card vs debit card. clark says debit cards do not have the same protection as credit cards. dave says there are debit cards with the same protections.

I can attest to the debit card protection from just last week.

Monday, someone in New Jersey/New York decided $700 of my recent tax refund would be better spent in their pocket from my debit card.

Tuesday, I get a call from some protection service of which sounded like a scam about fraudulent charges and I didn't call them back. I looked the number up online and it looked like a scam according to online testimony as well. I had planned to call the credit union the following day during business hours.

Wednesday, I get a call from my credit union about fraudulent charges before I was able to call. I went in and signed the papers stating I did not approve of the charges.

Thursday, I had my $700 back in my account. Quick and simple as that.

All taken care of by Visa, which is the logo on my debit card.