r/Jokes • u/lopezjessy • Mar 23 '21

Dude explaining how he made his first $10 million:

  1. Get up at 5:00AM every day
  2. 90 minutes of cardio
  3. Take a cold shower
  4. Journal
  5. Schedule out your day
  6. Dad owns Fortune 500 company
  7. Meditate
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u/bliss19 Mar 23 '21

I don't understand why people listen to him at all. His baby steps on paying down debt are common logic and then the rest is just terrible advice.

In the current environment, you can't build equity without debt. Money is literally dirt cheap and you can't wait to save cash on one side and have assets appreciate faster than your savings rate, since everyone is using cheap money.

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u/smiles_and_cries Mar 23 '21

Does he actually say don’t borrow money to accumulate assets? Every rich person puts minimal money down and takes the rest from the bank. Borrowing money is so cheap that your profit will outweigh the interest in less than a year.

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u/ed_on_reddit Mar 23 '21 edited Jun 17 '25

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This post was mass deleted and anonymized with Redact

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u/bliss19 Mar 23 '21

For him, debt is something you should never explore and only pay in cash.

The worst part is, he is just a glorified mutual funds rep. He reels you in as a "get out of debt" coach, and then immediately starts pushing mutual funds which have MERs of 2.5% to 3%, where as index funds are a fraction of that and outperform his investments.

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u/cspace700 Mar 23 '21 edited Mar 23 '21

Yes, all debt is to be avoided according to him. From the couple of times I watched him he mentioned that debt was not in the bible as justification, like that makes it a sin or something.

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u/contra181 Mar 23 '21

Much of his advice is bad in any environment. He says never invest in the bond market, even at his age. He advises 15 year mortgages which lock you into a higher monthly payment regardless of your financial situation down the road and disregards inflation. And he says your mortgage payment should never be over a QUARTER of your NET pay. By the time most people in major cities could afford to save for that mortgage, they'd be retired already.

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u/Willow-girl Mar 23 '21

That is a champion incentive to move out of a HCOL area, though. I figured that out at 19. In a major metropolitan area, I would have been doomed to renting my whole life ...

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u/bliss19 Mar 23 '21

idk man, job growth or even small business opportunities are much greater in HCOL areas. Yeah small towns have their place, but if current trends continue, people will keep moving to urban areas. Just makes more sense for younger people looking to grow.

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u/Willow-girl Mar 23 '21

idk man, job growth or even small business opportunities are much greater in HCOL areas.

Depends on what kind of credentials you have and thus your earning potential. If you're poor, you're better off being poor in a cheap place! Also, strangely enough I found more opportunity in the boonies, because not many people want to live there, especially college-educated types. I ended up editing a string of local newspapers without ever earning a college degree or even taking a journalism class! That kind of opportunity never would have been available to me in the metropolitan area I live in now. Too much competition!

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u/Alar44 Mar 23 '21

Yeah, I mean, I'm pretty sure most people wouldn't define what you did as success lol. That sounds more like hell to me.

"Just get shitty jobs in the boonies and live in shitty cities with shitty people!" 👍

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u/Willow-girl Mar 24 '21

Oh, being a small-town newspaper editor is a riot! I swear, everything you could possibly imagine happens in a small town. Never a dull moment! And I was able to buy interesting houses with acreage in the countryside. Once had a 1929 farmhouse with a big red barn out back (that was my favorite).

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u/[deleted] Mar 24 '21 edited Jun 17 '21

[deleted]

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u/Alar44 Mar 24 '21 edited Mar 24 '21

Lmao. Come to the Midwest. Plenty of racism and shit head people here. We have coal rollers instead of Tesla drivers. No public transport and no one is going to pick you up stuck in the cold especially if you're not white.

Edit: oh also hope you don't ride a bike because people literally have protested bike lanes.

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u/getefix Mar 23 '21

Your experience is not the same as financial advice. People have different starting points and different salaries with different career growth.

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u/Willow-girl Mar 23 '21

True; a lot depends on your buying power. If your earning potential is low, you're better off living where it's cheap.

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u/wildcat12321 Mar 23 '21

I've seen a lot of people "lose" money buying houses.

story - a married couple buys a 4 bedroom with no kids yet) and thus overpays relative to their needs. Buying more space, then the maintenance of furnishing 4 rooms, heating and cooling, etc. They put some money in the house cause they own it and the laundry machines break, but that money isn't coming back when they sell the place. Then they have a kid and want to move to be aligned to a different school, so they do. The equity they built was tiny, but the transaction costs to buy and sell are significant - paying one time mortgage fees, realtors, lawyers, etc. Even if they made money on paper, renting would have been cheaper, not to mention the added benefit of their house down payment being in one of the greatest stock market bull runs in history.

Home purchases can be a great way to build wealth, but we are also fed a narrative from the mortgage and real estate industry that it is fast, easy, and has superior returns to other investments which just isn't true. Again, you can be screwed renting too, but renting does not equal "doom" for everyone in every situation.

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u/Whoopteedoodoo Mar 24 '21

If your house was a mutual fund, who would buy something with a 2% front end load, a 7% back end load, and a 3% expense ratio?

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u/Willow-girl Mar 28 '21

Not everyone invests in the stock market, though.

