Book Review: Total Money Makover by Dave Ramsey // September 29, 2007
Listen to the Podcast @ Ransomed Speech! I expand a little more on this topic.
A couple of months ago, I sat down with my HHD (Headquarters and Headquarters Detachment) Commander who happens to be a real estate guy in the outside world. That is, when he is not mobilized he buys and sells real estate. We were chatting about life in general and I brought up the fact that as of 31 January, I would be PCSing - didn't know where at the time - and would have to sell my house. As we talked, the topic came up that we have only rented-this-house-from the bank (otherwise known as a mortgage) for a year, I stood to lose a significant sum of money just to get out of it!
Crap. Some things just can't be helped.
This lead me to take a long, hard look at where we are financially and where we need to be. In the midst of this painful process of self-awareness, I was looking for a new podcast to listen to since my runs in the morning are now an hour long.
I ran across the Dave Ramsey Podcast. You can find it here.
Let me be perfectly clear on this point.
I HATE fad anything!! Seriously, if it sounds popular or in any way too simple, I steer clear. I have been a part of too many fad diets in my efforts to get my weight under control to not develop a profound sense of disgust when anybody's name gets associated with "saving my life, finances, family... whatever." I just hate fads.
Dave Ramsey is to me a fad.
I mean, really, his books have his face on the front. All fad things have the guy's face on the front. And the people that follow him have their own vocabulary and all their books are large print... the list goes on and on.
Then I started to listen to the podcast. It made sense. Now, his laugh is extremely annoying and the program is somewhere between Larry Burkett and Rush Limbaugh, but on some level, it really hit that "huh - that really makes a lot of sense" button.
One day, not long after, I realized that my wife had been trying valiantly to fix our money situation but I had not been on board. I came home and in typical Fisher extremisms, apologized to her for not being the proper leader in our home, sold my truck, and soon will sell my bike - put us on a strict budget that spends every dollar to the penny, went on the "cash-in-a-envelope" system and watched our debt begin to dissipate.
It is amazing. We have cut our debt in half and are on track to, by the end of the year, having just a little left on our family car, my student loan, and the house. I won't give the dollar amount but it was A LOT of debt. A LOT!
Here are my thoughts on Dave Ramsey's "Total Money Makeover."
It's a very repetitive, RA RA GO GET 'UM, approach to financial freedom. If you are someone who likes books to be introspective, philosophical, intellectual, and fancy systems based - this is NOT your book. I found the book to contain the same clichés that he uses on his radio shows often and strongly. However, if you can get past the personality, you will find that what he teaches is a sound, common sense approach to personal finance that is a breath of fresh air in this "debt is the key to financial freedom" consumer society that we live in.
The books starts out by convincing you, very soundly I might add, that if you are in debt you have been lying to yourself and are headed for trouble. It's a very effective approach. He begins by attacking the "I'm not THAT out of shape" denial attitude that most folks have. I know I did. I figured that since everyone I knew who was my age and in my stage of life had debt the surely, I was ok to be in debt to the 10s of thousands.
No, its not ok. The Bible is correct - the borrower IS servant to the lender. I realized that I couldn't save for my daughter, that will be born in January, a college education - why? I was too busy paying interest to Master Card and Discover! I was in denial.
He then talks about myths - debt and money - that we all have been taught... and taught wrong!
He then goes into a series of chapters that lay out his basic ideas - the baby steps.
Step 1: Save up $1,000 to start an "Emergency Fund"
Step 2: Pay off all debt (except the house) using the "Debt Snowball" (smallest to largest)
Step 3: Save up three to six months of expenses in savings
Step 4: Invest 15% of your household income into Roth IRAs and pre-tax retirement accounts
Step 5: Save up college funding for your children
Step 6: Pay off your home early
Step 7: Build wealth and give! Invest in mutual funds and real estate
We are on step two and moving fast. We had to slow up because we are coming up on a break in service while I move from the Active Reserve world into the Regular Army but after that we'll pick it up and keep on trucking! I read the book because I was listening to the podcast and found it to be sound advise. It was the kick in the pants that I needed to get on the road.
My goal? To pay for everything with cash and save money. I know, I know, sounds lofty. There are many people who probably have a million reasons why I should not lead my family this way but you know - I believe this is the right answer. Yeah, its kinda painful to be driving one vehicle when you were used to two but you know what? By December, we will have paid off more than $20,000 worth of debt. Yup, you read that right, over twenty thousand dollars.
Its kinda like weight loss really. I got sick and tired of consistently coming in right where I had to be for the Army and decided to change my life. I'm twenty pounds lighter, have more muscle mass and feel better about myself than I have in years. I had to change my lifestyle - but it worked!
There is no easy way to lose weight and there is no easy way to get rich. Losing weight is simply putting out more calories than you are taking in. Bottom line.
Gaining wealth starts with "owe no man anything" and ends with saving more money than you are spending.
