I am NOT a fan of Dave Ramsey advice… usually. BUT, in this episode I’ll explain a few things that I can get behind from Ramsey.
At Money Ripples, we’re not afraid of looking at all sides of an argument. So, right now, I’ll tell you the two things I think Dave Ramsey has RIGHT, and of course also explain where you might have been misled.
Whether you’re a business owner trying to increase your cashflow, or you’re someone trying to figure out how the heck to start investing, we’ve got ya covered!
Don’t miss out on the chance to learn the real source of Dave Ramsey’s wealth, find out how real estate can up your cashflow, and hear my absolute FAVORITE piece of guidance for driven, service-minded individuals. Best part of it all?
You won’t have to compromise your integrity to become financially free if you do it with us. Get started today by taking our passive income calculator: https://bit.ly/3zOgC8J
Listen here or watch on YouTube!
TRANSCRIPTS
Speaker 1 (00:00):
Do your index funds only get professionally managed funds? But we already know Dave Ramsey figured this out with his company. That’s where he created his. But here’s the key thing that you need to remember when you’re looking at somebody’s financial success. Do not look,
(00:34)
Hello, my fellow rippers. This is Chris Miles, your cashflow expert in anti financianal advisor that shows for you those who work so hard for your money and you’re now ready for your money to start working harder for you today. You want to become work optional where you work because you want to, not because you have to, and you not just want to get rich, but you want to live a rich life because as you’re blessed financially, you have a greater capacity to bless the lives of others while living the life of freedom. Guys, that is exactly why I’m here today. Thank you for allowing me to create a ripple effect through you. Thank you for tuning in, binging and sharing with others that’s allowed our show to keep growing and growing month after month, year after year. All thanks to you. So thank you so much.
(01:13)
If you haven’t done so already, guys, remember there’s two YouTube shows that you can follow. There’s the Money Ripples channel and the Money Ripples podcast channel. So our podcasts get released on YouTube on Money Ripples podcast channel, but then there’s also a Money Ripples channel that has lots of continuing education about passive income, infinite banking, and all those other things that you love to hear. So check those out and subscribe today. Alright, so guess what? There’s a video I actually like of Dave Ramsey’s. Now it’s just a short video. It’s just a little one, but it’s no surprise that of course when I’m on this show, I have been very critical of Dave. But there are things that I do like because let’s be honest, the truth is he has helped millions of Americans, at least I think he’s helped millions of Americans. I don’t have a confirmed number.
(01:58)
I would definitely say it’s well into the hundreds of thousands if not millions, and I don’t take that away from him at all. In fact, I think that is one of the best things and the best investments he has made into the world, is trying to help people manage their finances, manage their money, be wise stewards to some level, even if it means overly simplistic, one size fits all advice. That’s the thing. He’s really done a great job on the budgeting and even getting people to be disciplined savers. That is great. And also I want to share this video with you guys that I thought was actually pretty cool, but it does bring up some other questions that kind of makes you wonder, Dave, where do you invest your money? So let’s check this out.
Speaker 2 (02:42):
I have three investments, that’s all I have. My business paid for real estate with no mortgages and mutual funds. I don’t play single stocks. I don’t screw around with gold, I don’t mess with Bitcoin and I don’t need your stock tip from your broke golfing buddy with an opinion you missed out on getting in on this steel Ramsey. Didn’t miss a thing. I’ll set my net worth down beside yours while you mouth off.
Speaker 1 (03:08):
Okay? So definitely he’s strongly opinionated. If you haven’t ever seen him before, he has an opinion, right? The interesting thing he said, there’s three investments he has, right? He’s got his business, of course, which I would say is probably one of his biggest investments. Two, he said he has paid for real estate and then three, he says he has his mutual funds. And of course he said, I don’t do anything with Bitcoin. I don’t do anything with gold. I don’t do anything with anything else. That’s all I do. And of course, put my net worth next to anybody’s and I’ll challenge it, right? And there’s actually some good points in that because I can’t tell you how many times I get approached by people saying, Hey, you should be looking at this investment. And it’s usually from the same kind of people that are kind of gamblers more than they are investors, and sometimes I might even got lucky on something.
