Expanded Baby Steps - Stolen from MYTMMO.com - Page 3
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  1. #31
    Registered User Michelle's Avatar
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    Quote Originally Posted by Greebo View Post

    Michelle, as I've pointed out before, this thread is posted in the DR forum. If you don't want me to argue your reasons for staying enslaved to debt, don't argue against the DR plan within the DR forum.
    Wrong. This is not the Dave Ramsey kith. If you want a place to talk DR with only people who agree with the program completely, then create a DR kith. There is absolutely nothing wrong with me disagreeing with DR in the DR forum (same as for any other forum except for the kiths). This is not a Dave Ramsey worshipper's forum.

  2. #32
    Registered User Greebo's Avatar
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    Quote Originally Posted by Michelle View Post
    Wrong. This is not the Dave Ramsey kith. If you want a place to talk DR with only people who agree with the program completely, then create a DR kith. There is absolutely nothing wrong with me disagreeing with DR in the DR forum (same as for any other forum except for the kiths). This is not a Dave Ramsey worshipper's forum.
    Read what I said again.

    I said if you do not want me to argue.

    If you make an argument against the DR plan in the DR forum, I will use DR's quotes, arguments, counterpoints, and his own published information to counter your arguments.
    Last edited by Greebo; 08-12-2008 at 11:09 AM.

  3. #33
    Moderator Ceashels's Avatar
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    You two are getting to be too funny over this. I agree that DR can and should be debated in a thread in the DR forum. It makes much more sense than debating him in the Kitchen Clone forum or in the Suzie Orman Forum.

    Any newbie coming here would expect to see and learn the pros and cons of each system and the debates in this thread are going to reflect the teachings of DR.

    jmho

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  5. #34
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    2 and 1/2 years ago we bought a 1 year old Dodge Grand Caravan for around 16K. It was previously a lease vehicle in really good condition. We used an "early inheritance" to pay for it outright. We also have a 98 GMC Sierra. Dh bought it new in the end of season so got a good deal and paid it off really quickly. It has only about 80k miles (give or take)

    Since buying the van we are saving about $350-400/month to be able to buy a "new-to-us" vehicle CASH.

    You can find a good used vehicle for a lot less than $25k. You also can pay cash for a vehicle.

  6. #35
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    http://www.daveramsey.com/etc/lms/drive_free/player.cfm

    I recommend people watching the "Drive Free" video on DR website, the link is above

  7. #36
    Registered User Samigirl's Avatar
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    I agree...it's perfectly fine to debate DR's ideas within this forum. I'm a HUGE Dave Ramsey fan myself. His plan is the only one that has stuck with me. However, he's not the end all when it comes to debt reduction. I respect the fact that others are doing different plans that work for them. There comes a point when you have to agree to disagree before the debate gets personal.
    Last edited by Samigirl; 08-12-2008 at 12:04 PM.

  8. #37
    Moderator nuisance26's Avatar
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    Quote Originally Posted by Greebo View Post
    The average car payment in the USA is $320 a month. If you invested $320/month at 10% for 20 years instead of paying it on car interest, you would have accumulated $242,998.03, as opposed to paying $76,800 in interest.

    Hope you like the car!

    Here's a crazy plan. Pay your current car off, then keep putting that car payment into a savings account until you have enough cash in the account that, when added to the value of your current car, you can buy a nice, 2 or 3 year old used car, for cash.


    DR says: Redirect snowball (debt or EF snowball) to savings for any certain major purchases coming up in the relatively near future.


    When trade in value + car replacement fund = cost of new to you car.


    When you have sufficient income to replace any furniture or other non-essentials. The you stop building this fund. If you dip into this fund for anything, then you start building the fund again. The month to month budget will look different every month - it's a living document.

    I'm curious why it's "impractical" to pay cash for a short term beater while you save up for a better car? If your existing car is 11 yrs old, odds are, you're already driving a near beater anyway. Why go into debt, increasing risk, decreasing financial security, and throwing money into stupid tax (interest) for an object that will lose value over time anyway?

