DAVE'S eNEWSLETTER November 2011 | DAVERAMSEY.COM
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Dave's Take on Occupy Wall Street Dave's Take on
Occupy Wall Street


Whether you support the occupiers, despise them, or have no clue what's going on, Dave shares his personal view in this article.

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Caring for Your
Elderly Parents

Learn about the importance of long-term care insurance and how to talk to your parents about the sensitive subject of elderly care.


Name Your Money

Do you have a budget? If not, learn the basics of making one. Tell your money where to go!

Are You Able to Give?

When you've worked your budget and have fought your way out of debt, you're free to give like never before. That's the goal!
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Dave's Take on Occupy Wall Street

Dave's Take on Occupy Wall Street

By Dave Ramsey

"I'm mad as hell, and I'm not going to take it anymore!" Yeah, that's great. But what do you want? What are your goals? What are your demands? What result are you looking for?

The beauty of being vague is that anyone who has any emotion can get caught up in the excitement and join your crusade. They'll just get mad at something and assume that you're both mad about the same thing. Put a few hundred of these people together, and boom. You've got a crowd, a headline and a lot of attention … but no message.

A lot of people on Twitter are saying I totally agree with the Occupy Wall Street (OWS) demands and goals. The only problem is that I have no idea what their demands and goals are. And neither does anyone else. If all you ever do is stomp around, yell and hold up signs protesting a million different things, sure you'll get some attention, but over time, you'll just look foolish. You end up coming across like a three-year-old having a temper tantrum.

This is what's happening to the OWS movement. They're being discredited because no one has stepped forward and really stated what it is they're after. The whole group is coming across like a bunch of jacked-up, jobless, wannabe hippies. That's not going to change anything in this country. You've got to state your goals clearly if you want to accomplish something.

So in the absence of any clear goals, let me comment and offer some helpful advice in some areas that seem to be getting a lot of disorganized OWS attention.

"No Government Bailouts!"

Banks and big companies should not receive taxpayer money for a bailout while their CEOs are making hundreds of millions of dollars. If that's your gripe, then you're protesting in the wrong location. Pack up and head to Washington, D.C., to deliver your message to the current administration. Don't get me wrong—I totally support a company's freedom to pay their leaders well. I just don't believe that I, as a taxpayer, should subsidize those huge salaries in the form of taxpayer bailouts. I pay my own team members; I don't need to pay everyone else's too.

By the way, you may be shocked to learn that the Tea Party agrees with you on this one—and so do I.

"Down With Corporate Greed!"

Protests

Gordon Gekko was wrong. Greed is not good. Greed is bad—very bad. It's a spiritual disease, and it is a disease that sadly affects a lot of companies across the country. If you believe a specific company is acting purely out of greed, then don't just get mad—do something. Point out where and how they're greedy and let the world know. Stop doing business with them. If enough people listen to you, the company will get the message because you'll hit them where it hurts: the bottom line. If they don't get their act together, then they'll go out of business and another business will take their place.

But if you're saying that all businesses are greedy and that capitalism itself is evil and ineffective, then I'm sorry—you're just being stupid. You're being misled and misinformed by some of the louder voices around you. Are you wearing clothes? Have you eaten any food lately? Do you have an iPhone in your pocket to check in with Twitter and Facebook while you're out marching around? Good. All of those products and services are brought to you by quality companies dedicated to serving you well in a capitalistic system that works just fine.

"Wall Street Is Evil!"

If you have this painted on a sign, well, now you just look ignorant. Wall Street is a street that people drive on. The New York Stock Exchange is a building where people exchange stocks in New York. This is the flea market of the financial world. Don't turn Wall Street into some terrible monster attacking American citizens. It's just a road with some buildings on it.

But here's what happens. Sometimes when people don't understand something, they start to fear it. And as the fear grows, it turns into anger. But just because you don't understand something, you shouldn't see it as bad or frightening or a conspiracy. You should just think of it as an opportunity to learn something new—something that could actually be a blessing to you.

