| Dave's
Thoughts on Hybrid Cars |
Dave, should I get a hybrid to save on gas? They make financial
sense in the long run, right? Gas prices are killing my
budget…a hybrid is the only answer!
 I’ve been getting so many questions recently from
people all over America about these cool, new hybrid cars.
Let me tell you straight up – don’t get one!
Since hybrids are new, they’ll get better rapidly…
and also go down in value rapidly. You don’t want
to try to be selling a high-mileage, first-generation model
in 5 years because the value will plummet.
Do you really want to lose money?
The Math Doesn’t Work
Let’s say you currently drive a vehicle worth $10,000
that gets 15 miles/gallon. There’s this $25,000 hybrid
you’re thinking about buying that gets 25 miles/gallon.
That’s a $15,000 price difference just to get 10 more
miles a gallon. If you drive 100 miles a week, that’s
about a $10 difference a week.
So that would be about $40 extra you’re spending
a month in gas if you stuck with the current car. A monthly
car payment is MUCH more than that! To get your money back
at current gas prices, it would take you almost 29 years
to save $15,000 in gasoline! Listen
to Dave explain this
The math DOESN’T work! You’d have to drive
to the moon and back to make it worth it!
What You Can Do
- Get a different car. If you want to sell your
gas-guzzling car, buy another car worth no more than the
previous car’s selling price – this means
no car payments!
- Move closer to work. Write down all the specifics
to see if it makes sense in your unique situation.
- Change jobs. No one says you have to work where
you do. There’s always the option to work close
to home – or even start a home-based business.
Don’t use this high-gas thing as a rationalization
to go get yourself a new car or spend a dime more on one.
Just think and make smart decisions before you rush
out to buy something like this that’s really going
to lose you money.
Related:
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Mortgage Options to Avoid
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If you’re about to sign on the dotted
line for a mortgage, there are a few things you should know.
Buying a house is a huge step, particularly if it’s
your first home. Always remember to hate debt when
you buy a house. This will instill you with a passion to
pay off your home early.
There are some ridiculous mortgage options available. If
you’re not familiar with the various plans, take time
to educate yourself about the different choices so
you don’t make a mistake. No one wants their dream
home to become their worst nightmare because they found
out the hard way they couldn’t afford their house.
 Adjustable Rate Mortgages (ARMs)
An ARM is a mortgage with an interest rate that changes
based on market conditions. The intention is to transfer the
risk of higher interest rates to you and, in return, the lender
gives a lower rate up front. This is a bad idea because you
only pay interest. Since they can qualify for more home, many
people find this mortgage appealing; however, the financial
stress later on makes it a terrible option.
Reverse Mortgages
A reverse mortgage is when a homeowner borrows against
the equity in their home and obtains monthly, tax-free
payments from the lender. This mortgage is a bad idea because
you are putting a paid-for home at risk, and the fees are
horrible. In fact, the FTC claims that reverse mortgages have
the most fraud in the mortgage business.
Accelerated/Bi-Weekly Payoff
The idea is to make a half-payment every two weeks, which
comes out to 13 payments a year. You’re paying off your
home early by making an extra payment each year. Now, this
is a good idea, but it’s a bad mortgage option. There’s
no need to pay your lender a fee in order to make the
extra payment. You can easily pay extra on your own without
having the fee tacked on.
Tax Advantage
Technically this isn’t a mortgage option, but many people
hang on to their mortgage instead of paying it off early—they’re
convinced they will get a tax advantage. If you’re keeping
your mortgage in order to get a tax cut, that’s just
dumb. Don’t fall for that myth; the math just doesn’t
add up. Watch
this video to discover why keeping your mortgage for a
tax deduction is a bad idea.
Check out more great information about mortgages and real
estate—and the steps to take BEFORE signing on the
dotted line—in Financial
Peace University.
Related:
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No Longer Feeling the Burden of Debt
By Alicia in Oklahoma City
 When
my fiance' proposed to me in May 2005, the hardest conversation
that I ever had was telling him that I had over $20,000
in debt. We got married in Dec '05 to which he added $15,000
in debt from a new truck that he bought just before we got
engaged.
We both had had debt our entire adult lives and had always
been under the burden of it. While planning our summer vacation
early in 2007, we began again to feel the burden of our
debt. We stopped our planning right then, sat down,
and formulated our plan to be debt free.
I have heard Dave say before that if people don't think
you've joined a cult while paying off your debt that you're
not doing it right. That has pretty much summed up our lives
for the past 15 months. We told our families "no,"
our friends "no," and from time to time each other
"no."
