| Dave's
Thoughts About the Economy |
Over the past month, we’ve witnessed the largest bankruptcy
in history, the stock market dropping like a rock, and the
talking heads on TV freaking out that the world is coming
to an end. I’m here to tell you the truth—we’re
going to make it. We’re going to be fine. Take a chill
pill.
This month I’ve compiled some of the most-asked questions
I’ve gotten recently from you:
Are we okay, Dave?
Definitely. Remember Enron and WorldCom in the recent
years? We survived that. But much worse than all this
was the financial crisis of the ‘80s – S&L
collapse and 1,000 bank failures in 2 years. We’re
nowhere near this type of thing; that was probably 50
to 100 times worse than all of this.
What does all of this come back to?
Greedy banks financing homes to broke people. It all
seemed to work okay in their minds when the economy was
booming, but when the economy slowed a little bit broke
people quit paying on their subprime mortgages. DUH. No
wonder they went out of business. Stupid decisions.
Is there anything we can do to fix this bailout mess?
YES! Here's a quick summary: Companies that had billions
in subprime loans were feeling the effects of their stupid
decision to make those loans in the first place, and practically
gave them away for pennies on the dollar. But since no
one wants these loans, and they've had to mark them down
to market value, it has frozen the market. If we temporarily
change the rule that forces companies to do that, that
will free the market up.
This is an absolutely huge deal, and it involves everyone
getting in touch with their congressperson before we spend
hundreds of billions of dollars that we don't need to!
Learn
more
Will the collapse of businesses and banks affect
me?
No, not unless you work there. Thousands of stock brokers
on Wall Street have lost their jobs in the past few weeks,
but that happens in other industries across the country
in good and bad times. This time it just happened
in NYC where all the national news media is so they made
a big deal of it.
If I have 401(k) money in a Merrill Lynch or AIG trading
account, should I move the money elsewhere?
No. Your money isn’t with them; your 401(k) money
is in the stocks. These big companies are just managers
(unless you directly own stock in their company). The
only thing that may be an issue is if they crash later,
you may have some customer service issues, but your money
is still safe. This is a good reminder to not have all
of your money in one stock—that’s stupid.
Always spread out your money in various growth
stock mutual funds.
With these acquisitions, will my 401(k) account and
entire portfolio with Merrill Lynch be lost?
No. They just own the company Merrill Lynch. Look at
it this way—if I owned 6 rental properties and hired
a management company that eventually failed, I would still
own the properties; I just wouldn’t have a manager.
Your broker doesn’t have title to your stuff. Your
401(k) is not a company asset; that’s the beauty
of it.
Should I sell my US stocks to buy gold and foreign stocks?
Absolutely not! Why would you think foreign stocks are
any better than US stocks? Again, diversify your money
in good growth stock mutual funds instead.
What practical lessons should small business owners
learn from these bank difficulties?
When you have no cash, you freakin’ go broke. You
must keep some cash on hand, no matter what kind
of business you have. Give yourself some wiggle room where
you can take a hit and still be standing.
Remain calm, America. We’re in a slow time, but just
pay your bills and you’re going to be fine.
Related:
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How to Cut the Food-Budget Fat
|
The situation: A particular family of 2
parents and 2 kids spends a whopping $1,000 each month
on food! Needing some quick advice to get that number
down, the wife went to the community forums on My
Total Money Makeover.com and asked for advice.
Here’s some of the advice this family received:
Leave Some for Next Time
We try to make meals that will feed more than our family
of 4. This gives me leftovers for lunch. I make a lot from
scratch and limit the amounts of desserts and such to buy.
Also, are you using cash? Our grocery/dining bill went down
20% just by using cash.
Lesson learned: Cooking 2 meals at once can keep
you from eating out because you get home from work and
your meal is already there waiting for you. It also never
hurts to spend with cash … wait, yes it does. That’s
why spending with cash is best!
