Dave Ramesy's rant about Pro Athletes going broke

thanks, listening now.

 

Question: I wonder what the financial situations of their hangers ons, Ex wives and various people that soaked up a bunch of their funds.

It seems like those folx are better money managers than the money makers themselves.

Rocket River

 

This is the article he's referring to

http://sportsillustrated.cnn.com/vault/article/magazine/MAG1153364/index.htm

 

I've read that one before. It's a really, really good read.

 

I hardly ever listen to the guy, but that was pretty good.

 

I would say that I have a considerable amount of savings, I pay the full balance of my credit card at the end of the month and have no outstanding debt so I still have the right to think pro athletes that go broke after a couple of years of retirement are dumb as hell.

Also, maybe I heard this wrong but did he describe average Americans as making between 3 to 8 million dollars in their lifetime?? So if you divide the lower limit of 3 million dollars by 40 working years that gives you $75k/year. I assume he would only be reffering to take home pay since he's talking about fiscal irresponsinsibility so they would be making even more than that before taxes. Uhhhh what average american is he thinking about?

 

I love Dave Ramsey, but he's got a LOT of crow to eat about annuities.

He understands the Variable ones well, enough, but hasn't a clue about the fixed ones.

 

He does. I love the guy, did his plan even though I didn't have debt and I give his book to family members, kids, and friends. If more people paid in cash vs credit, it would be a better place and people would be in a better place.

 

Ugh. Not going into this too much but it is what our Gov't has done with our collective money for years.

Sadly, when they ran out, they sent it to China.

We're screwed...

 

How is the average american spending between 3-8 million a year? Where are the many million he or she doesn't earn coming from?

 

He said in a lifetime. It is sad because I have frriends that try to out do or maybe compete with me, but I make 5x their entire household and I pay cash for everything. So if I buy a car or something, its cash and they will go get financed for it and think its something. Cash is King.

 

I have a friend who is a mechanical engineer. He is in his early 30s, making probably close to six figures, and has only contributed to a 401k for a year or so in his entire life. He has four cars, two bikes, and every electronic toy under the sun, but if it was not for his wife he'd have a hell of a time retiring in a reasonable time frame. It's crazy - these are dual income engineers - if you play that right you could probably retire at 50-55.

I know many other couples like this, most of them DINK (dual income no kids)engineers with 4+ cars and 3500+ sqft houses. They have no idea how to save. Crazy and irritating.

 

^crazy how things work...

great read...I'm in the wrong business...

 

Yeah, I love him too, I listen to his podcast every day. But you're right - there are several things I disagree with him about.

But his overall message is great. Pay off your debt, then start an emergency fund with 3 to 6 months of expenses, then pay off your mortgage, then start investing and never buy anything with credit (except maybe a house) again. Do this now, and you'll retire a millionaire no matter how much you make.

We're currently working our debt snowball.

 

i don't understand. if you have money, why not use credit cards? if you have the cash to pay for something, why not get a cash-back credit card (1-1.5% or so), use the credit card, pay it off each month (since you have the cash to pay for it already) and make that extra money? is it just a self-control issue? as in you'll automatically spend the cash after using the credit card and then won't have it at the end of the month to pay off the card?

even if you're getting out of debt, if you're currently being responsible about it at this point in time, it still seems like a credit card ranges from harmless to possibly beneficial if you get cash back.

 

Well, Ramsey's reasoning is that credit card companies are evil so why deal with them at all if you don't have to. Plus, he thinks people will be too tempted to get back to their old ways of doing things. "Eh, I'll pay this off NEXT month instead of this month -just this one time." That kind of thing.

I see your point about the cash back, but you gotta figure that a lot of people aren’t disciplined enough to pull that off without being late at least once in a year. What if you just flat out forget to pay the bill on time one month? Seems like just one finance charge and late fee would be more than a years worth of cash back.

 

I agree, plus there is the security of not being responsible for charges on a stolen credit card, while you are out of luck for stolen cash. I think Dave Ramsey's advise is best for those with real money management problems. If you have some money management skills, then you can do better than blindly following his advice.

I personally dislike that he advises people to invest in growth mutual funds. All of the research shows that value investing outperforms growth.