(03:54)
This is why I get people are all into digital crypto and things like that. It’s like, okay, that’s great. Good job for you. Let’s flash forward five, 10 years from now. Let’s see if you’re still doing that same thing. Maybe that’s still making you rich, maybe not awesome, but you’re taking high risks in hopes to maybe get a high return. And so when he has people saying, you’re old golfing, buddy says, let’s do this. Let me put my net worth next to yours. There’s another good point too. It’s like, okay, great. Give me those tips, but let’s see who actually has in the longterm made more money and that I agree with. Now, when I watched this video, it also got me to ask more questions. He said, of course, mutual funds is what he has. I was curious, how much does Dave Ramsey have in mutual funds?
(04:36)
And of course, I’ve even said on this show because I’ve quoted Dave Ramsey where he said his net worth was like 600 million, $700 million and most of it’s in real estate, and I decided to do some research and you could do your own too, but I’m pretty dang surprised how much higher of a number that is that comes out of his mouth versus what everybody else claims. And it’s no joke. I mean, it’s definitely a serious thing when you think about Dave tends to, he’s like a fisherman, right? If you think about the stereotypical fisherman says, I caught a fish this big and it’s really like this big, right? They over exaggerate and stuff, and it seems like with his wealth and his money, for whatever reason, he feels the need to over. I mean, the guy is successful, but he seems like he has to overcompensate for something.
(05:21)
I don’t know why I don’t. He’s doing this, but it seems like he really is. He keeps inflating this number. And so I started reading various different resources and everything from Wikipedia to Investopedia to different chats and groups, even people that worked for him and things like that, just to try to get more of a full picture. The interesting thing is, as of 2018, the net worth was estimated to be closer to 50 million. So to Dave Ramsey more than really Dectuple 10 times, 10 x his income and just his net worth in the last six years, not likely, right? The estimate’s actually more like 200 million, but even that’s debated and the majority of it’s all estimated based on real estate. Now, he said he had paid for real estate. He does have some rentals that’s been confirmed. He has his own house. He actually downsized his house.
(06:08)
He had the one house he sold for just over 10 million that he had in Franklin, Tennessee. That was the one that my wife actually went by when she was a Dave Ramsey counselor. And then he downsized to about a three and a half million dollars house. That may or may not be worth more than that today. He bought that in 2021 based on the prices, it could be worth more or less, just depending. But he downsized from his 13,000 square foot house down to a 7,000 square foot house. And that’s obviously he paid for us. By the way, the money he sold for over 10 million, he paid a million and a half several years ago back in the, actually during the death of the recession and during the deaths of the recession, this guy was making great money in his business. Now, his business valuation, that’s another thing, and that’s been debated too, about how much is his business really worth?
(06:50)
It depends on how much Dave really needs to be involved. Unfortunately, his personality is pretty big, right? It’s a big personality. He’s got his daughter Rachel working there. He’s got other guys like George working there as well. But he thinks that 80%, he claims that 80% of his income comes from non Dave Ramsey type of ventures. However, the employees always say, yeah, but you have to understand, Dave has Dave Math, right? There is a thing called Dave Math with Dave, this is probably the same thing. He always overestimates the return of the stock market is 12%, and many people bought that lie, which has been debunked so many times. He also is the kind of person that says you could pull out 8% a year. And when they’ve run models on his 8% a year, I even did an episode on that several months ago, it’s come back as false that you will likely run out of money much more quickly than your 30 year retirement goal.
(07:40)
Unless you die fast, then you might be fine. You just have to not live very long. So a lot of this stuff has already been debunked time and time again, even his investment portfolio recommendations, he says, don’t ever do your index funds, only get professionally managed funds. But we already know the stats are most professional managed funds don’t even make the s and p 500. And on top of that, I’ve already told you about the SP 590 being that high return anyways, definitely not anywhere close to 12%, closer to 8%. So we’ve got all these little lies and things happening, and then we talk about his net worth and how he claims about his money. And people even said, oh, he’s a billionaire. Well, here’s the deal guys. He’s got a big conference center that he built that’s much more expensive than his house, but it also has a hard time renting if it’s not a Dave Ramsey event.
