My very unscientific survey of the personal finance blogosphere finds Dave Ramsey to be the most often cited guru. This is a bit of a difficulty for me, because of the major gurus he is the one with whom I am least familiar. For example, until last night I had never heard his voice. If you are wondering how that could possibly be, that’s because you didn’t realize how regional his appeal is, and you live in Ramsey Country.
I had to go on his website to hear his show. According to the site, it is carried, on tape delay, on an AM station in Boston. I’d never heard of the station before and it doesn’t come in on my radio. (Also according to Ramsey’s website, the show is not available in New York City, the nation’s largest media market, at all.) It is available on XM and Sirius, but even I am too frugal to pay a monthly fee to listen to the radio.
Turns out he sounds like a likable guy, somebody I wouldn’t mind having in the next seat on an airplane. This is in contrast to, for example, Suze Orman. On reflection, I think that the principal difference between Ramsey and Orman may be cultural. They have very similar core messages. But the Nashville-based Ramsey is Christian in the wholesome American family values way. The San-Francisco-based and gay Orman, who refers to herself as a “57-year-old virgin” is really not. Ramsey’s on-air persona is that of the amiable but firm wise uncle. Orman is the busybody mother-in-law.
Yet they preach largely the same message and leave no doubt that they don’t really think that much of their listeners/viewers/readers. Both apparently regard the audience as the equivalent of children, for whom everything must be simplified down to the barest absolute instruction, without any subtlety, lest the innocents misunderstand it and do something really stupid.
Ramsey is, as far as I can tell from the blogs, best known for his “Seven Baby Steps” program for financial success. I suppose the word baby is meant to reassure that the steps are easy, but the choice of term is a bit, well, demeaning, don’t you think? (And babies don’t walk all that well. Actual baby steps often result in bruises and prolonged crying spells.)
Reviewing and discussing the Seven Steps is apparently a traditional staple of personal finance blogs. Bible Money Matters did a series in February and Moolanomy had a long post in March, to name two relatively high-profile recent examples. And who am I to ignore such an august blog tradition?
The steps, from Ramsey’s website, are:
1,000 to start an Emergency Fund
Pay off all debt using the Debt Snowball
3 to 6 months of expenses in savings
Invest 15% of household income into Roth IRAs and pre-tax retirement
College funding for children
Pay off home early
Build wealth and give! Invest in mutual funds and real estate
Of course, I’m as interested in what others have said about them as what Ramsey instructs his charges to do. And I’m only going to talk about the even numbered ones, 2, 4, and 6 as wells as the last one, 7. The other three, 1, 3, and 5 are bland and uncontroversial. And what’s the fun in that?
[Photo credit Kamyar Adl]