For example, imagine a group of natives out in the jungle in the farthest part of the world. I mean, picture a group of people who have never seen anyone outside of their tribe and have certainly never seen any kind of machine. What would they think if they saw a Red Cross helicopter land near them? And what would they think of the strange-looking men and women who jump out of the chopper and start walking toward them? They'd be freaked out! They wouldn't know or care if the Red Cross was there to help them with food or medicine. They'd think it was the end of the world or something because their minds would be totally blown!

I hate to say it, but a lot of OWS protestors are just about as uninformed as those jungle natives when it comes to how the American financial system works. A road and an office building. That's Wall Street.

"Wealth Redistribution Is the Answer!"

I've heard a lot about wealth redistribution over the past few years, and I'm sure you've heard it too. Call it whatever you want, but this is how it usually sounds to most Americans: "We are the 99% of Americans who don't have as much as the 1%, so we're mad and think the government should take their wealth and property away so that we can have a piece of it. Wealth inequality is a moral breakdown! We should all spread the money around so everyone gets a fair share!"

I have my toughest critique for those who believe this: You are a thief. When someone takes my money and gives me no say in the matter, that's called theft—whether they're using a gun or the government. At the core of this demand is envy. And that's not the same as jealousy. Jealousy just says, "I want what you have." Envy is a different beast. Envy says, "I don't think I can ever have what you have, so you shouldn't have it either." Decades of horrible economic teaching and the politics of envy have kept this monster alive and growing and moving forward.

This way of thinking makes you assume that all rich people are evil and have scammed their way into wealth. That may be true in the tale of Robin Hood, but I choose to live in the real world. Sure, there are some scoundrels, but the vast majority of successful men and women got that way by working hard and serving people—lots of people. Steve Jobs and Bill Gates changed the world in ways we're just now starting to realize. Their positive impact on the world has helped all of us live better lives, and they made fortunes for themselves by doing so. Why is it that you're holy if you help one person but evil if you help a million? That's just stupid.

Protests

A good friend of mine is a country music legend. He's made a bazillion dollars over his career, and he just bought a $400,000 car. He's worked like a crazy person his whole life, spending decades in tour buses, writing songs in the middle of the night, and entertaining enormous crowds of cheering fans. He paid a price to get there, and I'm happy for his success. Would it be right for me to walk into his house and demand my "fair share" of his wealth? Heck no! I'm a terrible singer! I didn't do one thing to contribute to his success, so why would I be entitled to a share of his wealth? He's given me years of entertainment through his music. That's my fair share of his hard work.

My problems aren't his fault. And my problems aren't McDonald's fault or Home Depot's fault or Walmart's fault, either. My problems are my fault! And the more people these companies serve, the more money they make—and that's none of my business! If you don't like McDonald's, then here's an idea: Don't eat there. But don't walk into the restaurant and demand a portion of their proceeds for the day.

When you scream, "I'm in the 99%!" you just look like a whiner. Those of us willing to pay the price to win look at you and shrug. Heck, when it comes to the music business, I'm in the 99% myself! But that doesn't mean I have to tear Toby Keith, Brad Paisley or even Kanye down. Oh, and a special note just for Kanye: Capitalism has been pretty good to you. I celebrate your success, but you look a little hypocritical protesting capitalism while wearing a $50,000 watch.

Celebrate the Land of Opportunity

This is the greatest country on the planet, but even here, you're not guaranteed wealth, talent, fame, a full head of hair or six-pack abs. Those things are not in the Constitution. You are, however, guaranteed the freedom to make your life what you want it to be. And when you do that, when you build your life around your dreams and passions and hard work, you're guaranteed the right to keep it. No one has the right to take it away from you.

So to summarize, I'm not very impressed at the moment. I'm not impressed by your temper fit. I'm not impressed at your lack of goals and focus. I'm not impressed by the fact that the only thing I see about your movement is ignorance, immaturity and envy. Grow up—and get a job.

