"100% of people who do not save money do not have any!"--Dave Ramsey

[Xist]

My phone recommended this, but YouTube didn't when I went to their site, even when I scrolled all of the way to the end. I used to watch this guy, I appreciated how he did not seem to have a bias, but after changing videos a couple of times because he definitely showed a bias, I thought that I would try again.

I am sure that people would argue that he does have a slant, but I do not feel that he is arguing for or against anything, and he said that he spent a month straight researching this. He says that he is a service-disabled Veteran and doesn't have anything better to do with his time:

https://www.youtube.com/watch?v=44mvkMqrW4U

3:30 talks about the Chargemaster, which Adam, the Ruiner of Everything mentioned a while ago, but Adam absolutely has a bias, and some things he has said had such obvious problems that I stopped watching him.
Anyway, the Chargemaster is their secret list of prices, which is inflated so insurance can get you a discount. If you do not have insurance, you pay the inflated price!
He said that Urgent Care is vastly cheaper because they do not need to support a hospital. It also seems like the faster you want something, the more it costs. He said that since the prices are hidden, if you somehow had a minute or two to call the closest hospitals, there would be no way of knowing which hospital might charge you ten times as much as another.
5:00 price varies by location--down to the street!
The ACA made it illegal to charge based on your medical history, but they can still charge differently for almost any reason, such as gender and age. Stitches on an infant would cost much more.
6:50 the ACA mandates that every employer with at least 50 employees needs to provide health insurance, but they might not pay for any of it, and you might have a terrible plan.
7:00 Car insurance costs less the fewer people that pay into it. This also applies to health insurance, but he says that people do not accept this. Mandating that everyone had insurance should have made it cheaper for everyone (except for those with preexisting conditions)
7:50 Many people consider health insurance to be a scam because you do not get anything for your money if you never use it.
11:15 If your appendix bursts with one month left in the year and you need continuing care the next month, which is the next year, you need to pay your maximum out-of-pocket cost again, effectively doubling your cost.
12:00 He seems to say that President Obama couldn't guarantee that you could keep your doctor because they can't force your doctor to continue working with your insurance company.

That does not sound honest. How many people lost their doctors because the doctors stopped working with that specific insurance company?


At 12:30 he said that you can go to an in-network hospital and be treated by a specialist out of the network.
19:30 A single person in Alabama must make less than $771 a month to qualify for Medicaid. A panhandler averages $25 a day, so he recommends skipping Halloween.
20:50 He says this is just an overview, most of his viewers are decades from using Medicare.
A is for Inpatient and Hospital Services, with no premiums for the vast majority of people, but there is a $1,364 deductible and a complicated copay and coinsurance table.
B is for Outpatient and Doctor Services with a $135.50 premium for everyone with a $185 deductible.
A and B, called Original Medicare, have no out-of-pocket limit.
C is a private plan that replaces A, B, D, and supplements. They cannot control what they cover, just what they charge you. It is supposed to provide the same coverage, but some study found that 56% of people were denied necessary treatment just for monetary gain.
About 36% of people on Medicate are on Medicare Advantage, which isn't actually Medicare, but probably what people have when they complain about Medicare.
D is Prescription Drug Coverage, the most abused part, and also private.
Reporters invariably leave out which part is responsible when they discuss problems.
24:00 Prescriptions aren't usually covered by health insurance. Even in countries with socialized medicine, dental, vision, and prescriptions are usually separate.
People in the U.S. pay up to ten times as much for prescriptions as in other countries. In the U.K. they have more people receiving government healthcare than are on Medicare. The U.K. government negotiates and gets good prices because that company will have a monopoly on 66 million people.
25:00 Market share seems to have a much greater influence on healthcare costs than competition; the more people for whom you are negotiating, the lower your prices. If the government negotiates such great deals, where do pharmaceutical companies raise the money to pay for R&D?
The U.S., which doesn't negotiate for 320 million people.
26:00 The average American earns $59,039, pays $6,288 in Income Tax, $4,516 in FICA, for a total of $10,804 (18.3%). In England, you would pay $8,667 in Income Tax and $5,784 $14,451 (24.5%).
While Brits pay more, healthcare is included. In the U.S. the average annual employer-based premium across all types and levels for an individual is $6,896 a year.

That is $574.67 monthly.

