Who lives by the "Dave Ramsey" way of living?

Discussion in 'The Okie Corral' started by BSA70, Aug 6, 2020.

  1. PEC-Memphis

    PEC-Memphis Scottish Member

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    Doh ?
    The original claim was that an average working person couldn't pay cash, rather than get a loan, for a reliable vehicle until late in life. A mechanically reliable vehicle can be had for $5k. According to the BLS, the average income for 20-24 (years old) is ~$2500 per month. Save just 8% of that for 3 years, and someone would have over $7k to buy a used reliable vehicle at the age of 23 (assuming you started working at 20). For $7k, they could buy a Mitsubishi Mirage still under warranty with less than 30k miles, or a Nissan Versa/Ford Focus with less than 50k miles.

    I just used my car as an example, which I'd drive cross country at any given moment, but it has been extremely well maintained. I am not suggesting that most 20 year old vehicles should be purchased for long distance commuters. I'm just saying that an average (not late in life) working person does not have to get a loan to buy reliable transportation.

    ETA: My grandson bought Ford Focus for "long distance" commuting (about 35 miles each way), rather than drive his 2500 diesel pickup. I think he paid <$2K for it, and ended up putting about another $600-$700 in it over two years. It kept 30k miles off of his truck, saved him about $4,000 in fuel expenses, and he sold it for about what he paid for it. It was a ragged-out POS, it did leave him on the side of the road once.

    ETA: I asked him about it tonight. He bought it for $400. He put another $1000 in it for two years (tires, brakes, battery, tie rods), so $1400. Two years later, the water pump went out on the way to work. He was working the night shift, so he left it on the side of the interstate (I-55, near Brooks Road, at about 6:00p; and called a coworker to pick him up. He called the tow truck to meet him at 7:30a. When he got there, the tires/wheels and battery were stolen. The tow truck driver offered him $500, as is, where is. He took the offer.
     
    Last edited: Aug 7, 2020
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  2. DaveD

    DaveD Ex-Mod Moderator Millennium Member

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    I still miss my SAAB's. I knew what they needed at 50K, 85K and 185,000 miles. Two of them got to see 200,000 miles with me. GM came in and that was the end.

    We are now fortunate enough to lease cars that we enjoy. We have a mortgage on one of our homes for about 40% of its value. We have the 15 year rate down below 3%. That interest is still a deduction so it's essentially free money. We have done well in the market and decided we will leave the kids comfortable while we enjoy ourselves. Grandkids college is set.

    I think college debt is partially responsible for a lot of todays issues. We have nieces that liked dance and spent 4 years and $150K in drama school. One is now going back to become a nutritionist and the other is 27 still looking for a big break on Broadway (mind you she has never even had a lead role in high school). I friend of mine has a daughter with a 4-year degree in film history. Where is that going?

    Parents also need to wake up and realize an education needs a return on the investment.
     

  3. fg17

    fg17

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    Got it.

    I've done it both ways. One. Bought used vehicles with 30-50k for cash and used for commute for 5-6 years.

    Two. Bought New bare bones subcompacts, sometimes had to order. The used cars with 20k to 30k that I could find were about the same price as new bare bones, some with extended warranty, got a 4 year low interest loan and drove for 8-10 years. I actually came out ahead buying new and had better piece of mind.

    My commuter with 140k has been well maintained but I'd really not want to drive it cross country.
     
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  4. fg17

    fg17

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    Good point about the Nissan Versa and Ford focus. New or used, so many people, even long distance commuters are unwilling to drive them. A lot of auto makers aren’t even making small budget cars anymore. Everyone wants big crossovers, SUVs and big trucks, which is fine. But for a 500 mile per week commute. No thanks.

    I know a guy who spend $150 per week on gas.
     
  5. Haldor

    Haldor Formerly retired EE.

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    And the average working 20 year old shouldn't be buying a new Silverado using financing either. That is one of the ways that bankruptcy happens.
     
  6. HollowHead

    HollowHead Firm member

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    Can you guys get a room? Dave Ramsey... HH
     
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  7. JW1178

    JW1178

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    I work at a car dealership service department. I see this all of the time.

    Customer brings car in with issue that is going to cost a lot to fix. Sales comes in and offers them to trade it in. We know they don't give you what your car is worth in the first place, but because the car is broken, they give them considerable less on their trade. So end result is that they end up in a car payment, ended up paying for the repair anyways from the depreciated value of the car, but at least they didn't have to pay that much money today. No, instead they can pay for it over the next 5-7 years.

    The issue with Dave Ramsey is that he suggests buying a cheap car and drive the wheels off of it. The problem is that a lot of cheaper cars, it's going to be one thing after another, which ends up costing similar to a car payment and it sucks having a car you always worry every time you turn the key if it's going to start or not. It's not practical for most people either.
     
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  8. Flying-Dutchman

    Flying-Dutchman

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    One thing is certain.

    The US economy (which runs on consumer debt) would collapse if everyone followed Dave Ramsey.
     
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  9. selogic

    selogic

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    Only a small fraction of people follow his advice . No chance of the economy collapsing from lack of consumer debt .