it is basically delaying the buy of the more expensive car in a few years later while driving a cheap clunker, which could involve lots of repairs too.
while the conservative 12% is BS, the concept is solid. if you're use to paying for a car payment, sell the car to pay off the remainder of the loan and buy something cheaper. Continue putting away the money you're use to spending in the first place, and you're budget doesn't change. good concept, but if you're broke and drive a piece of shit car because you can't afford payments in the first place, it doesn't work xD
Everything cost U money. It's just a matter of how & like the vid said yer conditioned. I got news for all you consumers. If you don't think a new car can't break down & cost you half a days work you're wrong. New 1's can still break down. The used car? It's not like you're burning the money this guy says put into a fund. You now have a mechanical allowance SO USE IT!
U don't want to work on cars? So what? You don't want to be debt free too. Get a repair book & most cars have dedicated forums
I'd love Dave to tell me where I can get a pretty conservative 12% in mutual funds. Of course, to prove your point, it could never lose money, either. Several years and one market meltdown later and I'm still waiting for him to explain that to me...
2. The tax, title, insurance and registration fees are just part of the price you need to pay for the vehicle... plan accordingly
Don't mean to be harsh by any means but it's amazing to me how many people actually fight to come up with reasons to give the bank money without considering alternative options
Or just get one that's going to the scrapper (or just a bad used one) but still legal to drive.
I'd imagine there are lots of them in a country that lives out of their cars.
Fix it up yourself with parts from a junkyard, only turn it in to a shop for major repairs and do the checkups yourself if your insurance company allows you to (not gonna have any second hand value anyway so who cares about a fancy logbook).
Most importantly, you'll learn a lot from it and save money.
Sure hope that first clunker lasts that 10 months you need to save 4600. Risky buisness, I'm trying this whole cheap car thing, I kind of miss the peace of mind of my new car and evil car payment.
If you cant afford to make a car payment, how are you going to have the cash to put into savings. You would be better off buying a bar of gold each month for 12 months then selling them all at the end of the year for 2 3 0r 4 times what they cost you and buying the car you want. Own your own car fix your own car hope none of the cars break down on your way up to you next newer better buy.
@phoenixman8569 Work harder and smarter. Produce more and get pay rises.
If you can't afford to save $464.00 a month you can't afford to pay $464 a month on a car payment either, So you need another sloution to your earning problem.
@50MillionMissing even 8% just means it takes a bit longer. The idea is you get more in life if you delay spending while you earn interest rather than be impatient and spend now and pay interest.
Sounds like a bunch of "broke people attitudes" here a bunch of "know it alls" and Im sure you guys are all rich right? Oh and dont forget the debt you owe.
ok free car? this means that you need money to begin with--if you need the money to have made the payments you still gotta have money --it says free car not buy a car straight out by saving money
Why spend $500 on a nice tv now if it's only going to be worth $50 in 5 years? Why buy that new game for $60 if it's only going to be worth $5 later on?
Sure you pay $33k for a car worth $6k in 5 years but you get $27k worth of benefits/enjoyment during those 5 years. So you're paying $5,400 a year to look nice in the latest car, not worry about it breaking down on you because it's new, and you'll still be covered by the factory warranty.
@bus5000 If a new TV is only $500 swoop it up. As for the game, play the demo, rent it, if you still want it, buy it used. Then trade it in towards your next game. Not many cars to most people are worth 27-33k for 5 years. You are paying 5,400 to look nice in the latest car for ONLY THE FIRST YEAR after that you are just paying 5,400 a year for a car. And if you think a new car doesn't break down, YOU'RE PLAIN WRONG!
@whatdupdoh True, but if it's new, it has a Warranty, therefore you don't have to worry about Break downs.
Seeing as how most cars are exactly the same for 5 years, if you buy a car in it's first redesign year, then the car is worth a lot more in resale. Say you buy a 2011 Charger new, it's going to be worth the same or very close to a 2015 Charger in 2016 when the next Charger comes out, and you get 4 more years of enjoyment.
Also consider this: If you invest in a mutual fund in taxable brokerage account, be prepared to pay a capital gains tax if there is an appreciation on your original investment. Furthermore, if the mutual fund pays a dividend or capital gain, which it might, you will be given a 1099 for that 'income' too. Consider all the facts before you implement this strategy
FALSE!! Great idea but details are all wrong. Consider the following: if we use the sp500 to represent the stock market, the median return on any rolling 5 yr period of the sp500 is approx 10%, the high is 28%, and the worse is -12%. Furthermore, since 1927 the sp500 has ten negative 5 year rolling periods. Investors beware - returns are not guaranteed and the illustration at 3:04 would assume 12% to be constant - FALSE. Lastly, the formula doesn't factor the inflationary rise in car prices.
I love reading all the self-defeating comments on here. These people will be enslaved by the bank for the rest of their lives, at their own will. This plan is workable on so many levels. Even since the big "crash" in 2008, it's extremely easy to find a good mutual fund that has averaged 10-12% returns over the last 3, 5, and 10 years. Mutual funds vastly reduce the risks associated with investing.
@unboxingguru1 You save the 464 dollars every month. Instead of paying a car payment, you put it in the bank. Of course you have to have a decent income for this to work.
Dave talks about not putting your $10k Emergency Fund in growth stocks because its not safe in the short run. You won't drive free cars for life but if you factor a safer 4% return and pay in a certain amount each month, you can pay cash for all your cars and it won't cost you more than your payment..however, an argument can be made for having a payment and investing the difference in a long term/12% fund..you can actually come out ahead at retirement. You won't be debt free but you'll be richer
@Watersmith53 Yes over a 10 year period yes, but in "44" months? Mutual Funds are designed for the long haul, this video encourages people to buy for the short term. The Investment Company of America through American Funds historically has done 12.1%, but that is over 77 years. Plus you have to figure expenses, C-Share ICA is 1.43% annually. I am all for investing with mutual funds, but you MUST be in it for the long haul not 44 months otherwise you are setting yourself up for disappointment
@thegreatone258 They're extremely easy to find. Lots of them average 10-12% over 3, 5, and 10 years. If you leave it in 5 years like the plan says, you're almost guaranteed a 10-12% return.
also, all the tom dick and harrys in the youtube comments section trying to poke holes in a rich man's investment strategy are hilarious. how's that second mortgage strategy working for you? you don't know what you are talking about.
mutual funds over the last 30 years have increased at 11.8%. it's a fact, look it up. the years before the downturn, it was rising at 20%. it averages out. the people who lost their shirts are the ones who invested poorly, or in the short-term only. instead of comparing where they are now to where they were 3 years ago, try comparing it to where they were 30 years ago. ~11-12% per year better now.
@johncfl Yeah john this advice marketeer convieniently ASSummes that the stock market and funds will return 12 % every year. That is the big glaring hole in their advice., They want your money for DVD's Books,Training,Seminars...they got it all figured out.
@justcallmeassinine Actually, no. Dave Ramsey does NOT only want your money for the products he sells. He is not trying to make a buck off of people. In fact, he does not accept credit cards for payment at all on his website because he encourages people to save and spend by cash or debit. Dave has repeatedly given people free books or free tickets to his seminars just to get them there so they can learn about finances. And no, I am not brainwashed. I don't agree with everything he says.
@amazonchic21 I stand corrected then,thank you.Sounds good....( except for the 12 % assumed return in investment. Year by year by year). He does have a lot of good common sense things to say.I like him but he's kind of a male version of Suzie Ormond,no ?
@justcallmeassinine Maybe. I don't follow her. I've gotten the impression she's trying to publish h as many materials as possible. I honestly don't know what financial principles she touts. I do know Dave has a heart for people, and since he's sincere he's been blessed financially. People who just want to make a buck eventually are mistrusted by the general public. I'm definitely NOT a fan of Robert Kiyosaki. At least Dave talks about living debt-free more than just getting rich.
