It’s roulette to buy beaters in hopes of trading up. I’d rather someone purchase a cheap 2 year old vehicle (even if financed) and drive it for 15 years, than pay cash for beaters in hopes of trading up (you will realize losses on the maintenance/repairs unless you can do the work yourself).

As for DR’s 12% claim: it’s a worthless number. But the same case could be said of JLP 9% claim: just because we have seen a long-term historical rate of about 9% yearly (who invests for 84-years anyway), doesn’t mean that the market will perform considerably below 9% into the foreseeable future. Past performance IS NO GUARANTEE of future returns.

#11 Jack) yes, only the returns adjusted for inflation matters anyhow — so the entire argument over 9% or 12% is academic.

Maybe I can help clarify … Yes, 12% (or higher) annualized return is possible. You can research growth funds with at least a 10 year track record which are doing this here:
http://screen.morningstar.com/FundSearch/FundRank.html

Can you just take your money and leave it in the same fund forever and make 12% … No, and DR doesn’t teach this. DR suggest you educate yourself, watch you investments, and adjust when necessary. The rub … for many its simply a disagreement on what is plausible. Dave strongly recommends people invest in Roth IRA’s … is this bad? Dave recommends investing in your company’s 401K and taking advantage of the matching funds … is this bad? He likes and recommends a tool for this called Mutual Funds … He recommends diversifying over multiple types of growth funds, and suggest only investing in funds with substantial track records of success … is this bad?

Yes , DR makes money off his business, books, and endorsements (Great for him!)… but I’ve dealt with all of those entities and guess what …. I’ve been making and saving money too!

Just some thoughts from somebody who is currently successful using DR’s recommendations. Good luck to all no matter what your personal investment choices are

The only thing Dave is helpful for are math-challenged people who are in debt and who need some common sense advice about living within their means. Also who really aren’t able to get satisfaction for having their net worth increased or their total debt decreased and need to get satisfaction from having one more tiny debt paid.

It’s not just investing. I’ve not taken loans for cars for quite a while, his number of $475 a month sounds awfully high. Also when I paid for my new car for cash, I didn’t think of it as “driving free”. If I had I would’ve bought a more expensive car for cash (after all it’s “free” if you use your savings, right?), but I was thinking about spending a whole lot of money. It doesn’t matter if it was a special account you marked for the car or just “savings”, it’s still money. Additionally, repair costs have to be factored in. Also, how important is reliability for you – can you live with your car stopping in the middle of the road while you are driving to work, would you have a ride to work if you need to leave your car in a repair shop, can you do stuff yourself, etc.; these things need to factor in a decision.

His generic “all debt is bad” message regardless of interest rate is very simplilstic, but this is a different subject.

@Sam Burton #8 “He has a pretty good track record of successful investing and guiding people. His Endorsed Local Providers are pretty strong.

Having said all that, I used the same scenario he did in my book, but used a ‘more common’ 10% number.”

He has no track record of successful investing at all. He made money on his business and his book, not on stocks. His own money are invested in his business not “growth mutual fund”.
Have no clue about his local providers, can’t comment there.

I wish you luck with your 10% estimate….

I was curious, so I did a search for one of his endorsed local partners. He recommended a commissions-based advisor with no finance degree, no series 7 license, and no CFP designation.

Oh, did I mention Ramsey gets paid handsomely for making this crappy recommendation?

This guy is laughing all the way to the bank while touting his Christian status symbol.

Where did he account for the taxes paid on these unrealistic returns on investment?

Another point is that while driving these first few clunker cars, who’s paying for the repairs? Is that money paid out in addition to the $475 being put in the bank toward the next car?

And the most obvious delusion – how is putting $475 a month in to a ‘car fund’ driving ‘free’? Is Dave Ramsey putting that $475 each month in all of our accounts for us?

Sometimes it’s tough to take this guy seriously.

Those data show a 0.8128% monthly return over those 40 years. To get the figure you quote (0.76% per month), the returns from 1926 through 1970 would have been 0.7118% per month.

The obvious break at that point is the loos of the gold standard, so perhaps it would be better to compare the total returns to inflation.

I’d love to get a copy of your data. I could not find monthly data earlier than 1970.