Where I stand
Let me start with Dave’s side. I’m a huge advocate of having a budget. I don’t think Robert’s stance would differ on the idea that a budget is required… you have to know your cash flow in order to run a business or purchase a property.
2. Use Credit Cards wisely
I don’t agree with the idea of not having credit cards. There are many times that business owners, if we use credit cards properly, can reap benefits. Credit cards have better protection than many debit cards, and many offer points back. So for that reason, I am leaning toward Robert about credit cards.
3. Live Within Your Means
I do agree with being frugal and I do agree with saving a little bit of cash (but not a lot). Budget, live a frugal life, don’t spend more than you make. I’m not a fan of over doing this part, we are not guaranteed tomorrow so balance this with living life and enjoying the things you love most.
4. Learn from Your Mistakes
Am I going to make mistakes? Yep. Probably this week I’ll make plenty… but you better bet I will do my best to learn from them!
I’m not a big fan of mutual funds. Today we have exchange-traded funds or index funds, and we have other things which can traditionally give us lower fees and different return scenarios. So I’m just not as big fan of mutual funds.
6. Start a Business
I’m on Robert’s side, yeah, you better believe I agree with starting a business! I see the ramifications of the business and how it helps me build net worth. I believe in using assets and not liabilities. I bought a car for twelve thousand dollars cash, I’m not going to go out buy a $60,000 car… it makes no sense. Do I agree with buying real estate, businesses, individual equities, and things of that nature? You better believe I do.
7. Smartly Use Debt
I like the idea of using SOME debt. What I disagree with Dave is to pay the house off. You’ve got tax ramifications, legal ramifications, every state is different on homesteading exemptions, the list goes on and on. I like the power of leveraged real estate and how efficient they can be at building true wealth.
8. Use the Tax Code
I’m going to use debt because I know that using debt aggressively in my business, and using it purposefully, will help me build net worth faster. I also know how debt “enhances” my tax returns. Dave Ramsey rarely talks about this.
I’m going to use the tax code to my advantage. I’m going to continue working with a good qualified tax planning CPA to help me.