There's something about Dave RamseyBlog added by Paul Wilson on September 14, 2011
Paul Wilson

Paul Wilson

Denver, CO

Joined: May 30, 2007

My Company

ProducersWEB

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If you’re ever at an insurance convention and things get a bit slow, I have some advice that is sure to liven things up: ask a few people around you what they think of Dave Ramsey.

In recent months, ProducersWEB’s contributors and readers have sounded off on Mr. Ramsey’s financial advice and presentation techniques and believe me, they have plenty to say.

ProducersWEB income planning and investing expert Chris Conklin kicked the whole thing off last year with his analysis of Ramsey’s views on cash value life insurance, in which he breaks down Ramsey’s own words and explains why he believes they are misleading.

The always outspoken Roccy Defrancesco followed with Is Dave Ramsey an idiot?, which includes his own thoughts as well as a detailed 17-page piece by Thomas De Jong. Here’s an excerpt:
    Do I think Dave Ramsey is an idiot? That’s a tough call. Do I agree with the advice he gives? No. But he’s one of those people who you might describe as “one of the richest idiots I know.” He is a marketing machine, and I’m sure he’s made more money than 99.9 percent of the advisors reading this article, as well as the author of this article.
Not surprisingly, Roccy’s article prompted a flood of reader comments, both supportive and … not so supportive.
    Ted in Las Vegas: Simply put, Dave Ramsey is a huckster through and through and should be denounced as such.

    Paul Cross: Term insurance or Whole Life is not the question... it doesn't have to be one or the other; in fact most people, especially in the younger ages, should have some of both.

    We are blessed in the financial world because we can learn from both the idiots and the gurus.

    Christopher Elliott: Dave is no idiot, he holds a Bachelors degree in finance and grew up in a very successful family business … He encourages people to talk to financial professionals and refers people to them though his Endorsed Local Provider program and adds that run during his show.

    Thomas De Jong: The point of the paper is to make the argument that Ramsey should stick to helping people get out of debt and leave investment and insurance advice to true professionals (who are licensed and regulated in the advice they give).
Thomas De Jong followed up this piece with More bad math from Dave Ramsey, which offers a rebuttal of two e-newsletter sent out by Mr. Ramsey. “I still can’t figure out why Dave refuses to acknowledge the difference between average annual rates of return and compounded rates of return,” De Jong says.
Again, there was no shortage of comments:
    By jkgarrett17: When browsing the internet for articles on financial advice, nothing more says "I'm an idiot! Don't read my article!" than titling the article bad-mouthing Dave Ramsey. You could entirely be 100% correct in your advice, and you could be 100% correct that Ramsey is wrong; but as an agent you should know basic successful marketing strategies don't include pointing fingers at other people, especially when they are icons of the industry who have helped thousands of families get out of debt and move on to live a successful financial life.

    By Nix Thank you for you clear-eyed critique of Mr. Ramsey's Madoffesque return claims. If is beyond comprehension in an industry as regulated as financial services, populated mostly by sensible people, that Mr. Ramsey's kind of fractured thinking ican be diseminated as "fact."

    By fishyak 1) To the extent Dave Ramsey helps people limit or get out of debt, more power to him.
    2) OTOH, financial advisors, particularly critics like those willing to post their opinions, wish we had the freedom to voice our opinions in some manner resembling free speech. However, since literally everything we say is "marketing material," our real axe to grind is our intractable "compliance" process that Mr. Ramsey need not confront.
Chris Conklin weighed in again with Does Dave Ramsey’s 12 percent growth stock fund exist? in which he looks further into Dave’s claims of 12 percent returns from growth stock mutual funds. “I investigated whether the 12 percent return that he quotes is realistic, and I found some surprising facts,” he said.

Here’s some of the reaction:
    By bob.wrinkle495c15: Dave Ramsey has probably destroyed more solid permanent life insurance programs than anyone since Art Williams. It is about time that some of the people who canceled their insurance and put it in the stock market only to lose large somes of money should take legal action against Dave Ramey. When this happens, he will start to watch what he says about getting 12% guaranteed in growth mutual funds.

    By dlmcgill: Bottom line, the 12% figure historically speaking is bogus! However, in the scheme of things it doesn't matter if the goal is to achieve a comfortable retirement. Not confident at 9% returns, then increase today's savings rate and everything will be okay!

    By insuralife: I want to say that I am a big fan of Dave Ramsey. What ever the investment for tickets to his show, they will be worth it in the long run! Having said that, I cringed when I attended my church's presentation of his Financial Peace program and heard him bat around those figures.

    By FBN: Ramsay says some good things when he talks about getting out of debt. Having said that, most of his other advice makes me cringe.
Finally, earlier this month, Allen Koreis wrote Dave Ramsey on life insurance, in which he states
    All the drama of Dave sticking his finger down his throat when he talks about life insurance doesn't change the fact that he is making outlandish claims about how much money a person saves or a person will have in the future if they invest in mutual funds.”
So far, the article has prompted 25 comments and 35 likes, and counting…
    By Ciexpert: I've been listening to the proponents of the "buy term invest the rest" crowd for more than 25 years now. The majority of folks I know who followed that advice (use that term loosely) are today broke, uninsurable and needing a permanent life policy more now than ever.

    By rezzard: How's this for the industry slogan of the year?... "You wouldn't trust your plumbing to a monkey with a wrench, why are you trusting your retirement savings to an "entertainter w/ a mike"...

    By bpeters2: Popularizers deal only with the population writ large, which means they never have to solve any real problems. We're the ones who actually deal with people who want and need help.

    By dud2alms: DAve has had these licenses before.. In his classes (which happen to be very good!) he is proud to say he ad a real estate license and indicates he had insurance and I assume he included a securities license as well.... Well, Dave is very proud to say he gave them up because he was told what he could and could not say..
Clearly, Dave Ramsey’s meteoric popularity doesn’t extend to everyone in the insurance industry. Based on the hundreds of comments we’ve received, it’s also obvious that everyone has an opinion about him. We would love to hear what advisors think of Dave Ramsey's philosophies below or in the comment section on any of the articles mentioned above.

What do you think? Is Dave Ramsey doing his best to share sound financial information with as wide an audience as possible, a snake oil salesman just looking to earn a buck, or does he fall somewhere in between?
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