A few months ago I wrote a piece for a national magazine and was able to "interview" (via email and via their representatives), some of the top names in personal finance today and ask them what their best piece of financial advice was. Here's the response I received from Dave Ramsey, radio talk show host and author of The Total Money Makeover, Financial Peace and More Than Enough:
The key to getting your money to behave is to bother. Caller after caller to my radio show have gotten themselves into financial messes because they were going through life like Gomer Pyle on Valium and not paying attention to what their money was doing. But people do smart things if they just bother! Get on a plan and stick to it. I learned through my own financial mistakes that the key to financial success was making the guy I shave with behave. Winning at money is 80 percent behavior and 20 percent head knowledge. It’s not about sophisticated financial theories; it’s about taking control. I won with money and you can too. Like Nike says: “Just do it!
For those of you interested, here's my best piece of financial advice.
A simple suggestion, but has a lot of merit. One example is that a lot of people never get around to set up automatic withdraw from their checking in order to save money. The money ends up being spent and they don't even know where it went.
I have made many, many mistakes in my attempts to invest. The big one was following the tech boom six months too long. At least I was able to maintain all of my principal, which represented monthly savings over a number of years. I made a small profit, but now I am investing with a better plan.
Posted by: Wayne | May 08, 2007 at 11:54 AM
Dave Ramsey rocks!
Common sense works ;-)
Posted by: MoleOnABull | May 08, 2007 at 12:08 PM
Sure, common sense works, but Dave Ramsey sometimes lapses. His model budget allocates 38 percent for housing. Here in my neck of the woods, 38 percent is unrealistic for low earners - most of whom pay at least 50 percent just for rent (not including utilities). Sometimes I wonder what he's been smoking.
Posted by: Minimum Wage | May 08, 2007 at 12:59 PM
DR is a total moron...What he doesn't say is that his advice is to pay off the mortgage early so in 22 years it makes a difference in your pocket money! My advice, don't listen to DR. :-)
Posted by: Ty | May 08, 2007 at 07:35 PM
Right -- don't listen to that moron Dave Ramsey! What did his advice ever do for anybody?
Oh yeah -- I listened to Dave Ramsey. And have paid off over $18K in debt in less than two years as a result.
My advice, listen to Dave Ramsey!
DB
Posted by: db | May 09, 2007 at 04:44 AM
Ty - 22 years? Actually his advice is to only take out a 15 year mortgage. He readily admits that it's not the best way mathematically (assuming you invested the difference).
Posted by: Skott | May 09, 2007 at 02:34 PM
What did his advice do for someone paying half their income for rent?
Posted by: Minimum Wage | May 09, 2007 at 04:46 PM
MW - I don't think it takes expert advice for that... get a roommate or two (short-term solution) and get some education/training that will allow the person to earn more in the long term. Not exactly rocket surgery!
Posted by: Skott | May 11, 2007 at 12:19 PM
I am a female who is past middle age, but not old enough to receive social security. I have heard you say on your radio programs to get term life insurance and not whole life policies. I have paid on term life policies for 30 years. I also have some whole life policies in my ex-husband's name which I still pay on. These were given to me during the divorce and were signed over to me as the sole owner. What would you recommend that I do with all of these policies at this point? By the way, he is more than a decade older than I am.
Posted by: N. S, | September 01, 2008 at 05:40 PM
NS --
If you're looking for advice from Dave Ramsey (which it appears you are), you're in the wrong place. This is not his blog.
Posted by: FMF | September 02, 2008 at 08:15 AM