Home Forums Hunting & Shooting Hunter's Campfire Dave Ramsey's Six Retirement Myths

Lots of good points here. Ramsey has good ideas for people just getting started. He mentioned getting an financial advisor. I had there and they were just awful. The time came when I knew the last one was just terrible. He sold me Non Traded REITS and loaded Franklin funds. It has been 5 yrs now and the Non Traded REIT is stuck there , not able to sell it and went from 25 per share to 17 and 7% dividends to 4%. Five years and still under water. The Franklin funds were sold but I track them and I would likely be up 5%?? after 5yrs. I stayed with him for a little over a year and was gone. Did not even bother to return his call and to make matters worse my sone worked there and they fired him a while later. For what it's worth , there is a Pimco bond fund I have been happy with for about a year. The ticker is PONAX. It pays monthly and comes to a bit over 5% in dividends per year. The share price stays almost the same but goes up and down a bit. I put my temporary money in it like future tax money I saved for property taxes ETC and in a ROTH. I low 5% is not much but it only lost 10% in the crash 10 yrs ago and went back up pretty good. I am way ahead doing my own investments . Here is the catch. I could get rentals and do well. I have been a carpenter for 38 yrs. I could go work on properties for sweat equity , or I could stay at work for $45-50 per hr. I put in two bids on 2 rentals 6 yrs ago. I would have done better had I go those two houses. I went with stocks and some bonds. My income is about $18,000 per yr. Not bad, and almost completely tax free with ROTHS, 401's and qualified dividends that are low taxed, with my Municipal bonds that are tax free on the divies. I have 38 investments from $2,000 in Owens Corning to $100,000 in British Petroleum and everything else in between. Here is one catch though. I studied investing for about 5 yrs now , almost every night . I learned that it is very hard to beat a handful of index funds and a few bond funds. I make almost exactly what the market does but I do it with almost half the volatility. A good way to start is index funds if you are young, but not if you are over 50 or so cause the market is very high, but might go a lot higher. Safe dividend stocks like the Dividend Kings are a good bet. AT&T, Exxon Mobil, Walgreens, AO Smith, Kroger Foods are good companies that have raised their divies an awful long time, even through the crash. I hope to get to about $25,000 in divies in 4 yrs when I turn 60. I should get $1,700 form S.S. but lets say $1,500 and hope for $700 from my Carpenters pension. This gets me $50,000 a yr. I think I can do that forever cause I made only $40,000 last year and saved $18,000. I am cheap , love life on the cheap. Get a kick out of guys with $50,000 boats. My boat is 29 yrs old as of Saturday and I catch more walleyes that almost all of them hot shots. Also, I have no debt and house has been payed for 10 yrs. The Lord with contentment is great gain.

That is incorrect. The vast majority of folks do not have the discipline nor common sense to save money on a regular basis unless they are somehow forced to do so.

I'd argue the vast majority of people do not have the money necessary to invest and eventually retire on it. The avg American family makes $50k annually which doesn't leave much to get wealthy on. I do agree that people are by nature very undisciplined.

Correct. It is not math it is behavior.

Top notch investment professionals usually wont touch a portfolio under 7 figures unless its a friend or family deal. I helped my father manage his 401k and other investments for almost 20 years until they got to the magic number. Then a real pro took over and has multiplied his original nest egg 10x since 2007.

That is very interesting and makes sense....

I was saving when I made minimum wage, and I’m still saving today. It probably won’t change when I retire. You just have to make it a priority. Not owing money helps too.

You're not the norm, obviously. I haven't had any debt in almost 20 years.

Yep. Debt free to create the available money. Behavior to keep socking it away like a robot. And insurance to keep from getting wiped out before time to retire. And Then a way to feed it back to yourself without getting whacked with taxes.

Frankly the "professionals" who wont touch small amounts are simply trying to work as little as they can while making the most. 5% commission on mutual funds at 25k is the same amount of paperwork as 5% of 6 million. They would rather have 20 clients than kill themselves with acquisition and service on 200 smaller ones.

