The Worst Money Advice Your Parents Gave You
Вставка
- Опубліковано 16 лип 2024
- 💵 Create a free Budget - Sign up for EveryDollar today! ter.li/ubldyt
Ever realize that some of the things your parents taught you weren’t quite right? Yeah, me too. That’s why I asked you guys what parental money advice you were given that turned out to be a bad idea.
Links:
This episode is brought to you by BetterHelp. Give online therapy a try at
www.betterhelp.com/george and get on your way to being your best self.
Preorder George Kamel’s new book, Breaking Free From Broke, and get more than $100 in FREE
bonus items. store.ramseysolutions.com/mon...
Universal Life Insurance? More like a universal LIE:
• Don’t Buy This Univers...
Why car loans are robbing you blind: • Why Is No One Talking ...
George Kamel is a personal finance expert and co-host of The Ramsey Show. Following Ramsey’s proven money plan, George went from negative net worth to a millionaire in under 10 years. His goal is to help people spend less, save more, and avoid money traps so they can live a life with more margin, options and freedom.
This channel will simplify complex money topics, bust money myths with actual facts, and debunk the stupid financial advice you're seeing in your social media feed. All with a healthy dose of pop culture, humor, and snark.
I’m a senior in high school. My dad keeps telling me that debt is okay in college if you don’t go crazy with it, paying cash for a car is impossible because more reliable cars are more expensive, and he wants me to buy a house as soon as possible. While he does have good financial advice every now and then, I think I’ll avoid debt, pay cash for a car, and buy a house as soon as I’m ready to buy a house.
Sometimes the biggest lessons we learn from our parents is what NOT to do.
No need to rush life but if you can aford a house it's beter to bie sooner rather than later when homes become to expensive to ever aford.
The college part is right especially if you wanna be a doctor/teacher you know obvious things you need a degree for but go community college or at least an in state or online college waaay cheaper. You can either pay for it before, during or after school that works.
You can pay cash for a car
Only but a house when you are ready mentally and financially. Houses are a huge responsibility
And you’ll probably buy a house before your peers anyway but you will have a huge down payment and zero debt.
My parents (pre-baby boom) taught me two things about money: 1) we didn't have any, and 2) whatever it was, we couldn't afford it.
I had a girlfriend when I wasn't a lot older than you; I was in the Navy at the time. She taught me that the price is the price (strange, if you understand the stereotype about many Asians), and that it's better to have fewer, good quality things rather than a lot of things that are cheap.
Thankfully for Walmart, most Americans do not follow that kind of advice.
The bit of advice that was missing from my dad:
Having an emergency fund to weather the storms of life.
He talked about saving for retirement, but not the emergency fund, because I don't think he was taught this concept.
credit cards are good if you pay them off 100% every month. They offer far more consumer protections and pay you a small amount back. Credit scores are a must because very few people can afford a house without a mortgage
They are not good at all. Any benefit or rewards you get have been leeched off someone who was not educated about them and has been tricked into debt which they will probably never get out of.
@@LawrenceTimme”any benefit or reward” well George and Ramsey always say a 15 year fixed rate mortgage and pay it off early…okay who is going to give you a mortgage (with a good interest rate) without a credit score? There are ways to build it without debt but for the vast majority of people who can leverage credit effectively, it is kind of a no brainer
@LawrenceTimme if everyone listened to Dave Ramsey, the economy would collapse. We have built an economy which relies on idiots
Skill issue
The worst money advice my parents gave me is that 8% is a safe withdrawal rate ;)
😂
The worst financial advice was that I needed to go to college in order to get a good job. Financially speaking, I wasted my twenties by going to college, getting a six figure degree, and then spending years hitting dead ends in jobs that weren't a good fit for me. I should have just gotten my CDL at 21 instead of this year at 31, and I probably would have already bought a house years ago and have a good amount invested for retirement. Or just became a UPS driver and be doing really good financially.
