Dave Ramsey Clients

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noggin's picture
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Joined: 2004-11-30

I  got a call from a smaller client ( less than 100k household) last week and they are going with a Dave Ramsey ELP ( endorsed local Provider) as their financial adviser. I was somewhat amused by the transfer forms that I got. They sent the good old liquidate and transfer to an American Funds IRA. I, of course ,let the client know what his costs were to do it and let them know that I wished them well. I only originally took the accounts as a favor to their father in law who has a nice account with me....it seems every time you do that you get a time waster. The real question is why isn't that ELP for Dave Ramsey required to disclose that they pay a fee to Dave Ramsey to be that endorsed local provider??   

Ron 14's picture
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Joined: 2008-07-10

Thats a great question. I didnt even know the ELP's paid him a fee. That seems to be contradictory to his "philosophies." Well I hope they enjoy their  growth / growth and income / income / cash portfolio. I flipped through one of his books once and when I got to the part where he assumes equity returns of 12% I quickly put it down. Good luck with that Dave !

Rob's picture
Rob
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Joined: 2009-04-01

Ed Slott has a similar program.

deekay's picture
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Joined: 2007-05-15

Ed Slott is nowhere near the public figure DR is.  The main difference is, Ed Slott actually knows what he's talking about.

navet's picture
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Joined: 2010-02-25

Dave Ramsey: "Eat beans and rice, pay off all your debt, tithe, invest in a good growth mutual fund". How much do people pay for that sage advice?

Vensik's picture
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Joined: 2010-01-30

Hmmm.... that's interesting.  I was invited this week to a DR seminar on Sunday by a client, I didn't know much about it but thought... well a bunch of people sitting in a room thinking and talking about their finances can't be too bad a place to be on a Sunday.  So I agreed.  I know this client has a decent sized account and is just looking for some idea's on reducing his revolving debt, but I had given him my "One of the ways you compensate me is by referring" shtick and this was his first suggestion.  I'll still go but I didn't know he had recommended advisors. 

gettingstarted's picture
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Joined: 2009-09-25

I live close to Dave.  His office is almost visible from our office.  Some pay upwards of $1000 a month - some way higher to be an ELP.... The Nashville area ELP is a Raymond James office...

I am legend's picture
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Joined: 2010-03-04

navet wrote:Dave Ramsey: "Eat beans and rice, pay off all your debt, tithe, invest in a good growth mutual fund". How much do people pay for that sage advice?Funny stuffThe real funny thing is that people will listen to him and think he knows more than you do!

navet's picture
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Joined: 2010-02-25

He's a great, common sense guy. But his schtick is budgeting. His investment advice has always been laughably simplistic.

gettingstarted's picture
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Joined: 2009-09-25

Dave's a real tool.  It's pretty common knowledge around here that he owns a pretty sizable chunk of Zander Insurance who he plugs at every possible moment.  Also he started the ID Theft program sold through Zander.  He lives in a new house on top of a hill in exclusive area, around 20,000 sq ft.   

Rhett Captain's picture
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Joined: 2010-01-01

ELPs pay something like $30 for each Dave Ramsey referral.  Don't know if it is disclosed but I'm sure FINRA would have shut it down if there was something questionable about the process.

Northwestern's picture
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Joined: 2010-06-01

Interesting take on Ramsey's ELP's.http://www.erictyson.com/articles/20090313

ZwingDing's picture
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Joined: 2010-09-15

Ramsey has excellent advice for people as it concerns building a budget, getting a grip on appetites for spending, and getting out of debt. He reinforces it all with a compelling personal story.......That said I wonder if anyone qualified to do so can speak to his receiving a fee from ELP's. It's not just investments, he also funnels people to one specific insurance firm, and real estate agents in many locations... It sure seems like a huge conflict of interest. I don't have the source so I can't back it up but I'm pretty sure the price tag to become an ELP is $1,500 per month....$18K per year. I'm assuming it is under some kind of advertising exemption.

