Omega Owners Forum

Please login or register.

Login with username, password and session length
Advanced search  

News:

Please play nicely.  No one wants to listen/read a keyboard warriors rants....

Pages: [1] 2  All   Go Down

Author Topic: Dave Ramsey  (Read 1981 times)

0 Members and 1 Guest are viewing this topic.

05omegav6

  • Guest
Dave Ramsey
« on: 16 August 2013, 12:48:41 »

I have just finished reading his book, Total Money Makeover, and found it quite enlightening, if a little scary in places :-\

My primary question is simply...

Has anyone here followed his plan? The theory is sound, but I have little understanding of how certain aspects of the financial world work, and am a touch dubious as to if the theory can actually be applied this side of the Pond.
My thinking is to simply substitute the dollar amounts mentioned with Sterling and run with it  :-\

Not after specific financial advice, but would be reassuring to know if anyone here has undertaken the plan, and that it is what it says on the tin. Obviously PM me if you'd rather not post publically :y
Logged

Rog

  • Guest
Re: Dave Ramsey
« Reply #1 on: 16 August 2013, 14:09:24 »

I've never heard of him or his book before, but I found a summary of it, see below

http://totalmoneymakeoverpdf.tumblr.com/


It all seem to make sense to me. Obviously his video is all a bit OTT and U S of A style, and I'm really not sure about how practical it is to write absolutely everything down. But the general approach of having a budget and chipping away at small debt and moving onto the next seems absolutely sound.

Personal debt is of something of a hidden issue. Nobody likes to admit it, vast numbers of people have it in some way or another, there is huge pressure and temptation to spend more than you earn. Credit card companies, banks, payday loan sharks etc all like us to have it, Governments ignore it. You want a flash car that you can not really afford ? Easy there will be a way for you to get it.

What he said all seems good to me
Logged

mantahatch

  • Guest
Re: Dave Ramsey
« Reply #2 on: 16 August 2013, 14:37:47 »

Well on the personal debt side I can say it is great feeling to not have credit card and loans on my back. We are now free of all of them except the last few years of a mortgage. And we now have some small savings.

I am sorry if that sounds like gloating, it was not meant to sound like that.

We made a concious decision about 5 years ago to become debt free. It was a difficult decision as the kids where teenagers but we new it had to be done as we where getting older and jobs can be difficult.

The last 5 years have been harder than normal, we went without 2 weeks in the sun, settling for 4 nights in the sun. Meals out became birthday treats etc. I have one small vice which I cut it down to save money,

But to me the best bit is knowing credit companies are not making money off me, when I use a credit card I pay it off straight away.

In some ways it has made me a lot less willing to part with my money. In the old days we would just buy something on a whim, Not now. If we buy something it is a neccesity. I am currently selling my bike and am looking for a small project, but look as much as I do and all of these projects are so overpriced it looks like I will not bother, sad really.

Good luck with what ever you decide to do.
Logged

Field Marshal Dr. Opti

  • Get A Life!!
  • *****
  • Online Online
  • Gender: Male
  • Utopia
  • Posts: 31559
  • Speaking sense, not Woke PC crap
    • View Profile
Re: Dave Ramsey
« Reply #3 on: 16 August 2013, 15:21:43 »

I've never heard of him or his book before, but I found a summary of it, see below

http://totalmoneymakeoverpdf.tumblr.com/


It all seem to make sense to me. Obviously his video is all a bit OTT and U S of A style, and I'm really not sure about how practical it is to write absolutely everything down. But the general approach of having a budget and chipping away at small debt and moving onto the next seems absolutely sound.

Personal debt is of something of a hidden issue. Nobody likes to admit it, vast numbers of people have it in some way or another, there is huge pressure and temptation to spend more than you earn. Credit card companies, banks, payday loan sharks etc all like us to have it, Governments ignore it. You want a flash car that you can not really afford ? Easy there will be a way for you to get it.

What he said all seems good to me

That's how I ended up with a seven year old  £1300 Omega.

