Perfect. That's all I was looking for. So car loans are not ALWAYS the wrong choice.

 

I don't know. I'll let you ponder that one on your own.

 

Good luck!

 

:lol::lol::lol:

OK, my friend. You answer the question I've asked (many times) of Wireman.

 

You/your child/your friend/it doesn't really matter who has $1,000 in his account. He just got a great job offer that will require him to have a relatively new and nice car. He will take clients out for dinner in it. He will have to drive it a lot to see all of his clients and by doing so will double, if not triple, his yearly income.

 

Your advice would be what when he says "I only have $1,000 and I need a good car. What should I do?"

 

Your quote was this

 

"I'll still stand 100% behind the point that the "pay cash for your car 100% of the time" argument is great in theory but not at all practical."

 

I disagree. I would say that it is very practical with a very few exceptions like the scenario you mentioned above.

 

To answer your question:

 

I would say take a loan out to buy the car you need with a plan to pay it off ASAP, 3-4 months (should be easy with a high paying job) Then try to learn from this and plan on having enough cash ready in the future to buy a car when you need it.

 

The mindset that "well, I am always going to have a car payment...." is not the mindset of the rich. I feel that a program like DR's would suggest to do whatever you can to put yourself in a better situation (debt-free) as possible. In most cases this does not happen over night and may require that you bend the rules if you will for certain exceptions similar to those you have given. It takes time, and hard work and discipline.

 

JMHO.

 

Great discussion by the way, I love getting on the P&R forum.

Your quote was this

 

"I'll still stand 100% behind the point that the "pay cash for your car 100% of the time" argument is great in theory but not at all practical."

 

I disagree. I would say that it is very practical with a very few exceptions like the scenario you mentioned above.

 

To answer your question:

 

I would say take a loan out to buy the car you need with a plan to pay it off ASAP, 3-4 months (should be easy with a high paying job) Then try to learn from this and plan on having enough cash ready in the future to buy a car when you need it.

 

The mindset that "well, I am always going to have a car payment...." is not the mindset of the rich. I feel that a program like DR's would suggest to do whatever you can to put yourself in a better situation (debt-free) as possible. In most cases this does not happen over night and may require that you bend the rules if you will for certain exceptions similar to those you have given. It takes time, and hard work and discipline.

 

JMHO.

 

Great discussion by the way, I love getting on the P&R forum.

 

Then we generally agree here. My whole point is that there are very few financial rules that apply to every person and every situation.

 

Secondly, many of these rules are tough to follow for the average American because they are strapped for cash (often due to their own financial mistakes), they need a good car , and they do NOT have the slush fund/emergency fund. DR's value IMO is handling the first issue of getting out of the debt rut. While I could point out a few situations where his approach is not THE best way, its a "system" that many can follow and get excited about. That's more than half the battle - having a plan.

 

Debt in and of itself is not bad. TOO MUCH debt it bad. If you can manage it and keep it at a minimum AND have the discipline to use your available funds wisely, debt is not evil. If you're fortunate enough to build up wealth (a relative term) then you really give yourself a lot of great options.

I know Dave Ramsey. Not every well, but he is my Grandfathers neighbor. He is not a flashy man and really does live a life that he preaches. If you listen to his show, when he answers questions...you will hear that even with his staunch ideas, those ideas do NOT apply to every single situation. He offers alternatives to these situations that will eventually bring you back to the program.

 

All in all, I like the program. Just like many others, I have issues with somethings, but hey...I am not debt free. If I did exactly as he says...guess what, I would be. Those who know me know I am a car nut. Therefore I drive new cars and do so about every 3-4 years. Is this a good idea...of course not. However it is something that I can afford to do while I live the lifestyle in other areas.

 

The DR method will not be for everyone. Especially those who are not serious about living debt free. For those who are serious...its tough, stick to it and you will be surprised how good it feels to send in that last payment to a CC company, or pay off that last loan. The whole idea as some have said is common sense, unfortunately our society seems to have lost a lot of the common sense these days. Someone is out there championing a great lifestyle!

