Debt Distortion: Why Dave Ramsey and Robert Kiyosaki are BOTH Right

Imagine a world where everything you perceive to be true about finance, family, fitness, food, etc… is not what millions of other humans perceive to be true. Not only that – people attempt to bring you down for your beliefs, or talk quietly amongst themselves about how stupid you are for doing the things you do. To be fair, you don’t think that highly of them either. You’re experiencing selective distortion – welcome to planet Earth. A Tale of Two Titans Let’s take a look at two highly successful, well-respected financial gurus and their respective stances on debt: Robert Kiyosaki, author of Rich Dad, Poor Dad, says that there is such a thing as good debt – or debt used to buy money-generating assets like rental properties and business equipment.   Dave Ramsey, radio personality and author of The Total Money Makeover, teaches followers to avoid debt altogether, often quoting Proverbs 22:7 – “The rich rule over the poor, and the borrower is slave to the lender.” Both agree that  debt carried on credit cards and cars is to be avoided, because these things only make us poorer. Kiyosaki is not against using credit cards persay, but teaches that balances should be paid in full every month. While some see Ramsey’s stance on not using credit at all as extreme, the fact that the Federal Reserve estimates that almost half of U.S. households are unable to pay their credit card bills in full each month, and that these households owe more than $800 billion in card debt …

Over $1,000 in NIKE gear for FREE!

You’ve no doubt heard the old adage, “if it’s too good to be true, then it probably isn’t”. But what about when too good to be true changes to even better than before?! This is the case with the NIKE store survey offer at the bottom of their receipts — a strategy you can leverage to get over $1,000 in sweet NIKE merch for absolutely zilch. Here’s the scoop: My wife is the kind of shopper that plans ahead, she knows birthdays and other gifts she needs to buy for throughout the coming months, and finds some of the most ridiculous deals imaginable. (We’ll be sharing even more of her finds on the blog!) I like to call her the Coupon Princess because her mom is the Coupon Queen. One of the coupon/rebate offers that she is fond of is at our local NIKE factory outlet store. Up until about 4-6 months ago, when you took NIKE up on the offer to rate the experience you had with their store, they’d email you a $5 coupon good on any NIKE product in any company store. It was an easy $5 off for pairs of socks, mini-basketballs, and even occasionally a pair of shoes when the kids’ soles were wearing through. But lo and behold, over the past few months we’ve had more and more NIKE bags showing up around the house and I started inquiring about what was being brought in and at what cost. My wife and son started …

5 Beneficial Ways To Use Your Tax Refund

5 Beneficial Ways To Use Your Tax Refund While tax time can be a dreaded time of year, your tax refund can set you up for greater financial success IF you use it to your benefit. Seemingly unlike everyone else, I really enjoy tax season. Working at a financial firm for years, we were consistently busy just before tax day. While our clients were stressing to make the deadline, I had started preparing my taxes January 1. Minus the fact that I am a finance nerd, the excitement of  filing my taxes and deciding what to do with my refund made the process enjoyable. Assuming you’ll be receiving a refund, the big question is what to do with it to gain the greatest benefit? While the majority of people want to spend their tax refund right away, maybe this year you should put a little more thought into how you will use those newfound funds in the best way for your finances. Here are 5 ways to use your refund that pose the greatest benefit to your financial health: 1. Pay off Debt Whether you have credit card debt of $500 or a student loan debt of $42,000, paying off some of this debt can be beneficial to you. Paying off your debt may not seem glamorous, but it could boost your credit score and take away some financial stress. Consider using the amount on the lowest balance you have remaining in an attempt to knock out that debt once and for all, …

Need Help With Getting Out Of Debt?

