Excerpts and Tips From Dave Ramsey On Debt and Investing
Excerpts & Tips From Dave Ramsey On Debt & Investing
Written by Sam
Dave Ramsey’s Financial Peace University or FPU. Committing to attending the 13 weeks of classes was one of the best financial decisions we’ve made. The course covers a broad range of topics regarding personal finances and really gives you a good 10,000 foot view of your financial situation. In this post I’ll describe how
Dave addresses many myths about debt and gives a step-by-step plan to get out of debt.
Dumping Debt
Debt Myths
Myth – Lending to a friend or relative helps them.
Truth – Instead it really changes the dynamic of the relationship and damages it.
Myth – Co-signing on a loan is ok.
Truth – Statistically the person you’re co-signing with won’t repay the loan. That’s why the bank requires someone to co-sign.
Myth – Cash advances help poor people get ahead.
Truth – Cash advances are a way for poor people to have things they can’t afford.
Myth – Lottery and power ball will make me rich.
Truth – Lottery and power ball are a tax on poor people.
Myth – Car payments are a way of life.
Truth – Most millionaires drive paid-off used cars.
Myth – Leasing is a good deal and a sophisticated way to drive a car.
Truth – Any expert or analysis will tell you it’s one of the most expensive ways to drive a car.
Myth – I can get a great deal on a new car.
Truth – The value of the car goes down 60% in the first four years.
Myth – Home equity lines are good for tax deductions and are a good replacement for an emergency fund.
Truth – The math doesn’t work. You shouldn’t take out more debt just to avoid paying some taxes.
Myth – I’ll get a 30 year mortgage and pay extra.
Truth – Nobody pays extra. You should get a 15 year fixed-rate mortgage.
Myth – It’s ok to take out an adjustable rate or balloon mortgage because I know I’ll be moving.
Truth – You will be moving when they foreclose on your house.
Myth – You need to have credit cards and take out a car loan to build your credit. Truth – Open credit card accounts with zero balances and car loans count against you when qualifying on a home.
Myth – You need a credit card to rent a car.
Truth – All major car rental operations accept debit cards.
To continue reading, please go to the original article here: