'I Don't Borrow Money,' Says Dave Ramsey, Even If The Offer Is $1 Billion At 0% Interest For The Next Decade

I didn’t think Ramsey could get any dumber. But I was wrong.

Actually I get it. Ramsey’s core audience is financially stupid people. So he has to spout financially stupid advice.

A corollary is “never sign a contract” for anything.

Yeah, you could put that $1b into 10 year US treasuries generating 4.6% interest. That would be $28M of interest income after taxes every year ($46M before taxes) for free with no risk.

Actually I get it. Ramsey’s core audience is financially stupid people.

We have been debt-free for 16 years. Not having a house payment enabled us to stash away plenty for retirement.

That is a pretty stupid thing for him to say!

Take the billion at no interest put it in a bank account that pays any interest, even .01 % and you have at minimum $100k /year.

But then again, other some very basic things he’s recommended to stupid people who have dug really deep holes, I’ve never been real impressed by his advice.

As a financial small group leader for years, I've learned that it's less important to try to win the math battles as it is to learn the person and keep them motivated.

For example, take the classic argument of if, after paying off all other debts besides the mortgage and having enough in investments to retire (and meet whatever other goals). Often at that point there's a debate over if you should use the excess in your budget to pay off the mortgage and be totally debt free, or use the excess to invest more and get a higher return than the interest rate of the mortgage.

I usually lean towards investing more, and before you retire have more than you need for retirement to allow you to pay off the mortgage if the day comes that you have a sour relationship with the bank and want to pay it off immediately. But if a couple says that they're on fire for getting out of debt and they don't know if they'd stay enthused to keep living on a budget and avoiding wasteful expenses if they did the investment math route, then I don't try to win the argument. I'd rather they stay enthused than try to change their habit and risk them losing their momentum.

Being debt free is a primary goal. But the ways Ramsey says to reach that goal are sub optimal for financially literate people.

I use to do Ramsey stuff prior to covid. Having kept to his plans during covid destroyed my business. A little debt would have kept it floating long enough to weather the storm. Granted I have no debt, but I have no money either. Oh well.

I would be happy to take that loan and be the terrible example Dave can point to on air.

But the ways Ramsey says to reach that goal are sub optimal for financially literate people.

Most people are not "financially literate," whatever that means.

The world if full of "financially literate" con artists, some of whom are very "respectable."

The way to avoid them is to never allow yourself to be vulnerable to them by doing business with them.

Ramsey is not a fanatic. Never listen to a fanatic.

Even WITH interest, anyone with brains would take it and use it for massive leverage! Ramsey hasn’t got a clue.

He is talking to his audience, mostly people who struggle to control their spending and fall deeply into debt.

If they took out a $1 billion loan with 0% interest, they would blow through the money quickly and then lose everything.

On the other hand you might still have lost your business and be even more buried in debt.

One of the primary goals of the plandemic was to exterminate small businesses.

He's using this example to make a point.

His audience is comprised mostly of people in various stages of financial distress. Nobody in his audience is in a position to borrow even $10,000 at 0% interest, let alone $1 billion.

If they took out a $1 billion loan with 0% interest, they would blow through the money quickly and then lose everything.

If that were true, most "minority" football/basketball players would blow through millions of dollars during their careers and be dead broke when those careers were over, and that never happens. 🤡

Well. He’s right. But he’s not a mom whose husband took off after a third deep state deployment screwed him up

Or who lost a job over a Covid shot

Or who is a kid who needs to deal with the out of control rip off college tuition setters

I do advise kids get a job you love to do then get real estate to live in and afford then get married

“I don’t listen to Tom Ramsey.”

It’s easy to turn down an offer that is never going to happen to maintain your fiscal purity. It avoids the “we’ve already determined what you are, now we’re just negotiating the price” punchline.

For an addict, it could lead to ruin. Ramsey might be an addict. The 1st billion at zero could lead to the second at 5% and a third at 10, etc,

He could also be preaching to addicts.

Personally, I use debt as a tool but it’s easy to see how i could be lured into a trap.