That totals $17,700 (30%).

He says that if you double your income and are married with two kids, you would still pay more in the U.S.

27:30 England has a Value-Added Tax of 20%, but the cost of living is 7% lower, and when you figure in sales tax, they are comparable.

If your sales tax is 13%?

A Samsung Galaxy S10 is $15 more in London than New York and a Big Mac is $1.50 cheaper.

He argues that U.S. healthcare is more expensive, but actually worse.

28:24 Per capita, we pay double what they do ($9,892 versus $4,192). The U.K. has longer wait times, from a few minutes in the E.R. to a week or two for a procedure, but if longer wait times drastically reduce cost, but does not negatively affect healthcare outcomes, how important is it to be seen right now?
29:08 Bootyjudge's For All that Want It, previously called the Public Option, wouldn't change coverage for most people that already have it.
29:40 Bernie did not start Medicare for All, that is some lady that already dropped out of the election. He showed a reporter repeatedly ask Warren how much taxes would go up and she refused to answer, instead trying to say how much overall costs would go down. He says this isn't a dodge, even though taxes will go up for the middle class, they will save money, whether or not they have medical expenses. It will also get rid of the infamous bloat, your HR person has to pick a health plan, hospitals and doctors need to hire special billing coders, the insurance company needs claims specialists, and YouTubers need to make videos explaining everything.

32:30 He does not have a horse in the race, he goes to the VA, and none of these changes would affect him.

[redpoint5]

That all lines up with my current understanding of healthcare. I'd love to see a lot of jobs lost that produce nothing of value, like shuffling papers to the insurance companies to bill them, and those papers getting denied and sent back, and then the papers go the patient, and then the whole cycle repeats.

The beginning of me being "woke" about the healthcare industry was when I herniated a disc in my back and called 5 different clinics asking what a standard office visit would cost. I'd get transferred to different departments, but zero of the dozens of people I spoke to gave a number. They even refused to give an average of what is billed. Not even a ballpark figure.

I went to a free clinic and gave them $200. They were the only ones that had price transparency.

I'm ready to burn the current system because it's about as broken as it can be while still somehow functioning...

If I needed something expensive dealt with, I'd just go to Mexico and pay in cash.

...and maybe out of pocket limits should be based on the cumulative prior 12 months of expenses, not on the calendar. For instance, the out of pocket is $5k, and you paid exactly $5k 11 months ago, so new expenses are billed to insurance. Next month that $5k drops off as it's more than a year old, and you have to pay out of pocket again until the limit is reached in that current 12 month period. This eliminates the scenario of hitting the limit in December and then having to hit it again in January.

[Xist]

Ever since 2016 I have wished that I could go back in time and Biff Tannen my way to being a trillionaire by 2014--a benevolent trillionaire!

I wouldn't quite gamble my way to unprecedented wealth, I would back things like these: https://ceoworld.biz/2016/12/08/50-b...-11-years-ago/

Buy houses in 2000, sell in 2007, etc.

You expect me to do something genius? You ought to know me better!

That first step, developing time travel, would be a doozy!

Yeah, I would be a trillionaire, yay, but I would have three goals:

1. Customer satisfaction
2. Employee satisfaction
3. Providing good healthcare

I am sure that I would have the opportunity to buy a health insurance company and maybe some hospitals. If I am a trillionaire, I would have millions of employees.

Then in 2014 I will buy up all of the air time that I can, donate it to charities, and run for President on the platform of "I already provided great healthcare to millions of Americans. If elected I will sell all of my assets to my employees and donate 100% towards the National Debt." I will tell rivals "I raised X millions of dollars for charity. What have you done? How will you help pay down the national debt?"

Well, that was a good use of everyone's time...

I guess that Publisher's Clearinghouse still has not officially chosen their $1,000 a day for life winner. Supposedly I have a one in billions chance.

Fingers crossed!

I spent hours recently trying to figure out my cashflow, but I honestly cannot tell you how much I have been able to pay down my debts in the last year. If I could not afford health insurance on that amount then I argue it is too expensive and my health expenses have been $500 or $600... ever?

That is how much I have spent this year, but I had not seen a doctor since leaving the Guard, and all of my expenses were covered since I joined the Army in 2008, and I was rarely sick.

I was rarely sick before then, but I had health insurance.