I just hate to see people think they can’t do it when I know they can.

What an tremendous reply. We are all different in our approach to life's obstacles/opportunities. I hope to work until 70 but will have to see what God has for me.

I am the world's best spender. I spend every penny I get my hands on. That's why I dont get my hands on it. I save or invest plenty and spend just enough to have a good time. Anyone can build up their wealth, you have to plan and execute.

My knees would break in half if I worked till I was 70.

I don't understand those that say they like to work? Working for others is my definition of hell. Working for yourself is better but you still have a boss.... your customers...
I say those that make the claim they love to work are lying to themselves and the rest of us.
Staying busy on your own terms is not work....

Yes. I hate buying things twice.

As far as retirement - not interested.

Shazaaaaaaam!!!

We like the Ramsey show and mostly follow his plan. I really like hearing the every day millionaires call in, but the above is mostly true. Every once in awhile he’ll have someone who made an average wage and saved a million but the vast majority made way over 100k. He always asks them what part debt played in helping them make a million and every one but one I’ve heard says none. But if you hear more of their story some of the net worth is in their home and almost all had a mortgage on it at some point. So debt did play a significant role in their wealth building.

That said I’m investing every month and am in it for the long haul. There’d be more millionaires or even just folks with decent retirement funds if they’d invest every month. Most won’t.

Ramsey’s answers to potential lawyers and doctors on how to pay for school are laughable though. He pretty much gives a non answer and says just do it debt free. If they all listened to him we’d run out of lawyers and doctors.

He is pretty upfront about loving real estate and that it’s not for everyone as well. I wouldn’t want to deal with renters.

I am in the camp that does not consider your home an investment to build wealth... maybe for your heirs?
You need a home to live in. Now if you plan to downsize or move to a much cheaper locale that could work. Maybe a reverse mortgage? Otherwise don't lie to yourself......

You know those people that you don't agree with? Well they don't agree with you right back.

very insightful post, your tip on the pimco fund isn't a bad one. 5% isn't a bad gig if you can liquidate it easily. This is an interesting thread. I think it shows different people view retirement and what is enough totally differently. I think this depends on where you live and also what standard of living you want. There is no right or wrong answer. Its you and your own happiness.

For me enough is a check for $20k/month in passive income. I don't see how you are going to accomplish that in stocks and "good growth stock mutual funds" The dave ramsey miliionaires aren't coming to the table with that level of passive income. I would also ask that if anyone knows someone that has built a portfolio with stocks that reaches 20k/month and didn't use inheritance or some lucky lump sum to get there I would be highly interested in talking to them. I personally think those people don't exist. I think the dave ramsey millionaires are people that have a paid for house, have 120k in a 401k, colllect $1500 a month in social security. and collect a pension, which probably totals 5-6k in income /month and they are calling themselves retired with that.

The problem with dave's strategy on real estate is that its kinda a mediocre investment if you don't use financing to accelerate it. Lets say you have 300k in cash to buy a rental house. Your investment is only appreciating 3% a year, That only keeps pace with inflation. So your cash nest egg investment most likely never gains in net value relative to inflation. Instead if you buy 3, 300k houses. you are getting appreciation on 900k in assets. so instead of 9k/year in appreciation. you are going to be getting 27k in appreciation on the 300k investment, that is 9% right there!!! even if you broke even on rents. Also the other beauty of real estate is you are able to keep rolling up and never pay taxes on the appreciated value. AND there are other things you can do with depreciation, google cost segregation study if you are bored.

with stocks you are paying taxes on the gains, with real estate you are deferring those taxes if you do it correctly. with stocks you have no leveraged appreciation. Also in most cases when you invest in the stock market you are depending on appreciation of the stock, Depending on a value increase IMO is gambling. If done correctly you invest for cash flow with real estate. That way you don't depend on appreciation, instead that is the giant cherry on top when you go to sell.