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|Born||David L. Ramsey III|
September 3, 1960
|Occupation||Author, Radio host|
|Born||David L. Ramsey III|
September 3, 1960
|Occupation||Author, Radio host|
David L. "Dave" Ramsey III (born September 3, 1960) is an American financial author, radio host, television personality, and motivational speaker. His show and writings strongly focus on encouraging people to get out of debt.
Ramsey's syndicated radio program, The Dave Ramsey Show, is heard on more than 500 radio stations throughout the United States and Canada, in podcast format, on IHeartRadio, a dedicated iOS application, as well as live audio and video on DaveRamsey.com. He has written numerous books including five New York Times bestsellers. His books and broadcasts often feature a Christian perspective that reflects Ramsey's religious beliefs. Ramsey was named the 2009 Marconi Award winner for Network/Syndicated Personality of the Year.
Ramsey has been featured on many media outlets including The Oprah Winfrey Show, 60 Minutes, and The Early Show on CBS. He recorded a pilot and six unaired episodes of The Dave Ramsey Project for CBS. He was the host of The Dave Ramsey Show, which aired at 8 p.m. ET and repeated weekdays on the Fox Business Network until June 2010.
Ramsey was born and raised in Antioch, Tennessee. He was a 1982 graduate of the College of Business Administration at University of Tennessee, Knoxville with a degree in Finance and Real Estate. At the age of 26, through his brokerage firm Ramsey Investments, Inc., he built a rental real estate portfolio worth more than $4 million and became one of Tennessee's youngest brokers to be admitted to the Graduate Realtors Institute.
Ramsey's success soon came to an end as the Tax Reform Act of 1986 began to have a negative impact on the real estate business. One of Ramsey's largest creditors was sold to a larger bank, which began to take a harder look at Ramsey's borrowing habits. The bank demanded he pay $1.2 million worth of short-term notes within 90 days, forcing him to file for bankruptcy relief.
Ramsey then began counseling couples at his local church. Soon after offering private counseling services, Ramsey began attending every workshop and seminar on consumer financial problems that he could find. He developed a simple set of lessons and materials based partially on his own experience and on works and teachings by Larry Burkett, Ron Blue and Art Williams of A.L. Williams company now called Primerica. In 1992, after many requests from his clients, he wrote his first book, Financial Peace.
Ramsey started his radio career by co-hosting the show The Money Game with Roy Matlock of Primerica on June 15, 1992. It is currently known as The Dave Ramsey Show. Originally based locally, it is now syndicated across the country. In 2007 the Fox Business Network launched a television show under the same title, but canceled the show in June 2010. In August 2013 the Dave Ramsey Show began transmitting a live video feed featuring the live three-hour call-in show, as well as other special video content.
Dave identifies himself as a devout born-again Christian. Many churches have hosted and promoted Dave Ramsey workshops.
Ramsey founded his company, The Lampo Group, Inc., in 1992, initially helping people one-on-one who were struggling with financial issues. In 1994 he hired Russ Carroll, Ramsey's lead financial counselor, and together they began teaching the first Financial Peace University classes on overhead projectors. Between 1999 and 2004, The Lampo Group grew from 18 to 105 team members. There are currently over 400 team members.
Ramsey runs his business completely debt-free, an accomplishment he states was critical to the success of his company.
Ramsey is also the creator of Financial Peace University, a biblically based training series for adults that integrates video teaching, class discussions, and small group activities. The video series lasted for 13 weeks until August 2012 when it was relaunched as a 9-week program. Some topics covered in the series are cash flow planning, investing, saving, credit, retirement, and giving.
"Share It!" is a foundation created by Dave and Sharon Ramsey for the purpose of working with other non-profit organizations, such as housing initiatives, work to success projects, domestic violence shelters, drug and alcohol recovery programs, crisis pregnancy centers, youth outreaches, and high schools, to help others become financially literate.
