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.