@amazonchic21 I agree. Kiyosaki runs an elaborate "educational" scheme with a wide assortment of courses,materials,private coaches,even cruises and "educational" getaways.He appeals to the young (mostly male) and naive who think they will get rich by rubbing shoulders with like minded people. Uses paid shills in the audience.He got his start in Hawaii where real estate is like a religion and every other person on the street has or had a RE agents license. Sad situation.
well i kinda get this but.... u lost me at the payment thing times 10. um... but yea i know about this moving up thing. and im 17. lol but if ur driving an higher price car... doesnt it depreciate? (well the car)
best car I ever bought was a Geo Metro for 500 dollars. It ran for 7 years, minimal maintenance, and got around 40 miles per gallon. My current computer cost more than any car I've ever paid for, which has made my life infinitely less stressful.
@IllustratorLion Thats amazing ! Maybe the best car story i have ever heard. I bought a used Kia 5 yrs ago and have only had to change the front brakes and the starter. Overall I am satisfied but you have to drive those cars gently, slowly and with care.The less power features you have the better and if you can find one without a/c (difficult) they can go for a long time. PS If you can do it,live without a car.Rent one when you need to or use a car sharing co. Its not practical for all but...
To thegreekman1981 : BE A MAN! you cant save money, but you will slave yourself to a bank. They treat you like a little kid. If you don't do as your told and make your payments on the banks car( that you borrow ) we wont let you use the car. Don't act like you own it, They own you! You even sound like a child in your statement.
Response to tommyboy220 the idiot! Brand new cars break all the time. dealerships count on them breaking thats where they make most of there money! so, your advise is to buy a 2-3 year old car. Every car breaks down! 2 ears - 1 mouth listen more then you run your mouth. Dave Ramsey has you set an Emergency Fund up first. This is how you take care of your car repairs.
i need a car. but i dont have any money becase i just got out of jail and i owe tomuch money to the courts. can you helpme? i have really bad crited,and i have a job at the junk yard earning 10cents a hour but that is going to make it hard for me tobe able to get the money for a car.
The other thing they fail to mention is repairs... if you buy a piece of junk for $1500, chances are you are going to have to fix a few things during that year. Even the $6,000 car is probably going to need some maintanence or repairs during the year.
I never recommend new cars, but if you spend a little more, say $10k for a 2 or 3 year old car, they are way more dependable. $464 for a car is crazy, my first house payment 10 years ago was less than that.
The only part I really cant get behind is the 464 dollar a month payment to myself.
I mean in reality its a great plan but thats about a 1/4 of my take home pay. We drive two paid off vehicles and pretty soon are going to start saving 200 a month towards a new car. I figure its the same plan but it just might take me a little longer.
LOL... and do you have a way to stop the payments that keep on going for the car there driving when they pull into your lot? Most car dealers want to pay off your balance and then add it back to the car you finance your still paying for your old car and the new one as well. Why not take your old car and the new one home your paying for them.
So the video claims you can buy an $11,000 car this year, and next year sell it for $11,000 after you put probably around 15,000-20,000 miles on it? Don't think so.
Also the $11,000 is retail probably in most cases. To an individual or dealer you'd never get that back. You'd be lucky to get 7 grand.
@awarepatriot What he meant is not buying that car and then trade in later. He meant you pay that $464 to yourself, in another word, save in your little piggy bank instead of doing loan. If u save $464 each months, within 20 months, u can owned a nice car without owning a penny to the loan. It is better then buying new car with loan and by the time u finished ur payment, that car u been paying for is no longer value. Plus, if u do monthly payment on the car, u will have to pay an extra $10,000.
@linh48964 Yes. That's what he meant. I understand that part.
But he's claiming if you go to a dealer & buy a car that is $11,000, the next year you can sell it for $11,000 and use the money you saved to compound with the car you just sold.
I'm saying that there is NO WAY you can go to a dealer, buy a car for $11,000 and sell it for $11,000 the next year. Cars depreciate fast, you put more miles on them, and dealerships often jack up the blue book value. $11,000 would sell for $6500.
@awarepatriot i see....haha..i miss that part.......i can't sell it back for the same price which i bought from last year. I can't even get 30 % back. I drove nearly 100,000 miles a year...so yeah.
my car is worth what... 5-6k here now, plus the insurance of 2k, road tax of 300ish, thats still alot less then the adverage 3 serise bmw or toyota avensis / nissan maxima etc etc.
Never needs a cents work, gets 30+ mpg and never pulled by police either.
@cooperunionstud That is kind of his point. Many people "pay big bucks" when they really can't afford to. I hear people complain about not having enough money, yet they have two newer cars in the driveway. When you are dropping $800-$1000+ a month on two new cars, and will be doing it for 3-5 years, you better have "big bucks" to waste, or you won't have much money to play with. Paying cash for a car will save you in the long run....lot's of money! At least it has for me!
I see a problem. He is assuming your used car holds it's value and that it won't have any costs other than operating. Problem is most cars continually devaluate and they dont' last nearly as long as they used to.
this is all swell and dandy exceptyou'd have to be out of your freakin mind to expect the stock market to average 12% returns. At 5.8%, good freakin luck making this happen.
@chase03670 Over longer periods of time, the stock market does grow at an average of 12%/year...on a 20-30 year track record. You are all forgetting that this recession will end someday...and now is the time to invest heavily, because when it does start going back to normal, youll wish you did. (not gold)
The information Dave Ramsey posted in this video is not correct. I talk about it on ilogicbomb and explain why. I wonder what kinds of returns those mutual funds he recommends have generated...
With saving that $200 and $100 next month out of my regular income, I am 3/7ths within my goal of a new Apple computer. In August, I'll be 4/7ths with in my goal. In October, I'll sell my netbook for around $100 and I'll have my brand new paid-for Mac Mini. After I buy it, I'll put about $35 a month away and in 4 years I can have a paid-for iMac.
I have decided that I want to shoot for an Apple computer despite them being very expensive. I could go to the bank and get a loan if my parents co-sign but debt is a destructive force. What I am doing is saving up for a $700 Mac mini. Now I am going to a tech school this summer and I have $200 from the pell grant that I received. Even though that was supposed to go to books, I am reading them for free in the school's library.
I have taken this idea of buying cars and changed it a little in how I am going to buy computers. I love Apple computers but they can be expensive. Despite my name conservative608 and most people associating conservative with rich, I am not rich. I have a very modest, fixed income. Now, I have about $100 a month to put into a computer fund. Right now I am on a 1 Ghz netbook with a USB keyboard, USB mouse and a VGA monitor. Continued next post.
I Believe this Strategy is a Great way to Invest for a Future-Car, as long as you currently have a Decent car.
Here's an Idea:
Buy a Nicely-Used 4-Door Common-car for around $5,000, Keep it for about 2-4years, Use THIS Method (You don't have to invest $454/Month, Half will do) during that Time, and buy a Nicer Car for about $10,000-$12,000.
Paid For! ;^D
*And Keep in Mind, you DO have to pay Taxes on Investment-Income. :^P
I think the "free cars for life" shtick is probably a stretch, but I agree with the initial concept of systematically saving money and buying a car you can thus afford immediately, instead of paying off a car for 4 years with interest. That's just sense.
Buy a beater that will last a year or so, sell it and save the "payments" then move up in car. You DO NOT need payments. That's a myth that broke people tell other broke people tell other broke people, and subsequently STAY broke.
I suppose if your Standards are so low, that you will drive Anything, and don't mind Oil-Leaks. Too me, oil-leaks are something your SUPPOSED to have Fixed.
The Reality is, that People that Have a Beater, won't spend $400+ on it to have it Fixed, because the Car's not Worth it!!
I have had my car Paid-For since 2005. I Take good Care of it.
It's FAR from a Beater, and it has All the Options I could have Got!
