In light of the roller-coaster economy over the past year, many people have asked if Dave has changed his views on anything or rewritten any of his fundamental teaching principles. The short answer is, “NO WAY!”

Dave’s teaching principles aren’t based on month-to-month shifts in the economy. What he teaches is nothing new; it’s just God’s and Grandma’s ways of handling money. These are timeless truths that don’t change, regardless of how the market performs.

So, let’s take a look at a few specific areas that we’ve been getting a lot of questions about.

Investing

Dave has said time and again that most people who get into trouble with their investments are those who try to time the market. That is, they put their money in, take it out, move it around and mess with it! That’s a HUGE mistake! You should keep investing in both good and bad times.

A full 100% of 15-year periods in the stock market’s history have made money. That’s 100%! Like Dave says, you don’t get hurt on a roller coaster unless you jump off!

In July of 2009, the Dow Jones increased 8.6%. That’s the best July performance in a decade! And the S&P 500, a listing of the 500 largest companies in America, was up 7.4% in July 2009. That’s the best July performance for the S&P since 1997. Not only that, but it’s up 34% since March 2009! If you got out of the market, you missed the growth!

Real Estate

Yes, foreclosures have been up lately. A lot of families who bought their homes with nothing down or stupid interest-only loans got stuck in a bad market and are losing their shirts. For a while this spring, it seemed like all the news media talked about was how bad housing was in America. But here’s the truth: 60% of the foreclosures occurred in only five states—Nevada, Florida, Arizona, California and Colorado.

Dave firmly believes that real estate will be the area that leads us out of the recession. It’s happened before, and it will likely happen again. One of the reasons is pent-up demand. Even though it’s a hard time to sell a house, people are still moving. They get transferred in their jobs or take a new job in a different city or need to move home to take care of their families. Life doesn’t stop happening when the housing market takes a hit.

The housing market is flooded with inventory right now, which has kept prices low. However, the cost of new houses really hasn’t changed much, because the cost of construction materials hasn’t changed. So, as the available inventory starts to burn off, prices will start to go back up because they’ll have to compete with the higher new home prices.

Manual Underwriting

If you do the things Dave teaches, like getting out of debt and cutting up your credit cards for good, your credit score will eventually drop to zero and become what’s called “indeterminable.”

The thing is, though, most mortgage lenders use only your credit score to determine whether or not to give you the home loan. They don’t really look at you at all; they just care about your three-digit FICO score. So, if you don’t have a credit score because you’ve gotten your financial act together, these lazy lenders can’t—or won’t—help you.

In that case, you’ll need to see a lender who does manual underwriting. These mortgage lenders actually take the time to see who you are, what you do, what your current financial position is and more. Our friends at Churchill Mortgage assure us that manual underwriting is still alive and well, and they’re approving these mortgages at A+ rates every week.

So What?

If the economic downturn made you pay attention to your money for the first time in your life, then that’s a blessing—even if it came with some pain. Pain is like that, you know. It can be helpful and instructive. It shows us where we’ve gone off track and points us back in the right direction. That’s always a good thing!

So don’t be afraid of the pain. Face it. Deal with it. See what it’s showing you. Correct the problems it is highlighting in your life. Clean up the messes it is uncovering. The economy won’t be bad forever. Make this the year you turn your life around.

Get more in-depth information about these topics by downloading the free PDF “Has Dave Changed His Views On Anything?”

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Nerds and Free Spirits Can Unite Over the Budget

There’s no denying that men and women look at money differently. Typically, one spouse is a nerd and the other is a free spirit when it comes to the budget.

Nerds enjoy putting together the monthly budget and calculating the numbers. They like that it gives them control, and they feel like they are taking care of their loved ones. Free spirits don’t want to have anything to do with the numbers and tend to “forget” about a budget. They may feel controlled or not cared for and appear irresponsible to the nerd. This can be a dangerous combination that leads to problems in your money and your marriage.

Thankfully, there are ways to work around these problems. The number-one cause of divorce in America is money fights. But when couples learn to agree on their money and are determined not to let it drive them apart, they form a unity that is crucial for a successful marriage.

The challenge in a marriage is to work through the different identities, ideals and values you each bring to the relationship. You win at marriage by losing your need to get your way in every battle. You get a happy marriage by giving up selfish desires in order to win together—you create shared visions and goals out of your own individual goals!

That’s why it’s important that both spouses be involved with creating the monthly budget. The partner with the natural gift can prepare the budget, but the decision-making must be done by both of you.

When you sit down with your spouse to have a budget committee meeting, there are three rules that each of you must follow.

Remember that opposites tend to attract in marriage, so work together for maximum wisdom. When you have a budget that reflects both of your goals and ideals, you will experience fabulous unity in your marriage.