I really must learn to be more frugal in future. ;)
Logged

aaronjb

  • Guest
Re: Dave Ramsey
« Reply #4 on: 16 August 2013, 15:27:13 »

and I'm really not sure about how practical it is to write absolutely everything down

I'd say it's essential if you really want to know where your money is going.. doing that I realised just how much I was spending on, essentially, 'nothing' - lunches at work, coffee when out etc etc..

Although, to be fair, I no longer do that - what I did was open another bank account and put a set amount of 'spending' money into that account; out of that comes everything but my monthly bills (mortgage, council tax, utilities etc) which come out of my original account. Amazing how easy it is for that money to be diminished by lots of tiny purchases..

It's not without sacrifice, though - I used to have a monthly meet up with a bunch of friends for a meal & a drink in Essex, that's gone for a ball of chalk and I now hardly ever make it as I have no 'spending' money left at the end of the month, we don't really go out much or do anything outside of work, eat and sleep. In terms of morale and emotional/mental wellbeing there's been a big decline, actually, lifted only when I see myself clear a chunk of debt.

All in all.. maybe ignorance was bliss!  :-[
Logged

05omegav6

  • Guest
Re: Dave Ramsey
« Reply #5 on: 16 August 2013, 15:58:34 »

The frightening thing for me is the prospect of having to pay £640 a month into a pension arrangement of some sort :o

It's going to be a pretty steep learning curve. Certainly, accounting for every penny is going to require some hard mirror time :-[
Logged

Field Marshal Dr. Opti

  • Get A Life!!
  • *****
  • Online Online
  • Gender: Male
  • Utopia
  • Posts: 31559
  • Speaking sense, not Woke PC crap
    • View Profile
Re: Dave Ramsey
« Reply #6 on: 16 August 2013, 16:08:34 »

The frightening thing for me is the prospect of having to pay £640 a month into a pension arrangement of some sort :o

It's going to be a pretty steep learning curve. Certainly, accounting for every penny is going to require some hard mirror time :-[


With the distinct possibility of getting back less than you paid in. :-\
Logged

Rog

  • Guest
Re: Dave Ramsey
« Reply #7 on: 16 August 2013, 16:19:33 »

The frightening thing for me is the prospect of having to pay £640 a month into a pension arrangement of some sort :o

It's going to be a pretty steep learning curve. Certainly, accounting for every penny is going to require some hard mirror time :-[

I didn't read that bit  ??? I would be careful there. Paying off interest bearing debt always takes a priority over everything else. Just look at the interest rates that Credit card companies charge Vs the return on investments. Just a few percent gained on "safe" investments Vs 20, 30, 40 + percent paid on credit cards and others. No brainer.
Logged

05omegav6

  • Guest
Re: Dave Ramsey
« Reply #8 on: 16 August 2013, 16:47:28 »

Spot on Rog :y

The idea as I understand it, is to invest in a spread of funds, giving a return of 8% allowing for inflation, over twenty five years. All things being equal this could give an annual income of 40-50k being paid from the interest.  Need to speak to someone who knows before embarking on such a commitment though.

In the grand scheme of things I have a couple of overdrafts and one loan, with no credit cards, so much better of than some, but no guaranteed income. I should have paid alot more attention a decade or so ago :-[
Logged

I_want_an_Omega

  • Guest
Re: Dave Ramsey
« Reply #9 on: 16 August 2013, 17:10:50 »

The frightening thing for me is the prospect of having to pay £640 a month into a pension arrangement of some sort :o

It's going to be a pretty steep learning curve. Certainly, accounting for every penny is going to require some hard mirror time :-[

Is that actually paying it o thinking about paying it? I suspect the second. The longer it's left the bigger the number becomes.  :-X Pensions are one of several large ticking timebombs that our society has to face upto  :(
Logged

05omegav6

  • Guest
Re: Dave Ramsey
« Reply #10 on: 16 August 2013, 17:29:32 »

Yup, the second :-[ fortunately I am the right side of forty, but along way past twenty five :-\

