Why Dave Ramsey is WRONG About Debt and Money

Dave Ramsey says that all debt is dumb. Is that a dumb thing to say? Brandon?

No, I don't think it's. I respect the heck out of Dave Ramsey. I respect, I respect that statement that he made because it applies to a lot of people that are slaves to credit card debt. And hopefully my parents never watched this because my parents were one of them. Anytime that there was a bump in the road, they would pay something with a credit card. My dad was a truck driver. He had situations back in 1997, 1998, where he was putting different things with his trucking company on credit cards. And it was a terrible choice. It was terrible debt for him to take on at 22.99% interest here, which I can't believe my parents ever paid a debt at over 22% interest. But they did and it was a terrible thing for them to take on that level of debt. My dad thought it was a business debt. So it was, it was, it was a good idea. But they had access to credit and they spent it very foolishly. I feel like Dave Ramsey's comments and content are mostly driven for the lowest common denominator. Your average person, your average person who is more than content to go out and buy an expensive card, expensive car, pay zero down on the car. They're fine with going to the store and buying whatever the trendy clothes are. They're wanting to access a level of lifestyle that, that they don't, they can't support with their finances. So I think that when your average person looks at debt of oh, what can, what kind of clothes can it put me in? What kind of cart puts me in? That's, that's true. I don't like the consumerist mindset. I don't like buying things that don't have much of a value to them. But then I also look at the other side where if you treated all forms of debt in a way that they should always be avoided, no one would ever own real estate, no one would ever own a business, no one would ever, it would be almost impossible to transact in a business without a loan. And there's a case where it's my prime example. There's a very, very multi, there's a well known multi billion dollar firm in the United States where the owner is a huge fan of Dave Ramsey. He might even be a personal friend. I'm not going to say who the company is, but they absolutely follow the Dave Ramsey mindset. The corp, the company. They run a manufacturing firm here in the United States. They do not use any debt whatsoever. They make wonderful products that could, that have the potential to sell tens of billions of dollars, but they are selling between half, half a billion and maybe $1 billion in sales. And it's because they will not use any level of debt to buy machines to make more money. They're manufacturing. They won't pay for tooling unless they've got two or three times the amount of money that they need in their bank. So what happens is this specific business is stuck in a cycle of selling the products they make to competing manufacturing firms with a license. And I'm not opposed to licenses, but they, they make wonderful products and they are stuck licensing their ideas to competitors because they can't scale their growth because they refuse to use any level of debt. I look at them and I say to myself, I would love to buy these products if I could get them. They're, they're in such demand that, that they sell licenses off to competitors that oftentimes make inferior products. But they won't use debt. And I feel like a competent business owner would look at 10 billion, $20 billion worth of sales they could do every year and if it would just take a couple billion dollars worth of debt that they could repay over the lifespan of the tooling, it would. It seems like a dumb decision to me and I think that that's the dangerous side of the coin. When you follow Dave Ramsey's advice without putting any level of thought into it. I think it's very, very, very concerning. Almost dangerous.

This recent budget should warn you that your pension is not safe and secure and they're coming for your inheritance. Do you even know how much is in your pension or where your pension is invested? Add to this the recent inheritance tax grab on your pensions and the risk of a market crash. You probably didn't know this and I didn't until recently, but 50 physical gold can be added to your pension pot. Gold is inheritance tax free and has grown 700 in the last 20 years. You probably know from my content I'm investing heavily in silver and gold and that's why I've partnered with direct bullion. Myself and Nigel Farage are brand ambassadors and direct bullion can help you with gold to protect and grow your pension. I buy my gold and silver from direct bullion and I don't earn any money on any purchases of gold or silver if you buy direct from direct bullion. So if you go to robmore.directbullion.com you can get a great price on your silver and gold and you can get the Pension Gold Investing Guide completely for free. As you know, I don't do many strategic partnerships and when I do, I do them with people who are credible, who've been doing it a long time, who invest in things that I invest into and gold and silver's going wild. I'm investing heavily in gold and silver. I and I recommend you check out robmore.directbullion.com do you see a difference between good debt and bad debt?

Yeah, good debts. When it good or bad debt is when you go out and use it to buy stuff that you don't need you and need. But when you use debt to go out and acquire things that can make you more money, I think it's a good thing for me. You know the thing that I've said more than once is all debt does is it takes you to the place you're already headed faster. And if you are on a trajectory towards bankruptcy, debt is just going to get you there quicker. But if you are an upward bound and you're already doing what makes you money and you utilize debt, it is just going to increase your trajectory and your growth and it's just going to advance you further.

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Generally speaking, I want to know what the owner current owner's biggest problems are. If I can quickly identify what their problem is, I can leverage that problem into a solution. And that solution will often involve me getting a discount. And it doesn't always have to come on the surface of I want this thing for 50% of what it's worth. It doesn't always have to come at the disc that at the discount of I need this thing immediately for 70% of what it's worth. Oftentimes you can arrange negotiation tactics with them if you know where their problem point is. I'll take it for instance. We just had one of the guys that I help, he's in the Midwest here too. He just acquired two laundromats with the real estate with $0 out of pocket. And we talk to people and they want everything for nothing. And this is truly a he got something for nothing case. And he identified very quickly in the owner's business process that one of their top employees was stealing money. He did not tell the seller it, but he very quickly identified in his due diligence that a employee in the company is stealing between 60 and $100,000 per year. So when it came down to it, he identified the owner's huge problem in this, the operation of these laundromats, employee theft. And he proposed an offer to them. Where I'm going to pay you over what this business is worth under two stipulations. Stipulation one, you finance this business or this business with the real estate for 20 years. Stipulation number two is I want it at 0% interest with 0% down. The seller looked at this, this laundromat business with the real estate. He's on the surface, he's getting a significant discount on it, or he's getting significantly over what he's asking for it. And he took the deal. My guy looks at it and he realizes that immediately that employee is getting fired. And it immediately improves the books from being in the red to in the black. He had the guy dead to rights. It's a young man and his girlfriend are going in every night and stealing from the laundromat. And he picked it up on the cameras. And that's a really crazy example. But I find that many businesses have these, these critical failings in them. Once again, when you work in the business and not on the business, you don't take that step back and stop treating it like a job and more like a business and an investment. Those kinds of problems, you end up getting blind to them. And somebody can be stealing you, in this case, stealing from you every single day and you miss it. So when you can identify those point pain points, you can get what you want. And it's not that you can't get a good price on the surface. Because if someone has to sell something today and you structure the deal, I'll buy this business today for X amount of dollars. You can very much go out and get an immediate discount on it. Because you've put yourself in the driver's seat. You've put yourself in a position where you can take it over. Immediate.

This episode was brought to you by Disruptive Media, helping bold entrepreneurs stand out through podcasting, video and social content. Visit disruptive media.co.uk to learn more.

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This episode was brought to you by Disruptive Media, helping bold entrepreneurs stand out through podcasting, video and social content. Visit disruptive media.co.uk to learn more.

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