Dave’s powerful class, Financial Peace University, is perfect for couples to strengthen their communication about money—even if they’re not in debt. Dave even focuses an entire lesson on how we relate with money in different ways. Angie in Iowa had this to say about her experience:

"Almost every class helped us to look at our finances in a totally different way. It answered questions that we had in the past but were probably too embarrassed to ask. For the first time in 15 years of marriage, we are on the exact same page with our finances. This class has truly been a blessing to our marriage and our family."

This can be you! Many classes are starting right now, so find one in your area!

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We Did It!

Making the Best of the Situation
By Lindy in OR

Two years ago, we inherited a house from a friend, as well as a life insurance policy that paid off the house. At that point, the only debt we had was $35,000 in student loans. Unfortunately, we rationalized needing two vehicles, so we bought a brand-new Subaru Forester and a used Toyota Tundra, then lumped those and a credit card all together into an equity loan, with an extra $15,000 to remodel the house.

Then we got pregnant with twins. One house remodel, seven weeks of bed-rest, and six weeks of having babies in the hospital later, we were over $80,000 in debt. Did I mention that we sold our Forester for less than it was worth in order to buy a 2005 Durango to put the babies in?

At the beginning of this year, a friend told me about The Total Money Makeover. We got on a budget and made a commitment to get rid of our debt. Three months later, I found out I was losing my job due to budget cuts. But we made the best of a bad situation.

We used the sale of the house to pay off all of our debt, and then we put the remainder toward our four-month emergency fund. I got another job across the state that enabled my husband to stay home with our 11-month-old twin boys.

We just sold our gas-guzzling 2005 Dodge Durango, turned around and paid cash for a '99 Subaru Outback, and we still have enough left over to complete our four-month emergency fund and start saving for a down payment on a house. Our credit card is canceled.

Any time we get tempted to stray from the plan, we always ask each other, "What would Dave say if we told him what we want to do?" Most of the time, the response wouldn't be pretty.

As of July 30, 2009, we are completely and 100% debt-free! And it feels so good!

This can be your family! Get started now with Dave's Seven Baby Steps.

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Stupid Tax

The "Month-to-Month" Contract
By Elly in AZ

Two months ago, a salesman knocked on my door selling a bottled water delivery service. I liked the convenience of it, and the contract was "month-to-month," so I could cancel at any time. I paid a start-up fee of $49 and a monthly fee of $39.

Then I read The Total Money Makeover and loved it! I decided to get gazelle intense!

I called to cancel my bottled water service and was told that I would have to pay $200 to clean and sanitize the water cooler that I was renting from them. I was then told that if I kept the service for a year or more, the fee would be waived. So much for a "month-to-month" contract.

Lesson #1: Read all the fine print. Lesson #2: Check with the Better Business Bureau when considering signing any contract like this. These people had a C- rating!

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How To Set Investing Goals

Most people dream about a nice retirement, sending their kids to college debt free or building their dream home. The problem is that many people don’t know how to make their dreams become a reality. The first, crucial step in achieving your investment goals is writing them down.

Sounds weird doesn’t it? However, the act of physically writing down your goals really does help. It works like a switch, taking your goals from a distant dream to a vision that is ready to go to work. Yet, this important step is often overlooked. As a result, many people fail to reach their goals simply because they skip this first step.

To help make your goals a reality, be sure to:

1. Briefly list any short-term goals.
   The keyword here is “brief.” Think bullet points. The more detailed list comes later.
   
   Short-term goals can be things you want to save for or purchase within the next two to five years. An example of a short-term goal might be buying tires for the car, finishing furnishing the house or taking an overseas vacation. Classify these goals as needs or wants.
   
   
2. Make a list of long-term goals.
   Again, make a brief list. Long-term goals are things you want five years or longer from now. Long-term goals are likely to be retirement, buying a home, or college savings. Ask yourself questions that help you determine what specific goals you have, based on where you are in life. For example, if you're in your early thirties, you might already be dreaming of a nice retirement or owning your first home. Ask yourself which will make you the most happy and give you a sense of peace.
   
   
3. Dig in to the details!
   Now is when you get into the specifics. First, list your goals with the most important at the top and the least important at the bottom. Next, it’s time to get more specific with your goals. Instead of just listing retirement as a goal, give it a number by writing down how much money you want to have in your retirement account.

Finally, all good goals have a time limit. Give yourself a specific time limit to reach the goal. If you’re 40 years old, then you might give yourself 20 years to reach your retirement goal. Do this for each goal you wrote down.

Here’s a short example:

1. Retirement – Have $820,000 in retirement fund by age 60.
2. College funding – Save $25,000 in eight years for daughter’s tuition.
3. Dream house – Build our $300,000 dream home in next 20 years.