@DiogNewmen May car is paid for too. The video is about BREAKING the car payment cycle. If you have to, buy a beater and make a temporary sacrifice NOW so that LATER you can have nice PAID FOR cars. My intent was for those that are going along with the myth that you have to have car payments. Save up and avoid the monthly payments to a bank. you don't HAVE to have a beater, but you might have to start there to break the cycle.
You will lose money on a used car, ther will be repaires on old cars. Old cars don´t have good gas mileage, and if you live in Denmark your car is no longer here after 10 years rust will get it.
@MrJumper68 truck is 16 years old. i get 18 mpg, nearly as much as a brand new truck (the M/Ts drop mpg by 2). i spend less per month on repairs than i would on a payment.
I bought my 95 saturn SL1 for $900 +$1000 for work. Now it's just like buying a brand new car for only $1,900 my gas mileage is AMAZING so relatively I am saving a lot of money by driving my light bodied 4 cylinder. It has great pick up to cause of the light body. I almost get 40 MPG not on highway lol. Just have to fix a slow oil leak :P So I'm in love with my car :D
He's making a very important omission. DEPRECIATION! You can't buy a $1500 car and sell it for the same price 10 months later. So there is no way this system works. Sorry to burst your bubble!!
@bobolito While this is true, the value of the car dropping is no where near as steep as the brand new car. Yes, the older one still lowers in value, but it'll similar.
@bobolito actually, for a car that's been around long enough that it only costs 1,500...the depreciation in 10 months is so abysmally small that it may not change at all in that time.
I like Dave & his Baby Steps, but I can't get behind this idea. Most of this has already been said... but will these low priced, high-mileage gamble (in the 5k to 10k range) of a vehicle come with a warranty? Not hardly- and finding a low price, highly-reliable car is a needle in a haystack. If you plan on driving a new car until it dies, who cares about depreciation? Nice concept, Dave, but waaaay too many holes & omissions.
and if you think that you are going to get anywhere near even the 12% rate of return for the next few years, I've got swamp land in Florida for a good price.
I love my system. I buy an ugly but reliable car for $800 or so - and I drive it until it is dead. Or, I get bored with it and see something else I like a few years later for about the same money - and I sell the old one.
Interestingly, the depreciation on an $800-$1000 car over that period is substantially less than a month of car payments and insurance. Yay, almost free cars for life!
Ok, love the concept, but a couple of issues here ..... 1) am I mistaken or did none of the used cars lose any value from the time you bought it until the time you traded it??? The $1500 car was worth $1500 ten months later, then the $6000 car was still worth $6000 ten months after that. I don't think so.
2) Dave would normally be the first one to tell you that you can't count on the stock market returning you 12% reliably over any 5 year period. Come on, Dave. Big flaw in this system.
Oh, and the growth in a mutual fund is taxable too. I wonder if they calculated that into the return?? They probably did, which is why they used 12% instead of something more reasonable like 9-10%.
Wondering where you can get any mutual funds at 12% right now. But it is a good plan and my son is turning 18, he will get his first car in a couple months. It won't be the "sweet ride" that his buddies have, but it will be paid for and he can upgrade as his financial situation changes over the next few years of his life. Thanks Dave for the great advice!
Well, I wouldn't call the video totally realistic, but almost. That's because betting on a 12% return on the stock market is crazy. The stock market will crash, and that is a fact!
I have a car replacement fund, but it is conservative.
And Sabiancym, If you buy a new car at $25,000, figuring (on the low end) with 8% depreciation each year your car equity equals
after the
1st year - 23,000
2nd year - 21,160
3rd yea - 19,467
4th year - 17,909
5th year - 16,477
so while you have the 5 year 'everything warranty' you haven't paid a dime for repairs, but lost $8,522 in depreciation. Remember that lost money is the same as money that you paid.
Yes, but what are the odds that I won't pay anything in repairs for either a used car using this system or a new car?
Not very good over 5 years.
Buying new and getting all the security that comes with it is better than gambling with this plan. A couple problems here on a cheap older car without a warranty can completely screw the "plan".
The thing also about this plan is not just that you don't have any car payments to make, but the way you're getting ahead is that that the older cars are the less they depreciate each year. So WHILE you're paying yourself for a new car, you're also NOT paying the massive depreciation for the NEW car. Your car is essentially worth the same as you paid.
This is ridiculously stupid. So what happens when that old car you're driving breaks down and you have to spring $1000 in repairs? If you had a new car and it was under warranty you wouldn't pay a dime.
No, what's moronic is your reply to this video. If that logic behind the info in the video, then you deserve to be paying out the ear for car payments!
Really? Because I have 0% financing, 5 year bumper to bumper and 10 year powertrain warranty. I'm not messing around with cheaper used cars that could end up costing me more in repairs because the warranty is up.
You have seriously been brainwashed...your argument sounded just like a U.S.Fidelis commercial.
I could see how this would sound stupid to someone who is not resourceful enough to actually do it.
As for your "10 year powertrain warranty", try to take it back 8-9 years from now and watch them laugh in your face when you expect them to actually honor their warranty.
@unclesonnyonutube totally agree! I bought a new car and even purchased the extended warranty. A year and a half later something (that wasn't my fault) was wrong and i took it in, and of course they didn't want to deal with it. It's wonderful having a dealership argue with you over something you PAID FOR ALREADY. I will never buy a new car again.
Not to mention the money that you save in interest will more than pay for 'warranty' repairs. If you keep the vehicle well maintained you shouldn't need them anyways. Insurance should pay for wrecks.
@Sabiancym you sound like you just swallowed a dealers hook,line and sinker. A $1000 + $1000 in repairs is still cheaper than a $26,000 car with $6000 interest.
The $1000 is supposed to be in your 'emergency fund', you know, for emergencies. Besides, the money you have saved on interest more than pays for the repairs.
Interest? What interest, there is 0% financing everywhere. I have 0% financing on my current vehicle, free roadside assistance, free oil changes, and a 5 year bumper to bumper warranty.
Car salesmen just LOVE people like you, Sabiancym!!!! You get 0% financing because your paid more for the car. Let me guess.... you could have done 0% financing OR $3,000 cash back!!! Am I right? So, you're 0% just cost you $3,000. I hope you're just trolling and not serious with your ridiculous arguments.
I paid for a new car, not a used car with no dealer benefits.
The video is bs, he suggests buying a nice $6000 car? Where in the hell will you find one of those, I live in chicago, did a search for used cars and there are very few for under $7000, and almost all of them have 100k+ miles on them.
Not to mention the fact that he said the average new car is 26k but at the end of the video he says you'll have 12-17k for a new car every 5 years....
If you take care of a decent vehicle, you shouldn't have to replace the engine or transmission. Manual transmissions are much less expensive to work on or replace than automatics. Take care of your car and it will take care of you in the long haul. A $1200 car will last a long while if you properly maintain it. Ive had mine over a year now. I spent around $400 in maintenance/insurance this year. So $1600/12=133.33 per month as opposed to ~450 per month.
I didn't have a car at all last Feb09 and now I have a serviceable $1500 car. I bought it in May 09 after saving back $500 per month for 3 months.. It took me a little bit to get it titled, plated & insured as I forgot to add this into the equation. Anyway, I have been saving $500 a month since June 09 and now have $4K earmarked for a newer car.. So far this plan is working for me... I am 2 upgrades away from getting a money market fund or whatever, but I really think this may work.
It does not factor things like repair costs into driving a cheap car with no warranty. Also many new car makers are offering 0% loans and that is what I always get with the extended warranty. My depreciation on my GT500 was negligable. I would be assed out if I bought a v6 Mustang or another lower end car brand new.
But the point is to not owe anything to anybody. If you lose your job, you're still going to have to find a way to make those car payments, even with 0% interest. With Ramsey's plan, you always have a paid off car. And you're usually not driving the real low-end cars for long. Usually less than a year. Buy a smart used car, and you won't have to worry much about repair costs.