I have zero reason to believe this will sustain forever. Who would pay my expenses if that client put me in the hospital--or my mom did?

What if I hit another elk and was seriously injured? What if I needed to have my tonsils or appendix removed?

I want health insurance, I just do not see any reason to stay in debt for it. However, open enrollment for the healthcare marketplace opens on the First. I have it on my calendar. Coverage was supposed to cost something like $750 for a year. Hopefully I still do not get sick, but I will budget in that much.

I start applying to grad schools soon. My first supervisor already wrote a letter of recommendation (although I am not sure that I will be able to use it). My other supervisor said she would and a previous supervisor has written me letters before. Grad schools only care about school, they don't care how well you already do the job that you may or may not do after you cease to be their responsibility, they care how well you will probably do in school, but I should have a chance with NAU's summers-only program and three on-line ones.

Become an SLP, have job offers for $60,000 a year for 10 months before I graduate, and have health insurance through my employer.

I would also see some clients after school and per hour that probably pays twice as much.

[redpoint5]

If you got stabbed on the job, your jobs insurance would pay your expenses. If you crashed your car, your auto insurance would pay your expenses.

I had my wife on a high deductible + HSA plan that cost $100/mo. After Obamacare, it went to $200/mo. It doubled overnight.

High deductible plans are what most people should have. An office visit for the sniffles should 100% be out of pocket, because the point of insurance is to protect against unexpected financial ruin due to catastrophe, not from minor or expected expenses. Office visits would then be super cheap because people would be price sensitive and require price transparency. After all, nobody brings a car into a repair shop, tell them to fix everything, and at the end pay whatever amount the shop wants to bill for.

Anyhow, I went years with no health insurance, and during that time I had a herniated disc that mostly disabled me for 2 months. If I had insurance, I'd have probably utilized more healthcare, but the results would have been the same; that the inflammation of the nerve went down over time and I was able to regain full function of my leg.

Regarding providing health insurance to employees; I'd never do it. I'm against it. Employing people has nothing to do with it, just as providing housing or a car or running water has nothing to do with providing employment. I would fairly compensate my employees and leave it up to them to get insurance tailored to their individual needs.

[Xist]

That's a straw man argument. Come on, you are better than that!

Do I Need a Credit Card?

[I]f you are not spending more and they are not collecting more fees on you than you cost them in airline tickets, they aren't going to keep you. You are what the credit card industry calls a freeloader.

Will someone please show me one person that had their credit card canceled for using their it responsibly?
Credit card companies charge around 2% to process the transaction.

They always make money. Credit Card Processing Fees and Costs

[redpoint5]

I've never paid interest on a credit card. They're happy to collect fees on transactions. If there were no cash back on my cards, I'd stick to a debit card and never use them.

Dave got burned once by being over leveraged and used that experience combined with the fact that most people can't use credit responsibly to just take a "no credit cards" stance.

[Xist]

Not only that, but Dave is morally opposed to debt of any kind, and advocates saving up for a house!

Let’s say you want to save up $100,000 for a home. Divide $100,000 by the amount you can save each month to determine how long it will take to get there.

$100,000 ÷ $1,000/month = 8 years, 4 months
$100,000 ÷ $1,500/month = 5 years, 7 months
$100,000 ÷ $2,000/month = 4 years, 2 months
$100,000 ÷ $2,500/month = 3 years, 4 months
$100,000 ÷ $3,000/month = 2 years, 10 months

Why spend 15 - 30 years paying off your house when you can spend 14 - 28 years saving up for a house before you even live in it?! Also, who can save one to three thousand a month and wants to live in a $100,000 house?

Fine. Let's give him a chance and do the math. You may not get much in interest, but who wouldn't prefer to earn interest instead paying it?

The thing is, I am going to assume that home values go up 3% a year, although that will make little difference in this bizarre scenario.

First of all, it will not make much of a difference, but if the housing market increases 3% a year while you are trying to save, the $100,000 house will be worth more like $102,493.80 by the time that you saved up 20% down (at $2,000 a month).

Using his calculator, putting 20% down, and financing $81,793.33 at 4%, you would have $605.02 payments on a 15-year loan, and you would pay off your house almost two months sooner than if you put $2,000 a month into savings at 2%. As long as the house appreciates the entire time, your investment would be gaining value instead of needing to save up more and more as the housing market grows faster than your interest.