My parents put a lot of financial focus on appearances- they said debt was inevitable, and my mom liked to spend on nice things- especially on a home decorated to look like a magazine. To them, having that big fancy home where we could each have our own rooms was “it”. But honestly we had the most fun in the tiny apartment where we shared bedrooms 🤷🏻♀️
Many wealthy individuals maintain their wealth by adopting frugal spending habits similar to those of the less affluent. They also prioritize continuous investment, whereas some poorer individuals tend to spend extravagantly without focusing on long-term investments, often attempting to impress those who are already wealthy.
How do you do that? I'm interested
I'm happy to see Everett Gary Oliver mentioned, She is recognized worldwide, my neighbor recommended her to me after investing £45000 and She has been a blessing to us
Same here, i will praise Mrs Everett Gary Oliver over and over again because She has great skills, i started with $30,000 and after 2week i received a returns of $118,000 then i continue with her ever since She has been delivering
I'm from Canada and I am currently on a weekly profit of $21,000 . I bless the day I invested with everett gary oliver
To be honest I invested as low as $7,000 because I was skeptical initially. Receiving my profit gave me more confidence to reinvest higher.
I'm a Mom of 2 adults. The worst advice I gave my son was he needed a credit card. I taught my youngest The Dave Ramsey way. I cleaned up my mess with my son and paid off his credit card of $6K I had to right that wrong before I paid our own debt. In BS7 now. Thank you❤
Not only you gave him horrible advice but you also did him NO favor by paying off his debt that he accumulated… smh
Credit cards are fine if used for smaller purchases and if you can afford it bigger purchases down the line. They should not be used like an unlimited money tool or for emergency expenses. Though I do understand sometimes stuff happens and you just have to.
@r.soclose Time will tell. My conscious is clean.
And what did he learn by you solving his problem for him
That was good of you to pay off that credit card for him. Speaking from someone who had family who helped me and family who didn't help me, I know which family I'm taking care of when they need it. People talking about 'what does he learn from you helping him' have such a brutal and sad view of how families should support each other. I'm sure that your decision will come back to you in a good way
worst advice i ever got was being told you can pull 8% every year from your 401k and you'll be fine.
😂
My dad gave me a some good advise "Never borrow money for toys" and "A car to get you from here to there, anything more is vanity."
My brother went to private medical school and has humongous student debt. But he graduated, got into a competitive specialty, and now makes big bucks. But if he’d not finished, or if he had ended up in a small-town practice, he’d be paying on those debts forever. It was a gamble. I’m glad he lucked out. But not everyone does. I will be going to college soon, thanks to Uber’s partnership with a university to give free tuition to drivers who have over 2,000 lifetime trips (just passed 80% of the way there this weekend). And I’ll save for graduate school after that.
So much knowledge! Absolutely free! I was never taught anything about money, I am praying and working to change that. I am 46 no retirement no savings because I made a lot of mistakes when I started investing, trying to correct that now. Already have a few thousand$ saved up to invest for long term. I would like to know what advice you could give to start my investing journey. Listening to you gives me inspiration and wisdom. Thank you so much!
Just buy low sell high. Stick with a good company by either not selling when it’s going lower and/or buying more at that time. Almost always the good well managed companies will come back strong at some point. The other is to get yourself a financial-advisor that can provide you with entry and exit points on the shares/ETF you focus on.
That's impressive! I could really use the expertise of this manager for my dwindling portfolio. Who’s the professional guiding you?
Thanks for sharing, I just liquidated some of my funds to invest in the stock market, I will need every help I can get.
My parents never gave me bad financial advice, because they were SO BAD WITH MONEY, and SO BROKE, that anything they tried to tell me bounced right off. Worst was my step-father, which determined that his net worth was determined by the credit limits he had on his credit cards, car loan, and HELOC. Seriously.
The system is stupid. Most of us can agree on that. The truly sad part is that most parents can't teach financial literacy to their kids because they never learned. And schools won't teach it to kids because.... why? Not sure. So I'm stuck trying to teach both my retirement aged parents as well as my college aged kid
Schools only want to teach students how to be good slaves to the machine that feeds the elite.
Don't get me wrong: capitalism is far and away the best system for raising the tide that lifts all boats. Only the poorest of the poorest of the poor under any system that is primarily capitalistic in nature (hint: there is no such thing as a pure free market, or a pure command economy in this world) is not positively affected by capitalism.
