STOP Listening To Dave Ramsey!

0:00 Welcome back to the Graham Stephan Show,

0:01 and this is exactly why you shouldn't listen to Dave Ramsey or Suze Orman.

0:05 And I'm not going to say I agree with all these statements,

0:08 but it is worth considering because this guy Azul posted

0:12 a video on this that I got a comment on.

0:14 As soon as you hit the like button, subscribe.

0:16 Thank you so much, and also a big

0:17 thank you to Cook Unity for sponsoring this video,

0:19 but more on that later.

0:21 I'm going to get in at least a little bit of trouble for making this video,

0:24 but I think it's important that I share with you my views

0:27 on why I think you should stop listening to Dave Ramsey and Suze Orman.

0:33 And I'm going to read you a quote that we're going to go over.

0:35 If you're poor, you listen to Suze Orman.

0:38 If you're middle class, you listen to Dave Ramsey,

0:41 but the rich think differently.

0:44 It's funny how everyone gets put into these categories like,

0:46 "Oh yeah, if you're poor, listen to Suze Orman." First of all,

0:49 I've never heard of anyone poor listening to Suze Orman.

0:53 I mean, most people listening to Suze Orman

0:55 probably have a good shoulder on their head.

0:57 So, probably budgeting already, they're saving, they're doing something.

1:01 For Dave Ramsey, it seems like a lot of people

1:04 who made mistakes in the past listen to Dave Ramsey,

1:07 and and they're getting out of it, and they're making a lot of progress forward.

1:10 And then if you're homesick from school, you listen to Caleb Hammer because,

1:13 oh my gosh, his entertainment value, I got to say is through the roof.

1:17 Like, I watch almost all of his videos just for the intros alone.

1:20 See like how insane they are.

1:22 But uh yeah, with that said, we'll continue.

1:24 My clients used to pay me thousands of dollars a year

1:27 as a financial advisor to share my thoughts with you.

1:30 And one of the things I love about YouTube

1:33 is I get to give you my views completely free.

1:36 All I ask is you give me a thumbs up for a like.

1:39 If you've watched a couple of my videos, think about subscribing.

1:43 As the kids say, "Thumbs for like and subs for love." That's my love language.

1:48 So, give me a subscribe or a like.

1:50 Thank you.

1:50 That is probably one of the best call to actions I've ever seen on a video.

1:53 Just for that, I'm going to give it a like.

1:56 I don't even know if I could compete with something like that.

1:58 If I ask you to hit the like button, like he does it with such sincerity.

2:03 How about this, guys?

2:04 If you're watching this video, and you haven't done it already, all I ask,

2:09 my only wish, just hit the like button

2:11 and subscribe if you haven't done that already.

2:13 And this promised because a lot of people were upset that I

2:16 didn't give them a picture of a snail in my last video.

2:18 Here's a picture of a snail.

2:20 The article's from Forbes.

2:21 It's called The Rich Don't Listen to Suze Orman and Dave Ramsey.

2:25 The author starts off saying, "The whole idea is that if you save,

2:30 scrimp, and avoid spending your entire life, you can die a millionaire.

2:35 And that didn't sit well with the author." He goes on to say,

2:39 "The thought of handling handing the money I'd worked my entire

2:43 life over to my children and grandchildren who'd likely blow it because

2:48 they don't they didn't work hard to earn it sounded like

2:52 a recipe for life for a life of misery to this person."

2:56 I do not think saving money and scrimping and investing

3:00 have anything to do with passing off your wealth to kids.

3:04 The whole point of it is really to save up for the life that you

3:06 want to live and make sure you're not overspending on the path to get there.

3:12 If you want to go and give it to your kids who

3:14 are going to blow it in like two generations, by all means.

3:18 But this whole concept really has more to do with the book Die with Zero,

3:22 which really suggests that you should be maximizing

3:24 your life experiences at different points of your life

3:26 and saving up for this experience specifically instead of just

3:30 trying to die with as much money as possible.