But wait! There's more!

If you pay $2,000 a month towards your mortgage, you are covering your housing and paying off your debt. If you are still renting somewhere then the $2,000 is on top of your housing, so calculating an extra $2,000 a month towards your mortgage: You would pay it off in two years and nine months, paying $4,749.21 towards interest, instead of paying a landlord $33,276.10.

I think there is an argument for paying mortgage insurance instead of a landlord.

All aboard for the rabbit hole!

First of all, all that I can find for around $100,000 in chic Show Low is that 520-square-foot house for $79,000 this... thing... Two bedrooms, one bathroom, and nine hundred square feet for $119,000. Sorry Dave, we are way over budget!


For the love of McGyver, when I say "Show me houses, not land or mobile homes, from cheapest to most expensive" I get four times as many lots and mobile homes as actual houses, like I specified. They are not sorted properly, either!

I removed all filters and still couldn't find anything worthwhile. This reminds me of why I like Homemade Home's approach. He and other guys talk about driving around, looking for abandoned houses, and finding ones that cannot be sold for some strange reason. Mr. Homemade Home says that he found one where the owner died, but it was still in their name, so he drove a couple of hours and ran through a graveyard in order to get a death certificate.

He bought that house for something like $10,000.

Someone else said that you track down the owner of a home and get them to share what needs to be repaired. Then you say "So, what you are saying is, with the current market, and needing to fix [long list] you feel your house is worth [lowball]."

Allegedly that makes them think that number is their idea and the market is the bad guy.

I have no idea if it works, but the only two houses that I found were $79,000 and $119,000. I would not want to pursue either.

Let's say that something decent comes onto the market while we are saving for a down payment. We only have $10,000, but we are desperate to not be left with leftovers. Zillow says that we would pay $44 a month on a $90,000 mortgage.

Wait, what?

Seriously? We are supposed to keep paying rent while the housing market grows without us instead of paying $44 a month for "Protection?!"

If you only put $3,500 down, 3.5% of $100,000, Zillow says that your protection money would be an overwhelming $79.

How is that worse than paying rent?!

Matt W. from Chattanooga, TN, bought his first home—a 1939 two-bedroom foreclosure—with a $19,000 cashier’s check. It wasn’t in the best part of town and needed a lot of TLC, but Matt and his new bride poured a lot of sweat into renovating it. Their hard work and patience paid off. Last year, they sold their honeymoon cottage for $64,000!

He is playing that game?!

Well, Zillow does not show any houses in foreclosure or preforeclosure.

Aw dang. I checked Craigslist and found this house almost an hour away: $64,900 Spacious Fixer Upper! Offering Potential! Realtor.com says that it is 2,111 square feet and cash-only.

Save me, Kevin!

How I got a bank to give me a conventional loan on cash-only foreclosure!

Lame. Clickbait title is clickbait. I tried to hide it.

He found a cash-only short sale [with the buyer needing to pay a restoration company]. He offered 25% down with no appraisal contingency and specified "if buyer's lender or appraiser requires any repairs as a condition of this loan closing seller authorizes buyer to complete any required repairs on the property and hold the seller harmless of any liability. If the sale does not go through for any reason seller will keep all repairs made at no cost to seller and buyer agrees to lose the money they invested fixing the property up."

So there, as long as you have 25% down and can pay for repairs, you too can get a conventional loan on a cash-only house.

However, I do not have anywhere near 25% of $65,000 ($16,250). I wouldn't know where to get the money for repairs, either.

Oh well. I was not that curious how many trips to the Show Low Lowe's and Home Depot it would take.

[Fat Charlie]

I'm a big fan of debt. We signed a few papers and bought a house for a payment of $1200 a month. We had been paying $1100 a month for one floor of an old house with bad water, spotty electricity loose windows, etc, and from day one we got to shift that $1100 a month into our house. We didn't have to save that money above abd beyond our rent.

Closing costs, yes, but moving expenses were a U-Haul for a couple days. It's much more than $100 a month better than that apartment was, and we're paying into our own equity, not someone else's.

[Xist]

A friend was congratulating me on paying off my credit cards soon. I only got one because I could not rent a car without it, despite her and Dave Ramsey saying that it was absolutely untrue.