Yes, there are jobs out there. There are jobs out there that haven't even been invented yet. Go create the next Facebook or Weed Eater. Go pick up so much dog poop that you can start your own fertilizer company. And stop complaining that companies are TOO RICH while also complaining that they aren't RICH ENOUGH to hire you! I've seen a lot of you guys. I wouldn't hire you, either. But if you take all of that energy and excitement and pour it into something new and creative, you'll get the chance to serve a whole lot of people really well, and over a decade or two, you'll get to become the very thing you're now protesting: rich people who actually earned their money.

Join in the conversation! Share your thoughts by leaving a comment.


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How to Care for Elderly Parents

How to Care for Elderly Parents

A recent poll revealed that 82% of people approaching retirement don't have long-term care insurance. As a result, 68% of pre-retirees expect to have trouble paying for long-term care for themselves or their spouse. Nearly 20% of retirees said they'd already faced difficulties paying for long-term care.

Bill Williams, one of Dave's Facebook followers, knows what that's like. His mother's nursing-home expenses have been paid out of pocket since 2009. "All she gets is her Social Security and a little annuity interest check each month," he said.

Her home has been sold to pay her bills, and Medicaid will start covering her nursing home expenses in a few months. But until then, the expenses will pile up. "How am I supposed to get blood from a turnip?" Bill asked.

More Options, Better Care

Long-term care (LTC) insurance is designed to pay for nursing-home care, assisted living facilities and in-home care. LTC gives you more options than you'd have with government assistance, which is usually limited to nursing-home care.

Shawn Patterson said LTC insurance enables her mother-in-law, almost 92, to live a vibrant, mostly independent lifestyle at home, even though she is nearly blind and has had both knees replaced.

"She has two caregivers who drive her to run errands, get her hair done—whatever she needs," Shawn said. They also cook her meals and keep an eye out for medical problems.

If her mother-in-law had not had the foresight to purchase LTC insurance, Shawn said she would have to either live in a nursing home or with her children. "That's why I call long-term care insurance true 'life' insurance, because it enables you to live your life!"

Have the Conversation

The first step in making sure your elderly parents' care is provided for is to start the conversation. Find out if they have LTC coverage, and if they don't, what's keeping them from getting it. If they can't afford it, but you can, consider buying it for them—it's that important.

And, don't forget, the cost of long-term care isn't just about dollars and cents. Madeline Constantine Conger said that because her father's LTC coverage takes care of the assistance he needs, she has been able to go back to work and her family after managing his care on her own for a year. If your parents will depend on you for their care, you must consider the financial and emotional consequences the situation would have on your family.

So talk with your parents now and get an LTC plan in place before you need it. It's a tough conversation to have, but it's a lot easier than facing the harsh realities of a parent who needs care but can't afford it.

Find the Right Coverage With an Expert's Help

Dave recommends LTC coverage as soon as you turn 60. Odds of needing coverage before that are minimal—only 1 in 10 claims in 2008 were initiated prior to age 70. Features vary from one company to another, so be sure you understand how your policy works, and consult an insurance professional you trust when you're ready to choose your policy.

Dave's LTC insurance Endorsed Local Providers (ELPs) are experts who have the heart of a teacher. Contact your ELP today.


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Do Your Dollars Have Names?

Do Your Dollars Have Names?

Pop quiz! What exactly is a budget?

a. A way to track your spending at the end of each month. 
b. A general plan for your monthly spending.
c. A way to spend your monthly income on paper, on purpose, before the month begins.
d. A financial tool that nerds use to torture free spirits.

If you answered "C," then you've got it. A budget is all about planning for the month ahead. Around Dave's office, we describe it as "giving every dollar a name."

So what's your plan? Do you name your dollars before the month begins? Or do you wait around and survey the damage later on?

To successfully budget, you have to sit down each month (with your spouse, if you are married) and come up with a game plan for your money—on paper and on purpose—for the upcoming month. Dave's class, Financial Peace University, will help you do this.