The Main Tip:
Your job as an investor is to determine in clear and simple terms what your short- and long-term goals are. Remember, it’s your money, so be intentional. Once you have your list of goals, sit down with a trusted investing professional to help you further prioritize and reach your goals.

Need help finding a financial advisor? Find a trustworthy advisor that Dave recommends.

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An Important Lesson From Pro Football Players

People who make a lot of money must have it made, right? While many people struggle with car payments and credit card bills, the high-income earners are living life on easy street, right?

Don’t be so sure.

A new statistic from Sports Illustrated reports that eight out of 10 players in the National Football League are bankrupt or face severe money problems within two years of leaving the league. These are players who make a minimum of $400,000 a year, and yet they have nothing soon after walking away. Listen to Dave’s rant.

I still can't parse how you could make millions and not just save a million and not touch it. You could still live like an idiot, and then when it all went south, you’d have your last million to fall back on, as long as you didn't go into debt.
—Gary622, My Total Money Makeover forum member

Why is it that so many of these athletes struggle with money? It’s the same reason that many other Americans struggle—they don’t know how to live within their means.

No matter how much money you make, you can’t out-earn stupidity. Making $400,000 a year doesn’t mean much if you spend $500,000. It’s the same deal on a smaller scale for the average American. If you make $40,000 and spend $50,000, you are in debt, plain and simple. If you don’t exercise discipline, you will go broke regardless of how much money you make. Earning a lot of money is not the key to prospering. How you handle it is.

Give a kid a million-dollar salary, and he'll spend it all. Once you get used to a certain level of lifestyle, it's insanely hard to settle for less. When his career ends in just a couple years, he now has an income of $45,000 but is used to a high lifestyle. Something has to give here, folks.
—nossmf, My Total Money Makeover forum member

Bottom line: It‘s all about your behavior. The good news is that you don’t have to make $400,000 to prosper. The bad news is that, unless you hold yourself accountable and tell your money what to do, not even $400,000 can save you.

Get a better grip on your money now! Create a free budget online in less than 60 seconds.

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Ask Dave: Q&A of the Month

What Insurance Does Dave Recommend?

Chris, a listener of The Dave Ramsey Show, wants to know what types of insurance are good and what types he should stay away from.

Dave's Answer: The purpose of insurance is to transfer risk—risk that you can’t afford to take. Having a heart attack and bypass surgery will bankrupt 99% of the people out there. Therefore, you need health insurance to transfer that risk to a health insurance company. You also need auto insurance and homeowner’s insurance, or renter’s insurance if you don’t own a home. Be sure to have that.

Have life insurance as well. If you are married or have kids, you need to have eight to ten times your income in 15-year or 20-year level term life insurance. It’s absolutely vital to have long-term disability insurance, which covers you to age 65 or so if you become disabled. The cheapest way to get that is through a group.

Insurance that you don’t need is cancer insurance, for example. You have health insurance and that covers your cancer bills. Don’t buy accidental death insurance. If you die by accident versus dying by disease, you aren’t double dead. Don’t buy return of premium on any type of policy. Never buy whole life, cash value or universal life insurance. It’s expensive and has horrible returns.

You do want to get long-term care insurance if you are 60 or older. It’s insurance that takes care of you if you go into a nursing home. Stay away from the gimmick insurance.

Listen to the radio clip from the show and get your questions answered by Dave.

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Arkansas Says "No Way" To Payday Lenders

If you are sick of living in an area crammed with payday lenders on every corner, maybe Arkansas is the right place for you.

On August 11, 2009, the final payday lending storefront shuttered its doors in Little Rock, Arkansas. Though the Arkansas Constitution limits interest on loans to 17%, a decade-old law enabled payday lenders to dodge the issue and charge triple-digit interest on loans.

Needless to say, the law had many vocal opponents. And, in an example of the judicial system at its best, the Arkansas Supreme Court found the law unconstitutional in 2008.

But did the government interfere with the free market? No way.

Michael Novak says our economy rests on a three-legged stool comprised of political freedom, economic freedom and moral restraint. Without any of these three "legs," the economy—as we know it—collapses.

In this instance, payday lenders had no moral restraint. They commonly took advantage of lower-class people by charging outrageous interest rates. So the government had to step in and pass laws to keep these predators from operating.

Capitalism without moral restraint is anarchy. Anarchy is anything goes—no laws, no restrictions, total chaos. A true capitalist believes in moral restraint.

So when a scummy "businessman" attempts to make a profit by charging 300% interest rates to lower-income citizens, the government can—and should—step in and shut down the business.

This isn't new. The government has laws against all sorts of unscrupulous activity. If some dirtbag decides to make a profit from child pornography, then he will eventually find himself in a jail cell. If the citizens of a capitalistic society have no moral restraint, then the government will eventually provide it.