Vensik's picture
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Joined: 2010-01-30

Well, I've had so many clients take the class and call asking questions that I finally took the class so that I could have a better discussion with them about it.  (Specifically an email he sent out telling everyone to never buy a bond in any form?) I also still didn't mind the idea of sitting in a room full of prospects discussing their finances.  We're in something like week 10 now.  There are 3 small groups in my class.  I now have 4 new clients from my small group, 2 of which are within 5 years of retirement and 1 mid 50's whose million dollar term policy was just delivered to my office friday and a farm owner that I am refinancing the mortgage on, which is freeing up enough to max out 2 IRA's annually (650k mortgage at 8% down to 4.25%).It has been well worth the class, and I'm not an ELP.  His investment advice is terrible, and very easy to dispute in the classroom and with your small group.  His Advice on owning gold in a portfolio is not to because the only way to trade gold is through options apparently??? Don't get me wrong, I think he should help people do what he's good at.  getting them out of debt.  But he learned a couple of things about investing in the 80's and now walks around like he knows every investment out there and the best thing for any person to do, 20 years old or 85, is to put ALL of your money into a growth and income A share mutual fund.Just thought I'd give an update. 

Spaceman Spiff's picture
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Joined: 2006-08-08

Why do I get the impression that this guy doesn't really want to know anything about Dave Ramsey ELP's?  Hey, moderator, one got through. 

Amp2Indy2006's picture
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Joined: 2008-08-13

I teach a class, just finishing up with final 2 weeks. I tell the folks that the instruction is theatre, personal knowledge and not a one size fits-all approach.  While most of what is said is truthful, it also tends to boarder on the intelectually dishonest.  Dave means well, but he is NOT licensed, is not accountable for his general financial advice and skirts the issues quite well.  I get the class to nod acceptanance that they understand and should ask specific questions.  I am an ELP.

7 Figs's picture
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Joined: 2009-06-15

Anytime I have a prospect that refers to Dave Ramsey, I ask them a few questions.1. Are you seriously thinking about taking financial advice from someone that signs their tax returns as an, "entertainer"?2. Are you seriously thinking about taking financial advice from someone that filed bankruptcy twice?3. I then tell them, "I got in a fight with my wife, I need to cut this conversation short".  When they tell me they're sorry and they will call back later, I respond, "oh, no worries, I'm just flipping through my cable tv to find either Oprah, or Dr. Phil so I can find some good, generic relationship advice to fix my personal problems".  When they laugh, I say, "kind of like listening to some joker about poor people budgeting".  End of Dave Ramsey rhetoric.By the way, you don't find many $1M+ accounts listening to Dave Ramsey.

Spaceman Spiff's picture
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Joined: 2006-08-08

That rhetoric sounds like it's coming from a guy who really doesn't know what Dave Ramsey's program is really all about.  Investing really isn't the main focus.  It's about getting people to think about what they're actually spending money on.  Then it's about planning on how to get out of debt so they can start to become the clients that we are all looking for. I certainly wouldn't rely on what I hear from Dr. Phil's show to fix my marital problems.  There's a huge difference between getting pop psychology advice from Dr. Phil and learning how to budget properly from Dave Ramsey.  And to answer your two questions - 1) Not entirely, that's why I'm calling you 2) The man has pulled himself out of bankruptcy twice and is now a multi millionaire - so yes, I'd take financial advice from him.  Would you take financial advice from Donald Trump?  How about Walt Disney or Henry Ford?  All of those folks, along with countless others, have filed bankruptcy and gone on to become incredibly wealthy.  Dave doesn't try to hid that he has filed for bankruptcy twice.  Instead he's telling people that he knows what it's like and here's what to do to avoid it.  And he probably has about 10X the amount of money you do.  I don't agree with the investment suggestions he gives in his program.  It's far too basic.  But the average person could do themselves a lot of good if they followed his advice on budgeting, spending, and saving. 

Stig's picture
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Joined: 2010-12-17

Good stuff. I love it.7 Figs wrote:Anytime I have a prospect that refers to Dave Ramsey, I ask them a few questions.1. Are you seriously thinking about taking financial advice from someone that signs their tax returns as an, "entertainer"?2. Are you seriously thinking about taking financial advice from someone that filed bankruptcy twice?3. I then tell them, "I got in a fight with my wife, I need to cut this conversation short".  When they tell me they're sorry and they will call back later, I respond, "oh, no worries, I'm just flipping through my cable tv to find either Oprah, or Dr. Phil so I can find some good, generic relationship advice to fix my personal problems".  When they laugh, I say, "kind of like listening to some joker about poor people budgeting".  End of Dave Ramsey rhetoric.By the way, you don't find many $1M+ accounts listening to Dave Ramsey.

