Financial Guru or Group Entertainer

Posted by Tomas McFie

March 7, 2010

“… You choose”

I hit the search button in my car a few days ago and stopped at “The Dave Ramsey Show”.
This is what the caller had to say:

“I am the owner of two houses that are in Florida, one is worth $250,000 and the other $350,000. I have paid for both of them.”

“I own a transmission shop worth $400,000 and owe $70,000 on it.

“I own our current home which is worth $350,000 and owe $120,000 on it.

“My wife works and brings home $90,000 after taxes and I work at my shop but have not been able to bring home any salary due to the economic downturn for the past 6 months.”

“I owe $90,000 on credit cards trying to float expenses at the shop due to the downturn.”

“My wife does not want to sell either of our properties in Florida because we would lose over 45% by the time we pay listing and seller fees.”

“What should we do?”

Dave begins by ranting and raving about this guys wife, that she is being totally unrealistic in this crisis position, Then Dave advised the poor man to sell one of the houses he owns in Florida and get out of debt! This is tragic advice for multiple reasons. The following are a few.

It assumes he values money over his relationship with his wife by mocking her concern and advice.

In a very depressed market it still assumes he can sell his property(s).

It assumes that by simply paying off his debt he will not continue to incur more debt in his business.

Besides it assumes that his financial disaster is over.

Furthermore, it goes against common sense by assuming that getting out of debt produces financial freedom.

Now we will study the facts:

If this gentleman can sell his house for 55% of what he has into it then he will receive max, $190,000 on the $350,000 home and less on the $250,000 home ($137,000.) This will pay off his current debt and leave him with $47,500. At the rate he has been spending money in his business this will last him roughly 3 months. Then he finds himself right back to where he started from. Only this time he has no equity to liquidate and “save himself” from being in debt. Strike one Dave!

Secondly, it is only an allusion to be debt free in the society of today. The only debt free people that I have seen are the people that are holding signs in parking lots and on the street corners. We really should just face the fact that nobody can be debt free unless they own absolutely nothing. If you own anything, than you face taxes, service fees, utilities etc. Guess What? This means that you have to live in debt. Strike two Dave. No one wants to be a homeless hobo.

Now in the third place Dave, you have completely ignored the fact that this man that called in has had some sort of financial plan. When you look at his entrepreneurial endeavors this becomes obvious. Your hack attack at his wife was self degrading and certainly unacceptable. The attorney trick was employed by you. If you cannot find fault with the deed attack the person behind the deed. This makes strike three Dave, you are out!

Actually this fellow has made some very sound financial decisions as evidenced by his asset accumulation and business acumen. And I will wager that his wife was not just an incidental bystander during that time. To insult and mock her is totally assign. But what can you expect? Call an entertainer for financial advice and you will get what you called for, entertainment right?

So besides prolonging bankruptcy as a result of selling his houses, what would be a good alternative?

Let us start with a little known, but nevertheless a true fact. Equity that is invested in real estate has no rate of return associated with it! The wealthy having known this for centuries have acted accordingly. This is the reason that the Infinite Banking Concept can be so beneficial to you. By Becoming Your Own banker you can have your money in a liquid form and secure place, still use the asset(s) which your money purchased and use the money that bought the asset(s) without penalization. Fact is, if you use the money for financing current needs and capital ventures… you will end up with even more money and assets with only one little caveat…you will not have to work any harder or longer to make that extra money because your money will be working too.

So even if Ramsey rants and raves against participating whole life insurance, do not be fooled, who cares what Ramsey says, if it is not true? The truth is that the people that pay these entertainers are the same ones that make money off of you by using your money at your loss.

Tom McFie PhDis a professional financial coach and is nationaly known for helping people recover the money they currentley spend. Don’t Make another payment until you have viewed his Infinite Banking Video Then Contact him he can help you

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