Wednesday, February 25, 2015

The Money Answer Book by Dave Ramsey (Book Review #18 of 2015)

The Money Answer Book
I checked out this book because I’m teaching Dave Ramsey’s FPU next month and have been working through the course material. This book is a FAQ for Dave Ramsey’s advice.
Each Q/A is a couple pages long and the book is a fast read. There is nothing in this book that you can’t learn by Googling for the information. The questions range from “what is a debit card?” to “My spouse and I have separated and I’m terrified he will bankrupt me. What do I do?”

All of the teaching points and anecdotes from Dave Ramsey’s course are in this book. If you’re teaching the course (and do so frequently) then look at buying a used copy of this book. Otherwise, you would do better to check this book or Total Money Makeover out from the library and use them instead of paying full price for his course. If you’re engaged or newlywed, check out Matt Bell’s Money & Marriage as it’s the same information and advice.

The thing I like least about Ramsey is his investment advice not including investing in index funds. Just signing up for a mutual fund, even a no-load fund, is going to result in higher fees and results that are repeatedly proven over time to be no better than an index fund. An index fund isn’t available, however, if you want to invest socially or avoid certain companies. This book does contain a couple of alternatives if that’s your thing.

He is also pretty nonchalant about finding a second job to make ends meet when trying to pay down the debt of past mistakes. There are quite a few people for whom it’s not that easy, and they don’t need the guilt trip.

My experience qualifying for a mortgage with no credit history also differs from what he claims is reality. The world is different than it was 10 years ago.

He misunderstands giving 10% as a biblical mandate and rips some scripture out of context. He’s a (non-licensed?) financial adviser, not a theologian.

There are some nuggests of wisdom and factoids worth repeating:
“Only contentment brings peace.”

70% of households live paycheck to paycheck.

“Laziness is a sickness, and it will get you absolutely nowhere in life….You need to learn from your mistakes or you--and your children-- will be doomed to repeat the cycle.”

“The German root word for ‘debt’ is the same as for ‘guilt.’”

“Many a man has failed because he had his wishbone where his backbone should have been.” - Ronald Reagan

“A little bit of controlled pain when you’re six will change your life when you’re thirty-six.”

“A budget is telling your money where to go instead of wondering where it went.” - John Maxwell

“We do make enough to save money; we just aren’t willing to quit spoiling have enough left to save...It just has to become a big enough priority for you.”

3 stars out of 5.

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