Financial Advisor Told Me To Invest Instead Of Paying Debt

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Comments

1. Now the caller shouldn't completely stop investing in the market just because he's paying off debt. There's a structured way to pay off debt. Would Dave Ramsey suggest pulling money out of your 401k or IRA to pay off a car loan? Hardly. And if he suggested it I would call him an ignoramus. But the so called Planner in Austin is not counting on the client getting a 1099 every year and paying taxes on the gains of his investment.
2. where is this show based?
3. Brian's "financial advisor" is not moronic, he's smart if he convinces uninformed clients who hand over their money to "invest" at 6% and maintain their loan debt at 3%, only because the "advisor" gets a commission for doing so. Unethical, but still smarter than the client who falls for it. There are so many unscrupulous persons who claim to be experts in EVERY field, especially in the financial and medical industries. All ripoffs.
   
   But have you ever had a financial advisor ever actually tell you WHAT that risk factor is, in real math numbers, when asked point blank? No.
4. 4:18 I'm an 8th grade math teacher...I'm offended : )
5. This interaction is asinine, not the supposed suggestion of the caller's adviser. Let's put it this way: If the caller could borrow money with an interest rate of 3%, and invest in a low-risk security with fixed-income yield of 4.5%, by what mathematics or soul-searching would the manoeuver be idiotic?
   
   Dave Ramsey's encouragement for people to consider their finances is appreciable. His outlandish, egomaniacal, dogmatic disposition, however, is not.
6. Plus, if my financial advisor is talking about 6% like that's something to be excited about, that's dumb too!
   
   You'd have made an average of a 6% annual return if you put your money in the day before the '08 crash and left it in there until today. The second worst financial disaster in American history, coinciding with THE WORST possible timing still gives you 6%. No, 6% does not excite me.
7. I invest directly with Vanguard - no broker or adviser fees!
8. I have no money to invest. Until I pay of my debt. it's taking every spare dime I have to make the minimum payments on my credit card debt. F U Debt! :)
9. I still don't get it. If someone is 25 and has 25k in student loans at 3-4% interest and starts paying off the loans aggressively, depending on their income it could take 4-5 years right?
   
   Wouldn't that person be losing out by not investing anything? If the person doesn't invest from age 25-30(bc he has to pay student loans) isn't he losing out on 5 years of compound interest that he will never be able to recover?
   
   From what I understand, it's not the same when someone invests $1000 at 25 compared to age 30 bc they have time on their side to help that money grow right?
   Is someone able to explain this?
10. money rule 1: invest in the known before the unknown [debt is known]
11. yet Dave doesn't know the difference between average and compound rate of return.
12. Anybody ever notice Dave just hangs up on folks?
13. haha i seen the title and had to see how this went. So funny. "My comeback? Your fired." LOL What i like to hear. Keep up the good work Mr Dave
14. If you don't have access to a workplace 401K and are not a business owner, you are limited to $5500 per year in retirement investments. If you forgo a year of investing in your retirement to maximize debt pay down you will NEVER EVER get that $5500 of retirement space back EVER again! 3% debt? yeah, that can ride at minimum payments while you max your IRA if you have the cash to do both. If you are constantly increasing your debt - that is a separate issue from investing in your retirement. A 22yr old college graduate would have 40 years of IRA investing to look forward to (Roughly $220,000 of tax deferred or tax free investing). If you spent 5 years paying down student loans instead of building your retirement you just lost $27,500 of tax free or tax deferred investment space - LOST FOREVER!
15. It's usually best to pay off debt before you invest. The interest in debt is higher than any interest that grows your money.
16. I am an experienced stock trader. I think that paying off debt involves risk as well. Generally when you hold cash you have options, vs. retired debt and fewer options. If this caller is comfortable investing then it is ok. I suspect he is a novice so anything can happen, and paying off the debt makes more sense in that case, but not necessarily what I would do. Best case is as the "advisor" suggests, you pay off the car and have cash also. My first rule of investing .... rely on no one else's advice.
17. This is one of the ways where Dave is very short sighted: The advise was NOT TO TAKE OUT A LOAN. It was YOU ALREADY HAVE A LOAN.
    
    And you have the following choices:
    A) pay off a loan you can afford to carry, and invest in a negative ROI
    B) make the payments you can afford, and invest in a positive ROI
    C) make the payments you can afford, and invest in stuff
    
    Dave is so blindly afaid of debt he never do this math.
    
    For the last few years this is the result of that 40K
    A) = have $40K - the loss of value in the cars for spending the $40K
    B) = have $60K+ for spending the $40K
    C) = have nothing because you spent the $40K in stuff + the garage sale $ of the stuff
    
    Dave's ignorance and bias shows here. The advice was not to go use the credit card to invest, it was based on where you are starting "B)" has the most up side for what you can afford. He just blindly assumes the risk was not in there. What he should have done, is asked the guy to get the risk adjusted numbers, and he costs more people more money than he will aver admit in the years he delays their retirement planing.
18. Always remember. If you can borrow money from some place at 3% and invest it at 6%, the 6% will come with high risk of failure because the banks are not morons to give you money at 3% when they could have directly invested it at 6%.
19. ill never go to a financial advisor..nobody has your best interest in your money but you.
20. my adviser said that too. I told him thanks but no thanks. not till I'm in baby step 4!