Review 2: Financial Peace, Dave Ramsey
13/01/07 18:55 Filed in: Books
That brings us to this book. He wrote about his experiences, gave it to a bunch of other financial experts for feedback and then self-published it. Let me preface this next paragraph by saying there are some good points to his book. First I need to bitch.
My main complaint is that somewhere along the line he should have given it to an editor. I've read a couple of books on finances, and the usual tone is sort of "we are going to talk slowly because you wouldn't be reading this if you didn't get it already". The Wealthy Barber does this, and does it successfully through 4 characters and their interactions. Ramsey, on the other hand, was too blunt for me. My finances aren't so bad; perhaps there are people that need to be told that "only people who like eating dog food don't save for their futures" but it rubbed me the wrong way.
Even so, even if a bit of bluntness can be excused, for he has certainly counseled a lot of people that need a strong slap upside the head, the Christian overtone nearly made me wretch. Before he gets to the good advice he spends a whole chapter talking about the spiritual aspect of money, quoting scripture once a page on average. Even before he talks about financial priorities, his first advice is to tithe, no matter the situation. A real gem, that one. Another choice piece is in the chapter regarding counsel. He laid out why a financial advisor isn't always in your best interests, how you should always consult your spouse etc -- FINE. Great. Then he says that your pastor is also a good source of financial advice. "If you are willing to trust your eternal soul to this person's direction, you should also seek his or her counsel in financial matters. As a Christian I believe God will give my pastor wisdom in matters he might not seem to have access to through his background or education. So I will seek his advice in decisions of importance" (243). Saying not to trust your banker but trust your pastor with your financial future is out and out retarded -- EVEN IF your banker wants a commission out of you.
ANYWAY, rant over.
The book actually does have some good advice if you can palate the style. Here are a few of my favorite points:
Credit cards are designed to pay themselves off on their own, so stop using them!
Live within you means - the best way to double your money is to fold it in half and put it in your pocket.
He also gives a step by step plan:
--Save $1000 before anything else as emergency money. I've realized that part of my money stress relates to this -- I have no financial cushion and if I am broke, I am flat broke.
--Kill off your loans, smallest ones first. (except mortgages) I mostly agree with this. Some people say that you should focus your money on the loan with the highest interest, but he believes that the psychological benefit of killing off a whole loan, even if the interest isn't the highest, is a huge reward and will keep you moving forward.
--Save up 3 to 6 months of expenses to cover any serious disasters. This, again, is pretty good counsel. Sure, you could have put that toward your mortgage, or spent it on something fun now that all of the other loans are done, but by building this nest egg a major amount of stress will be lifted.
--Lastly, start investing your income / killing off your mortgage.
One of the best things he said was about our feelings toward debt. After the Great Depression, people who were indebted were looked upon as pitiful, particularly because so many people had lost their whole fortunes from trading borrowed money on the Stock Exchange. Ramsey argues that the idea that "debt is a fact of life" is nonsense. Save up and buy that car in cash, don't lease it and pay double. Save up and budget your expenses, don't sell yourself to the bank. We can have all we desire if we only exercise a little patience and put money aside for a few months instead of buying it on the Visa and paying for it for even longer. For this resounding affirmation of one of my life goals, I give Ramsey a high five, despite his writing skills.
|