[alnorth]

I'm sure Dave Ramsey is a good man and doesnt beat his wife and all that.

When it comes to financial advice, his ideas are pretty stupid for people who are disciplined enough to manage their debts and investments wisely.

His advice is kind of like dealing with an alchoholic. With a normal person its fine to have an occasional drink or two, but with a recovering alchoholic, you need to have zero tolerance. They cant have a drop or they will just fall right back into the gutter. Dave Ramsey's advice is good for debtaholics, people who are too immature or foolish to manage their impulses to buy and borrow unwisely.

For everyone else with good credit and discipline, paying cash instead of borrowing at under 4.5% after-tax interest is equivalent to throwing money down a rathole. If you take the upfront cash or the extra principle payments you would have made and invested it instead in a broadly-diversified portfolio of funds over the long haul, when the mortgage is finally paid off you will be wealthier than the guy who paid it off earlier.

Dave Ramsey also believes that you should never use credit cards at all, which is just plain stupid. Again, if you are mature and disciplined enough to pay the balance off every month, its not hard to find credit card companies willing to pay you free money and airline miles for giving their card the action and processing fee that the merchant has to pay them. Its pretty simple: whether I write a check or use my card and pay the balance, I have a certain amount of money I have to spend every month to live. I can either write the check/use cash, or I can charge it all and pay the balance off. Same money is spent either way, except my credit card company is willing to give me a 1% kickback for giving their card some action and processing fees received from the stores.

By dealing only in cash and not having credit cards, over time your credit will return a "no-hit" or a "no-score", which is basically about as bad as having bad credit, preventing you from ever being able to borrow at good rates if you need the money.