I just know that when I went to pick up a car they wouldn't let me.

I told the friend that I have paid off credit cards before but I always plan on having debt. The thing is, I never plan on getting into debt again without the cashflow to cover it. People make excuses for not getting into real estate with endless What ifs.

You can take a calculated risk with a calculated reward, or you can maintain a $5,000 net worth while the average homeowner is worth dozens of times as much.

Ninety percent of millionaires and billionaires have gotten rich through real estate for the last two centuries.

I will provide sources if you like. I did the first time and the page completely disappeared.

One of those sources talked about buying a bigger house each year and renting out the old ones. Kevin says the same thing, but I am pretty sure that advice is older than he is, and buying a new house every year is much more work than he indicated. He talked about saving up $20,000 a year to buy a house, but that would not be much more than 3.5%, and I am unsure that a rental would flow cash in that situation.

[JSH]

Originally Posted by Xist

One of those sources talked about buying a bigger house each year and renting out the old ones. Kevin says the same thing, but I am pretty sure that advice is older than he is, and buying a new house every year is much more work than he indicated....

That is how Dave Ramsey become a millionaire the first time and then went broke in less than a year. (Buying real estate with almost no money down to rapidly build his holdings)

He also isn't completely against debt. He is fine with a mortgage (20% down on a 15 year loan) That is a pretty low risk loan

He is also fine with student loans for education (I believe he says they should be limited to the starting salary at the most)

The problem with buying house after house with a little down as possible is that it only works if your houses (or apartments) stay rented and the tenants pay on time. When a recession hits and your tenets stop paying rent all those mortgages are still due. Without equity in the properties you can't even sell some to save the rest even it you could sell them in a down market.

A know a bunch of people that got in big trouble back in 2008 / 2009 because they took out a mortgage with 3-5 % down thinking that housing prices only go up. Then they lost their job in the recession and needed to move for a new job. However, the housing market dropped 30% so now they own 25% more on the mortgage than anyone is willing to pay. So to get rid of the house they would have to cut a check to the bank but they had no money. Some cashed out retirements, some lived in a tiny studio apartment in the new city and kept paying for the old house, and some let the house go into foreclosure.


We did Dave Ramsey's Financial Peace class in my mid-20's when my wife and I had our wake up call and decided to get out of debt. (2002 recession / 60% layoffs at my work / 3X our annual income in debt. I quickly realized our debt financed world would come crashing down in a matter of weeks if I lost my job)

His plan is very straightforward and would work for most people. It is low risk and will work if you work the steps. Lot of people say it could be mathematically better he is into simple and low risk. For people struggling to make ends meet the goal is to become financially comfortable not a millionaire in a few year and quit working. While I'm a general fan I disagree with some things.

The aversion to credit cards is one of them. I get that some people have problems with them and lots of people don't know how they work. I also get that in general people spend more when using a card than with cash. However, the same can be said of a debit card and you can rack up huge overdraw fees on a debit card too.

We did the cash envelope system and it works very well but we were on a VERY tight budget without a lot of wiggle room. (While my wife was in school and we were paying down debt we had 5 years where we each got $5 a week spending money.)

Now instead of tracking every little expense we automated our savings and then take a look out the checking account to see if it is going up as it should or shrinking. Our budget has a lot of wiggle room so we don't need to track the spending to make sure we have enough at the end of the month to cover bills.

Today we use a credit card for everything except for the 12 $1 purchases to top off our Amazon balance and to make sure we use the debit card enough to get our 1.5% interest on the checking account. (Thanks for the tip Redpoint!) We also cycle through about 4 cards a year just to get the sign up bonus and we don't bother with a card unless it pays at least a $500 bonus.

Oh, and I got the "Sell The Car" speech in person from Dave at a book signing. He told me I should sell our 1 year old VW Jetta Wagon TDI and get a $2,000 beater. I didn't because:

1. My wife was driving that car 100 miles a day to school and I wasn't going to have her drive a beater.
2. We would have lost thousands in deprecation selling the car after only a year
3. It got 50 mpg and was saving us almost the car payment in gas per month.

Instead, since I was paying for her school out of pocket we took out some subsidized Stafford student loans and paid off the car. Uncle Sam paid the interest and the principal was deferred until she graduated. We paid those off in about 18 months after she graduated and started working.