I was hoping not to re-visit this subject again, however, I received a phone call from a fellow investor (Darlene M.) who received some real bad advice from Dave Ramsey’s radio program.
First, let me state I’m going by what she told me and I am basing my comments on the substance of the phone call to me, but I can tell you that I strongly disagree with what Mr. Ramsey teaches – more about that later.
Darlene explains that she called Dave’s radio program to refute what he has been saying on his radio program about now is a “great time to buy a house”. She did get on the radio to ask the pointed question, but as soon as she asked the question, Mr. Ramsey became angry and coarse, and stated anyone with a half of brain can see what great opportunities are out there for home ownership! What a great posture for a national radio personality to take when the general public calls in with a request for help and clarification, Darlene said she decided to take Dave’s advice and by a house (pre-foreclosure) 3 months ago, and since that time she has lost 5 % in value!
She read my back issues on my blog and noticed I was not a fan of Dave’s, and have clearly stated for the past 15 months that you should not be buying anything in this market, rather you should be using leveraged strategies such as lease options for investments and personal residences.
That being said, and being fair to Dave Ramsey, Darlene did not elaborate on the details of the deal that she did, so we can not bash Dave Ramsey if she got into a bad transaction on what she perceived to be his counsel. However, when it comes to the generic advice of “now is the time to buy real estate” – in the words of Dave Ramsey “have you been living under a rock”?
We have only seen 1/3 of the foreclosures that are going to happen according to financial pundits and Federal Reserve. In addition, these foreclosures have caused increased housing inventory forcing property values to sink 15-20% from all time highs. My question to Dave would be, what do you think is going to happen when the other 66% of people facing foreclosure comes into view? Can you say another 30% downward progression, and if you buy now as Dave suggests, you will be in a upside down property and be forced to stay in said property for the next 10- 15 years, while the market tries to gain value.
The other problem I have with Dave is on his investing advice! After becoming debt free, by the way this is the only thing I agree with him on, he encourages people to invest in mutual funds. Are you crazy Man!!! Have you seen how our dollar has been devalued? In 2002 the Euro was at .88 against the dollar, today the Euro is 1.51 against the dollar – you do the math!
Our country is being bought up by foreigners, who look at the
OK, many would say that I’m jealous of Dave Ramsey because he has a successful radio program and I have a blog. Nothing could be farther from the truth. I just want people to stop drinking the cool aid and start listening to the voices of reason, whether that be me or someone else, who can document and substantiate what we preach!