I do know a guy that has never borrowed a penny in his life. Started in the Military ( a great way to acrue savings). Had a pretty normal job for the remainder of his working career. Retired at 50. Has about a 400 acre farm now. Had a new house built on that property, and has all the cool toys a farmer would want. Don't know if this factors in, but never married and no kids. One anectdote that intrigued me, was when this fellow was in the market for a car ( cash deal of course), the deal was hung up on 500.00 difference. The car was a brand new Accord. I asked him why he would let 500.00 bucks hang up a deal on 17,000 dollar car. He told me that he had his price that he knew was fair and was not going above it. 4 months later the dealership relented and he had his car. Anyone that would have been financing this car would have been tested with the old "your payment will only be 10.00 more a month, if you finance that 500.00".

I do know a guy that has never borrowed a penny in his life. Started in the Military ( a great way to acrue savings). Had a pretty normal job for the remainder of his working career. Retired at 50. Has about a 400 acre farm now. Had a new house built on that property, and has all the cool toys a farmer would want. Don't know if this factors in, but never married and no kids. One anectdote that intrigued me, was when this fellow was in the market for a car ( cash deal of course), the deal was hung up on 500.00 difference. The car was a brand new Accord. I asked him why he would let 500.00 bucks hang up a deal on 17,000 dollar car. He told me that he had his price that he knew was fair and was not going above it. 4 months later the dealership relented and he had his car. Anyone that would have been financing this car would have been tested with the old "your payment will only be 10.00 more a month, if you finance that 500.00".

 

I can tell you right now that this most certainly factors in.

Then we generally agree here. My whole point is that there are very few financial rules that apply to every person and every situation.

 

Secondly, many of these rules are tough to follow for the average American because they are strapped for cash (often due to their own financial mistakes), they need a good car , and they do NOT have the slush fund/emergency fund. DR's value IMO is handling the first issue of getting out of the debt rut. While I could point out a few situations where his approach is not THE best way, its a "system" that many can follow and get excited about. That's more than half the battle - having a plan.

 

Debt in and of itself is not bad. TOO MUCH debt it bad. If you can manage it and keep it at a minimum AND have the discipline to use your available funds wisely, debt is not evil. If you're fortunate enough to build up wealth (a relative term) then you really give yourself a lot of great options.

 

 

I would not say that we "generally" agree. I feel that there are several universal rules that DR suggests one follows if they want to be successful (live off less than you earn, if you want to get out of a rut, you need to make changes, avoid debt as much as possible, make wise purchasing decisions with you money etc...) and that there are very few exceptions to the rules.

 

You are right, they are tough to follow, and it requires a great deal of discipline. I know people who make $200,000+ that would struggle to write a check for $500 today. While I know others who work at much lower paying jobs who know how to save and spend wisely, and have already built up healthy nest eggs and are debt free. I guess it just depends on if you make it a priority or not. For me it is. I am not debt free, and I do not follow DR's program to the letter, but I do feel there are several benefits from his program.

 

l66

I can tell you right now that this most certainly factors in.

 

I think it definitely factors in as well. Although, not always in the negative way that might be implied. It has to be a team effort with the kids having a role in the household wealth building along with the parents. I remember raising my first tobacco crop when I was twelve years old and receiving that first check. It was a great experience to put that money in the bank and to learn how to be responsible with it. While I was never perfect with money (and never will be) I do try to make a conscious effort before making fanancial decisions.

I would not say that we "generally" agree. I feel that there are several universal rules that DR suggests one follows if they want to be successful (live off less than you earn, if you want to get out of a rut, you need to make changes, avoid debt as much as possible, make wise purchasing decisions with you money etc...) and that there are very few exceptions to the rules.

 

 

 

l66

 

I'm down with all of the above. Its how I survive off of one income with lots of Catholic school/college bills. Obviously, all debt is not bad or buying a house would always be a bad decision.

 

SO do we agree more than "generally" or less than "generally?"

I'm down with all of the above. Its how I survive off of one income with lots of Catholic school/college bills. Obviously, all debt is not bad or buying a house would always be a bad decision.

 

SO do we agree more than "generally" or less than "generally?"