3:31 So, I tend to agree.

3:33 Yes, if you want to become wildly rich,

3:35 you cannot do what everyone else is doing.

3:38 I mean, there are certain principles that you could follow,

3:40 but if you follow what everyone else is doing,

3:43 and everyone else isn't rich, you're not going to be chances are absurdly rich.

3:47 So, yes, you do have to think differently, but at the same time,

3:50 I mean, it has nothing to do with giving your kids money like this.

3:53 He goes on to say, "Dave Ramsey's advice is to live debt-free.

3:57 And debt in Dave's world is a bad thing.

3:59 It means owning owing anyone on any

4:03 loan." "In addition to thinking differently about money,

4:07 the rich build all-star teams around themselves,

4:10 and that was a game-piecing piece of advice for this author

4:14 in his journey." I'm going to come back to that, but in general,

4:17 his point here is the aversion to debt.

4:20 Again, we're comparing apples to oranges here.

4:23 We're comparing building wealth, saving, investing, paying down debt.

4:27 It's one category.

4:28 And then we're talking about another category

4:30 of extreme wealth building through starting your own business,

4:34 running teams, hiring employees.

4:36 The two are totally separate.

4:38 You could have the business, have the employees,

4:41 and be massively in debt, overspending all your money, and be completely broke.

4:45 You could also be in a safe W-2 job earning

4:48 $80,000 a year and be worth a million dollars by saving,

4:52 investing, not going into debt, not living extravagantly.

4:56 Again, the two are completely separate and really

4:58 just depends on what sort of lifestyle you want.

5:00 Like for me, the idea of managing like hundreds of people doesn't sound fun.

5:05 But on the other hand, when I could just go into a half-converted

5:09 garage on my own accord because I felt like

5:11 it today and make a reaction video talking

5:14 about why you should stop listening to Dave Ramsey,

5:17 and it's just me editing these videos cuz that's what I enjoy doing.

5:20 So, that is my idea of fun, and that is how I'm able to save

5:24 and invest and do all these things because you know,

5:27 I I just take a path that works for me,

5:29 and it's not hiring hundreds of people, but it's doing this, and I enjoy it.

5:34 And but again, that has nothing to do with paying off debts.

5:37 I'm a fan of Dave's.

5:39 I think he really helps people save their first maybe $250,000,

5:44 but I think his aversion to debt is maybe a little too extreme,

5:49 and it can it can steal from us the joy of enjoying the journey.

5:54 Once you've learned how to save,

5:55 once you've learned how to spend less than what you earned every year,

6:00 once you've proven yourself you can be responsible with that, I

6:04 think it's okay to have debt for something like a mortgage.

6:07 To me, it really just depends on where interest rates are.

6:10 Like right now, at today's interest rates,

6:13 if I got a mortgage, let's just say at 6.5%,

6:17 I would probably want to pay that down

6:19 as soon as possible because long-term in the stock market,

6:21 you're probably going to get 8%,

6:24 which is going to be about 6.5% after taxes anyway.

6:27 So, when I get a guaranteed 6% return right off the bat immediately after tax,

6:32 I would probably rather just pay off the mortgage as soon as possible.

6:36 On the other hand, if I can get a mortgage for 3%,

6:39 3.5%, maybe even 4%, I'd keep that debt as long as possible.

6:43 So, I really just think it depends what the debt is, what the interest rate is,

6:48 what sort of inflation there is,

6:50 where else you could invest your money, and just do the math.

6:53 To me, it's just a math equation.

6:54 If your interest rates are too high, pay them off.

6:57 Don't do the debt.

6:58 If the interest rates are really low, keep the debt for as long as possible.

7:01 And in the middle, maybe you could split it here and there.

7:05 Now, let's talk about Suze Orman.

7:08 And for this, we're going to turn to a different article.

