Dave Ramsey Comments On My Post About His New House, His Debt Philosophy And Giving

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Dave Ramsey Comments On My Post About His New House, His Debt Philosophy And Giving


Posted By Peter Anderson On June 21, 2011 (9:26 am) In christianity, money

A few months ago I published a post about how financial guru Dave Ramsey had built a beautiful new multi-million dollar home in an upscale neighborhood in Tennessee.  When I wrote the post I intended to focus more on the fact that Dave Ramsey had built the house without any debt of any kind, and wanted to hold it up as an example of living a financially responsible life.  I thought it was pretty cool that Ramsey was practicing what he preaches, and was living a cash only lifestyle.

Soon after I wrote the post the comments section quickly took a turn, and the comments turned from a discussion of paying cash for a home, or living a cash only lifestyle, to a discussion of the ethics and morality of buying such a big home when you don’t need it, and whether you can be a witness for Christ when you have such wealth.

There were some comments that I believe made salient points about how we need to guard against allowing our wealth and possessions to become an idol in our lives, and about how we as Christians always need to be looking to Christ for guidance in our lives to make sure we’re being good stewards.


Photo  copyright coolsprings.com

There were other comments that I think were extremely judgmental, that were assuming the worst about Ramsey and essentially saying that he was making money off the misery of others and that he wasn’t a good witness for Christ.

I was thinking about closing the comments on the discussion because it was starting to devolve a bit, when Dave Ramsey himself decided to stop by and comment on the discussion to shed some light on the situation.

Dave Ramsey Comments On His House, His Debt Philosophy, Giving

It was obvious from Dave’s comment that he had read much of the discussion, and I’m sure some of it was pretty frustrating to read.  Here is what he said.

I just found this discussion from a twitter link. Wow. Thanks for all of your concern about my soul, my reputation and my witness. Please continue to pray for me because wisdom is sometimes elusive. The teacher in me has to reach out and help with proper biblical and life view points for some of you.

First, None of this is any of your business nor is it your problem, however in an effort to teach I have always been overly transparent. So I will try to help.

1) We tithe 10% of our before tax income to our local church
2) We have a family foundation that God allows us to give many times what our personal home or other items cost, so we give much more of God's money to his kingdom that we live on percentage wise.
3) No Gary, we don't have any debt any where of any kind. No corporate debt, no credit cards, no mortgage debt, no blind trusts, and no kind of debt no where no how. Didn't you hear? I don't believe in debt.
4) Before making a large purchase of any kind we ask God if that is what he wants us to do with HIS money. Like you I sometimes hear clearly and other times I am not sure. In the case of our home I was very sure.
5) Our home is a very small percentage of our net worth.
6) In the two years we have lived here we have had many many functions to fund raise for ministries, charities, and community causes. Millions of dollars have flowed through those events. We view our home, like everything in our life, as a tool to be used for the kingdom.
7) Yes, it blows my mind how much it costs to maintain a lot of things God has called me to manage. We have a 64,000 square foot office building (paid for) that we spend a lot of natural resources and money to keep operating and from where I came from it is sometimes hard to emotionally grasp the zeros. However, I man up, and step up to do what God gave me to do. It is weird some days though.
I used to say ignorant things like "what does anyone need with a ______ like that” when I was immature. Now I have been blessed to see how God uses people who are obedient when they are broke and when they aren't. I was with a really Godly guy a few weeks ago worth 2.2 BILLION. He gives 300-500 million a year. Some of you sent him hate mail worried about his soul because he bought a $110,000 car. That does not make him wrong, that makes that person silly, foolish, and spiritually immature. Note: God gave HIM 2.2 Billion to manage, God did NOT assign you to help.

Thanks again for your concern and please continue to pray for me as I am perfectly capable of messing this whole deal up. So far though, I am not inconsistent between my message and my life. So far I have managed to keep God First, Sharon Second, my kids third, and serving all of you fourth. I am having a blast and I thank all you who do understand.

