Tuesday, September 8, 2009

Free Cars For Life: An Intriguing Proposition

Dave Ramsey is a Tennessee-based financial adviser and radio host of the creatively named Dave Ramsey Show. Until a few weeks ago, I had never heard of him, but I came across a presentation that offered some interesting insights on car buying, and revealed how damaging a car loan can be to your financial health.

His arguments are a stretch (18% ROI on a mutual fund? Where?), but certainly the logic is sound. Automobiles are indeed one of the worst assets that you can invest in. And when you sign up for a big car loan, you become pulled from both ends. Over time, the value of the car trickles down, and the interest paid to the bank rises.

I decided to bite on the podcast version of his show, and I was somewhat disappointed. Although he gives solid, financial advice in laymen terms, the call-answer format of the show leads to Jerry Springer-esqe callers from the Tennessee area complaining about losing their job at Spencer Gifts. It ends up being a lot more problem solving and not much wholesome planning.

Still, I did learn some valuable lessons from his website, advice that seems to echo the general consensus from the world's analysts. Your income is indeed the most powerful financial asset that you have, and if you're careful when telling your money where to go, your smart decisions will pay off tenfold in the future.


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