Can We Trust Dave Ramsey’s Investing And Retirement Advice?

Today we backtest Dave Ramsey's investing advice and his retirement withdrawal strategy to see if he is right or wrong! Dave Ramsey claims that we should be investing only AFTER we are debt free (except our primary home) and have 3-6 months of living expenses saved in cash. Then he has an entire order of operations when it comes to the investing accounts we should use. After that Dave claims we should be investing in 4 kinds of Mutual Funds. I took notes from his website and built a portfolio of those kinds of funds, put them in a test portfolio in the proportions he recommends (each one an equal share, so 25% in each) and backtested it's performance in the stock market from 2010 until today. I compared those results with investing in a total stock market index fund and also against my own investment portfolio. Part 2 of the video is testing Dave Ramsey's retirement withdrawal strategy. He is infamous for claiming that as long as we are making 12%+ in the stock market that we can withdraw 10% from our investing accounts each year in retirement and everything will work out. That's always sat a bit wrong with me based on the books I've read and research I've done but finally today we test it with a proper modeling program to see what happens. Do we run out of money if we withdraw 10% per year? How much safer would our retirement be if we ignored Dave's advice and only withdrew 4% per year like the common wisdom (and research) recommends? Today we find all that out! ⏱Handy Timeline: 0:00 Intro 0:48 Who is Dave Ramsey? 1:03 BEFORE you start investing: 2:30 Investing Accounts per Dave 3:20 Dave and I disagree here 5:33 Psychological benefits of debt free 6:20 What Dave says to invest in! 10:25 What Dave says NOT to invest in 10:58 Finding investments Dave would like 13:28 Backesting Dave's performance vs my own! 18:14 Part 2! Juicy Withdrawal Rate Test 19:18 My BIGGEST problem with Dave's advice 24:31 My opinion in summary 25:08 Next videos 25:15 Bloopers Dave's Investing Philosophy: https://www.ramseysolutions.com/retirement/daves-investing-philosophy ===== 📗Easily learn all the essentials of stock market investing in a single afternoon: https://brendan-s-site-0fd7.thinkific.com/courses/Investing ⧉Join this channel to get access to perks: https://www.youtube.com/channel/UCVaO3-9dDkesDFAFrvqvcFg/join Free Digital Products I made for you: Relationship Money Plan: https://brendanbutler.gumroad.com/l/RelationshipMoneyPlan Net Worth Tracker: https://brendanbutler.gumroad.com/l/InvestingChecklist Budgeting Spreadsheet: https://brendanbutler.gumroad.com/l/BrendanBudget2022 New Investor Checklist: http://bit.ly/newinvestorchecklist Better Goal Template: https://bit.ly/bettergoaltemplate Memento Mori Life Grid: https://bit.ly/MementoMorigrid My Free Newsletter: https://brendanevan.substack.com/ My Early Retirement Projection Spreadsheet: https://brendanbutler.gumroad.com/l/RetireEarly ===== Services Worth Checking Out: 👨‍💻Data made easy with Fennel, the superpowered investing app: Free trial without a credit card AND get 1-12 months free!: http://fennel.sjv.io/c/2906384/1959471/20785 🐿Start investing with Acorns! Now get $20 when you use my invite link: https://www.acorns.com/brendan/ 🤿Want to dive deeper with an investing service built for the pros and available to everyone? Check out Interactive Brokers: https://www.interactivebrokers.com/mkt/?src=brendanevanPY1&url=%2Fen%2Fwhyib%2Foverview.php 💡Make informed decisions with deep investing tools and research with Seeking Alpha (My subscribers get 20% off plus the first 7 days free!): https://www.sahg6dtr.com/3146C9P/R74QP/ (These are ALL affiliate links) ===== 📥Contact me here for business purposes: Brendan@brendanevan.com #BrendanEvan Disclaimer: Any financial or investing-related topics discussed on this channel are not from a professional investment advisor and are not financial advice for you. This is for entertainment and inspirational purposes only. My opinions are not reflective of the companies mentioned in the video. Also please know that many of the links I have in video descriptions like this one are affiliate links which means I may be compensated by the company whom you do business with at no extra expense to you. Thank you for your support! Updated Acorns Affiliate disclosure as of 4/9/24: Paid ad. Compensation provides an incentive to positively promote Acorns. The information and opinions presented are for informational purposes only and represent the views of the promoter as of the date created and are subject to change. Investment advisory services offered by Acorns Advisers, LLC, an SEC-registered investment adviser. View important disclosures at https://www.acorns.com/brendan/ and Acorns.com.