I'm happy to report that there is a light on the other
side of the tunnel. We are DEBT FREE! We always felt
that by being in debt, we were the minority, but in sharing
our story with others, we have found that being debt free
is a minority. We share our story at least once every
day. We feel so passionate that others join us in this
new life - a DEBT-FREE life!
Thank you for your inspiration! We could not have
done it without you!
Related:
Read other We did It! stories
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We Didn't Look at the House!
By April in UT
 We
bought a house without even looking at it!
We thought we were investing and gave some bozo power
of attorney. He bought the oldest run-down house he could
find and sold it to us for more than he bought it
for without even showing it to us!
Now we owe $70,000 on a house worth $50,000 (if anyone
would be stupid enough to buy it). The best part about this
house is the house has been settling for the last 106 years
and all the floors, walls, and ceilings, are way uneven.
My 2-year-old likes to watch his toys roll down the living
room into his bedroom without even pushing them. HA!
We will be paying our Stupid Tax for a long time.
Related:
Read
other Stupid Tax stories
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You’ve heard about them. Talked about
them. Maybe even seen the movie based on them. But they
are out there regardless—the 7 deadly sins that
lead to debt.
 Going into debt is the symptom of a larger problem. You
don’t spend excessive money on “stuff”
unless you have a void somewhere in your life that you are
trying to fill. If you don’t have contentment,
you will want (and buy) things that other people have even
though you can’t afford them.
So what are the 7 sins, and how can they lead to being
out of control with money?
- Envy – Seeing your neighbor drive
up in a brand-new car can cause you to be envious of what
they have (though they are probably broke and bought something
they couldn’t afford). If you are so desperate to
feel “equal” or even “better”
than those around you, you’ll buy way too many
things and destroy your chances of building wealth.
- Pride – This can happen when you
try to do the “90 days same-as-cash” routine.
You buy a TV or major appliance and promise to pay it
off on the 87th day. Then something happens. You go on
vacation and forget the deadline. You accidently bounce
a check and can’t afford the payoff. Don’t
try to use the system to beat the system. It will
always come back and bite you.
- Sloth – Not paying attention to
your checkbook, or the terms of a loan, or walking around
like Gomer Pyle on valium and not being proactive with
your money, will eventually cause you to not have any.
Your spending will get away from you. Stay on top of your
money.
- Greed – This one almost goes without
saying. Many times we want what we can’t have. Trying
to get something before it’s the right time will
get you in big-time money trouble. You’ll get a
loan for a new car and make $600 payments for 5 years.
If you don’t make those payments, the car will get
repossessed and you will have no peace of mind.
- Wrath – This can happen when you
talk
to collectors. Their job is to make you mad or
scared. If they scream and insult you, and you pay
them before the light bill, you are not prioritizing well.
Work hard, work overtime and be smart with money. Keep
a cool head when the heat is on, and you’ll survive.
- Gluttony – It’s a more
long-term version of greed. Money can buy fun, but
not happiness. If you try to keep all of the money you
make for yourself and only spend it (never giving it away
or helping others), then money will only bring fun and
not happiness. Fun things aren’t as fun after a
while. If you eat enough lobster, it tastes like soap.
Helping others brings happiness, but if you never give
then you’ll never learn that lesson. More
- Lust – There has never been a rich
addict. If you have a problem with any sort of vice (drinking,
gambling, pornography, etc.) or anything else, your addiction
will cause you to spend, spend, spend. That will lead
to more than just a ruined bank account—it
will lead to ruined relationships, careers and lives.
Source: Yahoo! Finance
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Who Needs Long-Term Care Insurance? |
 Joe and Susie were a young married couple of equal age.
They weren’t always smart with money, but they worked
hard and built up a nest egg of $300,000. Later in life,
when Joe was 67 years old, he developed Alzheimer’s
disease. At first, it wasn’t too bad. Susie used some
of their nest egg to hire an at homecare specialist to help
with Joe a few hours everyday. But as his condition worsened,
Joe had to go into a nursing home. Sadly, after 5 years
in the home, Joe passed away from old age. Susie, now 72,
is healthy as can be for a lady her age but works fulltime
because her husband’s stay in the nursing home devoured
most of their nest egg.
What you’ve just read is sad, but it happens to
thousands of people every year. However, you can keep
it from happening to you.
What is Long-Term Care?
No one likes thinking about it, but as people age or become
ill, they might need help doing daily tasks like getting dressed,
bathing, and more. Long-term care (LTC) provides people with
those services. Unfortunately, long-term care is really expensive.
Most health and disability insurance won’t cover
it but long-term care insurance will.
Why You Need It
According to the American Association of Home and Services
for the Aging, 69% of people will need some form of LTC
after age 65. I’m a huge fan of this insurance.