Unless the Governments hire people like George Kamel or any of the other Ramsey team members to teach money advice in school, I think we are better off without them making it part of the curriculum. Have you noticed how poor the Government is at handling money? I just don't trust that they could come up with any better information than the advice shared by many parents and grandparents in this video.
schools need to teach basic financial literacy and cooking courses to all people. Incredibly valuable skills.
Parents either don’t have basic personal finance knowledge to begin with, or they grew up during different time periods, circumstances, and cultures so whatever strategies worked for them doesn’t necessarily work for future generations.
Credit scores are utilized for more than just issuing debt. Auto and homeowners insurance companies will review your credit score as part of their risk assessment of insuring you.
I was lucky my parents where good with money.
My Dad always quoted Charles Charles Dickens about money.
"Annual income twenty pounds, annual expenditure nineteen six, result happiness.
Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery."
I never recieved any bad financial advice from my parents, only thing I was told is to save money. They however were such good examples of how to be bad with money, that I learned perhaps the best life lessons. My bad examples were, file for bankruptcy, ignore bills, dont pay your mortgage, no savings, dont work hard, then lose house, become homeless and I got dragged threw all of this. I learned my lesson young.
I feel for you ❤ my dad passed on all his bullshit onto me as well and I'm still cleaning this mess up.
Parents told me that renting is throwing my money away and that i should get a mobile home with a small mortgage and then pay the monthly lot rent. By doing this, I’ll have more money to pay off debt and i can sell the mobile home later on and make money.
Ugh!!!!!!!
Dave Ramsey hard staring at George right now making sure he stays on script 😂
Papa Dave's bad advice is "pay off your 3% mortgage in your 20's"
Yeah. The S&P grows 10-12% EVERY YEAR. 😁
When i was struggling in high school in the early 80's, my foster mother told me not to worry about it. i didn't need a good education because I would have a husband to support me my whole life.
TELL me you didn't believe her! And God help all the girls who did believe this lie and were later crushed when their husbands dumped them.
So many of us …..
My parents started listening to Dave when I was a teenager. I'm very lucky.
You will not be lucky when they start withdrawing 8% in their retirement
You got me. When they, my parents, take out 8% I won't feel lucky. Our financial success relies on that. It also relies on credit card debt, car loans and leveraging debt. My life is ruined. I don't know what I'm going to do if my parents take out 8%. Thankfully they don't need to. Thankfully I won't have to. Followed Dave's teachings for a couple decades now. It works.
My dad told me to get a credit card ASAP I got it when I was 19 never missed a payment 95% of my time I paid in full only couldn't afford it maybe 3 or 4 times and my credit score right now is about 805 so I think it was great advice allowed me to buy my house when my credit score was 750
Your dad gave you a really good advice. Much better than the "expert" in this video. At 7:27 he spins it as bad advice. Let's see who gets a better Mortgage rate you or people who listens to this blogger.
I'm grateful that I never received bad advice from my Mum concerning money. She hates debt and never went into overdraft. The only thing I'd say she did incorrectly was stick with the same utilities providers when she could have looked around for a better deal. She is risk averse, but that has stood her in good stead. ❤️
My parents always told us to save. They paid off thier mortgages, no debt in retirement. Taught us the same thing!!
No advice from my parents or older siblings. I had to make mistakes including telling my daughter what I later had to take back and apologize for the confusion. So far she's doing well...paid student loan in full and working to return and finish degree debt free. And just asked for FPU. She got the email yesterday.
I always enjoy your videos. I don’t always agree with your advice, but love your delivery format.
lol you don’t agree with the millionaire giving your sound, lasting financial advice? Tell us more!
@@LindseyHarvell-vc4ez I am also a millionaire. I don't see anything wrong with getting a 30-year mortgage, for example. I don't see anything wrong with using credit cards, if you pay off the balance every month, especially while traveling abroad. Using credit cards is safer, because of the consumer protection laws.
🧡 heard all of these from my parents. Thank you George for sharing!
The worst financial advice I received is that 8% is a safe withdrawal rate.
Are you Dave Ramsey's son?