Now We’re Cooking
The real question is this: Do you know how to cook? If
not, then you'll never meet your goal. We put the vast majority
of our foods together from raw ingredients. I never buy pre-made
spaghetti, pizza, etc. I also bake my own bread, and it's
much better than store-bought (and healthier).
Lesson learned: The more work you do, the less
things cost you. It’s easier to buy the ingredients
to a pizza for $5 and make it yourself than it is to spend
$15 to have it delivered.
Just Say No
Our big thing is if we run out of chips before the end
of the month … oh well, no chips for the rest of the
month. Same goes for about half our groceries. If there is
rice, potatoes, cereal, bread and milk, then that’s
what we eat. Meal planning, less convenience foods, and cooking
at home whenever possible will save you a TON of money.
Lesson learned: When you learn to say “no”
and stick to the budget,
you’ll have enough money.
Stay Away From Snacks
Snacks can really put you over on the budget.
The cost for chips, cookies, granola bars, fruit snacks, popcorn
and stuff like that can be brutal.
We eat lots of fruit, chunk cheese, homemade popcorn
and veggies. I do on occasion get the fun yogurt or the
pudding snacks, but you can do better getting the big container
of yogurt and making the pudding yourself.
Lesson learned: Healthy snacks are less expensive
than sweet snacks. No snacks are the cheapest of all.
You won’t starve by not snacking, but you’ll
save money.
The people on the community forums save the day again!
Come ask your questions and get answers—it’s
FREE for 7 days!
 Take
your FREE Financial Reality Check now!
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A Minivan for Cash -- Really?
By David and Elizabeth in TN
 Dear
Dave,
When we first read your thoughts on buying a car with cash,
we had just moved to Nashville with no jobs. I was trying
to make it as a freelance musician, and my wife was looking
for a teaching job. So, needless to say, we thought your
ideas were nuts! Deep down, I knew that you were right;
I just didn't see how we could ever make that happen.
Well, 6 years later, God has blessed my career to the point
that my wife now gets to stay at home (yes, we now own a
house) with our 2-year-old son while I am able to support
us fully. Last year, work was so good that we decided to
save all our surplus budget money and save up for a van.
Funny thing is, it took us so long to find exactly what
we were looking for, by the time we found it, we had saved
up so much, we were able to get a nicer van than we had
originally even planned! So now we're owners of a 2005
Honda Odyssey, paid in cash!
We love it, and nothing was better than looking that car
salesman in the face while negotiating with him and telling
him that I was paying in cash. You should have seen the
look on his face!
Thanks, Dave, for sharing your financial wisdom with others.
It's made a difference in our family!
Related:
Read other We did It! stories
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Paying Too Much for Cell Phones
By Brad in VA Beach
 My
wife and I love our cell phones. We had been with this company
for 4 years, and in our pre-Dave era, we were paying as
much as $275 a month for service.
Since graduating from Financial
Peace University, we have been whittling away our
budget to gain more debt money. Over the previous 3 months
we were making changes to our service, bringing our monthly
bill to around $135. The customer service rep on the phone
gave me a great idea of deleting the special "push-to-talk"
feature (which we didn't use) in order to save $10 per
month on each line, bringing our monthly bill within
our budget amount. Excellent! Let's do it! Two days later,
we received a package containing two new phones with instructions
on activating them.
We were all happy and life was good until the following
month when the bill arrived for $532.38.
- Upgrade fee: $18
- Equipment: $196.46
- New plan (partial month): $111.99
- New plan (month in advance): $136.49
- Tax: $69.44
- Not reading the fine print: PRICELESS.
Now my new plan is more expensive, and in order
to get out of it there is a $200 (per line) early termination
fee. We don't like our cell phones as much now.
Read
other Stupid Tax stories
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|
How to Save Money on Health Insurance |
Whether you’re single or have a family, one of your
biggest expenses is probably health insurance. Hey, you’re
not alone. Health insurance costs seem to increase every
year for most of us. According to US News, families
paid an average of almost $3,300 for coverage in 2007.