(08:24)
And so this conference center, of course, it’s commercial real estate, which has been hurt recently in valuations. He’s claiming it’s worth, that alone is worth $200 million and other people are coming back saying maybe closer to 10 million. So that’s a drastically different number. So when he says he owns out of his 600, $700 million dollar net worth, he’s saying he owns about 600 million real estate already. You already know. He’s claiming that real estate is his number one thing. I would then say, followed by his business, which again, valuations can vary depending on how much Dave is involved. The less that Dave has to be in a business, the higher the value it is, right? And that’s true with my business as well. My business is kind of largely dependent upon me, even though I now have people in place to replace me, but still, you’re the one, I’m the face that you see.
(09:15)
Right? And this is why I don’t brand this as the Chris Miles money show like I used to before. I only did that because people suggested it because Dave Ramsey did the same thing, right? I actually went to my company, my original company name, which is Money Ripples, and make that the Money Ripples podcast because the truth is I want this to go beyond me. I don’t want it to be sent around me and my name. That’s not it. Eventually, you probably will see different hosts or maybe co-hosts with me and whatnot, I don’t know. But that’s one big reason is because I don’t want something to be so dependent upon me that the ripple effect cannot continue without me. That make sense? So I’m coming back to Dave Ramsey thing here, because if we’re trying to believe what Dave says, shouldn’t his words match up with the reality?
(10:00)
And what I keep finding more and more is that it’s hard to find out the truth with Dave Ramsey. It’s hard to find out what actual net worth is and where he actually has money invested and whatnot. But the one thing is clear is that real estate is his number one investment followed by his business, and then mutual funds have no clue. He says he has money in mutual funds. I question really how much of his money he puts in mutual funds. I’m sure he has some, but here’s the key thing that you need to remember. You’ve got to remember this. When you’re looking at somebody’s financial success, do not look at where they’re investing after their success. Look at where they invested before the success. Does this make sense? Don’t look at where they invested after their success. Look at where they invested before success.
(10:50)
Because if you’re trying to get where somebody is, you don’t want to do what they’ve done after the fact. You want to do what got them there in the first place. I will tell you how Dave Ramsey got there, and it does not take a rocket scientist to figure this out. His business, his financial peace university, his Ramsey solutions and all that kind of stuff, all those companies that he has focus on the financial education is his number one investment. First and foremost, that’s what got him wealthy. Remember, he destroyed his credit by filing for bankruptcy after the eighties when he was doing real estate investing, active real estate investing. He started out being a real estate investor, becoming a millionaire there, lost it all, went bankrupt, started over with financial education, built it back with real estate. Guess what guys? That’s kind of similar to my story.
(11:38)
It’s actually pretty similar, isn’t it? Remember I went, I actually was a financial advisor, wasn’t really getting wealthy as a financial advisor, but then I started into real estate investing, started making money there. That’s where I made my passive income. That’s why I was able to retire when I was 28. Started a new business with Gary Gunderson, right? And started a new business there. And then of course the recession hit and I got destroyed. I didn’t go bankrupt. I did avoid bankruptcy. I didn’t try to wipe the stay clean. I actually tried to pay back all that debt. Beat that, Dave, I bet you didn’t. I bet you your bankruptcy wiped out your debt, didn’t it? Well, I wanted to pay back my debt, even if I had to negotiate and settle on some of it. I still paid back my debt. And while I was doing that building up with my company, my company was helping me do that.
(12:22)
And as I started to build that up and started to rebuild my credit again, then I got back into real estate investing. Then I started to create passive income where as you always hear me say end of 2016, December to be exact, that’s when I started having enough passive income coming in from both real estate and from business passive streams where I was able to retire once more. And so when I’m teaching you guys stuff here, I try to make sure I teach in alignment with truth that’s worked for me right now. I’m not saying there’s not multiple paths to get to millionaire status, that’s the truth. But when I hear him coming out with all these things saying, we interviewed 10,000 millionaires and they all did it by investing their money in growth stocks and mutual funds and then paying off their house in an average of 10 years.
(13:07)
Guys, I know millionaires. I don’t know who the heck he was polling. I would guarantee it’s probably his own students. It’s probably who he’s actually polling, not himself. So of course they’re following his advice and getting there. Many of ’em, of course, they have high income jobs to be able to save enough into those growth mutual funds and stocks because the returns aren’t not that impressive. To be able to do it quickly. It takes a lot of time. You can do it, but it takes a lot of time where those that invested in real estate, guess what? He didn’t say anything about real estate being the reason they did it. He just said paid off real estate like their own paid off house. But I’ve found very many times, including if you look up and you researched statistics on your own, you’ll find plenty of examples where they say, these people all own real estate.