Clever one lol
I’m glad you appreciated my comment 😂
Thanks for the content, George (and team)! There is so much information packed into each video, but it is nicely paced (I don’t have to track back to hear it again) and very entertaining. Excellent work! I know you put a lot of effort into each video. It is appreciated!
ok George thank you
I noticed George has a Billy Squier's 1981 album face on the shelf behind him. I'm wondering how his parents were rocking out in Egypt playing that...hmmm
I didn't find out that I had a credit card until almost a year later, when I graduated boot camp.
My mother, a teller at a bank, went ahead and completed a mailed credit card offer and sent it in. For that year, they would get a tank of gas using the card and immediately send in the payment.
I actually had a 700+ credit score at 19 a few months after getting the card from my parents and a couple of small signature loans from navy fed and almost immediately paying them back.
I've learned a lot since then.
I gave my 17 year old daughter, who's a Junior in high school, The Total Money Makeover, and told her to read it cover to cover before she graduates.
Amen George
In most states no credit score can also affect your ability to insure your vehicles. No or low credit score will limit what insurers you can use and what rates they will quote. It falls under their "personal responsibility score".
My parents told me to save 25%, give 10%, and spend the rest. The thing they didn't (or couldn't) teach mean was that "spending" includes needs like groceries and bills. That was a hard wake up call once I was on my own as an adult. (Although how do you teach that to a kid in a way that sinks in?)
The whole point of getting a good credit score is to be trusted with a bigger debt limit. Very useful for buying a house or a car when that ease of credit is needed in the moment, like an auction or short sale option. I'm struggling to build mine up because of my dad. He wanted my older brother to have a credit card but not me until 2019, a full 9 years after graduating highschool. From the start of his senior year for 5 years before working an official tax return job, my brother had a 8600 limit. All he did was use his credit card to buy a hot and ready pizza and slurpee next to the highschool twice a month. We want activity on the card, we don't want constant irresponsible debt.
Worst financial advice my parents ever gave me: Have a $1000 emergency fund.
I get why it's in the steps but holy moly was $1000 not enough when an emergency hit and wow am I thankful I had other savings.... not savings I should have used but at least not new debt from it.
I’ve been telling my parents not to buy another trailer for months. I’ve learned in the past few years most of the choices they make with money is awful.
How about recommending an 8% withdrawal rate in retirement like George's boss says is safe?
Happy Wednesday y’all!
Dude credit cards are great when you pay them off in full. 2% cashback on everything with Citibank, or 4% back with gas with Costco. 5% with rotating categories with other credit cards.
There are other perks but it keeps your spending organized and categorized. It helps build credit for when you do have a major purchase such as a car or house.
Use a credit card wisely and don't spend frivolously and you're all good.
It also provides you with extra security features that protect you when you make purchases. Credit cards are awesome when used properly. The problem I had is that when I first got one, I viewed it as extra money. I think most people treat it like that, and that's how they get you.
I said this to him once and he said it's ok to admit you can't not use a credit card 🙄. I've been all cash before. But it's stupid if you pay it off every month. Get that cashback.
No.
My parents didn't teach me a thing about money... in a way that's worse
If you plan to borrow money to buy a house, you will pay a higher rate if you don’t establish some credit first.
One credit card that you pay off in full every month is useful for this. It can also provide a useful buffer, giving you time to move money from a money market account into your checking account. This can help keep more of your money working for you more of the time.
Let’s be clear about something George.
If you add your child as an authorized user, and mess up their credit, they can request to be removed from the account, and their credit would reset.
Don’t spread misinformation
I never really got financial advice. That’s what this show and the Ramsey shows are for 👍
Everything my family told me was bad.
My parents never gave me any bad money advice. They're rich and smarter than most
My parents told me not to pay off my house early because then I wouldn't get the annual tax breaks.
A good credit score helps you get a good home loan. No one is buying a house outright anymore. While debt isn't fun, most people will run into debt sooner or later, might as well be in the best debt terms you can instead of the worst.
My parents always saved, and encouraged savings. I stayed out of most debt and knew I should get my 401(k) match, but I wish I had saved just a little more. I didn't have any solid guidelines to follow. I also dabbled in single stocks, because I never got any advice on HOW to invest.