The word EntreLeadership describes the responsibilities of a small business owner as an entrepreneur (Entre) and as a leader (Leadership). EntreLeadership is also the name of a small business conference developed by Dave Ramsey. The principles presented at EntreLeadership seminars are the core principles of how Ramsey grew his company debt-free. EntreLeadership is available to small-business owners in two forms; a one-day abbreviated seminar; and a five-day master series located at a resort destination. The small business conference is taught by Ramsey and his leadership team. Ramsey also released the book titled EntreLeadership in 2011. The book rose to the New York Times Bestseller's list nearly overnight. EntreLeadership marked the fourth time Dave Ramsey has been listed on the New York Times Bestseller's list.
In 2013 Ramsey and the Lampo Group launched the followup to Financial Peace University, The Legacy Journey. This course is a biblically based training series for adults lasting seven weeks focused on "what's next?" after getting out of debt and, like Financial Peace University, integrates video teaching, class discussions, and small group activities. Some topics covered in this series are a deeper look into investing, basic estate planning, purposeful living, safeguarding your legacy, and discovering the keys to generational wealth and true generosity.
Ramsey supports the debt snowball method, where debtors pay off their lowest balance debt first instead of paying off their highest interest rate debt first. This is criticized by other financial planners, such as Suze Orman and NerdWallet.com, for, if the debt with the highest interest rate were to be paid off first, the individual pays less interest over time. However, a Kellogg School of Management research with over 6,000 participants, conducted by professors Gal and McShane, found that the debt snowball method was more effective. The article stated that the small victories gave the debtors motivation.
Ramsey states that investors can get a 12% average annual return and this is the number he uses in financial analyses. Critics state that using an average annual return rate is misleading for the compound annual growth rate is a better measurement when planning investments. Most individuals are unaware of this difference though. Critics also state that a 12% return is unrealistic. Following Ramsey's calculations could cause individuals to be seriously under-invested for retirement.
Ramsey recommends investors to hold all their investments in stocks, with no bonds. This advice is very optimistic and a recession towards an individual's retirement can quickly diminish their retirement. Bonds are often held in a portfolio to lower volatility and having no bonds pose great risk to investors.
In addition to that, he recommends that retirees withdrawal 8% of their retirement each year. This is much higher than the 3% to 5% recommended by academics. Withdrawing at 8% can result in a retiree outliving his/her retirement savings.
Ramsey recommends individuals buy term life insurance instead of cash value insurance or return of premium life insurance and invest the savings. This has caused many individuals to be stuck paying high insurance premiums forever for their premium is much higher at retirement then when they first joined. He does, however, generally respond to this critique by saying that life insurance isn't generally needed once a person has reached a point where life insurance isn't as necessary (i.e. no children or others dependent on a person's income). Ramsey recommends Zander Insurance, a sponsor of his show, and he is criticized for having this relationship.
The Nashville Scene has reported that Ramsey occasionally receives emails and letters containing the red-letter Bible verse: "And again I say unto you, it is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God." (Matthew 19:24) Ramsey interprets such communications as a rebuke of his own wealth and a call for poverty, dismissing these letters as “doctrinal nitpicking.” He instead points to Matthew 25:13-30 and the good Samaritan as examples of being a good steward of money. That is why he states he is unashamedly in favor of building wealth. As Dave Ramsey states, how can broke people help the poor?
In November 2013, Ramsey received significant criticism from other Christians over social media after posting an article by Tim Corley to his website, titled 20 Things the Rich Do Every Day.
The Total Money Makeover, Financial Peace Revisited, and More than Enough have been translated into Spanish.
Equities are extremely volatile and rarely provide the 12% annual return that Orman and Dave Ramsey tout for people looking to quadruple their income, Olen adds.
Let's take the case of a 25-year-old who is going to start saving today, and wants to retire when he's 65 with $1 million -- just as Ramsey mentioned on his Twitter page. If that investor assumes he'll make a 12% return per year on his investments, he'll need to save $97 per month. If, however, he assumes his return will be 6.7% -- the S&P 500's CAGR while factoring in inflation, which Ramsey claims to do -- that number jumps to $422 per month. Think about that: $97 per month versus $422. That's an enormous difference! For the hapless investor who saved $97 per month but experienced a more-normal 6.7% return per year, he will be over $770,000 -- or 77% -- short of his investment goal. I'm not sure why Ramsey harps on this 12% figure while not offering any solid numbers to back it up. His followers would be well served to dial down their assumptions before adjusting their retirement planning process.