I'll just repeat, the bible might be a good religion book but it's no good for finance. I believe there is a section in there on marine engineering, something about building a big boat, but only an idiot would follow that advice when building or analyzing a modern super tanker or aircraft carrier.
JMC wrote: I agree with you about Dave Ramsey. His assumptions are deceptive. He has helped lots of people get out of debt though, and I think that is a good thing.
Eagle wrote:From personal experience I agree Dave has helped lot's of people get out of debt. People sometimes throw the baby out with the bath water with Dave. Use his method (or another one) to get out of debt then look for serious advice on investments elsewhere.
The problem is that those things are not separable. If you think objectively then decisions regarding debt repayment and investment are all about expected returns. When DR or anyone else tells someone to pay off a 5% debt and then tells them that the market is going to return 10-12% on investments without risk, there is the implicit assumption that the person is incapable of thinking rationally. Why? Because the rational decision is to keep the debt and invest.
If you WANT to pay off debt for emotional reasons then that is a personal, subjective decision. Whether it is the optimum financial choice is NOT a subjective decision. It either is or it is not depending on the after-tax interest rate versus the expected return on alternate investments. I have trouble with any book that tries to paint decisions qualitatively rather than teaching people to think critically about them.
When people hear DR's preaching they must be disengaging their rational brain because it is usually not self consistent. It works for him because many of the people who follow him have been brainwashed into accepting inconsistency when it comes from a proclaimed authority. People have the freedom to do that but it is not a way to demonstrate good critical thinking skills.
If you want to accept fuzzy, unevidenced, qualitative thinking or reliance on authority then do that at (censored). But when making decisions with your money, learn to think rationally and don't accept anything on authority. Learn to do the analysis yourself.