Thankfully I figured it out before 30, so there was plenty of time left to invest more optimally.
My mom was ghetto fabulous and my step dad had no spine. She loved to spend his money on name brand clothes and kept revolving credit card debt.
Why do you have such a huge bucket of big league chew?! 😂
George please tell me that tele is tuned to drop c and not standard tuning?
I’ve been eyeing the pegboard wall as the backdrop for the sponsored sections. Is this custom or where can I find it!!
I have needed my credit score for only three things in life.
A personal loan when I had to fork over $3,000 to move into an apartment because they wanted 1st, last and the security deposit
When I financed my car (normally I buy used cars for cash but this time I went to a dealership)
And when I bought my home
Now that I make $110,000 a year, have two paid off vehicles and own a home... A credit score to me is effectively worthless
I think it’s a bit much to say you don’t need a credit score cause you can just never go into debt. If you want to buy a house or start a business there are loans that are reasonable to take out to do that, and having no credit score makes that more expensive.
I’ve had a credit card for years and pay it off every month. Some people can’t handle it and rack up debt, they shouldn’t have credit cards but that doesn’t meant they’re useless and evil.
When my dog was hit by a car and they needed to place a $17,000 hold on my credit card I was happy I had it. This accident didn’t cost me a dime because the insurance company reimbursed me every cent two weeks later. Without that credit card my dog would have died, even though I have pet insurance, because I couldn’t pay up front for a $17,000 vet bill.
I hope your pup is doing better ❤
My neighbor convinced his 20 year old daughter who had just finished school, that she should buy a 'top quality' car because it's a good 'investment'. Her total commitment over seven years with interest was just over TWO years of salary after tax.
So many contradictory videos on personal finances. Use credit cards only. Never use credit cards, buy stocks, stocks are a money pit that taks 30 years, buy crypto, dont buy crypto, make sure your credit is good, you don't need credit. 😫
Very true... In 2020 invested tesla $60 per share, then my brother said going lose it, then I sold it straight away.. 😮 .. I would made fortune thanks bro... Really important to say save and invest...
George Kamel, the Cory Wong of the financial world.
By example? Whole-life and front-loaded, actively-managed funds.
Worst money advice I got from my parents? That money was the root of all evil and that poor people somehow accrue more "Brownie points" with God by virtue of their financial misfortune. Which was usually followed up with "By the way, can I borrow $100?" Sorry, folks, there is no nobility in poverty, not all wealthy people are inherently greedy and selfish, and you're NOT obligated to be an ATM for people who can't get their fiscal cr@p together, even if they are family!
People misquote that verse all the time. 1 Timothy 6:10 actually begins, “For the LOVE of money is the root of all evil:”. Money is neither good nor bad. Greed (coveting money) is bad.
@@dannyh9010 that's 100% correct.
I get tired of hearing how old people are responsible for so many of the money problems today. Please don’t bunch them all together! “The Boomers blah blah blah blah”
I like what you have to say, mostly. Having a cc and paying it off monthly is the easiest way to build credit. Try getting a mortgage for a house with no credit score and tell me how that goes for you.
Apparently it's possible, but I still think having a score makes a lot of things easier. It's true that some people are better off without one, though, because a lot of people can't control their spending.
lol George did just that! It’s called manual under writing. Shop around and it can be done 😊
Heck, even most landlords don't even want to pour through years worth of bill stubs and pay statements to determine if you're worthy for something way less risky like a lease. Can it be done? Sure, but your options are heavily limited.
@damemethief the last time I rented with no score, I just paid a month in advance and doubled my security deposit (which I got back)
Corporate rentals won't budge but you dont want them anyways. A mom and pop landlord will ALWAYS negotiate.
@@jeffleonard343 Or did he? 🤔
He’ll tell you that, but won’t prove it because he most likely took advantage of the cheap loans from BCV (Before Coronavirus)
Young people would be in better positions if their parents would become educated with money. You don't have to be rich to point your children in the right direction and student loans are BAD.
#2 is correct. Kids can inherit credit history and a credit score is highest when you are never in debt.
