Hey guys it's Andy from Magooinvesting.
Today I'm going to be talking about Dave Ramsey and his take on credit cards.
I wasn't going to be making a video today, but I was putting along on a lawn mower today
at work, minding my own business, listening to his podcast.
And he was talking about credit cards.
To this point, I've been totally on board with everything he's talked about.
This was the first time that I stepped back and did not agree with that whatsoever.
So in this clip that I'm about to show, actually it's an audio clip, the question was basically,
the viewer was talking about how he's responsible with credit cards.
He was asking why Dave has such a strong stance that no one should be using credit cards and
that they're bad overall.
I think that Dave Ramsey has done an incredible thing for millions of people helping them
get debt free.
But I disagree with him on this one.
Let's roll the clip.
"Why shouldn't responsible individuals such as myself use credit cards?"
"Because you're not.
You're delusional.
You are more responsible than the average cat, I'll give you that.
But 90,000 bucks doesn't make you rich and those point.
I've met with thousands of millionaires, I've never met someone that said he maid all his
money off my airline miles.
I got 1 percent back on discover, let's do the math on that.
You run 100,000 dollars worth of expenditures through your Discover card, you know what
you're getting?
1,000 dollars.
You want to explain to me how that's a wealth building method?
That's dumber than a rock."
While Dave is 1000% more qualified to be talking about this than me, I really disagree with
him on the 1% not mattering.
You can definitely go into arguments about credit cards being dangerous.
They definitely get abused a lot and they can put people in horrible situations, but
this 1 percent thing not mattering is something that I whole heartily disagree with.
It was really interesting because this question came right after a viewer that he recommended
that she take a part time job in addition to working full time to help make some extra
money to pay off her debt.
It was kinda confusing how he just told this woman to work harder to get some extra money
but this guy that's been responsible with his credit cards is getting 1-3 percent cash
back on his cards and he just kind of brushes this off as not mattering.
While I agree that a lot of people misuse credit cards and can put them into horrible
situations, the 1-3 percent of anything whether it be an investment or cashback, that money
is nothing to scoff about.
He even talks about how he's never talked to a super person and heard them talk about
how they got rich off of cashback.
But there's this famous story about Warren Buffet being in an elevator with a bunch of
individuals.
They have a coin on the ground and they're curious to see if he's going to pick up the
coin because he's worth billions of dollars.
It's not worth his time mathematically.
But as the door opens, he picks up the quarter and allegedly he turns around and says that
it's going to be the start to his next million dollars.
If this is true, which I think is true, taking money from anywhere you can get it is always
a good idea.
And scoffing and rolling your eyes at 1-3 percent cashback on all of your expenses really
confused me on Dave Ramsey's Take on this.
The whole point of this channel in the first place was to show that you could start investing
or saving for a safety net with just a little bit of money.
It doesn't need to be 10's of thousands of dollars to get started.
And this 1-3 percent cashback, while I'm not spending 100,000 per year, that money is something
I can further invest to make more money and hopefully make me more wealthy in the future.
I think credit cards are a fantastic topic for the future.
I am currently in the process of writing a script for that.
I really want to stop, slow down my thought, and think about all the different situations
not just my own situation for credit cards.
Because from what you can see online, people abuse credit cards and lots of people have
a bad relationship with their credit card.
It's something that needs to be thought about.
Let me know what you think about credit card, have they been a good experience for you?
If you have any questions or topics you'd like me to discuss in the future, please leave
them in the comments section down below.
Thanks for watching guys and I'll see you in the next video!