Think that high cost gives you an excuse not to have health
insurance? Think again! Unpaid medical bills are one of
the biggest causes of bankruptcy. Not having health insurance
isn’t an option.
But here’s how you can save money: consider switching
to a Health Savings Account (HSA).
HSAs are great for people who don’t go to the doctor
often. If you’re young, healthy, or have grown kids,
then an HSA can be an excellent alternative to the usual,
expensive health insurance plans of PPOs and HMOs. A typical
HSA can save you hundreds of dollars a month while still
providing you with quality health coverage.
How Much Can I Save?
Well, that depends on you and your needs. Here’s
how much one listener saved:
Dave,
I just wanted to thank you for saving my daughter
thousands of dollars on health insurance. Your Endorsed
Local Provider [ELP] set her up with an HSA. She’s
saving $350 a month on premiums for a family of four!
From Bonnie in Florida
That’s not the only family who’s saving thousands.
My team and I get emails like this almost every day from
all over the country. With the money you’ll save,
you can pay off any debts or invest that amount toward your
retirement.
Getting Started With an HSA
Many companies now offer HSA plans along with their traditional
plans. If you’re company doesn’t, then talk
with a health insurance ELP about setting up a private
HSA for you or your family. Often times a private HSA can
save you more than your company HSA.
Just remember, that your individual health needs and the
area in which you live can drastically affect your options.
Before you make any change to your insurance coverage, it’s
best to get the advice of a health insurance ELP.
Is an HSA a good option for you? Ask
one of Dave’s health insurance ELPs
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|
The Shocking Reality of High Schoolers |
Before you send your child off to the mall with a credit
card, read this.
High school students are graduating without knowing how
to balance a checkbook, how to live within their means,
or how to save for the future. Why? Because no one is teaching
them! You can’t graduate without knowing what an amoeba
is, but the basic life skill of how to handle money is not
required. This is absolutely insane!
Credit card companies aren’t just going after college
students anymore; high school students are the new target.
According to Norma Mendoza, a researcher at the University
of Arkansas, several studies found that patterns of compulsive
buying start during adolescence. Teens are the perfect
vulnerable audience for credit card companies to sink
their claws into.
Reality Sets In
This is the reality of many teens in your households, schools,
churches, and communities:*
- 31% of students don't worry about their debt
- 6.9% of high school seniors scored a grade of “C”
or higher in a 2005 financial literacy survey
- 74% of college students owned at least one credit card
- 19% of young adults admit having their phones, cable,
or utilities cut off because they didn’t pay their
bills
- 15% of young adults have had their credit revoked
After high school, most teens head to college and are approached
with credit card offers the moment they set foot on campus.
More and more, the credit card companies are willing to
open a line of credit for teens without any credit history,
employment or parent co-signature. We as parents, teachers,
and community leaders have got to do something about this!
Easy (But Very Effective) Ways You Can Help!
 Our
new high school curriculum, Foundations
in Personal Finance, engages teens with relevant and
interactive lessons about how to manage their money so they’ll
actually have more. If you’re a parent, ask your
school board to purchase the curriculum and implement
it within your school system.
Unfortunately some schools don’t have room in their
already tight budgets to buy this material for their students.
If that’s the case, ask your company to sponsor
the curriculum for your local high school. Whether the
company is large or small, this is an excellent opportunity
for workplaces to get involved with their community
and a great way to make a positive impact for the future.
Learn more about Foundations
in Personal Finance
* Stat sources from CardTrack.com, Nellie
Mae 2005 study, Courier Post Online, Jump$tart Coalition
for Personal Financial Education
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|
Inspire Passion: Lead, Don't Manage |
 You’re
the meaning in my life, you’re the inspiration…
These are words to an old song—even if they are a
bit cheesy, think about how they relate to your co-workers,
boss, friends, and family. Inspirations for
one’s job and recognition for work well done are two
of the most underrated and underutilized tools a leader
has at his disposal. Remember, everyone is a leader.