(13:47)
Yes, they might own their own home, but some of ’em will also own multiple properties, and that’s what helped push them to millionaire status because the appreciation, okay, so the thing that just ticks me off is when you hear financial experts claim one thing, yet do another, they say, do this. Even though they didn’t do it themselves. They say, do this and you’ll see success, but then they go and do something else and they get success. I have no problem Dave Ramsey making his money in his business, but be honest and say, listen, your business should be the number one investment. And by the way, those of you that have businesses, it should be your number one investment followed by again, if you’re looking for other places outside of your business, real estate backed investments can be a safer place. I’m not giving you a recommendation, by the way.
(14:33)
I’m surprised because Dave Ramsey is a TV personality with the amount of strong recommendation he makes, even talking about what percentage you have and what kind of funds and putting all your money in mutual funds and things like that. And not to mention he’s had lawsuits from everywhere, from lawsuits about timeshare frauds that he’s advertising his show all the way to getting sued by his own employees because he discriminates and things like that. I mean, aside from all that stuff, and not to mention he’s being known as being kind of a jerk to his people. It sounds like definitely working for Dave Ramsey is not the friendliest, happiest place on earth, right? Not like Disney. You can kind of see that that follows him through. You start to see common threads. You start to see things like, well, the guy that’s kind of a jerk to people on the air can also be a jerk to people behind the scenes.
(15:22)
The guy that tends to overinflate numbers on math also overinflate his numbers and his personal life. Guys, I don’t always fully believe in the common mantra you hear people say out there is how you do. One thing is how you do everything. But I will say this, there is some truth to the point where how you do one thing is how you do some things or many things in your life. Maybe not everything, but some things at least there can be a common thread. Be careful who you listen to. And I’m not saying I’m perfect, right? In fact, you probably hear me say that all the time. I’m fallible. In fact, just this last week, I had a monthly call with our own clients and Craig, who’s our coach, he kind kicked it off the meeting and stuff, and he wanted to do a little market update and talk about what’s going on in the marketplace and possible reduction of interest rates, and he’s going a little scientific with it.
(16:12)
He says, I’ll turn the time over to Chris. Chris, what do you think is going to happen now with the markets? What’s your prediction? What are you seeing right in there? My answer, who the hell knows what I said, literally quoted? Who the hell knows? I don’t know. The truth is, is that things can change. There could be all kinds of crazy stuff that happened in the world beyond just the statistics, right? That’s the thing is that there are no certainties of life. There are no certainties that I’m going to be around tomorrow. I hope and pray that I am. I hope and pray that you are too, but we have no certainty, right? That’s the truth. There’s risk in everything for anyone to tell you. This is the way to do it. It is just bull crap, okay? Even when I talk about real estate backed investments, I talk about it because there’s a higher level of success there that’s proven.
(16:59)
There are people that accidentally become multimillionaires because they bought real estate and held onto it. They didn’t even do anything great with it. They just had real estate in their portfolio. Sometimes that can happen with stocks, that could even happen with Bitcoin. Although again, that’s a very new thing. It’s not a test time tested type of thing that I would gamble a lot of my money into. By the way, I bought Bitcoin, and by the way, I do own gold and silver. Dave Ramsey. I know you say you don’t invest in any of those things, but I have those things too. Why? Because I practice what I preach. That’s why. And when clients are saying, Hey, should I have money in gold and silver? Hey, that could be a great place to have. It doesn’t mean that cash flows, right? You may not make money there, but it could be a great place to hold some money.
(17:43)
I’ve bought Bitcoin too, but I bought after it crashed when everybody bailed out of it, and then I sold it when everybody was buying in. That’s buy low, sell high. I played with it. It was gambling money. It wasn’t like my true investment. So I agree with Dave, the top two that he says business and real estate. I’m right there with him. By the way, Dave’s almost exactly to the day, 17 years older than I am. Happy early birthday to you, Dave. And by the way, I accept gifts and other happy birthday wishes, even though my birthday is not for another month and a half-ish. But that’s the thing. Like there’s similarities. I’ve seen similarities in our thing. He’s all about adverse to debt. I’m about responsible use of debt, and this is from a guy that also lost almost everything because I had excessive debt, but I knew it wasn’t the debt that killed me.
