Originally Posted By Palm:
Always live below your means.

Never borrow money for things that don’t make you money.

It isn’t a mater of what you make; it is a mater of what you keep.

It really is that simple.

Originally Posted By Lou_Daks:

I apologize. Please forgive me!  Spidey07 said that.  Here's the exact quote:
The 4% withdrawl rate is based on what you can take for 30 years, safely. The principal will go down even at 4%.

I want to know how the $2.5M portfolio balance will decline with a 4% withdrawal rate, assuming a balanced portfolio, over 30 years.  Of course, we have to assume it's not invested in fidget spinners or beanie babies.  We have to assume that someone who is smart enough to amass $2.5M in liquid assets, and has a 30 year time horizon, is smart enough to have a balanced portfolio yielding, say, 6% on average.  This is a pretty conservative scenario.

I'm still waiting on the maths.

Originally Posted By norseman1:


Kiddies in the GD still can't grap those concepts.

Try fewer words but add in a reference to Tay Tay and their ears may perk up next time.

Originally Posted By neshomamench:


He gives somewhat horrible financial advice.

He gives great addiction and crisis counseling.

They are not the same thing.  If you need addiction and crisis counseling, great financial advice probably wont work on you.  

Some people can live their entire lives having a few drinks a few nights a week and become wealthy, educated professionals, with good home and family lives.  Dave is the AA guy saying that "no one should ever have a drink, for any reason, ever....EVER!"

Seriously, Dave Ramsey....time and time again, tells people who just got into medical school and need student loans to go, NOT to take any loans, to find a cheaper school (usually not how it works) and to uber or whatever, until they can pay cash.  It is the most insane stupid shit ever.   That person doesnt need addiction and crisis counceling. That person is making good shit happen. Dave is ruining their lives.

Originally Posted By Antisocial1:

A stock/bond portfolio balance will fluctuate over time.  Returns minus withdrawal is not always a positive number.  A couple of bad years in the market could see your principle decrease below starting value (as Spidey mentioned)

The 4% "rule" is based on the Trinity study...people may want to go and give it a read.  

Over most 30 yr time frames, a balanced portfolio should allow you to withdraw between 3-4% for 30yrs and still have some (maybe not all) left.

Originally Posted By ONETIMER:
Guys full of shit.

Originally Posted By JamiesGotAGun:
Dave Ramsey is very much likely richer than any one person here on ARFCOM.

He didn't do it by screwing people.  He did it by helping them.

Go be jealous elsewhere.
If you can't get over it, then show us on the doll where Papa Dave touched you.

Originally Posted By iwouldntknow:

During the golden years of a fiat bubble, sure.

Originally Posted By spidey07:


It’s so depressing that people don’t understand what net worth is. Assets-liabilities = net worth.

The goal is increase net worth.  Me personally I use liquid net worth. Then another column for illiquid assets (house). I prefer liquidity for planning purposes.  The illiquid assets are used for collateral to build more liquid wealth. The times of free money are over. But bet your ass I put up long term illiquid capital assets and locked dat shit in a 3%.

But spidey you bet against your house!!!???  No I didn’t. I bet on history at rates at/below historical inflation.  My goal is always increase net worth. Always, every decision I make is based on that. I didn’t bet against the home value. I used it to increase wealth.

Originally Posted By MSUlead1:

3) the fucking government owns half your 401k. As we demographically shift to communism, it could get worse.

Originally Posted By ramairthree:



There are some interesting points here.
When I see retirement age boomers living bottom barrel lives, it just makes me think WTF is wrong with them.
There were some fantastic times for them compared to the current economy.

The average boomer right now has about 190K in retirement savings, owes 200K on a home, and has another 25K of unsecured debt.  WTF did they do to end up like that?  

One issue with doctors not being in the top five-
Most doctors are not some 800K a year orthopedic spine surgeon or plastic surgeon pulling in 1.8M a year.
They are more likely a 350K a year ER doc or 250K a year pediatrician, family medicine physician, or internal medicine doctor.




They had four years of college, four years of medical school, then made like 50K a year for 3 to 7 years or so.
This means typically- somebody  was 17 or 18m spent a couple of hundred thousand on education- plus had basic living expenses, until they were about 26, then had sustenance level pay until 30 or more-
And now get a good salary.

And let's say they make 350K a year - with typically 200K in the hole of loans-
Plus-
Keep in mind this is an affluent salary- it is not in the realm of the wealthy with tax shelters, foundations, trusts, etc.-
After federal income tax, state income tax, FICA- they likely have a take home pay of 200-250K depending on where they live.  A lot of them will be employees, not running a business with write offs, etc.  They will have professional, licensing, insurance, etc. of varying types depending on if employee or self-employed.

Now, let's compare this with teachers.  Sure, it can be really crappy in some parts.
But, start at 40K a year, for 10 months work a year.  With a student loan repayment.  Annual raises.
Four years later they are at 44K a year plus obtained a cert so now, it's -
50K a year.  Plus the system paid for their lame internet masters,
So- let's say after 8 years, no loan debt, they have pulled in 200K.
They ave 60K for another 4 years.  Another 240K.  
They have also knocked out an internet D.Ed.  They are now 75K a year.
At some point if they go admin  

And this is in a crap state.  There are some cities and counties with drastic better pay.  And pensions.

I'm certainly not saying doctors are poor and teachers are rich.

I'm saying the loan debt dynamics, years to start getting pay, effective tax rates, lack vs presence of a pension, month worked, let alone hours per year objectively make for a delta not as drastic as at first glance.

