There is a war brewing between Dave Ramsey (boomer) and millenials according to this article in the Wall Street Journal (sorry pay walled). Essentially, many people under 40 think Ramsey’s advise is too overly simplistic or not applicable to their situation.
The thing to remember however is that personal finance is an upward educational journey similar to a career ladder. When I started working, I worked at minimum wage jobs in college to earn money and basically survived day to day. At the beginning of my minimum wage job, I was completely clueless about how anything in a work environment was supposed to function. I only learned how to do things because others, including my boss, taught and mentored me into what I needed to know often by assigning me tasks. When I graduated from college and joined the workforce as a real adult *some* of the things I learned at minimum wage jobs helped but the professional world was entirely different.
As a minimum wage worker I often was driven by “tasks” and I didn’t have to know anything about managing people, leading people, or technical things like balance sheets, income statements or cash flow statements. The professional world is entirely different and includes a broad spectrum of functions like human resources, finance, payroll, information technology, procurement, legal and more. The professional world isn’t driven by “tasks” but by collaborative outcomes and your boss and others won’t be handing you tasks, generally speaking you are the one handing out tasks to subordinates.
Dave Ramsey & Suzie Orman
When I think of Dave Ramsey or Suzie Orman I think back to my minimum wage job days. The bulk of advice is technically not wrong, “spend less than you earn” and “stay out of debt” are key “tasks” that Dave & Suzie give everyone that asks for advice but once you’re past the ‘minimum wage’ task based world and are ready for a ‘professional career’ you need a different set of mentors.
Personally, I got started in personal finance following Suzie Orman. I bought some of her books and that’s what started my educational process but within a few years I outgrew her simple minded advice because my situation became more and more complicated: RSU stock grants, stock options, deferred compensation, high income, tax shelters, etc. Suzie would recommend Roth IRAs but my income was so high that I blew right by that advice as an example. I don’t blame Suzie, it’s better to serve the clueless masses than a handful of high income earners, she has a business model to sell books to the uneducated and that’s fine but everyone will eventually need more.
Which Mentors?
This all begs a question, who should someone follow if they are past Dave Ramsey and Suzie Orman? The answer to that is it depends. It depends on how much money you have and what priorities you have. In my RESOURCES page, I started building these links for people that were asking me for advice and mentorship. I am happy to help but I’m just one person being asked by many and I don’t have the time. The resources page has starting topics on Bonds, Stocks, Options, Real Estate, Life Insurance, Tax Strategies and I will add more as I have time or come across something beneficial.
Don’t Stagnate
Unfortunately, the problem for most people is they stop growing their knowledge or worse yet, think the person they are listening to is the end all be all of financial knowledge. I am fully aware that Dave and Suzie have rabid supporters that won’t bother to listen to anyone but their chosen “savior” so don’t try to be one of those people or you’ll be trapped in a ‘minimum wage’ task based mentality forever. Grow your personal finance knowledge the way you would grow your career and don’t stop until you die.