Stig's picture
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Joined: 2010-12-17

Spaceman Spiff wrote:That rhetoric sounds like it's coming from a guy who really doesn't know what Dave Ramsey's program is really all about.  Investing really isn't the main focus.  It's about getting people to think about what they're actually spending money on.  Then it's about planning on how to get out of debt so they can start to become the clients that we are all looking for. I certainly wouldn't rely on what I hear from Dr. Phil's show to fix my marital problems.  There's a huge difference between getting pop psychology advice from Dr. Phil and learning how to budget properly from Dave Ramsey. 7 Figs was joking.And to answer your two questions - 1) Not entirely, that's why I'm calling you 2) The man has pulled himself out of bankruptcy twice and is now a multi millionaire - so yes, I'd take financial advice from him.  Would you take financial advice from Donald Trump?  How about Walt Disney or Henry Ford?  All of those folks, along with countless others, have filed bankruptcy and gone on to become incredibly wealthy.  Dave doesn't try to hid that he has filed for bankruptcy twice.  Instead he's telling people that he knows what it's like and here's what to do to avoid it.  And he probably has about 10X the amount of money you do.  Bankruptcy. Twice. And you'll take advice from him. Because he is a multi-millionaire.What about a Financial Advisor who has 2 bankruptcies on his U4 or Broker Check? Probably not.Its funny that anytime someone posts on this board that they have some credit dings and asks a "what if" question about compliance and their situation, the consensus come back and say something like "If you can't manage your own finances, why should someone else trust you..."Dave sure as hell didn't come out of bankruptcy twice investing in Mutual Funds at 12% return. Can you imagine the tactics and what type of leverage was employed to take the man from bankruptcy twice and propel him into multi-millionaire status? Probably not anything that a sane Advisor would recommend to their clients trying to build wealth. He was already bankrupt twice and probably didn't care what it took to get rich and didn't care about BK #3.In short, what was right for Dave, Walt, Donald, and countless others cannot be taken as advice for the masses.I don't agree with the investment suggestions he gives in his program.  It's far too basic.  But the average person could do themselves a lot of good if they followed his advice on budgeting, spending, and saving.  Then why follow Dave at all? There are countless alternatives that follow the basic formula of "spend less than you earn" without all of Dave's other babble.

7 Figs's picture
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Joined: 2009-06-15

Spaceman Spiff wrote:That rhetoric sounds like it's coming from a guy who really doesn't know what Dave Ramsey's program is really all about.  Investing really isn't the main focus.  It's about getting people to think about what they're actually spending money on.  Then it's about planning on how to get out of debt so they can start to become the clients that we are all looking for. I certainly wouldn't rely on what I hear from Dr. Phil's show to fix my marital problems.  There's a huge difference between getting pop psychology advice from Dr. Phil and learning how to budget properly from Dave Ramsey.  And to answer your two questions - 1) Not entirely, that's why I'm calling you 2) The man has pulled himself out of bankruptcy twice and is now a multi millionaire - so yes, I'd take financial advice from him.  Would you take financial advice from Donald Trump?  How about Walt Disney or Henry Ford?  All of those folks, along with countless others, have filed bankruptcy and gone on to become incredibly wealthy.  Dave doesn't try to hid that he has filed for bankruptcy twice.  Instead he's telling people that he knows what it's like and here's what to do to avoid it.  And he probably has about 10X the amount of money you do.  I don't agree with the investment suggestions he gives in his program.  It's far too basic.  But the average person could do themselves a lot of good if they followed his advice on budgeting, spending, and saving.   I normally would not respond to something like this, but there are likely new FAs reading this, and feel obligated to make a point.First, I am a believer that failure is often a much better teacher than success.  With that said, it is purely ludicris to put Dave Ramsey in the same peer group as Trump, Disney or Ford.  If you were trying to make a point, it didn't happen.  Here's a knucklehead that teaches people in essence to live on less than they make, and you think he is similar to some captains of industry?Second, I would not call Dave Ramsey incredibly wealthy.  Maybe affluent would be a better word choice.  I would argue his net worth is less than $2M, and definately not any greater than $5M.  To assume that he is worth 10x more than me is funny, given you do not know who I am.  And, yes, I am familiar with him. 

Amp2Indy2006's picture
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Joined: 2008-08-13

Are you the co-owner of Zander Insurance?  ROFL

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