When I was planning to write about the series on personal finance, I was searching for what personal finance is, which is an easy but tricky question. Hardly there is any challenging thing in personal finance that someone needs to explain. But when I see so many broken peoples, I realize that it is not an easy but a tricky thing. Some very visionary people make it simple to understand the general public. Dave Ramsey is one out of it. Today I will talk about him as not many people are aware of his work outside of the US.

Here I am going to write about Dave Ramsey, His tweets, his work, His Tips, and if I found other things.

Personal finance in simple words.

Though WordPress cannot show quote re-tweet, this is a critical tweet.

Every dollar is an app that makes it easy to make your Monthly plan or budget. Not writing down a dream is a fundamental reason why someone broke. Though I am not using the Every Dollar app, it looks very famous.

Yes. I saw it many times, even with me also. This is why I think many of our problems are still alive on many fronts of life.

I completely agree with this.

But Dave Ramsey is not famous for it. He is renowned for his Baby steps

Personal finance in small pieces. I am going to explain it step by step

  1. $1000 in an Emergency Fund: Though I wrote the whole post on it, I agree that if you remove your Luxury expenditure, then $1000 is not a tiny amount for taking care of emergencies. Even you can handle some medical emergencies in their starting point. You don’t need to worry about searching for debt or medical insurance by paying them from emergency funds. So Yes, it’s right.
  2. Pay off debt using debt snowball: What is debt snowball? In simple words, If you are Supposed to pay more than one Creditors, Payoff the smallest one first. It’s the most effective way to pay off debt. Why from the smallest? If you have one obligation, which is maybe repaid in full or above 50% by your savings or salary, then there is no need to pay interest on such debt. So that will help you to repay others. It is useful when you realize now you have one less account to repay. It gives relief. Personal finance is not always math. It’s the way you think.
  3. 3-6 Months’ expenses in saving. : Though I made it one factor, Dave, Being an expert, Made them Two different things, which is acceptable. Completely agree with him.
  4. 15% into tax Favored ( Tax advantage in Indian terminology): On his Website, he explained it as investing 15% of your income for retirement. Yes. That is the vital thing. And I think I wrote about it. Generally, It’s not advisable to take a considerable risk about retirement when you are telling some naive people. Another view is that you take significant dangers till you build wealth and then invest that amount in Tax saving funds. They maybe govt or Pseudo govt or anything else. Most of the time, it’s Fixed Income Funds or Maybe another asset class also. Dave Ramsey made it great by starting to teach you the importance of retirement planning.
  5. College Funding: Until this step, you paid off all debt and are planning for retirement. Now there is one more thing essential: keeping funds for your children and their College. As college education is both expensive and vital, Dave makes it an excellent move by keeping in mind that though some people may leave their home around 16-17, not all. Great thing. There are some different types of individual accounts in the US that are helping them to achieve this. But in India, it’s better to start investing in an Index fund or ask your financial advisor.
  6. Pay off home debt. : Some may say whether it is necessary or you are supposed to ignore it. However, the cost of funds is essential. For example, your interest rate is 9% which is attractive in India. But in the US, even 3.5% may be a high rate. So it would help if you talked with your financial advisor.
  7. Give part of your wealth to charity.

So Who is Dave Ramsey?

David L. “Dave” Ramsey is an American businessman, author, radio host, television personality, and motivational speaker. He was a 1982 graduate of the College of Business Administration at the University of Tennessee, Knoxville, with a finance and real estate degree. Ramsey’s syndicated radio program, The Dave Ramsey Show, is heard on over 500 radio stations throughout the United States and Canada, in podcast format, on IHeartRadio, the Dave Ramsey Show iOS application, live on YouTube, as well as live audio and video on DaveRamsey.com. He has written numerous books, including five New York Times bestsellers. His books and broadcasts advocate a fiscally disciplined approach to personal and household finances, including strict debt management. They often feature a Christian perspective that reflects Ramsey’s religious beliefs. Ramsey was named the 2009 Marconi Award winner for Network/Syndicated Personality of the Year and was inducted into the National Radio Hall of Fame in 2015. Ramsey is featured on many media outlets, including The Oprah Winfrey Show, 60 Minutes, and The Early Show. For CBS, he recorded a pilot and six unaired episodes of The Dave Ramsey Project. He was the host of the television program The Dave Ramsey Show, which aired on the Fox Business Network until June 2010.

How it all started

At 26, through his brokerage firm Ramsey Investments, Inc., he built a rental real estate portfolio worth more than $4 million. He became one of Tennessee’s youngest brokers to be admitted to the Graduate Realtors Institute. Unfortunately, Ramsey’s success soon ended as the Tax Reform Act of 1986 began to harm the real estate business. One of Ramsey’s largest creditors was sold to a larger bank, which started to take a more complex look at Ramsey’s borrowing habits. The bank demanded he pays $1.2 million worth of short-term notes within 90 days, forcing him to file for bankruptcy relief. Sixty days later, another bank demanded nearly $800,000.

After recovering financially, Ramsey began counseling couples at his local church. Soon after offering private counseling services, Ramsey started attending every workshop and seminar on consumer financial problems that he could find. He developed a simple set of lessons and materials based partially on his own experience and works and teachings by Larry Burkett, Ron Blue, and Art Williams of A.L. Williams, now called Primerica.

Today, Ramsey’s company, The Lampo Group, Inc., headquartered in Brentwood, Tennessee, oversees six divisions geared toward financial education. ( Wikipedia)