Sounds like you could sum this up into one statement. Save for a car in advance and pay cash to avoid interest. That's all this is. You are working up to a more expensive car slowly as you have more saved and using the old car as equity, instead of buying the high dollar car first before you have the money. It doesn't consider maintenance costs or depreciation in value however.
Actually, he implied that the 11K car would be worth 7K, added to the 10K you pull from your mutual fund, that's 17K for your next "upgrade". He didn't mention depreciation on the 1st or 2nd car ($1500/$6000 respectively), but often times, older used cars sold within the same year don't depreciate that rapidly.
Fer cryin' out loud -- NOTHING you pay for is 'free'. The only 'advice' in this vid is to put some $450 into a mutual fund every month and after a coupla years buy a decent $16,000 car. But a lotta people just can't AFFORD to sock away $450 a month. They buy a $2000 used car in decent shape & make it last several years, repeat as necessary and upgrade if/when they can. The popular idea is BS, re: succumbing to marketting hype and buying a new car that depreciates like 50% in the first 2 years.
well for people who are paying $450 car payments i think they should try this but instead of buying a car ever year they should just keep their money in the mutual fund for 10 years.
this is stupid
blafiman 6 days ago
of course.. while saving from monthly payments you put into your MF or bank account.
It can make some sense in a way.
nega73 1 week ago
it is basically delaying the buy of the more expensive car in a few years later while driving a cheap clunker, which could involve lots of repairs too.
nega73 1 week ago
this video is great, and dave ramsey is great too, check out my channel. hes got a better video i've also favorited. sub me you won't be disappointed
wakemeupintwenty 2 weeks ago
while the conservative 12% is BS, the concept is solid. if you're use to paying for a car payment, sell the car to pay off the remainder of the loan and buy something cheaper. Continue putting away the money you're use to spending in the first place, and you're budget doesn't change. good concept, but if you're broke and drive a piece of shit car because you can't afford payments in the first place, it doesn't work xD
tpersing88 2 weeks ago
Everything cost U money. It's just a matter of how & like the vid said yer conditioned. I got news for all you consumers. If you don't think a new car can't break down & cost you half a days work you're wrong. New 1's can still break down. The used car? It's not like you're burning the money this guy says put into a fund. You now have a mechanical allowance SO USE IT!
U don't want to work on cars? So what? You don't want to be debt free too. Get a repair book & most cars have dedicated forums
F0ckUtoob 2 weeks ago
I'd love Dave to tell me where I can get a pretty conservative 12% in mutual funds. Of course, to prove your point, it could never lose money, either. Several years and one market meltdown later and I'm still waiting for him to explain that to me...
andrewupintheair 2 weeks ago in playlist Dave Ramsey STUFFs
Dumbest video ever.
1470cool 3 weeks ago
And if the car gets crashed ? and what about Tax?
mrzkhan1 1 month ago
@mrzkhan1
1. Carry comp and collision Insurance on the car
2. The tax, title, insurance and registration fees are just part of the price you need to pay for the vehicle... plan accordingly
Don't mean to be harsh by any means but it's amazing to me how many people actually fight to come up with reasons to give the bank money without considering alternative options
Tsyoka 1 month ago
Or just get one that's going to the scrapper (or just a bad used one) but still legal to drive.
I'd imagine there are lots of them in a country that lives out of their cars.
Fix it up yourself with parts from a junkyard, only turn it in to a shop for major repairs and do the checkups yourself if your insurance company allows you to (not gonna have any second hand value anyway so who cares about a fancy logbook).
Most importantly, you'll learn a lot from it and save money.
Djhg2000 1 month ago
Well you need a car just to take you places and plus just pimp your ride for a low price.
harmansingh101 1 month ago
Sure hope that first clunker lasts that 10 months you need to save 4600. Risky buisness, I'm trying this whole cheap car thing, I kind of miss the peace of mind of my new car and evil car payment.
Giantravis 1 month ago
omg the Neon is so cheap
Latvietis96 1 month ago
If you cant afford to make a car payment, how are you going to have the cash to put into savings. You would be better off buying a bar of gold each month for 12 months then selling them all at the end of the year for 2 3 0r 4 times what they cost you and buying the car you want. Own your own car fix your own car hope none of the cars break down on your way up to you next newer better buy.
jimmyray1984 1 month ago
i am a low income person,
where the hell is the $464.00 a month i pay myself coming from, thin air
yea right!!!!!!
phoenixman8569 2 months ago
@phoenixman8569 Work harder and smarter. Produce more and get pay rises.
If you can't afford to save $464.00 a month you can't afford to pay $464 a month on a car payment either, So you need another sloution to your earning problem.
82snowball 2 months ago
an s2k for free!?!? where is this dealership?!?!?
Floor13Inc 2 months ago
good idea, but 12% mutual fund? where is that?
50MillionMissing 3 months ago 2
@50MillionMissing even 8% just means it takes a bit longer. The idea is you get more in life if you delay spending while you earn interest rather than be impatient and spend now and pay interest.
82snowball 2 months ago
Sounds like a bunch of "broke people attitudes" here a bunch of "know it alls" and Im sure you guys are all rich right? Oh and dont forget the debt you owe.
whatdupdoh 3 months ago
free not free at all!!
GhostmysteryGhost 4 months ago
ok free car? this means that you need money to begin with--if you need the money to have made the payments you still gotta have money --it says free car not buy a car straight out by saving money
GhostmysteryGhost 4 months ago
not really you dont have to have a good income well a ok income to make it work. it all depends on what you have to work with..
thbplayboy 4 months ago
since when is your life 5 years?
lampduffday72 5 months ago
@lampduffday72 Most people replace their car every 5 years
82snowball 2 months ago
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dexterfloyd414 6 months ago
Why spend $500 on a nice tv now if it's only going to be worth $50 in 5 years? Why buy that new game for $60 if it's only going to be worth $5 later on?
Sure you pay $33k for a car worth $6k in 5 years but you get $27k worth of benefits/enjoyment during those 5 years. So you're paying $5,400 a year to look nice in the latest car, not worry about it breaking down on you because it's new, and you'll still be covered by the factory warranty.
bus5000 6 months ago
@bus5000
Bus is drinking the KoolAid...that American KoolAid. Keep on cruisin that sweet ride dude. I'm glad you do. I'll buy it from you in 4 years.
jhcombs 5 months ago in playlist Debt Free
@bus5000 If a new TV is only $500 swoop it up. As for the game, play the demo, rent it, if you still want it, buy it used. Then trade it in towards your next game. Not many cars to most people are worth 27-33k for 5 years. You are paying 5,400 to look nice in the latest car for ONLY THE FIRST YEAR after that you are just paying 5,400 a year for a car. And if you think a new car doesn't break down, YOU'RE PLAIN WRONG!
whatdupdoh 3 months ago
@whatdupdoh True, but if it's new, it has a Warranty, therefore you don't have to worry about Break downs.
Seeing as how most cars are exactly the same for 5 years, if you buy a car in it's first redesign year, then the car is worth a lot more in resale. Say you buy a 2011 Charger new, it's going to be worth the same or very close to a 2015 Charger in 2016 when the next Charger comes out, and you get 4 more years of enjoyment.
moparsrock 3 months ago
I got a better idea. Buy a classic car. Everyones happy.
jakixs 6 months ago
Also consider this: If you invest in a mutual fund in taxable brokerage account, be prepared to pay a capital gains tax if there is an appreciation on your original investment. Furthermore, if the mutual fund pays a dividend or capital gain, which it might, you will be given a 1099 for that 'income' too. Consider all the facts before you implement this strategy
sjismael 6 months ago
@sjismael I would rather earn a $1 and pay 30 cents tax, than lose a dollar and not have to pay tax,..... I am just saying.