Everyone leads someone.
In study after study, the number one way to motivate your
team is not money, but recognition. That’s
right. A simple “thank you” can help your bottom
line…and it’s cheaper. How many times have you
personally wished your boss, spouse, or co-worker would
simply say “great job” or “excellent work”?
The best bosses know this; that’s why they inspire
you and instill the same passion.
Recognition doesn’t have to be expensive, but it
requires thought.
Try reading an email bragging on someone, celebrating their
birthday or the birth of a child, announce the addition
of a new client, or the fact that they can now use the copier
successfully. Recognition raises your team up and shows
them you value every single thing about them. Once they
know this, inspiring them takes little effort because they
believe you value what they bring to the table every day.
Don’t be the boss who says, “My team should
just be happy they have jobs.” It’s no wonder
this person’s team won’t stay late or come in
early. Everyone who has the honor and privilege to lead
should work tirelessly to build a team. That’s
right—a team, not employees. Employees come
in late, leave early and most likely steal while they are
there. When you have a team, you are united with one
goal and striving every second not to let your teammates
down. This is what turns you into a leader from a manager.
Colin Powell says, “Perpetual optimism is a force
multiplier.” So what are you waiting on? Inspire your
team and those you love! I promise everyone will benefit.
Want more words of wisdom and advice on being a leader?
Learn
more about Dave's EntreLeadership events
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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
"Fox Business" with
Stuart Varney
On Monday September 29, Dave will be on Fox Business Network's
"Fox Business" with Stuart Varney at 12:30pm CDT.
Redbook Magazine
The September issue of Redbook magazine includes an article
that features families who have gotten out of debt.
Upcoming LIVE Events
Here is a list of Dave's upcoming events across the nation:
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Check out our newest
stations!
There are over 360 affiliates nationwide
| City & State |
Radio Station |
Air Times |
| Duluth, MN |
KDAL AM 610 |
M-F 10pm-Midnight CST |
| Albany-Schenectady, NY |
WGY AM 810 |
Su 11am-1pm EST |
| Mt. Jackson, VA |
WSVG AM 790 |
W-F 5-8pm, M-Tu 5-7pm EST |
| St. James/Rolla, MO |
KTTR AM 1490 & KTTR FM
99.7 |
M-F 6-9pm CST |
| Burlington, IA |
KBUR AM 1490 |
M-F 10am-Noon, 12:30-1pm CST |
| Fargo, ND |
WDAY AM 970 |
Tu-Sa 1am-4am CST |
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 There
are a ton 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. This
month we're highlighting a few to get you started:
- Gazelle
Budget Lite
With this online tool, you can create a budget in 60
seconds! This is a great way to get started budgeting
without it being totally overwhelming. We'll even
walk you step by step through the process. Get
started now
- Dave's
Mortgage Calculator
How much can you save if you make extra payments? How
much extra can you put toward your house if you stopped
eating out for lunch? You can quickly discover how
much money in monthly payments, interest, and total amount
you'll pay on a piece of real estate. Use
calculator now
- Free,
High-Interest Checking on CheckingFinder.com
Dave says, "Start making your money work harder right
now on CheckingFinder. Enter your zip to find and open
free, high-yield checking with no minimum balance.
It's easy to do, and you're done in just minutes. I've
never found a better checking account."
Get
more useful tools here
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|
Quotes About - The Economy |
My dog is worried about the economy because Alpo is up to
99 cents a can. That's almost $7 in dog money. —Joe
Weinstein
The economy depends about as much on economists as the
weather does on weather forecasters. —author unknown
Economy is half the battle of life. It is not so hard to
earn money as to spend it well. —Charles H. Spurgeon
Tis the set of the sail that decides the goal, and not
the storms of life. —Ella Wheeler Wilcox
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