If you become ill, it ensures that your spouse will have enough
money to eat and your kids won’t be burdened with huge
payments. Not having LTC insurance can be a $300,000 to $400,000
mistake.
Now you may be thinking, “But Dave, won’t the
government pay for my long-term care?” They will if
you qualify for Medicaid—the government program designed
for people who truly don’t have any money.
A lot of times people try to cheat the system and move
all the assets out of their parent’s name and get
the government to pay for LTC. Doing that is called fraud—a
federal crime—and the government will prosecute you!
Also keep in mind that the government is already having
trouble paying for those on Medicaid. Do you really want
to count on the government to pay for your LTC? I say
NO WAY!
When to Buy It
Only buy LTC insurance when you turn 60. When you turn 60,
the probability of having to stay in a nursing home increases
dramatically. On your 60th birthday, buy it immediately!
However, if you have parents who can’t afford LTC
insurance and you can afford the payments, then you can
buy it for them.
Where to Get It
If you’re at least 60 or have a parent who is, speak
with one of our long-term care ELPs. They’ll answer
all your questions and help pick the right insurance for you.
Click
here to find your long-term care ELP
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Q&A With Dave - Credit Cards |
Is there ever a good time to have a credit card? NO. NEVER.
When you play with snakes, you get bitten.
“But Dave, I pay mine off every month.”
CardTrak, who gets their information from the credit card
companies, reports 60% of people don’t pay
your credit cards off every month. Cambridge Consumer Credit
Index found that 47% of balance holders only make the minimum
payment. You aren’t paying it off every month.
 You’re
also paying more. A study by Dunn and Bradstreet showed that
the credit card user spends 12 to 18% more when
using credit instead of cash. After McDonald’s began
taking credit cards, they found that people spent $5 to $7
more per sale. It hurts when you spend cash and therefore
you spend less.
“But Dave, they give me airline miles.”
Consumer Reports says 75% of the airline miles are
never redeemed. You won’t wear the hat or t-shirt.
And the next time you are in the store that gave you a discount
for signing up for a card, you will have forgotten your cash;
you’ll use the card and then carry a balance again.
“But Dave, I need it for travel and to buy stuff
online.”
Between media appearances and events, I guarantee I travel
more than most of you, and I do it all with a debit card.
I don’t have a credit card. I buy things online, stay
in hotels and rent cars all the time using my debit card.
The only thing the debit card won’t do is get you into
debt.
“But Dave, I have to build my credit.”
Bankers, car dealers, and unknowledgeable lenders have told
America for years to “build your credit.” They
are telling you to get debt so you can get more debt because
debt is how you get stuff. Those of us who are debt free know
that cash buys stuff better than debt.
“But Dave, what about buying a house?”
Since you aren’t “building your credit”
you will need to find a mortgage company that does actual
underwriting. That means they are professional enough
to process the details of your life instead of using only
a Beacon score (lending for dummies). You can qualify for
a conventional 15-year fixed-rate loan if:
- You have paid your landlord early or on time for 2 years.
- You have been in the same career field for 2 years.
- You have a good down payment.
- You have no other credit.
- You are not trying to get too big a loan.
The big question is, What do millionaires do? They don’t
get rich with free hats, brownie points, or air miles. What
do broke people do? They use credit cards. I rest
my case. Related:
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|
Dave Ramsey Updates |
|
Where's Dave? |
Magazines, websites, LIVE events, TV - Dave's everywhere!
Get
all the up-to-date info
"Fox Business" with
Stuart Varney
Dave will be on the Fox Business Network show Monday, July
28 at 12:30pm CDT.
"Fox and Friends"
Dave will be on the FoxNews Channel's show on Wednesday,
July 30.
Your World With Neil Cavuto
Dave will be on the FoxNews Channel show on Thursday, July
31 at 3:40pm CDT.
Upcoming LIVE Events
Dave's Total Money Makeover LIVE Event stops in the
coming months:
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Check out our newest
stations!
There are over 350 affiliates nationwide
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Radio Station |
Air Times |
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|
Quotes About - Retirement |
When it comes to wealth building, perserverence wins.
Sprinters do not. It's worth it to persevere.
- Dave Ramsey
56% of Americans do not systematically prepare for
retirement age by investing. - USA Today
Retirement is the ugliest word in the language.
- Ernest Hemingway
The trouble with retirement is that you never get a day
off.
- Abe Lemons
The best time to start thinking about your retirement
is before the boss does. - author unknown
The worst of work nowadays is what happens to people when
they cease to work. - Gilbert K. Chesterton
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