Dave Ramsey vs. The Money Guy: Which Strategy is The Best? 

I know plenty of grown adults aged 30-92 who do not respect debt and constantly steal from their future without understanding what is going on. Dave Ramsey is for them.

That is such a good point. As much as everyone wants there to be a one-size-fits all strategy, it differs from person to person.

Totally. I really don’t care for Dave’s style and I’ve heard some things about him that I really wouldn’t agree with. All that said, I truly can’t argue with the results. FPU works for people in the way that my finance nerd advice does not. So that’s good.

Similar experience with a co-worker. Not running a business, but just couldn’t handle the responsibility of managing the debt.

I mean to be fair, I use "Good debt" to fund my business and it has made me far more money than I could have if I would've been debt free and waited. The idea though is that you pay OFF that debt asap before it does eat away from your bottom line.

I’ve posted numerous comments after Ramsey videos telling people it’s time for them to graduate to the Money Guy. Unfortunately Money Guy has lost their focus on teaching sophisticated points to the financial mutants.

Nailed it.

I kinda started going in the Money Guys direction even before I ever heard of them, which was only a couple of weeks ago. I definitely enjoy both though and they both do great work.

My wife and I did FPU and it revolutionize our finances and that was back in 2015. I still follow Ramsey Solutions but I have also been tuning more in the Money Guy Show. I couldn't agree more that a blend of the two strategies is huge. Move with gazelle intensity in Baby Steps 1-3 and in 4-6, apply the FOO and become a financial mutant.

I totally agree, I'm on bs 6 and with the high yield savings accts at 5.25% and my mortgage at 2.99%, I started to think I am probably in control enough at this point to funnel money to the hys acct. Once those rates start to tumble I can always move it to paying off the mortgage. But this would not work for someone likely to use that money for other things.

Same for me, Dave was my ticket to financial education and what led me down the path that ultimately had me on this channel. Dave gave me the tools to become debt free, The Money Guy gave me the tools to financially flourish in a way I never dreamed possible a decade ago. 33 250k liquid networth, zero debt. Thanks Chris and Bo

Exactly! I use one credit card for convenience & pay it off weekly. I use it to fill my tank up with gas ⛽️ & buy groceries. I’m not getting rid of it!

That was me

😊👍 agree

I think you're totally right. Dave Ramsey is what some people need. But you can do better if you can handle it.

Dave jump started me. For 20 ys was drowning in debt even though my income doubled, almost tripled. I paid off 25k in 9 months (3 loans). Now taking a break to bulk up 401k.

I think that a good way to look at it he makes it simple enough for not very financially educated people to be successful

Agree....Dave starts that beginning you literally cannot do the money guys until you get out the debt. Also Dave has his ELP... Dave gets the monkey off the back... These guys help grow your money if you do not want to use an advisor.

Well said.

100% We did FPU; it got us started down the right path. We've made a ton of progress. But Caleb Hammer has pushed us over the edge. I'm here on the Money Guys because we need to know what to do after we're debt-free when the house gets paid off soon.

Nailed it

Agreed. I'd love to see them make 2 different illustrations on this just for poops and giggles though.

And even if you pay it off it still costs you every year with taxes! I'm still a believer of you pay it off taxes shouldn't happen! This is a big reason why our elderly can't afford their homes after they pay them off.

@@randalfischer8939that would be a huge blow to state tax revenue. Which the elderly also rely on for healthcare etc.

I agree, I am financially disciplined, but I have a "safety" gene and want to have safe investments protected before the more risky ones. That brings a peace of mind that makes me enjoy life more having that security

When it's urs, it's urs. Minus property taxes. Good goal to have.

🤣🤣🤣🤣 me too

I'm really excited about this comment! This is going to be the most exciting comment about Bo's excitement ever!