I totally thought my wife had hit the Listerine too hard that morning. “$20,000 in a savings account?!” “Yes” she said as calm as can be. “Twenty-thousand dollars would make me feel safe and secure and then you can do whatever you like to do.” At the time we were 23 years old and working to blast away about $50,000 worth of debt between credit cards, car loans and student loans (not to mention a couple of car repairs I’d had to finance). All of this on an annual gross combined income of roughly $76,000. The question she answered from me was: How much do you need in savings to feel safe and secure? At the time I thought she was insane. Why would anyone need those kinds of funds set on the sideline when they could be invested in the market or real estate or FUN? While I’ll get back to my feeling about how much to have set aside for safety/emergency reasons (as well as what my wife and I ended up doing),  it seems the question how much do you REALLY need in savings has become quite popular. In my opinion, it was the study done by the Federal Reserve that began prompting the question more and more. The results, after all, were staggering — 46% of adults reported they would be unable to cover a $400 expense without selling something of value or borrowing the money from elsewhere. It was covered widely from Fortune magazine to …

Want To Get Out Of Debt? — Start Here.

At the age of 23 I was struggling under the pressure of nearly $50,000 in debt between student loans, credit cards, a car loan, and a variety of consumer debts. I remember putting purchases on my already-ballooning credit cards and rationalizing, “if I charge this, then I’ll have cash in my checking account.” My money programming was completely jacked. Looking back, I know exactly why and how it happened. My college career was one long social experiment. My Dad called it my ‘4-year break from reality’. I called it the longest and most expensive party I’ve ever been to. In the first few months of my freshman year, I signed up for a credit card through MBNA in exchange for a 2 pound bag of M&M’s and a seemingly unending source of fun (and ultimately, frustration). Upon graduation, I left my University with a healthy $8,000 in credit card debt at nearly 25% interest. (Almost all of it was spent at a place called Shagnasty’s. *true story*). Within four years I was completely debt free with the exception of a mortgage. For the past decade, my wife and I have lived a life of freedom and flexibility having now amassed a high 6 figure net worth. I want to share with you how to do it yourself… What got you here, won’t get you there. You Can Break Free This post is for anyone that wants (as desperately as I did) to break free from the bonds of debt. It is …

Student Loan Payback – Are You a Cow or a Buffalo?

When a storm rolls over the Colorado Rockies you can see it coming from miles away. The billowing clouds are a visual representation of the impending doom that’s about to rain down (quite literally) on the plains to the East. Out on those plains there are cows grazing that see the storm coming, and because cows want nothing to do with standing in the rain, they begin walking, trotting, then running the opposite direction. As they run to the East, the storm eventually overtakes them and they continue running with the rain. The effect being a prolonged bout of hanging out in the storm. The buffalo, on the other hand, also grazing in similar fields, see the storm coming over the mountain range and begin running headlong into the storm. The buffalo, bold in their approach, end up being in the rain for a fraction of the time the cows were. Instead of running away from the problem, they run straight into it. So when it comes to paying back student loans, are you a cow or a buffalo? When we produced the documentary Broke, Busted & Disgusted about the rise of student loan debt in America, we interviewed a young man named Justin who buffaloed his way through his loans. When Justin graduated from a state university with $32,000 in debt, he said it never occurred to him he had no money, instead he looked at it as if he had -$32,000. With $600 to his name and no …

8 Money Questions To Ask Your Spouse

Not On The Same Page Financially? Here are 8 Questions To Ask Your Spouse… Having been married for almost 17 years, my wife and I often fall victim to the assumption that we know what the other is thinking. We make decisions or snap judgments because we erroneously believe we know how the other might react before ever having a real conversation. While money issues are often listed as a primary cause of divorce in America, I tend to believe that the larger issue is money wasn’t ever REALLY talked about in the relationship to begin with and there were simply massive assumptions made about your finances (by both partners). For partners that have been together for a long time, perhaps it’s an unconscious attitude toward money that you both need to bring to the conscious level. To help you bridge the gap that may be growing in your financial relationship with your spouse, consider asking the following questions: How much do you need in savings to feel safe and secure? I first learned the importance of this question after reading David Bach’s Smart Couples Finish Rich. Bach suggests in the book that men and women have different risk tolerances and each may feel more secure with a different amount in savings. When I asked my new bride how much she needed to feel safe and secure, her answer made me think she’d hit the listerine too hard that morning… (her answer was $20K). My recommendation is figure out how …