7:11 You know, there's one part about building wealth that almost no

7:12 one talks about because it's not complicated and it's not flashy,

7:16 but it makes a huge difference.

7:17 And it's simply how you manage your everyday decisions.

7:20 Like the people who actually do the best aren't focused on these huge wins.

7:23 They're just focused on the everyday decisions

7:25 that get them closer to their goals.

7:27 Think about it.

7:28 How often do you overspend on takeout, waste time figuring out meals,

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9:19 Now, let's get back to the video.

9:20 Now, let's talk about Suze Orman.

9:22 The title is Suze Orman says a $10 million nest egg is chump change.

9:28 Is she right?

9:30 That would be funny if she said 10 million.

9:32 I think I think he meant to say 2 million.

9:34 Imagine, people would lose their minds.

9:35 All you got to say to go viral is say, "Hey guys,

9:38 $20 million is nothing." My gosh, you can't buy anything with $20 million.

9:45 You can't even afford to fly private jets at $20 million.

9:49 What are you going to do?

9:50 And then people lose their minds.

9:52 But a small portion of people say, "Oh man, this guy is right.

9:56 Let me go follow him." And then you get millions

9:58 of dollars saying just what the most nonsense stuff out there.

10:01 The more nonsense you spew out, the more views you tend to get, unfortunately.

10:05 That's the nature of social media.

10:06 But anyway, $2 million retirement Trump change

10:09 really just depends on where you live, what your expenses are.

10:12 I'd say a lot of people could get by on $2

10:14 million if they spent 4% of that every single year.

10:17 Pretty good.

10:18 It's a good retirement.

10:19 $2 million is nothing.

10:21 It's nothing.

10:23 It's pennies in today in today's world, to tell you the truth.

10:27 So, is she right?

10:28 Is $2 million nothing?

10:30 Let's Let's look at the numbers because you and I know

10:34 $2 million is a heck of a lot more than nothing,

10:38 and it's a heck of a lot more than the vast majority of Americans have.

10:43 She's getting clicks.

10:44 She's just playing to like whatever gets headlines.

10:46 It gets her name gets out there.

10:48 She's able to like sell more speaking engagements, more bucks.

10:51 Again, anyone with like three brain cells

10:53 could see that the more outlandish you are,

10:57 the more you stand out.

10:58 And you have to stand out if you want

10:59 to get any sort of viewership on social media.

11:02 So, that's my interpretation of this.

11:05 This is according to the survey consumer finance from the Federal Reserve.

11:09 And this shows how much Americans have saved for retirement.

11:12 And you can see almost half of all Americans have $0 saved for retirement.

11:17 Another 9% have have less than 10,000.

11:22 From 10,000 to 50,000, it's another 13% 50,000 to 100,000, it's another 7%.

11:30 So, in aggregate, that's about 80% of America

11:34 has less than $100,000 saved for retirement.

11:38 And they would love that $2 million that Suze Orman says is nothing.

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12:29 Let's look at the median net worth.

12:31 Half of the people have more, half of the people have less.

12:34 And you can see here 45 to 54-year-olds have about $250,000 total net worth.

12:41 55 to 64, so this is when people

12:44 are starting to think about retiring, have about 365,000.

12:49 65 to 74-year-olds have about 410,000.

12:53 And then in retirement, that goes down to about 1/3 of $1 million.

12:58 So, you can see somewhere between 365,000 and let's call it 410,000 is what

13:06 people have their median net worth when

13:08 they decide to pull the trigger and retire.

13:10 It's crazy the difference between median and average.

13:13 So, for those unaware, the median is split right in the middle.

13:16 That's getting rid of the outliers, getting rid of the trillionaires out there,

13:20 so to speak, which pull up the average.

13:22 But when you see the average,

13:23 you could see that's pulled up by the people who are really,

13:26 really, really wealthy.

13:28 So, when you see this, just know the averages are

13:30 definitely skewed by the few individuals who have a lot.