But what about credit card companies? The credit card companies are operating a bad product—it's definitely predatory—but the customers are not all poor people. The companies are not beating up one segment of society. The credit card companies should not be put out of business by the government, but they should be put out of business because you quit using their stupid product.

So, yes, the government does get involved in too many things. But, in some cases, people must be protected from predators—because predators don't have moral restraint.

The question is: With Arkansas leading the way in removing these types of predatory payday lenders, will other states take notice and follow suit?

Learn how you can change your personal economy and incorporate moral restraint with Dave's best-selling Total Money Makeover book.

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Seven Ideas to Boost Your Bottom Line

When the economy tightens up, everyone from executives to stock clerks feels the pinch. That means everyone at every level in an organization has to work a little longer and push a little harder. Don't expect upper management to pull the company through while everyone else settles in on cruise control! Team problems require team solutions!

Dave Ramsey knows business. He's been in the middle of it during the highs and the lows, and there's one thing he's discovered: Time-honored, tried and true business practices work all the time, no matter what's going on in the economy. Whether your business is flying high or hunkered down right now, check out these seven key tips from Dave on how you can make a difference in your company this week.

1. Financial Peace for the EntreLeader: Build a retained earnings account that amounts to half of your annual expenses. This allows you to be your own bank when unexpected expenses pop, provides easily accessible liquid cash reserves, and keeps cash flow manageable.



2. Sell Something: A lot of businesses buy expensive equipment, trucks or cars just in case they need it "some day." If "some day" only pops up a few times a year, sell the overhead and rent the equipment when you need it. That way, you won't have an office or warehouse full of depreciating assets that are covered in dust.



3. Hire a Champion: Talent is everywhere these days. Lay offs and business closings have flooded the market with outstanding professionals looking for their next opportunity. Not only are highly skilled people available right now—they're affordable! Add an executive-level team member on a profit-sharing pay structure. If they become a champion by revitalizing a revenue stream or product line, you both win-and it didn't really cost you anything!



4. Advertise: A lot of companies are pulling back their marketing dollars right now. You shouldn't. With everyone else cutting back, your marketing dollars will go further now than they used to. TV, radio and print media are desperate for ad revenue. Now's the time to beef up your marketing and get the best deal on your ad outlets.



5. Have an Open House: Show your customers that you are still alive and kicking by having an open house or some other celebration, complete with giveaways. Customers are still active in the marketplace; you may just need to give them a reason to come back in. Let them know you're still in business and that you plan to be there to serve them in the future.



6. Ask Your Team: Recruit your most valuable business asset—your team. Send out an email and ask them where they think the company is wasting money. If your employees know the information will be strictly confidential, you'll be surprised at what they'll tell you. You'll most likely discover areas of waste that you've been totally blind to. Once you see the problem areas, correct, streamline or eliminate them.



7. Network: Don't act like you have all the answers. You don't. Identify key business leaders who are winning in your area, and then start scheduling lunches. Make a goal of sitting down with six successful leaders over the next six weeks, simply asking them for their key strategies for success. You will have more ideas than you know what to do with.

Tough economy or not, Dave's business know-how and team leadership can make a huge difference at your company. Voted one of Nashville's "Best Places to Work" for the past three years, Dave focuses on team building that produces results—and his team loves it. For more business help, check out the business section at daveramsey.com and Dave's EntreLeadership business and leadership conferences and workshops. (Seating at conferences and workshops are limited, so don't miss out!)

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Useful Tools

There are plenty of free resources available at daveramsey.com to help you with everything from setting up a budget that really works to getting a free annual credit report. Here are a few highlights:

• Online Mortgage Calculator
  How long will it take to pay off your house? How much could you save if you made extra payments? How much extra money could you put toward your house if you stopped eating out for lunch? Use our calculator and find out!
  
  
• Need A New Plan?
  What's your financial future looking like right now? With this free financial test, you'll see how age 65 is looking.
  
  
• Find Dave's Class In Your Town
  Financial Peace University classes are beginning all over the country, so get involved with one in your area.
  
  
  Enter a US Zip Code: Within 10 25 50 75 100 miles

Get more useful tools here

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Dave Ramsey Updates

Where's Dave?

Magazines, websites, live events, TV—Dave's everywhere! Get all the up-to-date info.

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New Radio Affiliates

Check out our newest stations!
There are over 450 affiliates nationwide.

City & State	Radio Station	Air Times
Los Angeles, CA	KFWB AM 980	M–F, 9 p.m.–Midnight PST

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Quote of the Month

There is a great difference between worry and concern. A worried person sees a problem, and a concerned person solves a problem. —Harold Stephens

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