Dave Ramsey’s Financial Peace
Jun 25th, 2008 by brianschettler
I just finished Financial Peace Revisited by Dave Ramsey. A pretty good read with sound financial advice. I especially thought that the chapter about compounding interest was very good, although you have to remind yourself that after 40 years of saving, inflation has wiped out a good portion of your gains. It’s easy to look at saving $2000/year and after 40 years you have $2,000,000. But that’s two million 2058 dollars, not two million 2008 dollars. Also, he was basing his calculations off of 12% interest rates which are quite high for right now.
It reminded me of two different schools of thought when it comes to spending money. One side says, “Who am I to deny myself? I only live once! It’s just money and I can’t take it with me when I die, and as long as I work I can always get more. I should spend money and enjoy myself.” The other side says, “Woa woa, now. We should save for a rainy day. It’s a security blanket, because unexpected events wipe out a lot of people, financially speaking. And often if we wait a while, we’ll see that buying xyz wasn’t really a good decision.” Right now I definitely fall in the latter camp. But I think happiness, like most things, is somewhere in the middle.
Also: I wonder if it’s possible for someone starting out to stay completely out of debt in today’s world?