P.S. I will not be visiting back to see your comments because I already know what they are: Some get it, Some don't.

Yours In Christ,Dave Ramsey

To Be Continued...

What do you think about what Dave Ramsey said? Do you think its for any one to say what is "too much" for someone else?  Especially if they are doing it God's way...

MsMoneyGuru

ARE YOU READY TO BUY A HOUSE? MsMoneyGuru’s Steps to Buying a House

A few weeks ago I posted an article in which I advised couples to avoid buying a house within the first year of marriage or commitment.  In that post I also promised “The MsMoneyGuru’s Steps to Buying a House”. 

Okay, first a little background. When I was a young professional starting out in my career, and single, I purchased an investment property.  This choice at such a young age proved to be a smart thing to do in the short term.  It forced me to get on a budget, gave me a huge responsibility, taught me about delaying gratification and saving, and gave me a head start on wealth building.  However, I failed to realize that I had purchased a home at a very unique time; it was at the beginning of one of the biggest real estate booms in recent history, and within two years I had “made” over $100k in equity. 

Like most booms, the bubble burst 4 years later, but not before I purchase two (YES TWO) additional properties!  This decision was based in part on the short term success I had experience during the first 4 years.  Of course being the over-achiever I am I did this the same year I got married!  As you can imagine, this did not proved to be the best decision, but like most, I failed to consider the risks before me.  I only considered the “up” side because I was limited by my own experience up ‘til then. 

Today, I no longer own those properties, and have focused my efforts on building wealth in a different way, but the important part is that I have come away with REAL LESSONS LEARNED from my experience.   

This list represents what I would do differently.  It also represents what I have learned from hearing countless stories from others who have gotten in over there head with real estate.   

So, here it is— 5 SIMPLE STEPS:

1)      Be debt free (including auto, student loans, and all credit cards)

2)      Save an Emergency Fund (3-6 months household expenses)

3)      Save for a Down Payment, enough to avoid PMI (Mortgage Insurance)

4)      Take out 1 mortgage only, do not do an 80/20 or 95/5 deal

5)      Your Payment on a fixed  interest rate mortgage should be  25% or less of your net income (gross-taxes)

**If you haven’t accomplished at least these 5 things, you are not ready to buy a house.  Remember your bank or real estate agent doesn’t always have your best interest in mind.  It’s YOUR responsibility to put the brakes on a situation that doesn’t work for you or your family.

Additional Tips:

1)   Homeownership is a long term decision (5+ years), not a short term one, so choose wisely…the longer you stay in a house the more of a benefit you get out of it. LEAVE FLIPPING TO THE PROFESSIONALS!

2)   Location, Location, Location…no matter what a house looks like, it will always be limited by the neighborhood it’s in.

3)   Don’t get emotional about house buying; there is a house on every corner.

4)   Estimate 25% of your annual carrying costs for repairs (in your budget).

5)   Consider a 15 year mortgage, they tend to have better terms. Why would you want to stay in debt for 30 years? Set a goal to pay off your home early, you will be richer in the long term.

6)   Never take out a second mortgage or HELOC; don’t borrow against your house to pay for ANYTHING, debt is never the answer to your problem.

7)   Never take out a variable rate (or balloon) mortgage; you can’t predict the future, and it’s a riskier way to go.

8)   The Deal is made at the PURCHASE (not the sale), don’t think you can “improve” your way out of a FULL PRICE Money Pit, you will lose money.

9)   Never finance an investment property or second home, buy it with CASH; this is the only way to maximize your return on investment—it’s unacceptable to have a negative cash flow.

10) Anyone who tells you to use “Other People’s Money” doesn’t understand that “The Borrower is Slave to the Lender” (Proverbs 22:7). Why would you want to be a slave?

What experiences have you had while buying or owning a property?

If you have had a negative experience, did you miss any of MsMoneyGuru’s steps?

Check back next time…MsMoneyGuru