Dave Ramsey Accidentally Shows Us Why We Use Caution When Taking Advice From Personal Finance Professionals

Earlier today on Twitter, personal finance “guru” Dave Ramsey showed us his plan that would allow everyone to “become a millionaire”:

Saving only $100 per month from age 25 to age 65 at 12% growth = $1,176,000. Everyone should retire a millionaire!

Sure, he’s encouraging people to save, and that’s obviously a good thing. But, he’s also using exaggerated claims about how to achieve some dream-like lifestyle in an effort to sell more of his stuff. The truth is, it’s not that easy for most folks, or even financial professionals for that matter.

After receiving several responses calling out his absurd claim, he took to his radio show to go on an all out rant:

It’s simple concept in a culture that has the savings rate and financial maturity of a two-year-old. To simply put out there that maybe if you save some money you would have some blows people away. This is why I have a job for as long as I want one. I will never be unemployed. Just teaching people to save money and get a bunch of money and get out of debt. Me and Jenny Craig, we got a lock for life, baby. We got enough work forever.

Ouch. Sure, there may be some truth there, but come on. He’s basically said that he likes that people are in debt because it keeps his pockets lined. Not cool, man.

He later went on to say that if you can’t find a fund that averages 12% per year, then you should call his hotline for advice on which funds to pick.

Very convenient…call a hotline to get a list of Ramsey-endorsed funds. I wonder why he would endorse certain funds?

It’s because he gets PAID to endorse those funds! It’s the same scenario when a financial advisor recommends funds that bear his or her company’s name—they get paid more to suggest them whether they’re the best option or not.

All in all, Dave Ramsey does help a lot of people. However, it’s a good reminder that no one really cares about YOUR money more than YOU. Especially someone that gets paid for giving you advice.

  1. bearodon reblogged this from canajunfinances
  2. canajunfinances reblogged this from moneyisnotimportant and added:
    12% year over year? I didn’t that during the dirty 90’s! Real growth 3-5% is a good model (and even that may be a little...
  3. kittymarx reblogged this from plagueonurhouse
  4. plagueonurhouse reblogged this from moneyisnotimportant and added:
    12% return. 12% return. I…just…ugh.
  5. plantosave reblogged this from moneyisnotimportant
  6. even20four11 reblogged this from moneyisnotimportant
  7. toppriorities reblogged this from moneyisnotimportant and added:
    He’s a funny guy and although I’m not religious, he does squeeze in God into his seminars in a non-pushy way. :)
  8. aulpatrick reblogged this from moneyisnotimportant
  9. linda0711 reblogged this from moneyisnotimportant
  10. celloyouvegotabass reblogged this from moneyisnotimportant and added:
    12%? sign me up dude
  11. digital-wisdom reblogged this from moneyisnotimportant
  12. heatherileana reblogged this from moneyisnotimportant
  13. fruglr reblogged this from investsafely
  14. investsafely reblogged this from moneyisnotimportant and added:
    Another reminder - No one cares about YOUR money more than YOU.
  15. financial-reader said: Dave Ramsey is a case where I would say “Don’t throw the baby out with the bath water.” He does have a lot of valuable things to say, but it is sometimes mixed with sensationalism and hype.
  16. theskinhorse reblogged this from moneyisnotimportant
  17. fire--lord--azula reblogged this from moneyisnotimportant