Budgeting isn't about giving yourself a list of vague guidelines—well, this month we'll spend less on eating out and more on paying off the credit card. No, it just doesn't work that way.

You've got to define those limits ahead of time. This isn't Washington D.C.—you can't just spend money however you want to and ignore the consequences! If you've got $50,000 in debt with a $40,000 income, and you're spending $800 a month on eating out, then you've got to make drastic lifestyle changes immediately. It's not the time to become a regular at your favorite restaurant.

Make decisions. How much are you going to spend on groceries? Think beans and rice if you have to. How much are each of your bills? How much more can you put toward your debt this month?

A budget isn't a financial straitjacket, though some free spirits would disagree. A budget is really just about making a plan—and, when you do that, you'll actually experience more freedom than you had before. A lot of people are shocked when they realize they "find" more money after creating a realistic budget and sticking with it.

For all you first-time budgeters out there, we've created a small list of helpful budgeting tips:

  • It will take three to four months for you to get the budgeting process down.
  • Remember, spend every dime on paper before the month begins.
  • Overfund your groceries category. Many people who haven't budgeted don't realize how much money they spend on groceries.
  • The budget is not a "whipping tool" for an unwilling spouse. Guide them along, but don't beat them over the head with it.
  • Married couples should budget together. When you got married, the preacher said, "and you are one."

Give every dollar a name—mortgage, credit card bill, groceries, car repairs. Name them all. Once you have a plan and a purpose, you'll be well on your way to creating financial peace and changing your family tree forever!

You don't have to do it alone. We're here to help! Dave's class, Financial Peace University, will walk you step by step through creating a budget and taking control of your money.


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Something's Gotta Give

Something's Gotta Give

Anne Frank said it best—"No one has ever become poor by giving." Sadly, some people are so debt-ridden that they don't give.

But not all.

Last year, more than 5,500 people participated in the My Total Money Makeover Giving Tracker and told us about how they helped others with their money or time. Their stories ranged from assisting family members to sponsoring mission trips to lending a hand to complete strangers. In doing so, they made a difference that was small—and not-so-small.

Here are some quick examples of people who gave.

Giving of Money

  • Matthew in Tennessee gave $300 to a college friend to dig clean water wells in Africa.
  • Kim in Indiana gave $72 to feed a child for a year.
  • Lance in Alabama gave $100 to a family out of work to buy groceries.

What if Matthew was in debt up to his eyeballs and unable to give? That $300 would have gone toward a student loan or even credit card interest. The money would be feeding some bank bigwig instead of providing water for a poor village.

Similarly, Kim was able to give enough money to feed a child in a Third World country for a year because she didn't have to pay down a car loan. Lance saw a family in need and was able to buy food for them because he was deliberate in how he spent his money.

Giving of Time

  • Christie in Kansas volunteered for Habitat for Humanity.
  • Meg in Maine helped an elderly lady with housework so she can stay in her home.
  • Bill and Ruth gave two hours for two Friday nights a month to the mental health support group at their church.

Again, debt and the negative consequences associated with it can steal opportunities to help others. What if collectors were calling Bill and Ruth so relentlessly that they had to take second jobs to pay off their debts? They probably wouldn't have made it to their church to help the group, and someone would not have received the counseling they needed.

Same goes for Christie and Meg—they would not have been able to help those in need if they had to work to pay off their wants.

Giving is one of the most rewarding things you can do in this life. It's much easier to pull it off when you don't owe money. Get on a budget and get rid of your debt.

Then start giving. Heaven knows there are people out there who need it.

What does Dave say about doing your due diligence when giving?

Tell us your giving story.


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Bought a New Car and Got Fired

Stupid Tax
By Rashad

My 29-year-old younger brother was recently hired as a rental agent with AVIS. His 2001 Mercury Sable broke down about a year ago. He has been sharing a car with my mother since then.