82snowball 2 months ago
FALSE!! Great idea but details are all wrong. Consider the following: if we use the sp500 to represent the stock market, the median return on any rolling 5 yr period of the sp500 is approx 10%, the high is 28%, and the worse is -12%. Furthermore, since 1927 the sp500 has ten negative 5 year rolling periods. Investors beware - returns are not guaranteed and the illustration at 3:04 would assume 12% to be constant - FALSE. Lastly, the formula doesn't factor the inflationary rise in car prices.
sjismael 6 months ago 2
bla bla bla wheres my free car?
Warlord795 6 months ago
22 people bought new cars before watching this video.
ma1achite 6 months ago
Buy don't the 6k and the 11k car u use to add the savings on loses it's value still?
SeasaCleaus 6 months ago
@SeasaCleaus because you only had them for 10 months. If you put a butt load of miles on it then it would be worth less.
smjtx 6 months ago
I love reading all the self-defeating comments on here. These people will be enslaved by the bank for the rest of their lives, at their own will. This plan is workable on so many levels. Even since the big "crash" in 2008, it's extremely easy to find a good mutual fund that has averaged 10-12% returns over the last 3, 5, and 10 years. Mutual funds vastly reduce the risks associated with investing.
AlexanderRozhenko 7 months ago
how are u paying ur self 464 dollers huh and be able to buy a 1500 doller car u make no sense and ur not garunteed that stocks will work all the time
unboxingguru1 7 months ago
@unboxingguru1 You save the 464 dollars every month. Instead of paying a car payment, you put it in the bank. Of course you have to have a decent income for this to work.
wontacceptthis 6 months ago
Dave talks about not putting your $10k Emergency Fund in growth stocks because its not safe in the short run. You won't drive free cars for life but if you factor a safer 4% return and pay in a certain amount each month, you can pay cash for all your cars and it won't cost you more than your payment..however, an argument can be made for having a payment and investing the difference in a long term/12% fund..you can actually come out ahead at retirement. You won't be debt free but you'll be richer
iran4u 8 months ago
He didn't depreciate the used cars, but kept their value moving up to each higher level. Overall yes, its good advice.
radioheads1fan 8 months ago
Give me a mutual fund that make 12% every year.....
thegreatone258 8 months ago
@thegreatone258 Actually, most mutual funds consistently make 12% over any ten year period, even through recessions.
Watersmith53 8 months ago
@Watersmith53 Yes over a 10 year period yes, but in "44" months? Mutual Funds are designed for the long haul, this video encourages people to buy for the short term. The Investment Company of America through American Funds historically has done 12.1%, but that is over 77 years. Plus you have to figure expenses, C-Share ICA is 1.43% annually. I am all for investing with mutual funds, but you MUST be in it for the long haul not 44 months otherwise you are setting yourself up for disappointment
thegreatone258 8 months ago
@thegreatone258 They're extremely easy to find. Lots of them average 10-12% over 3, 5, and 10 years. If you leave it in 5 years like the plan says, you're almost guaranteed a 10-12% return.
AlexanderRozhenko 7 months ago
What happends when that 11,000 car brakes down..? and
rambo631 9 months ago
@TheSweetSarahizes
hahaha did you block me? why? Maybe it was because I was tearing you a new ass hole and destroying your weak arguments.
It's incridible that you
a grown person living in a western nation is that badly educated. it's funny how sometimes people who don't know shit always want to talk the most.
Alba12349 9 months ago
also, all the tom dick and harrys in the youtube comments section trying to poke holes in a rich man's investment strategy are hilarious. how's that second mortgage strategy working for you? you don't know what you are talking about.
treefittyfive 10 months ago
mutual funds over the last 30 years have increased at 11.8%. it's a fact, look it up. the years before the downturn, it was rising at 20%. it averages out. the people who lost their shirts are the ones who invested poorly, or in the short-term only. instead of comparing where they are now to where they were 3 years ago, try comparing it to where they were 30 years ago. ~11-12% per year better now.
treefittyfive 10 months ago
What about the taxes on the interest gained on the money. Where is that factored?
wichman613 11 months ago
Tell me RIGHT NOW the names of ANY fund getting 12% interest!
johncfl 11 months ago
@johncfl Yeah john this advice marketeer convieniently ASSummes that the stock market and funds will return 12 % every year. That is the big glaring hole in their advice., They want your money for DVD's Books,Training,Seminars...they got it all figured out.
justcallmeassinine 11 months ago
@justcallmeassinine Actually, no. Dave Ramsey does NOT only want your money for the products he sells. He is not trying to make a buck off of people. In fact, he does not accept credit cards for payment at all on his website because he encourages people to save and spend by cash or debit. Dave has repeatedly given people free books or free tickets to his seminars just to get them there so they can learn about finances. And no, I am not brainwashed. I don't agree with everything he says.
amazonchic21 10 months ago
@amazonchic21 I stand corrected then,thank you.Sounds good....( except for the 12 % assumed return in investment. Year by year by year). He does have a lot of good common sense things to say.I like him but he's kind of a male version of Suzie Ormond,no ?
justcallmeassinine 10 months ago
@justcallmeassinine Maybe. I don't follow her. I've gotten the impression she's trying to publish h as many materials as possible. I honestly don't know what financial principles she touts. I do know Dave has a heart for people, and since he's sincere he's been blessed financially. People who just want to make a buck eventually are mistrusted by the general public. I'm definitely NOT a fan of Robert Kiyosaki. At least Dave talks about living debt-free more than just getting rich.
amazonchic21 10 months ago
@amazonchic21 I agree. Kiyosaki runs an elaborate "educational" scheme with a wide assortment of courses,materials,private coaches,even cruises and "educational" getaways.He appeals to the young (mostly male) and naive who think they will get rich by rubbing shoulders with like minded people. Uses paid shills in the audience.He got his start in Hawaii where real estate is like a religion and every other person on the street has or had a RE agents license. Sad situation.
justcallmeassinine 10 months ago
I hate this security question
sideslide23 11 months ago
well i kinda get this but.... u lost me at the payment thing times 10. um... but yea i know about this moving up thing. and im 17. lol but if ur driving an higher price car... doesnt it depreciate? (well the car)
HellmanChase 11 months ago
best car I ever bought was a Geo Metro for 500 dollars. It ran for 7 years, minimal maintenance, and got around 40 miles per gallon. My current computer cost more than any car I've ever paid for, which has made my life infinitely less stressful.
IllustratorLion 11 months ago
@IllustratorLion Thats amazing ! Maybe the best car story i have ever heard. I bought a used Kia 5 yrs ago and have only had to change the front brakes and the starter. Overall I am satisfied but you have to drive those cars gently, slowly and with care.The less power features you have the better and if you can find one without a/c (difficult) they can go for a long time. PS If you can do it,live without a car.Rent one when you need to or use a car sharing co. Its not practical for all but...
justcallmeassinine 10 months ago
your money can not work for you!!
it looks only for you like this. but other people has to work, that "your" money can grow in a bank. and do you know how they have to work?
it is better to buy 1 time in your live a car, and drive this till you, or the car dies.
a car that runs over 1 million miles is in my comprehension more worth than a million dollar Ferrari, witch brake every quarter mile down.
donblub 11 months ago
that 11000 car will depreciate to 10000 car in 5 years . AND YOU ADD 7000 TO THAT ?
NOOOOOOOOO WAAAAYYY
MORE LIKE TO 4200 BUCKS
zloben9000 11 months ago
PROBLEM you have to save 464 USD every month and drive clunkers
zloben9000 11 months ago
thats what i do?...what the problem?????
navyseal100 11 months ago
Comment removed
zloben9000 11 months ago
Which Mutual fund are you talking about?
Elect4Sure 11 months ago
Awesome, video.
When will people learn that Repairs are cheaper than Interest and depretation.