13:34 And the challenge I have with Suze's quote that $2 million is nothing.

13:39 Yep.

13:39 Yes, of course we'd we'd rather have $5 million instead of $500,000.

13:46 But we do the best that we can,

13:48 and I think Suze's quote about $2 million being nothing,

13:52 unfortunately, an unnecessarily stokes fear in people.

13:57 And this is from a Goldman Sachs survey, and they say that 58% of people are

14:03 worried that they're going to outlive their savings.

14:05 And And that causes people to to work years longer than they might

14:10 have to, and give up what I call the youth of their senior years.

14:15 Is that fear, or is it really just like a rage bait?

14:18 It's just rage bait.

14:19 She's good at it.

14:21 She's good at it.

14:22 That's all it is.

14:22 It gets people going.

14:24 It gets them all Oh my god, I got to respond to this.

14:27 Let me share it.

14:27 Ooh, did you see what Suze Orman just did?

14:30 Now, the people who do worry about this, in my opinion, from this 58%,

14:35 I have a feeling they're probably closer to the median

14:38 where they have a few hundred thousand dollars saved.

14:40 And there is a chance they're going to outlive their savings.

14:43 That's a real concern that a lot

14:45 of people have if they don't have enough savings.

14:47 And for some people, they need to continue working hard working more years.

14:52 I'm not saying to retire before you have enough money to retire.

14:56 But what I am saying is be thoughtful

14:58 and deliberate about do you have enough money to retire?

15:03 Ben Shapiro got a whole bunch of flak.

15:05 I remember when he said this that people shouldn't retire,

15:08 that retiring's actually a bad thing.

15:10 And statistically, when you look at the data, he's not actually wrong.

15:13 Because when people retire, you see their cognitive skills go down.

15:16 They stop contributing.

15:17 They stop feeling a sense of fulfillment.

15:20 They stop socializing, and they just go downhill.

15:23 And I know a lot of people say, "Oh,

15:25 well, if I retired, I would go skiing every day.

15:28 I would do this.

15:29 I would do that." Well, the data shows something completely different.

15:32 And a lot of people who do retire, they are in their 60s or their 70s.

15:36 And what they do instead is nothing.

15:39 Their health declines.

15:41 They lose their purpose.

15:42 They lose their sense of community.

15:43 And again, it's not everybody.

15:45 There are exceptions to this.

15:47 But by and large, it goes to show you

15:49 that you should have something you're doing every day.

15:51 It doesn't have to make money.

15:52 You could be volunteering.

15:54 You could just be working at a place that you enjoy for fun,

15:56 and it could be your sense of retirement to do something on your own terms,

16:00 which I think is really important.

16:02 But going and just doing nothing,

16:04 that actually has shown to shorten your lifespan.

16:07 Believe it or not, there you go.

16:08 That's the data.

16:09 Love it or hate it.

16:10 That That's just what happened.

16:12 Retired people had about 25% more money if they had a written

16:18 financial plan than their counterparts that did

16:21 not have a written financial plan.

16:23 Because when you retire, what I saw is a lot of people unnecessarily sacrificed.

16:29 They could have been spending more money or maybe retired sooner.

16:33 So, that was about 3/4 of my clients.

16:36 But about 1/4 of my clients,

16:38 probably not that much, less than that, but were unknowingly,

16:42 before they started working with me,

16:44 putting their financial future at risk cuz they were spending too much.

16:48 And if you don't have a written financial plan,

16:50 those two feel real close to each other.

16:52 The reality is, there's no way to time this perfectly and save the perfect

16:56 amount of money because you have no idea what the market's going to do.

16:59 You have no idea about any potential

17:01 health emergencies or something that might come up.

17:04 So, it's either you work harder, you save too much money,

17:08 and you don't spend it, or you don't work enough.

17:12 It's going to be one or the other.

