Townhall.com, Where Your Opinion Counts
Talk Radio:   Bill Bennett   Mike Gallagher   Dennis Prager   Michael Medved   Hugh Hewitt   
BREAKING NEWS  LeftArrow - Townhall.com : Conservative, Political, Republican   RightArrow - Townhall.com : Conservative, Political, Republican  
Columns, funnies & more in your inbox!
Login | What's Hot
  • Check the boxes and send us your email address to receveive your free newsletter
  • Your daily must-read of conservative columns, cartoons and news. Coulter, Sowell, Krauthammer and more.
  • Townhall.com’s weekly inside scoop on what’s happening behind the scenes in the world of politics. When news breaks, we report.
  • Signup to receive the latest daily Townhall cartoons
Tuesday, July 29, 2008
Dave Ramsey :: Townhall.com Columnist
Student Loans, Cars, and Insurance
by Dave Ramsey
Forward Print Share Single Page
Vote on It:
Average Vote:
[+] Text [-]
 
 
Poll
Will the Dems' health care Christmas Present to America be an improvement or detriment to our health care system?


I’m okay with you buying a car. You’ve managed your money well, and you’re in great shape financially. But when it comes to the big shiny things, pay cash or don’t buy it!

- Dave

Dear Dave,

Does having supplemental insurance make good financial sense?

Anonymous

Dear Anonymous,

Some of it does under the right circumstances. But you have to be very careful when choosing these products, because there are lots of companies out there trying to sell you stuff that doesn’t make good financial sense.

One example is short-term disability insurance. I would not do that. Another example is cancer insurance. I wouldn’t do that, either. But they also sell good stuff like long-term disability insurance. That’s something you really need!

Beware of the little gimmick insurance plans, too. Those six dollar a month things are not a good idea!

- Dave

1 2
| Full Article & Comments | < Previous
Share:
Forward Print Single Page
Vote on It:
Average Vote:
 
About The Author
Dave Ramsey is a personal money management expert, popular national radio personality and the author of three New York Times bestsellers.
 
TOWNHALL DAILY: Be the first to read Dave Ramsey column. Sign up today and receive Dave Ramsey and Townhall.com's daily lineup delivered each morning to your inbox.

Join The Debate!

Post Your Comment
(18 comments so Far)
View in ascending order     View in descending order
Reply # 1
Date: Jul 31, 2008 - 1:32 AM EST
Sweetie hit the jackpot!!!

In the early 1970s we decided we must plan ahead for retirement. We found a class that would give Sweetie information about buying, managing, renovating, and selling a building for a profit.

Sweetie did so much more and so much better than anyone could expect. On a street lined with apartments, she went door to door asking if anyone wanted to sell, and hit the jackpot.

We (snd I do mean WE) completely renovated the 17 units — new carpet, paint, reworked all bathrooms and kitchens. Among all the other things, Sweetie “antiqued” 17 sets of kitchen cabinets. Beautiful.

Eighteen months later we sold it for about 170% of what we paid for it. Well, actually we traded it (an IRS expression) for a 39 unit building, sold that one for a great profit (10 times our original investment) a couple of years later, and on and on, and the rest is history,

But give credit where credit is due, “The rest is HERstory!”

I then got off the computer industry payroll, and we traveled the world for the next 25 years.
Flag as Offensive

Reply # 2
Date: Jul 31, 2008 - 12:14 AM EST
What's more expensive?
A) Paying $100,000 cash for a property
B) Paying $100,000 amortized over 15 years
C) Paying $100,000 amortized over 30 years

Most people, including Mr. Ramsey, would say C. But that's because they never look at the whole picture. They only look at the total amount paid out over that 30 years.

It turns out that choice A is the most expensive. This is explained in detail in the book LEAP by Bob Castiglione, but I will attempt a short explanation.

What Mr. Ramsey and other bad economists don't seem to understand is that there are unseen variables in addition to the seen ones. Yes, if you pay over 30 years, the total amount you pay is much more than $100,000, but what about Opportunity Costs? What COULD you have done with that money? What about inflation? These things never seem to be discussed.

For the full story, read the book referenced above and also check out Killing Sacred Cows. Both are amazing books that, at the very least, will give you another viewpoint. Knowledge is power.
Flag as Offensive
Sign Up to Post Your CommentsSign Up to Post Your Comments
If you are already registered, click here to login. Otherwise, please take a few seconds to register with Townhall.com. Once you sign up, you’ll be able to post your comments immediately, use the action center, get podcasts, and more!
Note: Fields marked with a red asterisk (*) are required.
Salutation:
First Name:
*
Last Name:
*
Email:
*
Nickname:
*
Note: Nick name will be shown when you post comments.
Address 1:
*
Address 2:
City:
 *
State:
 *
Zip:
 *
Phone:
       
Your daily must-read of conservative columns, cartoons and news. Coulter, Sowell, Krauthammer and more.
(Bi-Weekly) We highlight the best opportunities from our partners for surveys, action items and more.