82snowball 11 months ago
@82snowball to some people peace of mind is worth more
jaguar1410 2 months ago
@jaguar1410 Financial security gives me peace of mind. Not a car payment
82snowball 2 months ago
@skatedude223 the point is stay out of debt and save money and you will be better off than getting into debt.
82snowball 11 months ago
To thegreekman1981 : BE A MAN! you cant save money, but you will slave yourself to a bank. They treat you like a little kid. If you don't do as your told and make your payments on the banks car( that you borrow ) we wont let you use the car. Don't act like you own it, They own you! You even sound like a child in your statement.
madddensdrool 1 year ago
Response to tommyboy220 the idiot! Brand new cars break all the time. dealerships count on them breaking thats where they make most of there money! so, your advise is to buy a 2-3 year old car. Every car breaks down! 2 ears - 1 mouth listen more then you run your mouth. Dave Ramsey has you set an Emergency Fund up first. This is how you take care of your car repairs.
madddensdrool 1 year ago
It is simple to write a plan like this up, however much much much more difficult to follow.
TheGreekMan1981 1 year ago
lol 10 months i get 6.000$ a week! lol poor america!
eluabs 1 year ago
@eluabs lucky
nivekevinutz 1 year ago
i need a car. but i dont have any money becase i just got out of jail and i owe tomuch money to the courts. can you helpme? i have really bad crited,and i have a job at the junk yard earning 10cents a hour but that is going to make it hard for me tobe able to get the money for a car.
matthewjamesbudds 1 year ago
@TheHipHopAP sounds like a marriage license..fo real
chickitie34 1 year ago
The other thing they fail to mention is repairs... if you buy a piece of junk for $1500, chances are you are going to have to fix a few things during that year. Even the $6,000 car is probably going to need some maintanence or repairs during the year.
I never recommend new cars, but if you spend a little more, say $10k for a 2 or 3 year old car, they are way more dependable. $464 for a car is crazy, my first house payment 10 years ago was less than that.
tommyboy220 1 year ago
The only part I really cant get behind is the 464 dollar a month payment to myself.
I mean in reality its a great plan but thats about a 1/4 of my take home pay. We drive two paid off vehicles and pretty soon are going to start saving 200 a month towards a new car. I figure its the same plan but it just might take me a little longer.
plasterofparisify 1 year ago
1969 Chevelle SS 396.......
DGKall2010 1 year ago
LOL... and do you have a way to stop the payments that keep on going for the car there driving when they pull into your lot? Most car dealers want to pay off your balance and then add it back to the car you finance your still paying for your old car and the new one as well. Why not take your old car and the new one home your paying for them.
prentis45 1 year ago
This is all well and good if you have a surplus of 464 dollars a month. I make 12 bucks an hour and live in LA. I sure as hell don't.
GlaciusNLV 1 year ago
there's a taurus in the background for 2200...
91jchevy87ec1 1 year ago
So the video claims you can buy an $11,000 car this year, and next year sell it for $11,000 after you put probably around 15,000-20,000 miles on it? Don't think so.
Also the $11,000 is retail probably in most cases. To an individual or dealer you'd never get that back. You'd be lucky to get 7 grand.
awarepatriot 1 year ago
@awarepatriot What he meant is not buying that car and then trade in later. He meant you pay that $464 to yourself, in another word, save in your little piggy bank instead of doing loan. If u save $464 each months, within 20 months, u can owned a nice car without owning a penny to the loan. It is better then buying new car with loan and by the time u finished ur payment, that car u been paying for is no longer value. Plus, if u do monthly payment on the car, u will have to pay an extra $10,000.
linh48964 1 year ago
@linh48964 Yes. That's what he meant. I understand that part.
But he's claiming if you go to a dealer & buy a car that is $11,000, the next year you can sell it for $11,000 and use the money you saved to compound with the car you just sold.
I'm saying that there is NO WAY you can go to a dealer, buy a car for $11,000 and sell it for $11,000 the next year. Cars depreciate fast, you put more miles on them, and dealerships often jack up the blue book value. $11,000 would sell for $6500.
awarepatriot 1 year ago
@awarepatriot i see....haha..i miss that part.......i can't sell it back for the same price which i bought from last year. I can't even get 30 % back. I drove nearly 100,000 miles a year...so yeah.
linh48964 1 year ago
my car is worth what... 5-6k here now, plus the insurance of 2k, road tax of 300ish, thats still alot less then the adverage 3 serise bmw or toyota avensis / nissan maxima etc etc.
Never needs a cents work, gets 30+ mpg and never pulled by police either.
Crazybenjiwoo 1 year ago
@TheHipHopAP depends on the car, i paid 500 euro for my 1.6 civic, with test + tax so its worth 5+ k now.
Crazybenjiwoo 1 year ago
@cooperunionstud That is kind of his point. Many people "pay big bucks" when they really can't afford to. I hear people complain about not having enough money, yet they have two newer cars in the driveway. When you are dropping $800-$1000+ a month on two new cars, and will be doing it for 3-5 years, you better have "big bucks" to waste, or you won't have much money to play with. Paying cash for a car will save you in the long run....lot's of money! At least it has for me!
belcherboys 1 year ago
so how long do i have to wait to buy a brand new s500
whitehawk38 1 year ago
car worth only 30 percent after 4 years?!? humm you must be driving a car made of cardboard box. no car is that CHEAP
cooperunionstud 1 year ago
I see a problem. He is assuming your used car holds it's value and that it won't have any costs other than operating. Problem is most cars continually devaluate and they dont' last nearly as long as they used to.
captainblackjeep 1 year ago
Chase, the video is from April 2008l
JanetUSA 1 year ago
this is all swell and dandy exceptyou'd have to be out of your freakin mind to expect the stock market to average 12% returns. At 5.8%, good freakin luck making this happen.
chase03670 1 year ago
@chase03670 Over longer periods of time, the stock market does grow at an average of 12%/year...on a 20-30 year track record. You are all forgetting that this recession will end someday...and now is the time to invest heavily, because when it does start going back to normal, youll wish you did. (not gold)
neemguy81 1 year ago
thumbs up if you type in free cars on google then press im feeling lucky.
petervinhchau 1 year ago
The information Dave Ramsey posted in this video is not correct. I talk about it on ilogicbomb and explain why. I wonder what kinds of returns those mutual funds he recommends have generated...
williamsqualus 1 year ago
@EvilJonas - That's European way of thinking? I was raised to think that way and my parents were both born here in the US. LOL
SicaGR 1 year ago
@SicaGR Are your grandparents europeans?
Schmiki24 1 year ago
@Schmiki24 - Nope. My mom's family has been here longer than it's been a country and my dad's family has been here since the Civil War.
SicaGR 1 year ago
How come there wasn't depreciation in the second 6000 dollar car? You buy it for 6000 and then get a 6000 dollar trade in a year later?
kidpower2001 1 year ago
lol @ 12% interest. Try a more realistic number of 6-8% over a long term and these days maybe even 0 - 4% OR even negative.
Oh he also didn't figure in the depreciation of his cars...
coverturf85 1 year ago
With saving that $200 and $100 next month out of my regular income, I am 3/7ths within my goal of a new Apple computer. In August, I'll be 4/7ths with in my goal. In October, I'll sell my netbook for around $100 and I'll have my brand new paid-for Mac Mini. After I buy it, I'll put about $35 a month away and in 4 years I can have a paid-for iMac.
conservative608 1 year ago
I have decided that I want to shoot for an Apple computer despite them being very expensive. I could go to the bank and get a loan if my parents co-sign but debt is a destructive force. What I am doing is saving up for a $700 Mac mini. Now I am going to a tech school this summer and I have $200 from the pell grant that I received. Even though that was supposed to go to books, I am reading them for free in the school's library.
conservative608 1 year ago
I have taken this idea of buying cars and changed it a little in how I am going to buy computers. I love Apple computers but they can be expensive. Despite my name conservative608 and most people associating conservative with rich, I am not rich. I have a very modest, fixed income. Now, I have about $100 a month to put into a computer fund. Right now I am on a 1 Ghz netbook with a USB keyboard, USB mouse and a VGA monitor. Continued next post.
conservative608 1 year ago
Reality is, People don't want a Hoopty.
