On The Agenda:

He has a huge empire and millions of people listen to him each day, but should you listen to Dave Ramsey’s advice? Find out in today’s podcast.

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Episode Show Notes:

On this episode of How Money Works, Craig and Jennifer Moser are talking about financial guru Dave Ramsey. He has millions of followers, but do we agree with all of his financial teachings?

“I’m a fan of what Dave Ramsey does, because he has helped thousands of people. I’ll give him his kudos,” said Craig. “It’s just that some of this stuff is not as applicable for the entire population.”

No credit cards

Dave says you should never use a credit card. If you have one, cut it up and close the account.

“I just disagree, but let me put some caveats on that,” said Craig. “This day and time, I think it’s very difficult to operate in the world without a couple of good credit cards.”

We would say, don’t carry a balance on a credit card, or don’t be late on a payment.

Whole life insurance

Dave says never use whole life insurance because it’s a rip off. He prefers term insurance or to self-insure.

For a lot of people, it’s very important to have permanent whole life insurance. For some people, Dave’s approach is appropriate. Many times, term insurance won’t be the right tool for the job – for example, if you’re a business owner. You might need a combination of both types of insurance.

Invest in four types of mutual funds

Dave says you should invest in four types of mutual funds – growth, growth and income, aggressive growth and international.

He’s basically saying you should only select stock-only mutual funds. Early on, when you’re young, this kind of asset allocation gives you the chance for high growth, but it has volatility.

Listen to the full episode or use the timestamps below to jump to a certain section. Thanks for listening.

Important Points:

0:40 – Credit cards

2:39 – Whole life insurance

5:26 – Four types of mutual funds

7:03 – 12% return on mutual funds

10:57 – Pay off mortgage

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