I have kept
my mouth closed on Dave Ramsey for years, but no longer. I have
finally had enough.
In a January
23, 2008 phone call, he excoriated Peter Schiff's book, Crash
Proof, after telling the caller that he had never heard
of the book or Schiff.
This was unconscionable.
The rule is simple: if you attack a book, read it first.
a young woman, said that her father was worried about a coming stock
market crash. He was buying gold and foreign currencies. Ramsey
said this advice was "absolutely ludicrous."
On that day,
the Dow was at 12,270. Gold was at $880.25.
September 2, the Dow closed at 11,240. Gold closed $1,884.50.
You tell me:
Ramsey or Schiff?
But it gets
worse. Ramsey's off-microphone research man told Ramsey that Peter
Schiff is Irwin Schiff's son. Ramsey then went into a tirade over
the father's tax protest advice. He then said this: "This kid's
dad is a nutburger, which probably means the kid is a nutburger."
No, it means
that Dave Ramsey is a disgrace. He verbally tarred and feathered
Peter Schiff for a position Schiff personally opposes: the tax revolt.
The "kid" is
three years younger than Ramsey. He runs a business. And, just for
the record, he has never declared bankruptcy. Ramsey did
and has become a multimillionaire by parleying that act of contract
breaking into an anti-debt career. He is like the reformed alcoholic
who says no one should take a drink. For the record, I hope he has
long since repaid all of his former creditors with interest. "The
wicked borroweth and payeth not again." (Psalm 37:21a).
On Irwin Schiff,
I have been clear.
I was clear in the mid-1970s, when Schiff began his crusade against
paying income taxes. I published R. J. Rushdoony's 1975 article,
"Jesus and the Tax Revolt," in the Winter 1975/76 issue of The
Journal of Christian Reconstruction, which I edited. The article
was a refutation of the tax protesters. This was when Schiff had
just begun his crusade. I knew who he was, and I joined with Rushdoony
to oppose what he and others like him were doing.
In 1975, Dave
Ramsey was 15 years old.
Watch the video.
Then I will comment on Ramsey's pathetic track record as a financial
that young woman. He was contemptuous of her father's advice. He
made it appear as though her father was a gullible victim of a charlatan.
as charlatan does.
The phone call
came in January 2008. Remember what happened next an event
that Schiff had called perfectly? There was the worst stock market
meltdown in modern times. The entire financial structure was changed.
The government nationalized Fannie Mae and Freddy Mac. The Federal
Reserve gave secret
loans of $1.2 trillion to big banks.
Was the advice
that the woman's father received from Schiff accurate? Yes. Was
the advice from Ramsey accurate? No. Yet he came on like a know-it-all
expert. He showed her!
Then the stock
market showed him: the worst crash since 1932. Unemployment remains
In Texas, they
would say that Dave Ramsey is all hat and no cattle. They would
be wrong. He is all hat and diseased cattle.
longer your money stays invested, the more it can grow. Over the
last 30 years, the S&P 500, a standard measurement of stock market
performance, has averaged a 12% growth rate.
your retirement money in growth stock mutual funds with a track
record of at least five years of consistent returns (12% average).
Divide your portfolio equally among growth, growth and income, international
and aggressive growth funds.
He posted this
on March 22, 2010. On that day, the S&P 500 closed at 1166.
Ten years earlier March 22, 2000 the index was at
these figures, the investor who bought a no-load index fund of the
S&P 500 and held it for a decade lost almost 40% of this investment.
discusses the retirement-destroying rate of return that American
stocks have produced since early 2000. It has been 11 years of false
is a purveyor of false hope. He never changes. He never learns.
For the record,
I warned my Remnant Review subscribers in February 2000 and
again in March that the price/earnings ratio was too high, and that
a market decline was imminent. It began in mid-March. In terms of
purchasing power, it has never recovered.
He offers his
desperate listeners the dream of riches. But they must do it Dave's
read on his site:
study conducted by Dr. Thomas Stanley and Dr. William Danko revealed
this fact in their book, The
Millionaire Next Door. The findings by the two researchers
support what Dave has said for years: your biggest wealth-building
tool is your income. It almost sounds too simple, but it's absolutely
you might be saying to yourself, I work hard and have a steady
income. Why am I not a millionaire? The answer might be that you
spend more than you make. If that's true, you're essentially giving
your money to someone else so they can become rich while you live
paycheck to paycheck. If you want to be a millionaire, you need
to change your lifestyle to mimic most millionaires.
you take special notice that most millionaires invest their money?
It's not enough to live below your means and save money; you must
invest that money. Dave recommends you invest in mutual funds
because they offer several advantages over individual stocks.
Here's a quick breakdown of his suggested investments:
* 25% in a growth mutual fund
* 25% in a growth and income mutual fund
* 25% in an aggressive growth mutual fund
* 25% in an international mutual fund
with this rosy picture? This: the book describes self-made rich
men, and almost all of them made it by starting a business. What's
more, most of them declared bankruptcy once. Some did it repeatedly.
They lived in terms of debt. They stiffed their investors, their
bankers, and their relatives. Starting a business is risky. They
passed to others as much of this risk as they could.
In the book,
we learn that 85% of them had started businesses. To start a business,
you must adopt one or more of these options to fund it: (1) borrow
money from friends and relatives; (2) borrow money from a bank;
(3) borrow money from customers (e.g., cash up front for a subscription);
(4) put up your own money for a cash-only business (exceedingly
rare the first time you start one); sell shares in your firm (even
more rare). Once the business is profitable, you borrow money more
to grow it. This is "the millionaire mind." the authors' title for
their other book.