Three Sticks — Something for Everyone

I was first introduced to Dave Ramsey as an author several weeks ago when I heard him speak at a Northpoint Community Church in Atlanta. As I wrote in my article, The Value of Persistence, Dave is a dynamic speaker with a powerful message to help you transform your life. I was so enamored by Dave’s talk that I decided to read his book, The Total Money Makeover: A Proven Plan for Financial Fitness.

I loved the book. I have begun to implement his process for getting out of debt and building wealth. The Total Money Makeover is a process that Dave developed to manage his own finances. He is a highly credentialed person who went through bankruptcy and lost a multi-million dollar fortune twice. He is now an extremely successful speaker, author and radio personality. However, as his book explains it took Dave a long time to overcome the bad behaviors that caused him to twice lose his fortune.

His central premise is that there is no such thing as bad debt. All debt is bad, and to be fair to Dave’s position, he considers all debt to be stupid. In Dave’s world, debt is the consequence of immature people using money that they don’t have to purchase stuff that they don’t need. He considers them to be immature because to Dave, a basic tenet of maturity is the ability to deny gratification for a greater reward. Most of us have not been trained to to this so we go into debt to buy educations, homes, cars and virtually any other item of life.

Thus, Dave considers debt to be a behavioral problem rather than a purely financial problem. In his world the answer isn’t simply to make more money, but to acknowledge and change the behavior that caused you to go into debt. There isn’t a simple answer to this problem. Like most issues of personal development and personal growth, the only way to overcome your debt is through prayer, hard work and self discipline.

Dave has an 8 step plan that leads you to going from your current debt induced situation to becoming completely debt free. Yes, Virginia this includes your mortgage ;-). He starts you off with building a small emergency fund and quickly moves you to tackling you debt via his debt snowball concept and lastly has you paying off your mortgage. Dave claims that using his system most people are able to pay off their consumer debt (not including mortgage(s)) within 2 years and paying off their mortgage within 7 years. His total money makeover system also includes saving for retirement and college for your children. It’s truly amazing.

To test the validity of his system, I began listening into his radio show to see if real people called in to say that they were debt free and achieved financial freedom via his system. It turns out that a number of people have achieved true financial freedom on relatively modest incomes of a teacher, firefighter or other financially limited occupation.

Anyone that calls into his radio show that has become debt free is allowed to scream over the radio “I am debt free!!!!!” It’s great fun to hear the happiness and pride in their voices.

The book and radio show are simply amazing.  They also highlight my own financial shortcomings so, I’m now working to dig myself out of debt and achieve true financial freedom.

I highly recommend this book. My regular readers know that I am a huge fan of Robert Kiyosaki’s, Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money–That the Poor and Middle Class Do Not!. I think that everyone should read both books the The Total Money Makeover: A Proven Plan for Financial Fitness first and Rich Dad, Poor Dad second.

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