Yes, I said it! Hoopty!!
I Believe this Strategy is a Great way to Invest for a Future-Car, as long as you currently have a Decent car.
Here's an Idea:
Buy a Nicely-Used 4-Door Common-car for around $5,000, Keep it for about 2-4years, Use THIS Method (You don't have to invest $454/Month, Half will do) during that Time, and buy a Nicer Car for about $10,000-$12,000.
Paid For! ;^D
*And Keep in Mind, you DO have to pay Taxes on Investment-Income. :^P
DiogNewmen 1 year ago
I wish i could pay 464 a month to myself LOL
Toadphillips 1 year ago
I think the "free cars for life" shtick is probably a stretch, but I agree with the initial concept of systematically saving money and buying a car you can thus afford immediately, instead of paying off a car for 4 years with interest. That's just sense.
Akaruchan 1 year ago 11
Here's a piece of Intelligence that is more Realistic for People:
1> Buy a Nicely Used Car that's 1 to 3 years old.
*This way, you Save Money in the Following:
A) Beat-out Most of the Depreciation. (Pay Less for the Car)
B) Pay Less for Insurance.
C) Pay Less for Plates. (Yes, Plates get Expensive for Higher-End Cars!!)
2> Pay it Off in about 2 years.
Sure, you could just Save-up the Money & Pay Cash. But how are you gonna do that, if you need a Car Right-away?!?!?
21cElectronicsMaster 1 year ago
@21cElectronicsMaster
Buy a beater that will last a year or so, sell it and save the "payments" then move up in car. You DO NOT need payments. That's a myth that broke people tell other broke people tell other broke people, and subsequently STAY broke.
eline65 1 year ago
@eline65
I suppose if your Standards are so low, that you will drive Anything, and don't mind Oil-Leaks. Too me, oil-leaks are something your SUPPOSED to have Fixed.
The Reality is, that People that Have a Beater, won't spend $400+ on it to have it Fixed, because the Car's not Worth it!!
I have had my car Paid-For since 2005. I Take good Care of it.
It's FAR from a Beater, and it has All the Options I could have Got!
And still low Miles! :^)
DiogNewmen 1 year ago
@DiogNewmen May car is paid for too. The video is about BREAKING the car payment cycle. If you have to, buy a beater and make a temporary sacrifice NOW so that LATER you can have nice PAID FOR cars. My intent was for those that are going along with the myth that you have to have car payments. Save up and avoid the monthly payments to a bank. you don't HAVE to have a beater, but you might have to start there to break the cycle.
eline65 1 year ago
My Car is Paid-for.
But I would Never buy a Car worth only $1,500.
Not $3,000.
Not even $4,000
What you get for $5,000 is what I Consider 'Entry-Level Feasible'
My Current car (Which is Paid for) I bought Used in NEW Condition for about $16,500. That was back in 2004.
Still a Nice Pewter-Metallic 2000 Camaro Z28. With just 59k Mi! :^)
21cElectronicsMaster 1 year ago
You will lose money on a used car, ther will be repaires on old cars. Old cars don´t have good gas mileage, and if you live in Denmark your car is no longer here after 10 years rust will get it.
MrJumper68 1 year ago
@MrJumper68 truck is 16 years old. i get 18 mpg, nearly as much as a brand new truck (the M/Ts drop mpg by 2). i spend less per month on repairs than i would on a payment.
pfun41 1 year ago
Good idea, but not very realistic.
muffinman9311 1 year ago
I bought my 95 saturn SL1 for $900 +$1000 for work. Now it's just like buying a brand new car for only $1,900 my gas mileage is AMAZING so relatively I am saving a lot of money by driving my light bodied 4 cylinder. It has great pick up to cause of the light body. I almost get 40 MPG not on highway lol. Just have to fix a slow oil leak :P So I'm in love with my car :D
monkeyman123321 1 year ago
dont get this
edward12erm3 1 year ago
Too bad he's always exaggerating the facts!
paleodust 1 year ago
12%? Is that up or down? Real, very long term, return, from the S&P 500 for example, is a pre-inflation <7%
tstrahle 1 year ago
He's making a very important omission. DEPRECIATION! You can't buy a $1500 car and sell it for the same price 10 months later. So there is no way this system works. Sorry to burst your bubble!!
bobolito 1 year ago
@bobolito While this is true, the value of the car dropping is no where near as steep as the brand new car. Yes, the older one still lowers in value, but it'll similar.
NinjaWagz 1 year ago
@bobolito actually, for a car that's been around long enough that it only costs 1,500...the depreciation in 10 months is so abysmally small that it may not change at all in that time.
xdesperatex 1 year ago
I like Dave & his Baby Steps, but I can't get behind this idea. Most of this has already been said... but will these low priced, high-mileage gamble (in the 5k to 10k range) of a vehicle come with a warranty? Not hardly- and finding a low price, highly-reliable car is a needle in a haystack. If you plan on driving a new car until it dies, who cares about depreciation? Nice concept, Dave, but waaaay too many holes & omissions.
utubepunk 1 year ago
is he talking about sparing money and selling the car i owe, than add my spared money amount to the price of my sold car and buy a newer car ?
BMWoooTEAMoooRACING 1 year ago
and if you think that you are going to get anywhere near even the 12% rate of return for the next few years, I've got swamp land in Florida for a good price.
LifeSMyth 1 year ago
@LifeSMyth CGM focus fund(CGMFX) has had an average return of 18% from 2000-2010.
mcfarlandaaron1 1 year ago
I love my system. I buy an ugly but reliable car for $800 or so - and I drive it until it is dead. Or, I get bored with it and see something else I like a few years later for about the same money - and I sell the old one.
Interestingly, the depreciation on an $800-$1000 car over that period is substantially less than a month of car payments and insurance. Yay, almost free cars for life!
SuxatCS 1 year ago
Buying new and driving it until it dies is a way better system than this gamble.
Sabiancym 1 year ago
Ok, love the concept, but a couple of issues here ..... 1) am I mistaken or did none of the used cars lose any value from the time you bought it until the time you traded it??? The $1500 car was worth $1500 ten months later, then the $6000 car was still worth $6000 ten months after that. I don't think so.
2) Dave would normally be the first one to tell you that you can't count on the stock market returning you 12% reliably over any 5 year period. Come on, Dave. Big flaw in this system.
domn8r59 1 year ago 2
Oh, and the growth in a mutual fund is taxable too. I wonder if they calculated that into the return?? They probably did, which is why they used 12% instead of something more reasonable like 9-10%.
domn8r59 1 year ago
Wondering where you can get any mutual funds at 12% right now. But it is a good plan and my son is turning 18, he will get his first car in a couple months. It won't be the "sweet ride" that his buddies have, but it will be paid for and he can upgrade as his financial situation changes over the next few years of his life. Thanks Dave for the great advice!
Venturabumm 1 year ago
Its 12% over a long track record...say 20 or so years.
neemguy81 1 year ago
Well, I wouldn't call the video totally realistic, but almost. That's because betting on a 12% return on the stock market is crazy. The stock market will crash, and that is a fact!
I have a car replacement fund, but it is conservative.
CarlosMerighe 1 year ago
I KILLED a 12% return in 2009! (I was closer to 20%)
Regardless, it is MUCH better than paying the bank interest and taking big depreciation hits!
belcherboys 1 year ago
Agreed!