“Love it!!”-Bo

i actually use both. Dave is better for paying off debt. i dont have a job with a 401k, i will have a pension plan. So i want to maximize my time horizon by NOT having debt by retirement and also having supplemental income from a personal ROTH. also, also, i like my cars so i did my on spin off and will save for them in cash/investments/CDs so that I can pay in cash. essentially, I decided on my maximum car price FOREVER. 35k for my entire life and will save for it in 5 year increments, so that by the time I retire, the money can pay for both repairs and the interest can perpetually accure. I mean I might buy a car every 5 years or actually wait every 10 years or even when it fully breaks down. THATS MY OPTION. but I'm not maxing out my money on vehicles that take away from retirement. While that sadly denies me certain types of vehicles, it enables my future self to one day make a FULLY FUNDED (ie not financed) dumb car purchase. laugh at like im poor now, but I'm debt free. and I'll have enough WEALTH to pass off to my kids to have them born with silver spoons. my great idea is that I can do a cash out refi my home and give the money to my kids so they can have a house PAID IN FULL and they just pay our mortgage and own 25% of the house. and when we die, they can have the home in full anyways. 😂😂😂. they can then fully use that home as a rental or sell it. we would be dead anyways, but it could serve them well to do as they see fit. KEY THING IS, to NOT have lots of kids. I want minimal inheritance. 100K ÷3 has less purchasing power than 100k ÷2. this is my LIVING inheritance plan, aside from a life insurance policy.

Tithing is not a NT command so I disagree with Dave on that point.

That seems only important to the religious crowd.

Probably the most important thing to have fully paid off when you go into retirement is your house. When you are 25, paying off your mortgage quickly doesn’t make that much sense, but if you are 45 paying it off quickly is pretty important. The one thing that Dave doesn’t go into is how to create cash flow in retirement. Rental properties is a good thing for that, dividend stocks or REITs is as well. What’s important is to go into retirement with as few expenses as possible while creating a few streams of cash flow.

Not really. Focus on dividends is misplaced. Too many other simplistic misconceptions to get into. Check out Rob Berger videos, for example. With inflation at 5+%, why repay a

very unique way of looking at it, thanks for this perspective

Yeah I think if you are a natural spender then what you say is true. For people that are natural savers and hate spending though I can see them using credit cards without getting into trouble with them.

Yeah how the hell is someone nowadays making 40k BEFORE tax gonna be spending 10k a year on retirement when 15 should be plenty and that’s way better than most people that are way in debt.

Also, contrary to what Dave says, it can be extremely difficult (if not impossible) to qualify for a home loan with no credit score, and therefore an entry-level credit card can be good for building credit in order to get a home loan. However, I completely agree with him on avoiding credit card debt that you can’t pay off. I never use more than 25% of the limit (it won’t help your credit score as much otherwise), and it’s always an amount that I can easily pay off with cash.

perfect description!!!

Plus, taking advantage of 401k match before paying off debt, and the first step is better than Dave's baby step 1

Dave Ramsey is a racist tho. Very condescending to persons of color.

@@GeneralSirDouglasMcA I am going to say this -- I LOVE Dave Ramsey, but even before listening to these guys I had decided early I will NOT cut up my one credit card that has been with me for 10 or more years and when I didn't have a job, my credit card help me feed my family. I keep my credit card not only paid off, but even with a $100 credit, if I can. You have to eat the meat and spit out the bones. I also differ from these guys where I want to pay off my mortgage ASAP.

Lets not forget how badly Dave has shit on his employees.

Why would you pull from your brokerage account instead of your emergency fund?

@@haydenclement2738 well, I think the emergency fund is for emergencies only and not necessarily for regular living expenses. If you depleate the emergency fund on routine living expenses then you won’t have anything left for an emergency. I had to dip into my emergency fund once for an emergency. I woke up one Sunday morning to take my little guy to Cub Scouts. When I went to get into the car turns out someone had crashed into my car during the night while I was asleep. The whole front drivers side was smashed in, tire flat and bent so badly that it wouldn’t turn. None of this was visible from the other side. I do have insurance, but a thousand dollar deductible and it took a month to get the car fixed and I had to rent a car for that month. There was over $8,000 of damage to the car. I used the emergency fund to pay the deductible and car rental cost. Something like that, an unexpected occurrence, can happen regardless of what the economy is doing. Thank goodness I had an emergency fund!

I can feel your pains. New guys need to realize the risks that come with all of this. You could lose it all and you could win it all. It goes both ways. Second, what works for A may not necessarily work for B and you should not be a bandwagon investor. A good number of folks are raking in huge 6 figure gains in this downtrend, but such strategies are mostly successfully executed by folks with in depth market knowledge.