(18:31)
The debt was just the result. It wasn’t the cause, right? The cause was negative cashflow, not having my cashflow in order, not having significant enough of reserves. I had reserves, but not nearly to the point that I should have had. So not having those reserves, not addressing the cashflow quickly enough was the thing. Cashflow is the cause. Net worth is the effect. That’s why the debt only came after I had negative cashflow. If I didn’t have negative cashflow, I wouldn’t have had an excessive debt. I wouldn’t have had that story. I’d be telling you guys about having over a million of dollars of debt. That happened because I started sinking between my business and my real estate. Both started to sink, and that was of course a very interesting time. I also took undue risks, right? I started a business and I was launching it, and I didn’t really know what I was getting into.
(19:18)
I’m glad I did it, but it was definitely not a good investment per se. I cut off also other income streams. I had passive income streams that were working that I cut off, so then I could focus more on that business that I had started. So there’s a lot of mistakes I’ve made along the way, and that’s the thing is I want my pain to be your gain, right? I want you to learn from my example. I’m not saying my way is the only way or the best way, and like I said, I don’t know what’s going to happen, but I do know that there are time tested principles and strategies that can work. The principles are first and foremost, focus on where you earn your money. Focus there first. How can you earn more money by creating more value for the people you work for?
(19:59)
It could be clients or customers. If you’re a business owner or it could be your employer, the company you work for, how do you create more value for them? How do you become almost indispensable? And I don’t mean from a scarcity standpoint where you’re like, I’m going to guard all of my secrets so that nobody takes ’em. No, it’s actually the opposite. You actually have no problem sharing what you’re doing, but you know that the talents you have are significant enough that you can bless more lives. You can keep developing those talents, making a bigger impact for the people that you serve. Serving people and solving problems is the one guaranteed way of success towards wealth. Dave Ramsey figured this out with his company. That’s where he created his wealth first. Now, with all the profits and all the money he made, that’s why he was able to buy that paid off house, right?
(20:47)
Granted, he could have bought with a mortgage, but he didn’t. He bought that house for a million and a half, that huge mansion that he bought for a million and a half dollars, that then appreciated, hey, it did multiply by six times from 2008 all the way till 2021. Good for you, Dave. That’s pretty dang awesome. But notice it wasn’t from his mutual funds. His mutual funds did not grow by six times, okay? It was his real estate. Even when he bought other real estate, whether it’s paid for or not, it doesn’t matter. That’s the stuff that made him the most money. That’s what increased his net worth. When he tells every person knowing that you’re broke, starting off rather than telling you focus on increasing your income and then saving that income to put in real assets, he tells you, go gamble it in the stock market.
(21:29)
And it kind of makes you wonder, gee, Dave, do you get paid for telling people this kind of stuff? Now, somebody could argue and they’re like, Chris, I’ve heard you talk about infinite banking. You make money off that. Yeah, I do. But I was recommending it before I made money off of it. Just be aware of that. I was still telling people, this is a cool way to do it, even when I wasn’t selling it myself. Now we bring it in-house. Yes, we do offer it. So yeah, we have financial interest in that. But yeah, and we have financial interest in helping people out and our clients and getting them connected with real estate deals. But again, I’m one of those people that I’ve gone through life knowing that I’d like to see evidence work and to see something like that, to see where, again, that video was on the surface level good, but what it got me to ask more questions.
(22:15)
I think more critically, I started to realize, dang, I wish that people like Dave Ramsey would just come clean and say, you know what, guys? You could actually put your money in the stock market. You could lose a lot of money. I’m telling you this, because honestly, you’re probably, you need something simple. I don’t think real estate investing may be the thing for you. You probably don’t have enough money anyways because you’re saving a couple hundred bucks a month. Go do it in the stocks. Great, awesome. I could actually give some very similar advice to that too as an option. I probably wouldn’t give that advice. I don’t want to give investment advice here, but that could be an option for you. But the thing is that there’s people that have a lot more money that could be doing better things of their money, including maybe you listening to this right now, but you’re not doing it because you’ve been held back listening to these talking heads that have zero accountability.