CarlosMerighe 1 year ago
But you LOST 40% from October of 2008 to March of 2009!!!
domn8r59 1 year ago
And Sabiancym, If you buy a new car at $25,000, figuring (on the low end) with 8% depreciation each year your car equity equals
after the
1st year - 23,000
2nd year - 21,160
3rd yea - 19,467
4th year - 17,909
5th year - 16,477
so while you have the 5 year 'everything warranty' you haven't paid a dime for repairs, but lost $8,522 in depreciation. Remember that lost money is the same as money that you paid.
Caveoabellum 1 year ago 3
@Caveoabellum Win!
nnarum23 1 year ago
Yes, but what are the odds that I won't pay anything in repairs for either a used car using this system or a new car?
Not very good over 5 years.
Buying new and getting all the security that comes with it is better than gambling with this plan. A couple problems here on a cheap older car without a warranty can completely screw the "plan".
Sabiancym 1 year ago
The thing also about this plan is not just that you don't have any car payments to make, but the way you're getting ahead is that that the older cars are the less they depreciate each year. So WHILE you're paying yourself for a new car, you're also NOT paying the massive depreciation for the NEW car. Your car is essentially worth the same as you paid.
Caveoabellum 1 year ago
This is ridiculously stupid. So what happens when that old car you're driving breaks down and you have to spring $1000 in repairs? If you had a new car and it was under warranty you wouldn't pay a dime.
This video is moronic.
Sabiancym 1 year ago
No, what's moronic is your reply to this video. If that logic behind the info in the video, then you deserve to be paying out the ear for car payments!
sds4kst8 1 year ago
@sds4kst8
Really? Because I have 0% financing, 5 year bumper to bumper and 10 year powertrain warranty. I'm not messing around with cheaper used cars that could end up costing me more in repairs because the warranty is up.
good try though.
Sabiancym 1 year ago
You have seriously been brainwashed...your argument sounded just like a U.S.Fidelis commercial.
I could see how this would sound stupid to someone who is not resourceful enough to actually do it.
As for your "10 year powertrain warranty", try to take it back 8-9 years from now and watch them laugh in your face when you expect them to actually honor their warranty.
unclesonnyonutube 1 year ago 3
@unclesonnyonutube totally agree! I bought a new car and even purchased the extended warranty. A year and a half later something (that wasn't my fault) was wrong and i took it in, and of course they didn't want to deal with it. It's wonderful having a dealership argue with you over something you PAID FOR ALREADY. I will never buy a new car again.
Bookwirm 1 year ago
Preach it!
people are always bitching about domestic quality when foreign cars give you the same problem...debt and hassle.
Its like letting someone put their hands around your throat and complaining when they choke you.
But advertisements will always reel in the weak minded and make it sound so appealing. Once you sign those papers they got their hooks in you.
unclesonnyonutube 1 year ago
@unclesonnyontube
Not to mention the money that you save in interest will more than pay for 'warranty' repairs. If you keep the vehicle well maintained you shouldn't need them anyways. Insurance should pay for wrecks.
neemguy81 1 year ago
@Sabiancym you sound like you just swallowed a dealers hook,line and sinker.
82snowball 11 months ago
@Sabiancym you sound like you just swallowed a dealers hook,line and sinker. A $1000 + $1000 in repairs is still cheaper than a $26,000 car with $6000 interest.
Repairs are cheaper than interest.
82snowball 11 months ago
@Sabiancym
The $1000 is supposed to be in your 'emergency fund', you know, for emergencies. Besides, the money you have saved on interest more than pays for the repairs.
neemguy81 1 year ago
Interest? What interest, there is 0% financing everywhere. I have 0% financing on my current vehicle, free roadside assistance, free oil changes, and a 5 year bumper to bumper warranty.
Sabiancym 1 year ago
Car salesmen just LOVE people like you, Sabiancym!!!! You get 0% financing because your paid more for the car. Let me guess.... you could have done 0% financing OR $3,000 cash back!!! Am I right? So, you're 0% just cost you $3,000. I hope you're just trolling and not serious with your ridiculous arguments.
domn8r59 1 year ago 2
I paid for a new car, not a used car with no dealer benefits.
The video is bs, he suggests buying a nice $6000 car? Where in the hell will you find one of those, I live in chicago, did a search for used cars and there are very few for under $7000, and almost all of them have 100k+ miles on them.
Not to mention the fact that he said the average new car is 26k but at the end of the video he says you'll have 12-17k for a new car every 5 years....
Sabiancym 1 year ago
@Sabiancym 100k is nothing for any decently built car.
pfun41 1 year ago
Oh, yeah, what does it cost for a new engine, or transmission plus labor? Well more than a cheap car is worth.
captainblackjeep 1 year ago
@captainblackjeep
If you take care of a decent vehicle, you shouldn't have to replace the engine or transmission. Manual transmissions are much less expensive to work on or replace than automatics. Take care of your car and it will take care of you in the long haul. A $1200 car will last a long while if you properly maintain it. Ive had mine over a year now. I spent around $400 in maintenance/insurance this year. So $1600/12=133.33 per month as opposed to ~450 per month.
neemguy81 1 year ago 2
cool! sea of emotions!
irstaxdebtrelief 2 years ago
I didn't have a car at all last Feb09 and now I have a serviceable $1500 car. I bought it in May 09 after saving back $500 per month for 3 months.. It took me a little bit to get it titled, plated & insured as I forgot to add this into the equation. Anyway, I have been saving $500 a month since June 09 and now have $4K earmarked for a newer car.. So far this plan is working for me... I am 2 upgrades away from getting a money market fund or whatever, but I really think this may work.
GoddessSinD 2 years ago 2
It does not factor things like repair costs into driving a cheap car with no warranty. Also many new car makers are offering 0% loans and that is what I always get with the extended warranty. My depreciation on my GT500 was negligable. I would be assed out if I bought a v6 Mustang or another lower end car brand new.
EXPcustom 2 years ago
But the point is to not owe anything to anybody. If you lose your job, you're still going to have to find a way to make those car payments, even with 0% interest. With Ramsey's plan, you always have a paid off car. And you're usually not driving the real low-end cars for long. Usually less than a year. Buy a smart used car, and you won't have to worry much about repair costs.
noisykingofools 2 years ago 2
That was supposed to be in reply to EXPcustom. Not sure why it didn't nest there...
noisykingofools 2 years ago
the recording quality is not very good, but in this case, and everything is clear
debttoincomeratio 2 years ago
Sounds like you could sum this up into one statement. Save for a car in advance and pay cash to avoid interest. That's all this is. You are working up to a more expensive car slowly as you have more saved and using the old car as equity, instead of buying the high dollar car first before you have the money. It doesn't consider maintenance costs or depreciation in value however.
getoffmyinternet 2 years ago
Sorry here Dave, but the car that you buy @ 11K, is still not worth 11K ...10 months later. that was the only thing I saw wrong with your video.
I do like the idea of not paying the bank though.
47927411D 2 years ago
Actually, he implied that the 11K car would be worth 7K, added to the 10K you pull from your mutual fund, that's 17K for your next "upgrade". He didn't mention depreciation on the 1st or 2nd car ($1500/$6000 respectively), but often times, older used cars sold within the same year don't depreciate that rapidly.
shuppiedoop 2 years ago
Fer cryin' out loud -- NOTHING you pay for is 'free'. The only 'advice' in this vid is to put some $450 into a mutual fund every month and after a coupla years buy a decent $16,000 car. But a lotta people just can't AFFORD to sock away $450 a month. They buy a $2000 used car in decent shape & make it last several years, repeat as necessary and upgrade if/when they can. The popular idea is BS, re: succumbing to marketting hype and buying a new car that depreciates like 50% in the first 2 years.
starmanskye 2 years ago
Good advise but even if you pay cash for the car it will depreciate in value all the same.
jch01135 2 years ago
well for people who are paying $450 car payments i think they should try this but instead of buying a car ever year they should just keep their money in the mutual fund for 10 years.
rakjune 2 years ago