Two weeks after he started training, he told me he found a 2009 Dodge Charger he was going to buy. He said that he had to put down $2,000 and his payments would be almost $400 a month. I tried to convince him this wasn't the smart thing to do, that he should get a beater for now or, better yet, take public transit. Of course, he didn't listen.

Fast-forward two weeks, and, due to low numbers (the high-earning agents illegally bump up prices, and he wasn't comfortable doing this), he was "released out of his probation." Not only did he seriously overpay for the vehicle and commit the cardinal sin of buying a car based on "how much down, how much per month," but now he has a loan of about $18,000—and no job. Talk about STUPID TAX!

I am so glad I found Dave. I am currently selling a 2011 car to help me get out of debt!

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Being Debt-Free Is Amazing!

We Did It!

By Stevo

Before getting married, I had $11,000 in student loans and $22,000 in car debt. I would usually buy everything with my credit card to get points, but always found myself sweating at the end of the month when I had to pay the bill. I wasn't in a horrible situation, but I didn't have Financial Peace. During our engagement, my fiancée and I enrolled in Financial Peace University. We soon realized that we had to make a lot of changes and that our money could go a lot further. Long story short—we became debt-free!

Though it took time for all of Dave's points to gain credibility in our world, everything turned out to be solid advice. Financial Peace University helped us come out of a wedding and honeymoon without debt, pay off all student loans and car debt, establish a six-month emergency fund, pay ourselves a car payment instead of a financial institution, and cut up that credit card to which I had been attached for nearly five years. It wasn't easy accepting the fact that I lost $9,000 (just in payments) to drive a used BMW for 15 months, but once I transferred that title and got rid of those payments, I didn't even think about the money wasted.

After going through all the actions, I can say that it is amazing to be debt-free. We are so flexible now. We can save more, travel more, invest in continuing education, give more, etc.

Though we don't have house debt, we are actively saving for a large down payment in order to minimize the amount due on a mortgage.

Thank you, Dave!

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Building College Foundations

Dave's college curriculum teaches students to make a better financial future

A Business Of Hope

We've reported before that student loan debt now exceeds credit card debt in our country. In fact, the Federal Reserve Bank of New York reports that this year, for the first time ever, outstanding balances on all student loans will exceed $1 trillion.

It's easy to understand why the college-age population's outlook on their financial future is pretty dim. Only 18% of people ages 20–29 believe they will be able to have a comfortable retirement; 46% say their current financial success is below their expectations.

For 20 years, Financial Peace University (FPU) has brought financial education and hope to adults who have felt the same way about their future because of their money mistakes. Now, with Foundations in Personal Finance College Edition, college students in more than 150 schools receive FPU's message of hope—empowering them to make better money decisions and build a brighter financial future.

Addressing Students' Needs

Don Leavitt, Assistant Professor of Business at Corban University, has been teaching personal finance for 11 years. He's seen first-hand the need for a comprehensive personal finance curriculum that addresses students' current needs.

"Students bring me credit card statements they do not understand, and they are maxed out and late," Don said. "College students need to know how to handle money correctly now, not in retirement."

Brad Barnett, Senior Associate Director of the Office of Financial Aid and Scholarships for James Madison University, agreed, saying the practicality of the Foundations curriculum is one of its strongest features.

"It's relevant to where they are now as well as where they are going in the very near future," he explained. "As an instructor, it's motivating to watch students make such positive behavioral changes throughout the course of the semester."

Students Becoming Instructors

Both instructors said student response to the class has been positive. Seats fill up quickly and attendance and class participation are excellent.

"One of the coolest by-products of the class is that students start teaching their friends and family what they are learning," Brad said. He shared this comment from one of his students' course journals:

"I think what I've enjoyed the most is my ability to be more honest and sharing the lessons I've been learning with my mother. Who knew she'd actually start listening to me? I'm proud that I actually took a real-life course at JMU, because this is the most important class at JMU that I've ever taken. It made me face the reality of dealing with issues after college. And I'm not as upset about facing it anymore."