 

If you agree with what I stated above then I guess you could say we agree generally. :thumb:

 

I was just saying that I disagreed with this statement:

 

"My whole point is that there are very few financial rules that apply to every person and every situation. "

 

I would say that most of DR's rules would apply to most people in most situations, just not every.

 

Like I said earlier, excellent discussion. I enjoy talking about money and getting other people's perspectives on things.

I like his saying, "Learning to live your Wage."

I'm down with all of the above. Its how I survive off of one income with lots of Catholic school/college bills. Obviously, all debt is not bad or buying a house would always be a bad decision.

 

SO do we agree more than "generally" or less than "generally?"

 

He kinda addressed your point yesterday in the difference of paying off a debt and investing.

 

He said those who say invest, don't consider risk. Paying off the debt of a house payment before investing over the 15% of your income that he wants you to, doesn't consider risk.

 

I like his saying investing is your head talking and risk is your heart talking. You have to consider both.

 

Whose to say that the economy does not go bad in your area of the next 5-10 years. Whose to say that you or your spouse won't have a dipilitating illness or injury. Wouldn't it be nice to have NO HOUSE PAYMENT, if those things occur? How would that affect you in a bad economic downturn or illness or injury to know that you are not in danger of losing your house? Wouldn't that have you looking at things differently?

He kinda addressed your point yesterday in the difference of paying off a debt and investing.

 

He said those who say invest, don't consider risk. Paying off the debt of a house payment before investing over the 15% of your income that he wants you to, doesn't consider risk.

 

I like his saying investing is your head talking and risk is your heart talking. You have to consider both.

 

Whose to say that the economy does not go bad in your area of the next 5-10 years. Whose to say that you or your spouse won't have a dipilitating illness or injury. Wouldn't it be nice to have NO HOUSE PAYMENT, if those things occur? How would that affect you in a bad economic downturn or illness or injury to know that you are not in danger of losing your house? Wouldn't that have you looking at things differently?

 

 

I don't follow everything you said above.

 

I would argue that if you have your debt paid outside of your mortgage and assuming your mortgage is at a relatively low rate, it would be unwise financially to devote all of your available funds to the house.

 

However, if you are of the mind that risk is bad (I'm not) and you're not sure how to invest your money so that those funds gain more than your after-tax net interest expense, then maybe paying off your house is the wise course.

 

To your point about potential future problems, if you just do "fairly well" investing, you will have funds available , in addition to your emergency fund, should the unforseen occur.

 

I'm going to assume that DR does not tell everyone (and I think someone already confirmed this) to pay off their house as quickly as possible in all cases.

I don't follow everything you said above.

 

I would argue that if you have your debt paid outside of your mortgage and assuming your mortgage is at a relatively low rate, it would be unwise financially to devote all of your available funds to the house.

 

However, if you are of the mind that risk is bad (I'm not) and you're not sure how to invest your money so that those funds gain more than your after-tax net interest expense, then maybe paying off your house is the wise course.

 

To your point about potential future problems, if you just do "fairly well" investing, you will have funds available , in addition to your emergency fund, should the unforseen occur.

 

I'm going to assume that DR does not tell everyone (and I think someone already confirmed this) to pay off their house as quickly as possible in all cases.

 

He believes in ROTH IRA's. Are there not penalties for early withdrawal?

 

REMEMBER, he believes 15% of your income SHOULD be invested. What he is talking about is investing ABOVE 15% of your income.

 

Having your home PAID OFF gives you the peace and mind of having no doubt in case of bad economic times, injury or illness that greatly limits your income that you will not be losing your home.

 

That should be addressed before investing OVER 15%. Now I do think he is looking at basic mortgage loans and the rates that are normal. I have a mortgage with a 3.9% FIXED rate. I am an unusual circumstance where he is addressing normal circumstances to worse case scenario circumstances.

Having your home PAID OFF gives you the peace and mind of having no doubt in case of bad economic times, injury or illness that greatly limits your income that you will not be losing your home.

 

.

 

I have no problem with the "peace of mind" approach. However, you have to realize that it comes with a cost in many/most cases. Its all a matter of priorities.