    Or is "impractical" a euphemism for "I just don't want to"?
    ~I just wanted to point out that the math you used here is misleading. Only a small percentage of your car payment is interest. Whether you buy a $20K car in cash or with interest, all you can 'save' to invest is the interest, not the full $300 payment. My DH had to buy a new car 2 years ago. The purchase price was $20K and we paid $5K down. At 6% interest, our payments were $300. I aggressively paid down the debt in 2 years. Altogether we paid just under $1000 in interest, the cost of a modest vacation or the cost of repairs over 2 years to an older car. New isn't always the wrong way.~

  9. #38
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    The biggest loss is in the depreciation of the "new" car. The minute you drive off the lot with your new car it becomes a used car and is no longer worth anywhere near what you paid.
    You lose somewhere in the neighborhood of 30% instantly.
    ~Russ

  10. #39
    Registered User Greebo's Avatar
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    Quote Originally Posted by nuisance26 View Post
    ~I just wanted to point out that the math you used here is misleading. Only a small percentage of your car payment is interest. Whether you buy a $20K car in cash or with interest, all you can 'save' to invest is the interest, not the full $300 payment. My DH had to buy a new car 2 years ago. The purchase price was $20K and we paid $5K down. At 6% interest, our payments were $300. I aggressively paid down the debt in 2 years. Altogether we paid just under $1000 in interest, the cost of a modest vacation or the cost of repairs over 2 years to an older car. New isn't always the wrong way.~
    You are correct - my statement about $76,000 being all interest. It's all car payment, which is what I meant to say, not all interest.

    But - watch the video linked above - and consider the full implication. If you buy a beater, and pay cash for cars from now on, and save your would have been car payment in the meantime, eventually you can have enough invested that your return on your investment pays for all your future cars. For life.

  11. #40
    Moderator nuisance26's Avatar
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    Quote Originally Posted by Greebo View Post
    You are correct - my statement about $76,000 being all interest. It's all car payment, which is what I meant to say, not all interest.

    But - watch the video linked above - and consider the full implication. If you buy a beater, and pay cash for cars from now on, and save your would have been car payment in the meantime, eventually you can have enough invested that your return on your investment pays for all your future cars. For life.
    ~I understand the concept completely, it's my dh that has car fever. I grew up watching my dad fix every used car we owned, never making car payments. DH grew up watching his parents each trade in their cars every six years. At the time of DH's last car purchase(06)we had been car payment free for over a year. I had been saving what we had been paying in car payments and then some and we had a fund of over $7000 to purchase a car(in addition to our 2 month EF). I tried my hardest to get DH to come around to my way of thinking but I finally gave in with his promise to make this car last 10 years. The video has got it right that so many people have become completely brainwashed into making payments forever. After paying off this last car of his, I showed him the math of the 3 new cars he's purchased and financed in the last 16 years. Everything he's(and we've)paid adds up to the purchase price of our house.~

  12. #41
    Registered User Greebo's Avatar
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    A house! Good lord! Maybe you should just sell it and buy a luxury RV in that case!

  13. #42
    Moderator nuisance26's Avatar
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    Quote Originally Posted by Greebo View Post
    Maybe you should just sell it and buy a luxury RV in that case!
    ~Don't think I haven't suggested that.~
    Last edited by nuisance26; 08-12-2008 at 02:22 PM.

  14. #43
    Registered User Cricketlegs's Avatar
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    Good used cars are out there.

    In 2006 I totaled my van--wahhhhh the fun mobile was no more.

    Dh works at our local chevy dealership so I got online and started looking.

    I found a 2005 Impala for $12,000 plus. It has been a while so I can't remember the exact prices.

    Dh ran out and looked at it and called to say he was bringing a car home at lunch for me to drive.

    He came home with a DIFFERENT impala that was the same year (2005) and costs $2000 more but had 20 thousand LESS miles(16,000 total) on it and was like new clean.

    So Blue Belle came to live with us.

    So with zero down payment--I got payoff on the van only--I got my Impala for $14,000.

    At this point I was still in the debt game being dumb.

    I started making extra payments on it just this January and I already have my balance down to (waiting on the payment for this month to go through and I am 3 months ahead anyway)should be at $6400.

    I bought this car in October 2006.

    Seeing as I just stopped being dumb and am paying extra--my payment is $311. I pay $400 the balance is just zipping away.

    My POINT IS (LOLOL)-- you don't have to buy new when almost new is out there and at a better price.

  15. #44
    Registered User Greebo's Avatar
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    Bumping this one - and a request to FV to make it sticky.

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    this doesn't seem to warrant a thread of its own but I'm curious
    "0.1: Commit to NEVER borrow $$$ EVER for ANYTHING other than possibly a house."
    Education? Is this phrased in this way because DR does't believe education is worth going into debt for, or because the plan is aimed at married couples who are out of college so he didn't feel the need to mention college debt?

    Not that the answer's gonna make me drop out of university or anything, I'm just curious how to interpret it because pretty much everyone I know considers education something worth going into debt for.

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