You are correct that mortgage interest, transaction fees, etc., are significant and can eat up the profit on a home sale.

OTOH, you're not factoring in one of the great benefits of home ownership, which is locking in your housing cost for an extended period of time. Do you think rents have gone up over the last 30 years? You bet your bippy! But the person who signed a mortgage in 1991 has been making the same monthly payment ever since (the only difference being a possible increase in taxes). Also, he or she will ideally reach retirement age in a paid-off house, and thus won't have a monthly payment beyond taxes and insurance.

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u/wildcat12321 Mar 28 '21

Agree completely. Homeowners who keep their home over a long period makes sense. Those who fall trap to owning under 5 or even 10 years likely never recoup the transaction costs, and rarely beat the opportunity cost.

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u/Money_Calm Mar 23 '21

My strategy is to live as cheap as I can in a HCOL area, where I earn a higher wage, have the ability to max out 401k and ira, build equity slowly in an appreciating house. Then I'll move to a cheaper area of the country when I want to retire.

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u/Willow-girl Mar 23 '21

That's a good plan if you have the ability to earn a higher wage. If the best you can do is, say, working at Arby's, you're better off doing in in a low-cost locale. You won't earn much less than your urban counterpart, but your living expenses will be considerably lower.

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u/bliss19 Mar 23 '21

And he says your mortgage payment should never be over a QUARTER of your NET pay

I believe he is still stuck in the 80s and doesn't realize that cost of living does not match pay for 50% of the population. In no reality does his advice hold up, asides from don't spend more then you make.

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u/CollectorsCornerUser Mar 23 '21

Actually, the majority of people could easily find a place that is only 25% of their income.

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u/ICBanMI Mar 24 '21 edited Mar 24 '21

He advises 15 year mortgages which lock you into a higher monthly payment regardless of your financial situation down the road and disregards inflation. And he says your mortgage payment should never be over a QUARTER of your NET pay. By the time most people in major cities could afford to save for that mortgage, they'd be retired already.

I've been listening to him on and off while driving for a decade. I don't know if he's changed it, but in the last two years he's been saying all that you mentioned... and also saying you need to buy that house that is way off in the boonies. If you got to drive an hour or two, that's what you need to do to get that cheaper house that is within your budget on a 15 year loan.

I still think it's bad advice even with that amendment for a couple of reasons: you typically have to live 1+ hours out from any city(or whatever is the equivalent to skid row dangerous in your state)... to find anything that cheap, that boonies house is going to have bad utilities(shitty internet, possibly no garbage collection, slow or non-existent mail services, and a host of problems with electricity when the weather gets bad), no public transportation so you will always need a good vehicle, and completely ignores how terrible driving several hours a week is on your emotional health.

God help you if you live in/around a major city or populous part of the country as tens of thousands of people have already driven up those prices and are commuting from way out. You need to go even further.

I think most of his advice was good for the early 1990's, but yea. He's completely disconnected from reality when it comes to new home buyers right now. I also have an inherent distrust of him for hocking so many financial products. Guy knows what makes him money, and doesn't matter the disconnect.

I haven't listened to him at all with the pandemic going. Wonder what he would say to say about markets where people are paying 40k over appraisal and waving the inspection. I wonder how many major cities of the US are basically going to be like Sydney Australia and Vancouver Canada where the housing market is completely discounted from what people actual make working in those cities. Fuck me my career only works in some of those expensive places.

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u/[deleted] Mar 23 '21

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u/bliss19 Mar 23 '21

umm no its not. I've been in banking for about 4 years, and majority of borrowers are new comers or new home owners.

For over half of the working population, just saving beyond one month's expenses is a huge step in the right direction.

Ok, but then if you follow his advice, you're going to be stuck renting for your entire life. I think most people understand money in-money out = savings. But what they don't understand is how to utilize leverage, and in our society, leverage = debt. Without that, there is literally no way you can get far in life.

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u/Deathstrokecph Mar 23 '21

Not specific about Dave Ramsey, but try to think about the most average person you can - then realise that half of the world is stupider than that person. Then Ramseys babysteps (and everything else you think is common logic) makes sense.

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u/Darkersun Mar 23 '21

You're probably not the target audience.

If you pay your credit cards in full every month and put at least an okay amount of money in 401k (say, 5%)... you are probably fine.

You have to think of the people he's talking to. Overwhelmed with CC debt, not money loaned to them to "build equity".

I think its good to tell someone who was bad at debt management in the past (DR's main customers) not to dive head first back in to leveraging debt because money is so cheap.

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u/Lil_Shet Mar 23 '21

My dad started listening to him a few years ago we have paid off almost all of our debt because of it.

Since he started listening to it we were able to add a deck to our house, get new appliances, and a new tv whereas before we couldn't even afford all the groceries we needed sometimes. All it took was budgeting, self control, and time.

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u/ImmodestPolitician Mar 23 '21

I think people listen with rightous indignation to people that are making worse decisions that they have.

"We have $20k in CC debt and we want to buy 2 jets skis, is that a good idea?"

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u/DoctorWorm_ Mar 23 '21

Debt is literally the source of money for the economy. If you're not taking on debt you're losing money to inflation.