My parents tried to teach me about investing, but I never understood their explanations. Parents know best, right? I trusted them to invest my savings for me, but they lost in what I now understand to be day trading (aka gambling in the stock market).☹️
Any unasked for "financial advice" they give me now would be better shared with a brick wall.
If you try to buy a home with 25% of your take home pay with a 15 year loan you will never buy a home because you will never find a $25,000 house anywhere that actually has jobs. The reason that they say 35% of your pretax money with a 30 year loan is this is reality you know the real world where you can actually find a house to buy. Only in a fantasy world is where you can actually find a home paying 25% of take home pay on a 15 year loan.
Going with this stupitaty to buy an average American house costing $400k you will have to be making a half million dollars a year pretax. So only the top 1% would ever own a home and everyone else would be renting for their entire lives never being able to retire.
You misunderstood the principle. It's a 15-year mortgage where the payment is no more than 25% of your monthly take home pay. That is very doable. In fact, I'm doing it right now!
1:45 Take home (net) or 25% of Gross Income??
Net
I LOVE THIS!
I really wish you would stop saying the S&P “grows at a rate of 10-12% annually every single year”. That is absolutely false. A 10 year old can know that it doesn’t grow at that rate every year. I know what you MEAN is that is AVERAGES 10-12 % a year but that is not what you say. It’s does not grow 10% “every year”. Sometimes is up 20% sometimes it’s down 25%. Sometimes down 3% then shoots up 15%. It’s an average. And yes, there is a big difference when you are planning long term financial goals. But I love the show! Keep it up.
Use common sense bruh
The worst advice I heard is an 8% withdrawal rate in retirement!
Not only do you need a credit score to secure a decent mortgage, but pretty much every landlord now requires a credit check before they will rent to you.
Let's stop pretending a credit score isn't important please. If I had thin credit I wouldn't have had a place to live.
Credit scores are absurd. They only exist in backwards hellholes like the USA.
Wait, I disagree with the whole have a credit card that you pay off every month being "bad" advice. Set the auto pay to the statement balance and you don't get charged intrest. Then you can turn your checking account into a high yield savings account and pay off your card from there. Not only are you getting points that way, but you recieve intrest on all the money you dont spend. Most importantly live within your means, and always think about cheaper alternatives.
I don't disagree with the investment section, but technically your savings *DO* get compound growth. It's just at a lower rate of return than the stock market.
When is your book going to be out for shipment?
I think January is the release date?
January 16
You know what ELSE is bad advice? That 8% is a safe withdrawal rate. Too soon?? But in all honesty, Dave is dead to me if he doesn't apologize and retract patently false and misleading "financial advice."
Can you expand on this please? @ezmaass Thanks 😊
There are good debts and bad debts. A 30 year mortgage at 3 or 3 percent is good debt. The extra money is better suited in investments that earn 8 to 10 percent with the added benefit of being more liquid. It just maths.
Getting yourself a car between 3 - 5 years old seems to be the best idea.
1. You get a relatively new model with most of the new safety features and other stuff if you're into having the newest things.
2. The car value drops a lot over the first 3 - 5 years ( depending on a model etc ) so you won't overpay for it.
3. After that time most of the issues that come with new models should have been found resolved and any recalls probably already happened. ( if it is some kind of a new model of a car )
Buying a new one, even if you can afford it seems like a waste of money.
Either 20+ years old or brand new only
9:04 Do pensions suck? Probably.... I will be at my job for 34 years before getting to retire on 64% of the average of my highest 5 years income. I'm guessing that the $8,424 per year could have amounted to more outside of the pension, and this pension promises 0% increases for the entire retirement (hence promising a devaluation each year based on inflation. At 7% until and 4% during retirement, the same amount could have provided $5,100 to $6,500 per month for 30 years instead of $3,600 per month.
The upside could be that many will not invest as they should and the forced system provides for those that would otherwise squander their lives away.
I didn’t even know those still existed.
Where can you still get those?
"Get a credit card to built credit history, but make sure to pay it off every month" advice at 7:27 is a very good, financially sound advice. This channel lost all its credibility.
Do not even get me started with Dave's 8% "advice"
Wish it was only toddlers.
