I attended Dave Ramsey's Townhall For Hope last night at our church. Here are the notes that I took during the seminar.
For many years, we have experienced unprecedented prosperity.
The current situation may lead to a spirit of fear, which is not healthy. Pray!
Government interference is a dumb idea.
John Maynard Keynes & FDR came up with the New Deal
- Full employment can be maintained only with government involvement
- Government should promote public works projects and hire the unemployed
- Government must deficit spend
Many people believe the New Deal brought us out of the Great Depression. However, WW2 was actually more responsible - Pearl Harbor 12/7/41
Milton Friedman challenged Keynes, saying the depression was produced by government mismanagement.
Our hope is in capitalism.
- Political Freedom
- Economic Freedom
- Moral Restraint - serve your clients, do not milk them dry
Sometimes life is not fair. It can hurt or be scary.
We must love people enough to allow them to fail. When people have no chance to fail, they also have no reason to do their best.
Perseverance leads to success.
Money is not like a cake, it is more like a candle. No has become a lost word.
Personal Responsibility
- Take care of your house
- Feed your kids
- Work
For some, prayer has become a code for I don't want to face reality.
You can pray while you are working.
The Bible says the diligent shall prosper.
Children of the Great Depression were permanently changed and became more responsible with money.
During the Great Depression, unemployment was 25% and the market was down 89%. Today unemployment is 8.5% and the market is down 57%. 2009 is not as bad as 1974 or 1982.
Investing & 401k
- 100% of all 15-year periods, the market makes money.
- Today's market is artificially low.
- Since 3/9/09, the last 7 weeks, the market is up 22%.
Where there is no vision, the people shall perish.
Continue to invest
- The market
- Real estate
(Opinion) Housing will lead us out of the recession
- Interest is under 5%
- On sale everywhere
- Pent up demand
Foreclosures
- 60% have been in 5 states
- 35% have been in 35 counties
Baby Steps
- $1000 in the bank (short term emergency fund)
- Get out of debt
- 3-6 month emergency fund
Who to trust
- someone with the heart of a teacher
- not someone trying to sell
Banking
- No big banks
- Small community bank of local credit union
- For a better level of service
Invest in things that go up with inflation
- Growth stock mutual funds
- Real estate
Gold is a crummy investment. Gold is at a 176 year high.
- From 1833 to 2001, gold increased 1% / year
- From 2001 to now, gold increased 15% / year
- Gold is now volatile (like the .com bubble)
- Gold has not been a medium of exchange in a failed economy since the Roman Empire
- After hurricane Katrina, the medium of exchange was goods & services (water & gas)
Starting a business
- You know where you stand, as all the weak competitors are already driven out.
Jobs are a symptom of the recession, not the cause.
- New jobs alone will not solve the problem.
- Unemployment is only up 3.5%
Bible - Those who plow should do so in hope.
Three perceptions for those struggling with hope.
1) Get up, take action, get moving
- Your best (only) chance at success is you
- A great place to go when you are broke, to work!
2) Don't participate in loser talk
- Read & associate
- Dan Miller - 48 Days To The Work You Love
- Who Moved My Cheese
- The average millionaire can't tell you who got thrown off the island.
3) Learn to give again
- Money or time
- We could give the government out of business.
1 comment:
I think Ramsey is quite good at what he does best, and that’s training and counseling individuals to live within their means … and that means, “free of debt.” Indeed, we are 10 weeks into his 13-week Financial Peace University at our church. In the past, we had only worked Dave’s approach to home finances about 70% of the way — but now we’re trying to seal the deal and take it all the way: no credit cards, month budgets on paper, saving like fiends, etc.
Unfortunately, Dave he falls flat when he bad-mouths precious metals as “stupid.” His mantra that “metals are never used in the barter economies that follow disasters” is a straw man argument (though somewhat understandable, given that some metal and coin dealers seem to imply that metals will be money when the feces hits the fan).
Precious metals shouldn’t be bought/held primarily for a “social meltdown” scenario, but as an historically-reliable store of value.
A couple of ignorant things I’ve heard Dave say recently about precious metals:
• “They have no more intrinsic value than a shoelace.” (IOW, precious metals only have value because man assigns it value and does so arbitrarily — we could just as easily assign similar value to dirt!) I’m utterly amazed that Dave doesn’t grasp fundamental principles of value found in precious metals such as world-wide recognizability and desirability, ease of divisibility and transportability, and high value in relation to volume and weight.
• “Precious metals haven’t been a medium of exchange since the Roman empire.” This is simple ignorance of history. What does Dave think the value of US currency was pegged to by law until only 1971? (Not to mention the fact that US quarters, dimes, and dollar and half-dollar coins were 90% silver until 1964!)
It is a paradox that, while preaching so faithfully against personal indebtedness, Dave won’t/can’t preach against our government’s indebtedness and the central-bank-issued fiat currency that aids and abets it. I know Dave is a Bible-believing Christian — well, the Bible vehemently condemns theft by the use of unjust weights and measures, which is precisely what fiat currency is: “faith-based” money that is backed up by absolutely nothing and which results in that most insidious a invisible of taxes, a.k.a. inflation. (Oh, incidentally, Dave has defined “inflation” as price increases due to variables of supply and demand. Yes, prices do fluctuate as a result of supply and demand, but inflation is an increase in the amount of money in circulation at the hands of central banks and government-owned printing presses. When more money is pumped into the system via the printing press or electronic credits, it serves to devalue the money already in circulation, and prices rise in response to that. IOW, long-term price increases are not inflation, but rather they are a symptom of inflation — more money chasing after a fixed amount of goods. The best example I can point to is the artificial boom in home values earlier this decade, which were the direct result of the ease with which more and more people were able to get loans. I.e., more money — in the form of credit — chasing after a fixed supply of houses.)
For a different — and reliable — take on our current economic mess, I would urge you to spend some time reading the articles and watching the videos of Peter Schiff. Just Google him … you’ll find him. Peter is also “death on debt” — but he called the current financial mess a few years ago, based on the fact that Americans and their government borrow endlessly to buy things they simply cannot afford. I.e., rampant consumerism and endless lines of credit.
I love Dave for what he does well, but he has a ways to go to understand the government-monetary-policy basis for the dire straits in which our nation currently finds itself.
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