Originally Posted By MSUlead1:
A couple of things, coming from a 50 year old with about $750,000 in his 401k

1) Dave Ramsey is as full of shit as they come. His “requirements” that people straight up quit living to pay debt is unrealistic
2) a million dollars isn’t shit now. Compared to when Biden was inaugurated, a million is only worth about $700,000 and that is probably a conservative estimate. We are being gaslighted about true inflation
3) the fucking government owns half your 401k. As we demographically shift to communism, it could get worse.

But mainly, Dave Ramsey is full of shit

Originally Posted By migradog:


Ramsey has $200,000,000

Originally Posted By MSUlead1:
A couple of things, coming from a 50 year old with about $750,000 in his 401k

1) Dave Ramsey is as full of shit as they come. His “requirements” that people straight up quit living to pay debt is unrealistic
2) a million dollars isn’t shit now. Compared to when Biden was inaugurated, a million is only worth about $700,000 and that is probably a conservative estimate. We are being gaslighted about true inflation
3) the fucking government owns half your 401k. As we demographically shift to communism, it could get worse.

But mainly, Dave Ramsey is full of shit

Originally Posted By JPL:


Once I got totally out of debt and stopped buying unless I could pay for it, I experienced my cash building incredibly fast and am now able to buy and do whatever I want within reason (No I'm not our buying helicopters and yachts).

Originally Posted By JamiesGotAGun:
Dave Ramsey is very much likely richer than any one person here on ARFCOM.

He didn't do it by screwing people.  He did it by helping them.

Go be jealous elsewhere.
If you can't get over it, then show us on the doll where Papa Dave touched you.

Originally Posted By neshomamench:


He says he is worth 200 million. That is indeed mega rich. But there are members here that are richer.  

And again, among those who made that kind of money or more, most used and continue to use debt.  He became rich in a way that few do.

Originally Posted By JPL:


Once I got totally out of debt and stopped buying unless I could pay for it, I experienced my cash building incredibly fast and am now able to buy and do whatever I want within reason (No I'm not our buying helicopters and yachts).

Originally Posted By migradog:



And someone making $50,000 a year will be able to use debt finance a helicopter or yacht and use debt to their advantage?

Originally Posted By Lou_Daks:

A minor but important distinction: People who are that rich own very successful businesses, and the businesses use debt.

Originally Posted By Notcalifornialegal:


Gross

Originally Posted By Wineraner:


I'm not sure why you're laughing.  Show stats from another commodity market with extensive historical records, where one can find 6% annualized returns.

The nominal value expansion during the 1982-present US equity securities market---where it's done that and more---is damn near unprecedented, and the titanic expansion of the money supply, post gold-window closure, has a giant part to do with it.

If the Trinity study suggests 4% appreciation is prudent, sure, you can exceed it with your outlays, but if you're wrong...

Originally Posted By neshomamench:


Ummm....

Many people with that level of wealth, often TIED UP in a business, often literally live off of loans.

Google "Buy, Borrow, Die"

It is a fairly common method to how the rich do things. (various twists and details included)

And....not everyone that wealthy owns a "very successful business" (even if whatever they do has various corporate fuck fuck games.)   Many people at that level of wealth have had a liquidity event(s)

Originally Posted By Lou_Daks:

There you go again conflating "rich" with "millionaire", as per the OP.

Why don't you address why you continue to do that, then we can go from there.

Originally Posted By Wineraner:


Delays realization events, for one thing.  

For another, significant levels of inflation---and we've had them, Clinton was completely full of shit with his appointees and CPI determinations---favor debtors.  Why not pay back pre-inflated debt with post-inflation dollars worth much less?  And give you the opportunity to invest those pre-inflation dollars into an appreciating asset?  Which also can be leveraged.

Since the U.S. Federal government is The Debtor of Debtors, don't expect any of the above to change.

Originally Posted By neshomamench:



You literally said this:

"A minor but important distinction: People who are that rich own very successful businesses, and the businesses use debt."

I responded to that.

Originally Posted By Lou_Daks:

I challenged you many posts ago to explain why you can't stay on the topic presented in the OP.  How about you do that, then we can dance.

Originally Posted By neshomamench:



You dont even understand how the wealthy often fund their lives.

Call me out all you want. You said what you said.

Dance with yourself.

Originally Posted By Lou_Daks:

lol

Now you're conflating "wealthy" with "millionaire".  

Here are some more adjectives & nouns you might consider while you're tilting at windmills: Loaded, well-to-do, moneybags, fat pockets, phat.

lol

Originally Posted By Lou_Daks:

We don't disagree.  The $2.5M will be worth less after 30 years but it's STILL $2.5M.

Falarak said that the $2.5M would be substantially less than $2.5M after the 30 years.  I want to see the math on that, assuming 4% withdrawal and a reasonable, diverse portfolio during the 30 years.  I'm just not seeing it.

Once again, I'm NOT advocating a 100% portfolio of CDs at 5%.  But even that would throw off 5%, which is 1% more than the 4% withdrawal.

Originally Posted By Bubbatheredneck:

Yup. Staring 250k in the hole just to land a 55k year job for 3-6 years  before getting a 250k per year job at age 32 or 33 is a heck of a hurdle to overcome. Debt and the time value of money absolutely kills the average physician.

Originally Posted By Lou_Daks:

So you're admiting that we will continue to experience what we're experiencing, without actually admitting it.  Cool.

Originally Posted By Kingstrider:
Lol teacher what is that guy smoking?  Most teachers I know don't make squat.

Originally Posted By ACEB36TC:
Being DEBT FREE and living below your means for decades is the way for most. Spending thirty years in DEBT is NOT the way.