Gold isn’t a risk. It retains value. It’s real money. It’s historically validated. It’s not an investment. It’s a hedge and solid way to save money for the long term.
Also, I’m big on a 6 month emergency fund in cash. Adjust the fund to correspond with current inflation.
My dad read everyone from Donald Trump to Ted Turner. He told me make passive & residual income. Thanks pops.
Better help is a scam you shouldn't be supporting them they've been sued multiple times
your parents came from the middle east and your last name is Kamel. hmm🐫
One bad financial advice i got was to draw down my retirement at 8%. Another was to put all my money into paying down a mortgage at sub 3% rate before investing for retirement. People give sone crazy advice out there.
To be fair to the Ramsey Solutions Team, they advocate investing 15% while paying off your mortgage. If you have any money left over, they want you to put more into paying off the mortgage early instead of investing more. I agree that it's better to invest more than to pay off a low interest debt, but what you stated above is not accurate.
Best advice I've ever gotten: get a credit card and pay it off every month. I was able to fully fund my Roth IRA this year with just CC points
LOVE NO CREDIT CARDS
Credit cards are not evil. The way you use them matters. If you're not responsible enough to live below your means and pay off your balance in full every month, you shouldn't have them.
So if you pay them off in full every month why have a credit card in the first place? Just use your debit card...
@@lowellhurst1738 rewards. Not to mention these rewards are tax free, it can really help you stretch your dollar further. You're also leaving money on the table by not using a credit card. Merchants generally charge the same price for an item (cash or credit). However card transactions have a fee which they have to cover. This cost is built into every item they sell. By paying cash or debit, you've effectively paid more for the item
@@lowellhurst1738 You get rewarded for using other people’s money, not your own, that’s why.
@@lowellhurst1738 everything I buy is 1-5% cheaper on credit. And if my card is stolen, they can't drain my entire bank account out. It's the CC company's problem, not mine.
They are evil, the fact that they exist and the credit card company makes money means enough people are using them "incorrectly" and paying interest to fund your points/rewards. Overall they are a net negative to society.
How can your mom file a credit card application for you, and you are in debt?
The card will be in your name. Not hers. So it is their fault for not paying it.
If you add your kid to your card. There is nothing wrong with it. Pay it off. And your kids credit won't be messed up.
I don't credit scores "don't matter"?
A credit card is not I love debt. Stop repeating that lie.
Man. While most of the advice.... the "Ramsey-advice" I'll agree with..... I just can't get behind the "25% of your TAKE HOME pay on your mortgage" and especially the "ONLY take out 15 year mortgages." The first one, mainly because that'll have you living in a shoe box your whole life and is your financial independence really worth living a life of poverty.... by choice? IMO.... fuck no. If I took that advice I would only be able to pay like... $950-1,000 a month.... on a 15 year mortgage at that!!!! hahahaha..... that's so fucking stupid. Mainly because no such place exists - even out here in the country unless you put like...... 90% down. And if you're putting that much down you might as well save up the entire amount and just pay for your house in cash. Why they just don't adopt that attitude is beyond me. It makes a fuck load more sense than the "ONLY 25% OF YOUR TAKE HOME PAY ON A MORTGAGE AND THAT MORTGAGE MUST BE A 15 YEAR MORTGAGE" mantra. 25%..... is SO fucking low. But to be fair.... it's really subjective. I mean maybe if you want to be the most frugal guy in town.... .that "sleeper" rich guy because EVERYTHING about you looks like shit..... but your bank account - go ahead. Live that life I guess. It really makes no sense from the Ramsey religion either because they PREACH to not take out any other debt or use credit cards. So..... what the fuck are they spending their money on? If your ONLY debt is your house.... you can EASILY spend 50% of your take home on a mortgage.
