"People who do math don't have credit card debt."

[Xist]

The road to Heaven is paved with good intentions.

"I realized that on most issues, I agreed fully with Dave." Someone asked how he disagreed:

1. "A 12% annual rate of return in stocks is not realistic." "Warren Buffett’s long term prediction that stocks will return about 7% annually." If you invest $100 a month for twenty years, at 7% you would have $50,753.64. At 12% you would have $91,121.11. If you do this from when you turn 18 until you are 65, you would have $198,502.47 or $687,461.97, depending.
2. Personal responsibility is the problem, not credit cards.
3. "A $1,000 emergency fund is[n't] enough if you’re paying off credit card debt." He says that emergencies could easily cost more than $1,000. Sure. Hopefully, you could use those credit cards again for the duration of the emergency, and you should have less interest.
4. "`Growth' mutual funds are not the be-all end-all of investments." He says Ramsey only recommends growth mutual funds. I listen to his book last week and I remember him saying to invest in four different types. Hamm seems to suggest something like Vanguard, which as I recall, has a better return than anyone but Warren Buffett, but a tiny fraction of the overhead.
5. "Do not cut your retirement savings during the initial push to pay off debt." Hamm says to match employer contributions and then pay down your credit cards with whatever may be left. I would really want to run the numbers on that.

https://www.thesimpledollar.com/five...h-dave-ramsey/

What do I know? I owe more than a year's salary, but I am trying to figure out the best way to fix that.

[oil pan 4]

1 maybe under the Obama administration. I have made around 30% in the last year.
A typical bush year was 12 to 20.
You only get 7% if you leave your money in there, ignore it and and don't make any effort to move it when there is a down turn.

If you employer is matching dollars for dollar you should continue to contribute unless you are paying hundreds upon hundreds of dollars per month in interest.

[freebeard]

https://www.cnbc.com/2017/10/16/wiki...overnment.html

WikiLeaks founder Assange claims he made 50,000% return on bitcoin thanks to the US government

• Julian Assange thanked the U.S. government after it pushed companies like MasterCard to block payments to WikiLeaks in 2010
• This forced WikiLeaks to accept payment in bitcoin

[redpoint5]

Originally Posted by Xist

match employer contributions and then pay down your credit cards with whatever may be left. I would really want to run the numbers on that.

An employer match is like gaining 100% interest instantly. No need to run the numbers.

This is why it's absolutely insane when people don't take advantage of matching 401k contributions from their employer.

[jamesqf]

Originally Posted by oil pan 4

1 maybe under the Obama administration. I have made around 30% in the last year.
A typical bush year was 12 to 20.

Well, if you overlook the last Bush year (2008), when the DJIA dropped 54% https://en.wikipedia.org/wiki/Stock_...8.E2.80.932009 (37% for the total market) Then there was 2002, when the annual drop was 22.1%, following 2001's 11.9% drop: https://www.thebalance.com/stock-mar...y-year-2388543 Obama years were much better, but of course a lot of that is because of the recovery from '08.

[oil pan 4]

I had already taken my money out of stocks when the 2008 housing bubble burst, just following my normal yearly stocks to bonds back to stocks cycle. I noticed trading volume had been really high so I panic sold all my stocks about a month before I normally would.
2008 was not a typical year and I do not invest in dow Jones based funds.
Mid 2002 was just about the first year I was able to start investing money. So for me the bush years were great. Anyone that started purring money away in the late 90s, probably not as much.

Then the 2008 non recovery was great for me since I didn't lose any thing to start with. But then by 2010 we were looking at stagnation and recession again.
2009 on was like investing in bonds. It got better towards the end. Light at the end of the tunnel syndrome I guess.

Then before the supposedly rigged 2016 election I kept every in stocks on the very unlikley chance that Trump would win, against the likelihood that the market reaction to hillery wouldn't be that bad. Normally by Nov 4 I have $0 in stocks.
This year I am taking another chance by leaving money in, hopefully everyone will still be riding that Trump high through the new year and not sell or hopefully some bubble isn't going to pop.

[Xist]

Originally Posted by redpoint5

An employer match is like gaining 100% interest instantly. No need to run the numbers.

I did it anyway!

I have seen many calculations using abstract numbers. I like realistic ones. I could do my situation, but I think we are required to contribute the maximum for retirement. I read somewhere most employers match 3 - 6%. Let's say yours is good for five.

That actually does not seem like much, but it sure does add up! Going with Ramsey's 12%. The average credit card debt per person (household) is $16,883. The average interest rate is 15.07%. The per capita income for the overall population in 2008 was $26,964, but we will go with the median salary for workers with an associate’s degree is $41,496. If you earn $41,496 yearly and your employer contributes 5% to retirement, that is $2,074.80. Say your minimum payment is 3% (usually between 1 - 3%)

Let's say that you have just enough to make the minimum payment and max out employer contributions. That is $8,152.68. Ramsey says to get out of debt and then invest. RedPoint says to max out contributions and then get out of debt. So, some numbers! (but RedPoint is right)

Ramsey would have you get out of debt faster and the credit card accrues more interest than interest funds pay out, but is it worth paying interest in order to receive $2,074.80 each year? (Yes)

If you paid $8,152.68 towards your credit cards and then paid the same amount towards retirement, after fifteen years, you would have $281,686.82. If you paid the minimum of $6,077.88 each year, contributed $2,074.80 towards retirement, and your employer matched it, and then once you paid off your debt you contributed that money to retirement, after fifteen years, you would have $298,869.74. So, getting your employer to contribute another $4,149.60 yields another $17,182.92 after fifteen years.

However, arguably, Ramsey's method is safer.

[wdb]

I agree with Ramsey.

Job #1 is to get out from under the horrific interest rate debt from credit cards. Everything else pales in comparison.

Job #2 is to shred every credit card you have since you plainly can't control your spending habits and have no business with a line of credit that has the potential to bankrupt you and/or make you a slave to uncaring behemoths. Stick with debit plastic.

Job #3 is to stuff every penny you have left into your employer's matching fund.

[jamesqf]

Originally Posted by oil pan 4

Then the 2008 non recovery was great for me since I didn't lose any thing to start with. But then by 2010 we were looking at stagnation and recession again.

Are we discussing your personal investment strategy, though, or the general market? Because the numbers say that for the general market, the Obama years were quite a bit better than the Bush years for someone like me, who basically puts money in index funds and such, and leaves it there. (For me, the extra money I might make by being more active isn't worth the time & aggravation.)

This year I am taking another chance by leaving money in, hopefully everyone will still be riding that Trump high through the new year and not sell or hopefully some bubble isn't going to pop.

Yeah, I figure it's going to crash before too long - indeed, I'm rather surprised it hasn't. But it'll recover sooner or later.

[Xist]

I wonder if Buffett says index funds will only return 7% is because he expects a zombie apocalypse under Turnip.

I have had people say "If you cannot afford to fix your car, just don't fix it."

How about the E.R.?