How so..................?
Why Do Suzie Orman and Dave Ramsey Trash WL So Much?
- Thread starter Mburns
- Start date
How so..................?
- 634
My world wouldn't be. His radio show was somewhat eye-opening. Helped me get out of debt. Perfect advice? No. Motivating? Yes.
- 5,243
I'm with you.
As to the taking on loans to open $500k restaurants or any business for that matter. Most people don't have the discipline to start small and progress upwards. Most people could start a $50-$100k business with no loan. Build it up sell it for more, you do that a couple of times and you can cash flow a start up of the $500k biz. The only business debt I've ever taken on is real estate and I would never recommend someone overextend themselves to open a business...short term financing like a couple of months..sure..long term SBA loans (aside for real estate) never.
This is all counter to the immediate gratification that our society promotes. Which I think is 1 of the biggest things DR, live like no one else and all that jazz...
At the end of the day debt is risk...to each their own.
- 634
If you believe his 12% 8% crap! there is a good chance for you to go busto. Don't go busto.
- 5,243
Can you elaborate a little for me?
If you have enough money to start a business you probably don't need a business. Who has the $750k plus need to start a lot of businesses? Do you think Ramsey defer heard about rusk/reward.
- 634
Dave preaches 12% ROI in mutual funds, and you can safely withdraw 8% at retirement. He does because it makes his system look better. A guy from Lynch a few years back said one could withdraw 7% and that was shown to be too high. Most people agree 10% ROI, 5% withdraw is the most accurate.
- 11,298
I wouldn't even go that high. 2008 wiped out 50% of most people's portfolios... AND if they had to take out income???
If your portfolio goes down 50%... what rate of return would you need to get back to where you were?
In other words, you had $100,000 (to keep the math easy) and you lost 50%. You now have $50,000.
What rate of return do you need to get back to $100,000?
100%
I'd love to assume 10% per year... and if a client wants to assume that, I won't stop them. But I also know it's not that reasonable itself.
For withdrawal rates, I wouldn't go any higher than 5%... and hopefully, we can have that guaranteed and secured by an annuity.
Now, don't forget portfolio management fees. Generally about 2% of your returns (and losses) are going to be affected by about 2% per year.
So, if you earned 10%... what you'll really get is 8%.
If you lost 10%, you'll actually lose 12%.
This goes on for as long as you have your money in these kinds of wealth management "portfolios".
No 'fees' in an index annuity... except for perhaps a lifetime income rider fee each year.
I have a life insurance illustration that is my "This is why Suze & Dave hates life insurance" illustration because it is a 'minimally funded' permanent life policy. I'll show them exactly why it doesn't look good and get the client to agree with me. Then I show them how *I* structure life insurance policies so that the client can get the most out of it from year one and for as long as they are alive.
- 634
Nice post, in my F.A. days compliance made us use eight and four. I know Buffet said 7% was about the best one can get.
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