But the "15 year morthgages ONLY" advice is just stupid to me. Taking out the LONGEST term loan is easily the better option. So long as you take on this debt with the mindset of you'll be making extra payments for the life of the loan and still pay it off in 15 years...... or less. This goes for ANY loan to not just home loans. Take out the longest term loan as the monthly REQUIRED payment will be the lowest possible. Yes the interest rate will be the highest possible but again..... you'll be making extra payments so - you'll wind up spending as much on interest as the guy LOCKED into his 15 year loan. A person on a 30 year mortgage is MUCH more likely to pay off their home in 10-20 years than 15 year mortgage holder is going to be able to pay off their loan..... really in any timeframe less than the agreed to term. The reason you take out the longer term loan is because REGARDLESS of what the Ramsey disciples say..... it's so much more flexible and IMO safer than a 15 year loan.
Example..... you can afford a $250k house, planning to put $50k down. You can even afford it at a 15 year loan price of about $1900/month..... $1860 is what i calculate using my area as an example. Take out a 30 year loan. Your required monthly payment will be about $1350/month. Just go in with the plan of paying that minimum but also an extra payment each month of about $500 going towards the principle only. You'll pay off your home in..... 15 years. You take the 30 year mortgage because let's say.... life hits you in the face and you have an unexpected expense. You can use that $500 towards that expense and not toward the principle pay down. The Ramsey-ites will say "well that's what your emergency fund is for"..... true. But...... I'm not a huge fan of the "emergency fund" thing either. While I think people should have cash on hand..... I think socking away $10-20,000 which is what they recommend - 3-6 months of living expenses - I think that's pretty stupid..... just having THAT MUCH money sitting in a savings account.... doing next to nothing when it could be invested and earning you 8-12% instead. It's also why i think it's GOOD to have a credit card. To pay for those unexpected expenses and just pay off the card immediately as fast as you can. It all boils down to just being..... responsible. Both with your money.... AND DEBT. Debt isn't the Oogey Boogey man Ramsey-ites make it out to be. Dave only treats it as such because he was a debt machine when he was younger and it bit him in the ass..... he was..... irresponsible. The lesson he learned from it IMO was the wrong lesson. He walked away thinking ALL DEBT IS EVIL AND ANYONE WHO TAKES ON DEBT IS STUPID (like me). Taking on debt responsibly is not only NOT scary..... but using leverage can also make you thousands.... hundreds of thousands.... if not millions of dollars. FAR faster than the Ramsey advice of not living below your means.... but WELL below your means. Is it risky? Sure. But anything worthwhile in life carries some risk. Taking on a 15 year mortgage IMO is far riskier than taking out a 30 year mortgage. For some reason that's OK risk per Ramsey. Because trust me... Banks don't care if you make EXTRA payments..... but when you CAN'T make your minimum payment.... they get real pissy real fast.
Agree with taking out the longest available loan possible and then just sending in extra money on the principal when you have it
I don't agree with the refusing to get credit cards and build your credit. His mentality is to only pay cash and never take out debt which isn't truly feasible in today's economy and how many people would be able to save up and pay cash on a home considering the average price is over 300k. Regardless even if you had that much cash, it's smarter to get a low interest rate mortgage and leave your money in a high yield account to take advantage of compound growth. Why pay cash and wipe out your savings when it could be growing at 10% while your mortgage is at a lower rate?
Debt consolidation to a lower interest rate is objectively better than sitting there and paying unnecessary interest as a form of penance for your financial sins. A 0% credit balance transfer is mathematically better than paying a higher rate. You get an automatic return of whatever the rate existing rate is, e.g. 24%+. If you don't fully pay it off in that period, you can simply do it again and cancel the now unnecessary card. Obviously, you also need to stop spending beyond your means.
“Always having a car payment“ has nothing to do with buying new vs used. If you keep your vehicle longer than the term of any loan you take out, you will get rid of your payment. If you are replacing your vehicle after only a few years, you are foolish.
"We've seen the S&P500 grow at a rate of 10%-12% annually every single year" might be a bit misleading to new investors IMO
7:08 Betting on a single country is also risky.
I use a diversified index fund (the ACWI), as well as an actively managed fund (Berkshire Hathaway), to manage my money.
Credit Cards to build a Credit Score? Well, it's exceedingly difficult to get a rental without a good credit score, so not a bad plan if you are responsible. Pensions? He's right, if your Federal government, you're safe, otherwise plan for a contingency. Even with a Federal pension, you should invest on the side.