Empower Your Students

For any school on the fence about offering or updating their personal finance course, Don and Brad had the same message—"Do it!"

"We need to prepare young people for life in addition to a career," Don said. "Any college should consider this curriculum for their students as an orientation or elective class—maybe even required general education."

"I've seen students completely change their behaviors and perspectives on life overall as a result of being in this class," Brad added. "Not only do the students learn better skills to handle their money, but many of them report they are happier overall and more confident about life in general. This stuff is literally life-changing."

Foundations can be used in the classroom or in campus organizations. Find out how Foundations in Personal Finance College Edition can fit in at your school today.



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Don't Believe The "Lots Myth"

Life is constantly proving that it's false.


Don't Believe The

By Jon Acuff

The "lots myth" is one of the most popular myths in the history of money. And chances are you've heard it—or maybe even spread it yourself. Here is how it goes:

"If I had lots of money, of course I would have Financial Peace."

"If I had lots of money, of course I could buy a car with cash."

"If I had lots of money, of course I wouldn't need my credit cards."

"If I had lots of money, of course I could make wise decisions with money."

The exact phrase may change, but the sentiment is always the same: If I had lots of money, things would be different.

But is that true? Is the secret of Financial Peace simply having lots of money? Is that a shortcut to good living? Is that the easiest, smartest way to find a sense of calm in your life when it comes to money?

No.

I mean you had to see that coming, right? I called it a "myth" right off the bat, so the "no" really shouldn't have come as a surprise. But why do I say the "lots myth" isn't true? Why do I feel like it's a work of fiction?

Because life is constantly proving it false.

Think about professional athletes. Many of them have struggled their entire lives financially. They've come from humble roots and are ecstatic to get their first professional sports contracts. They can make it rain money and have more than they could possibly ever need. So do they tend to make good financial decisions? Is that incredible income always a blessing? No way. In fact, Sports Illustrated found that within two years of retirement, 78% of former NFL players have gone bankrupt or are in financial distress due to joblessness or divorce.

Or just think about lottery winners. How often do you read an inspiring story about how a lottery gambler changed his broke way of life and set his family up for generations of wealth? Rarely. The truth is that 70% of lottery winners squander all their winnings within a few years.

You see, money doesn't make us smarter; it just amplifies what we already are. If you're a mess with a dollar, chances are you'll be an even bigger mess with a million dollars. If you're wise with a nickel, chances are you'll be great with a thousand nickels. It's like Dave says, "If you do broke people stuff, you'll get broke. If you do rich people stuff, you'll get rich." Money isn't really the key ingredient here; the difference-maker is your behavior.

If you want to know what your life would look like with millions of dollars, it's easy. Just take a look at what your life looks like right now. Are you saving, or do you spend every dime you get your hands on? Do you pay cash for everything, or are you hooked on OPM (other people's money)? Are you a generous giver, or do you keep all your money for yourself? Are you living broke, or are you living like the rich—the real rich?

The belief that more money alone will solve your money problems is a myth. If you believe it, if you get suckered by it, you'll wait for your "lots of money" to show up before you start working toward Financial Peace.

Don't do that. You've already got what you need to get moving. So get moving.

Jon Acuff is the founder of stuffchristianslike.net and the author of the books Stuff Christians Like and Quitter. His insight into everything from church, to advertising, to money, to life is as funny as it is true. In the last 12 years, he’s written branding for companies such as The Home Depot, Chick-fil-A, Staples, Bose and many others. He’s a contributor to CNN.com , speaks nationally on the subject of social media, and joined the Dave Ramsey team in 2010. He lives with his wife and two daughters in Nashville, Tennessee.

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Quote of the Month

"Overnight success" is a myth. My fave book on building a winning biz: The Tortoise and the Hare. The tortoise wins every time. #elbook —Dave Ramsey via Twitter, @daveramsey




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