(23:03)
It doesn’t matter if you lose all your money or not, they still get paid. That to me is criminal. That’s financial advisors. Do you realize they get paid when you win in the stock market? They take the claim, but when it goes down, they like to lay the blame, right? I didn’t mean that to rhyme, but is true, right? Financial advisors like to take the claim when it goes up, but when it goes down, they like to lend out the blame. Oh, it was the market. It was something outside of me. I had no control of that. Do you realize that financial advisors get paid whether you make money or not? Even if money, the market tank, you’re losing money, but they still get paid. They, they get a little haircut of what they get paid, but they’re not losing money at all. So if you want, here’s the best financial advice if you want, we want to compile all this together.
(23:45)
If you want the best investment possible, right? In the financial world, the best thing you could do is become a financial advisor, become a great salesperson, and just get a bunch of money under management, and then claim that you’re going to do your annual review with people. Even though all you’re doing is really, you might tweak this button or that button, but you’re doing nothing and helping them decide where they put their money. You’re just trying to make them feel better about their money and just say, keep saving. That’s what a financial advisor really does. They say, keep saving. You’re on track. Keep going. Maybe you want to save more money now, because as their numbers come in lower than they always predict. They always say, well, just save more money. You need to save more money. Inflation. You got to save more money. Okay, I was already saving more last year.
(24:22)
Now you want me to save more again? Yeah, just keep saving more. In fact, add more, add more. And then of course, you get to that final day of retirement, and they’ve already had made lots of money in their business, by the way. They can’t really retire off their investments either. They’re just making money off of you, and then they come back and say, well, you just didn’t save enough. Oh, you know what? Maybe just extend a little bit longer. Just work a few more years. Yeah, I know you’re 67 years old, but just keep working a few more years and then you should be okay. Oh, maybe just live on 8%. Like Dave Ramsey claims, which we already know is BS too. I mean, all that stuff. They’re all part of the same machine, the same marketing machine of financial companies brainwashing you right now, and I guess I’m getting kind of fired up.
(25:02)
I wasn’t planning on going down this little rabbit hole, but it’s so true is that if you’re going to invest, do things that are proven to work, don’t gamble your money away. Don’t believe in high risk creates high returns because high risk creates higher losses. That’s what happens in reality. I want you to do what actually has been proven to work. First and foremost, focus on how you best generate income using your talents and gifts in the service of others, and then two, when you’re going to put your money, put in things that actually have real assets backing you up. Put it into real assets. Don’t gamble on digital currencies. Don’t gamble on stocks that could go up or down. I had somebody tell me that Nvidia, they’re like, Hey, I should put my money in Nvidia rather than putting in live insurance. Like, well, yeah, you could make more money in Nvidia and this overvalued AI tech boom stock that’s been driven up by hype, but that also means it can drive itself downward just as quickly and usually quicker.
(25:52)
When the market goes down, it goes down quicker than it goes up. It takes you more years to recover. Stop buying into all the speculative crap and look at buying real assets. Buy real investments, and that’s why it’s worked for me twice, right? When I actually bought real assets, that cashflow positive, they’re actually profitable investments, not just speculative investments. That’s the problem I made last time. When you actually have profitable investments and you have good income and you save that income to put away, to buy more profitable investments so that you have multiple streams of passive income, now you’re talking. Now you’re cooking. Now your net worth goes up, and now you could be the person that actually can give Dave Ramsey some good advice, at least honest advice, right? That’s my challenge to you guys, is that there is a better way. If we can help you in any way, shape, or form, reach out to us@moneyripples.com.
(26:39)
But remember, don’t buy into the crap. Don’t do what they say, do what they’ve done. They’ve built it in business and in real estate, and by the way, he even built real estate because of his business, business first, real estate Second, the mutual funds was just play money for him. He didn’t make jack’s. Even if he made a little bit of money, it did not move the needle on his net worth. The first two is what did it. You could do the same for yourself as well. It’s proven. He’s proven it. I’ve proven it. Other people have proven it. Why not follow that kind of advice? Guys, make a wonderful prosperous week. We’ll see you later.
Speaker 3 (27:15):
Thank you. Yes. Hey,
Speaker 4 (27:24):
Visit us online@moneyripples.com for more resources to help you fix money leaks and get your money working harder for you. Now.