@@freedomisEexpensive-08 Factos!! Since the market became extremely volatile and pressure increased (I should be retiring in 17 months), I took the decision to work closely with a financial advisor. It has already been 9 months and counting, and I have made approximately 600K net from all of my holdings

@@NotyourBusiness-urto6 credits to NICOLE DESIREE SIMON, one of the best portfolio manager;s out there. she;s well known, you should look her up

Which is the majority of people

Right !

I agree that it is the majority of people. My criticism of Dave would be that he thinks it's 100% of people.

that's all apart of the mental gane though. You're not seeing that. For the sake of the majority he has to be 100% with his points unless he's outright incorrect. Because people listen in and if they hear flip-flop or exceptions people will always think their different.@@theduke7616

I live in one of the hotter areas for housing in the last couple years (Roseville, CA). A lot of newly tele-working bay area techies moved in during the pandemic. My house (4bdr, 2000') went up 50% from mid 2019 to mid 2022, but has since dropped 18-19% in the past 5 months (higher rates, prices calming). Things might not be as bad as you think now, or you're in a weird area that might not be worth it.

@@Lucky008aau I'm in the North Phoenix area. It looks like prices may be dropping but not as much as they've gone up by

Another problem with the Ramsey rule for home buying is that by the time you save up the 20% down payment, plus more if necessary to bring the loan size down to the point where the payment fits within the prescribed limit for a 15-year mortgage, the home prices likely would have increased significantly during that time, making you worse off than if you'd gotten a 30-year mortgage with a 5-10% down payment a few years earlier.

Hey guys so in Canada the 6-700k house is average, and that’s down 10% in the last year .. I get your frustration with the price up - 2 points: if you bought your house in 2007 you would be saying opposite, and, my monthly mortgage payment increased by $1000 since January (I’m glad I had no other debt) we can’t get 15 year fixed up here

Dumb blanket comment. Literally millions of people have followed Ramsey and thrived.

You can not work on a new car with all the computerization. Even the manual will tell you "no user maintenance" the backyard mechanic days are over forever!

Dave is way out of touch on the Car issue

I’m in the same boat

I want to sleep well at night AND do X, Y, and Z

This

I see it as Ramsey is going to high school, and TM Guys are teaching like you were in grad school, they both complement each olther.

Dave is for the idiots

Jason not so - the spread of performance 10% versus whatever the lower mortgage rate would be benefits the investor over the mortgage prepayments and exponentially amplifies over the following decades since that 10% difference compounds. We were kind using 6%, and wanted to be conservative on the assumptions and respectful.

@@MoneyGuyShow thanks for the response! Maybe I was unclear. At 17:17 you use an example, very well done I might add, showing that saving 25% vs 15% gets you to financial independence 8 years sooner. At 18:11, Brian, you tell us this difference would be even greater if you assumed a 10% return. That is not true. Rerun the math with the new assumption. The better the return, the less your contributions determine the final value. This can be easily seen at the extremes. Would the 15% saver reach $1,000,000 closer to the 25% saver if the rate of return were 0% or 100,000%. 100,000% obviously. They would both get there in the same first year. Cheers!

I ran the numbers off a 55k salary. (Assuming none of these people got a raise) The difference at 6% is only a few hundred thousand dollars while the difference for 10% is 1 million dollars…….. and at higher incomes I’m sure the discrepancy is much higher. You are just flat out wrong.

@@domferris9963 you would be correct if we were talking about the difference in final portfolio value. But we are not. We’re talking about number of years to a set portfolio value.

The same fairy tales with talking animals? Ya, no thanks.

Dave has never advocated a car loan

It depends how old you are, how much you can handle risk/complexity, and how much you've saved. Under 40, go with the taxable account. Over 50 and on track to retire when you want, focus on the mortgage. Mathematically, a taxable account makes more sense (equity investments should return much more than 3%). Emotionally, some people feel better not having debt. The boys will tell you to have it paid off by retirement, but they've also told people it feels good to save up money in a taxable account and to think of that money as a way to pay off the house.

Invest in the taxable account. Or just put it in a money market. You can earn 4.5% with liquidity. The 3% mortgage is like free money, don’t pay it off early

VA loans have a 3% service fee