17:13 There's no way that you're going to be able to say like, "Oh,

17:15 well, if I stop working here and I save this amount of money,

17:19 and I have all these expenses coming up,

17:20 and the market does that." You just don't know.

17:23 So, I tend to think it's usually better to overplan,

17:26 to save a little too much money than not enough.

17:29 Now, let's talk about that team aspect

17:31 that the first Forbes article was talking about.

17:34 How the author of that said working on a team.

17:37 And what this person meant was, you know,

17:39 having somebody to make sure that they they had an estate plan,

17:42 at least a will in place, some common trust.

17:45 There are There are things that you can do

17:47 that are really a gift to your heirs that will

17:51 make things go smoothly and make sure that the people

17:54 and the causes that you care and love about,

17:57 make sure that all of that goes smoothly

17:59 for them with as few headaches as possible.

18:02 Just don't give them too much money.

18:03 That's all it is.

18:05 Or, if you're going to do anything, it seems like just from what I've seen,

18:08 if you give your kids a controlling interest

18:11 in a business that you bring them up into.

18:14 Like, you get them incorporated when they're young.

18:16 They could see what's going on.

18:18 You teach them the business.

18:19 They grow into it.

18:21 And then eventually, when you're still alive,

18:24 they kind of take over the reins a little bit, and it's their business.

18:27 And they got to work for it.

18:28 Instead of just being like, "Oh, here's a few million dollars.

18:31 Have fun." They're going to blow it cuz they didn't work for it.

18:34 They didn't do anything for it.

18:35 But when you incorporate them into a business,

18:37 make them work for that, then it seems to actually work out pretty well.

18:41 The other thing I I've seen that seems to work

18:43 well is giving them some real estate to manage.

18:46 It's like you give them a 10 unit, and you know, the money's not free.

18:49 They could squander it.

18:50 But if they manage it properly, they could grow it.

18:53 It just gives them something to do.

18:54 That's all it is.

18:55 So, that's what I think.

18:56 Just from what I've seen talking to a lot of people.

18:58 And also be thoughtful and deliberate about the age that you decide to retire.

19:03 And that's why I made this video here.

19:05 Why waiting to 65 to retire might be a big mistake.

19:09 Here's my honest take on Dave Ramsey.

19:11 On the fundamentals, he is absolutely fantastic,

19:13 and he attacks everything from a psychological perspective.

19:17 He's not a math guy.

19:19 He just looks at how dumb is the average

19:22 person when it comes to spending money on credit cards,

19:25 spending too much money on things they don't need,

19:27 and living beyond their means.

19:29 He takes that person and he says,

19:31 "These are the financial principles that are best

19:34 for you psychologically speaking." And he is correct.

19:38 But on a mathematical standpoint,

19:40 a lot of what he says is a little too conservative,

19:42 and it's not going to get you as far.

19:44 So, if you're a logical person who's big into the numbers,

19:47 who could separate their psychology from what actually works logically,

19:51 then get the credit card, get the low interest rate mortgage,

19:55 leverage the debt a little bit smartly.

19:57 If you know, on the other hand, that you get $100,

20:00 you see it in your wallet, and you're like, "Oh, you know what?

20:02 I'm going to spend it tonight on drinks,

20:04 even though rent is due next week." Listen to Dave Ramsey.

20:07 That is my thought.

20:08 Everyone has their own purpose, but that's my take on it.

20:11 Let me know what you think down below in the comment section, and as always,

20:14 I do my best to read and reply to as many of you as I can.

20:17 If you haven't done it already, hit the like button, subscribe.

20:20 Almost tipped that over.

20:21 Thank you very much.

20:22 I'm going to link to uh Azul's channel down below in the description as well.

20:25 Check him out.

20:26 Uh definitely worth uh subscribing to him as well,

20:28 because his earlier uh subscribe comment, that got me.

20:32 I'm I've already subscribed to him as well.

20:34 So, uh thank you so much, and until next time.