Time to knuckle down...
Logged

MR MISTER

  • Guest
Re: Dave Ramsey
« Reply #11 on: 16 August 2013, 20:18:18 »

I don't know quite how to describe my behaviour in matters such as these. I will spend months moaning that we are spending too much on things that we don't need. Which is just as well, becaause the wife can shop for England. Then for no reason, I will wake up one morning, decide I am fed up being a tight git, and go mad.
A good example is the recent purchase of the orlando. There is/was nothing wrong with my zafira. It was seven years old, but tidy with only 48000 miles.
There you go. :-\
Logged

05omegav6

  • Guest
Re: Dave Ramsey
« Reply #12 on: 16 August 2013, 20:25:27 »

Saving up to spend it is fine :y (provided everything else is accounted for of course)

Borrowing to buy stuff is plain stoopid, as I am slowly coming to realise....
Logged

Rods2

  • Omega Lord
  • *****
  • Offline Offline
  • Gender: Male
  • Sandhurst Berkshire
  • Posts: 7604
    • 1999 3.0 Elite Estate
    • View Profile
Re: Dave Ramsey
« Reply #13 on: 18 August 2013, 02:32:49 »

Spot on Rog :y

The idea as I understand it, is to invest in a spread of funds, giving a return of 8% allowing for inflation, over twenty five years. All things being equal this could give an annual income of 40-50k being paid from the interest.  Need to speak to someone who knows before embarking on such a commitment though.

In the grand scheme of things I have a couple of overdrafts and one loan, with no credit cards, so much better of than some, but no guaranteed income. I should have paid alot more attention a decade or so ago :-[

Pension growth projections are always IME good for a laugh, just don't take them seriously and expect to average this. In the present climate after inflation consider that you have done well if you manage to cover the fund annual costs which are normally 1-2% of the funds value. It may not seem like much but it is over 30 years. 30 X 1.5% = 45% of your funds value have gone to the fund managers. Now this used to be livable with when there was good global growth and tax relief on pension fund dividends, but with the current poor global growth and Gordon Brown with his £5bn a year tax raid has basically IMO screwed the private pensions system.

Personally, I won't lock any further money in pension funds, where there is no stability on how rules and taxes will change, which are beyond my control. I would rather pay the tax now, have complete control over the money and have my own investment strategy.The important bit is having a credible, funded, retirement plan.

Make sure you factor in that inflation will halve the value of your money every 20 years.

As an aside, at the moment the stock market is due a correction where it is overbought. PE ratios have gone up massively where profits are largely flat. The current global rises equity rises are not backed by fundamentals but due to massive QE liquidity sloshing around that has to find an investment and return home somewhere. This is the next global bubble that is just waiting to burst.  :o :o :o :o
Logged
US Fracking and Saudi Arabia defending its market share = The good news of an oil glut, lower and lower prices for us and squeaky bum time for Putin!

05omegav6

  • Guest
Re: Dave Ramsey
« Reply #14 on: 18 August 2013, 04:38:29 »

The aim was/is aim for 12%overall, less 4% for inflation over 20-25 years :-\

The argument being that although current interest rates are pretty much 0, and not much higher as an average for the last decade, the previous decade averaged 18%. Average growth over the last  80-90 years has typically been near as damn it 12% year on year...

Retirement fund is perhaps more accurate than pension fund. As already said, I will be seeking professional advice before committing to anything, but as a rough idea of what I am considering...

Mutual funds with  proven record of 10+ years growth, split equally

1. Growth and Incomne funds, (Blue Chip).
2. Growth funds, (Equity/S&P500).
3. International funds.
4. Aggressive Growth funds.

As a further thought, presumably there is no reason why instead of paying, say, £500 each month into a pension fund for 25 years, so a total of £150000 hypothetically, that that amount couldn't be saved up and then be invested as a one off amount with a view to allowing it to mature for twenty years :-\
Logged
Pages: [1] 2  All   Go Up
 

Page created in 0.038 seconds with 21 queries.