Too easy...
A couple of months ago, I sat down with my HHD (Headquarters and Headquarters Detachment) Commander who happens to be a real estate guy in the outside world. That is, when he is not mobilized he buys and sells real estate. We were chatting about life in general and I brought up the fact that as of 31 January, I would be PCSing - didn't know where at the time - and would have to sell my house. As we talked, the topic came up that we have only rented-this-house-from the bank (otherwise known as a mortgage) for a year, I stood to lose a significant sum of money just to get out of it!
Crap. Some things just can't be helped.
This lead me to take a long, hard look at where we are financially and where we need to be. In the midst of this painful process of self-awareness, I was looking for a new podcast to listen to since my runs in the morning are now an hour long.
I ran across the Dave Ramsey Podcast. You can find it here.
Let me be perfectly clear on this point.
I HATE fad anything!! Seriously, if it sounds popular or in any way too simple, I steer clear. I have been a part of too many fad diets in my efforts to get my weight under control to not develop a profound sense of disgust when anybody's name gets associated with "saving my life, finances, family... whatever." I just hate fads.
Dave Ramsey is to me a fad.
I mean, really, his books have his face on the front. All fad things have the guy's face on the front. And the people that follow him have their own vocabulary and all their books are large print... the list goes on and on.
Then I started to listen to the podcast. It made sense. Now, his laugh is extremely annoying and the program is somewhere between Larry Burkett and Rush Limbaugh, but on some level, it really hit that "huh - that really makes a lot of sense" button.
One day, not long after, I realized that my wife had been trying valiantly to fix our money situation but I had not been on board. I came home and in typical Fisher extremisms, apologized to her for not being the proper leader in our home, sold my truck, and soon will sell my bike - put us on a strict budget that spends every dollar to the penny, went on the "cash-in-a-envelope" system and watched our debt begin to dissipate.
It is amazing. We have cut our debt in half and are on track to, by the end of the year, having just a little left on our family car, my student loan, and the house. I won't give the dollar amount but it was A LOT of debt. A LOT!
Here are my thoughts on Dave Ramsey's "Total Money Makeover."
It's a very repetitive, RA RA GO GET 'UM, approach to financial freedom. If you are someone who likes books to be introspective, philosophical, intellectual, and fancy systems based - this is NOT your book. I found the book to contain the same clichés that he uses on his radio shows often and strongly. However, if you can get past the personality, you will find that what he teaches is a sound, common sense approach to personal finance that is a breath of fresh air in this "debt is the key to financial freedom" consumer society that we live in.
The books starts out by convincing you, very soundly I might add, that if you are in debt you have been lying to yourself and are headed for trouble. It's a very effective approach. He begins by attacking the "I'm not THAT out of shape" denial attitude that most folks have. I know I did. I figured that since everyone I knew who was my age and in my stage of life had debt the surely, I was ok to be in debt to the 10s of thousands.
No, its not ok. The Bible is correct - the borrower IS servant to the lender. I realized that I couldn't save for my daughter, that will be born in January, a college education - why? I was too busy paying interest to Master Card and Discover! I was in denial.
He then talks about myths - debt and money - that we all have been taught... and taught wrong!
He then goes into a series of chapters that lay out his basic ideas - the baby steps.
Step 1: Save up $1,000 to start an "Emergency Fund"
Step 2: Pay off all debt (except the house) using the "Debt Snowball" (smallest to largest)
Step 3: Save up three to six months of expenses in savings
Step 4: Invest 15% of your household income into Roth IRAs and pre-tax retirement accounts
Step 5: Save up college funding for your children
Step 6: Pay off your home early
Step 7: Build wealth and give! Invest in mutual funds and real estate
We are on step two and moving fast. We had to slow up because we are coming up on a break in service while I move from the Active Reserve world into the Regular Army but after that we'll pick it up and keep on trucking! I read the book because I was listening to the podcast and found it to be sound advise. It was the kick in the pants that I needed to get on the road.
My goal? To pay for everything with cash and save money. I know, I know, sounds lofty. There are many people who probably have a million reasons why I should not lead my family this way but you know - I believe this is the right answer. Yeah, its kinda painful to be driving one vehicle when you were used to two but you know what? By December, we will have paid off more than $20,000 worth of debt. Yup, you read that right, over twenty thousand dollars.
Its kinda like weight loss really. I got sick and tired of consistently coming in right where I had to be for the Army and decided to change my life. I'm twenty pounds lighter, have more muscle mass and feel better about myself than I have in years. I had to change my lifestyle - but it worked!
There is no easy way to lose weight and there is no easy way to get rich. Losing weight is simply putting out more calories than you are taking in. Bottom line.
Gaining wealth starts with "owe no man anything" and ends with saving more money than you are spending.
Too easy...
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Book Reviews , Interesting Articles , Podcast , Reflections
Chaplain Jon Fisher
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