The Single-Most Important Takeaway From The Graham Stephan-Dave Ramsey Podcast Episode

Here’s what I learned

I listened to a recent episode of YouTuber Graham Stephan’s “The Iced Coffee Hour” show and his guest was the financial “legend” himself — Dave Ramsey.

Now I normally don’t agree with too much of what either of these millionaires preaches because most of their advice doesn’t pertain to me. One can’t bring himself to buy a cup of coffee while the other one has baby steps for literal babies.

I somehow made it through the entire episode because I was genuinely interested in listening to the back-and-forth banter between two millionaires. Most people have to pay for that kind of opportunity.

Toward the middle of the episode, Ramsey — the king of paying in full with cash — made a comment that actually made me pause the show and think.

Ramsey said something along the lines of: “Using debt as leverage to earn money means you’re taking on a risk.”

I’m paraphrasing, but that was the basic gist of his sentence.

And the more I thought about it, the more I agreed with him.

Here’s why it’s a solid point

I already don’t like debt. It’s a burden that my wallet and bank account don’t have time for.

But I never thought about it as being a risk or liability to myself. Ramsey’s reference was about using debt for building a business. However, it can apply to individual financial budgets as well.

For example, if I take out a car loan for a new vehicle instead of paying it off in full, I’ve now added more risk to my financial situation.

I have to keep making payments on that loan until it’s paid off. It doesn’t matter if I get sick, hurt or lose my job. I owe that money and I have to pay it every month. I risk losing my car and opportunities that come with vehicle ownership.

I never planned on taking out a car loan, but now I understand the kind of risk that comes with the situation.

It seems obvious, but associating debt with risk is a parallel that I had never thought about before.

What do I think about Ramsey’s other points?

Meh lol.

I think his baby steps are OK — but a bit flawed.

Ramsey and his team give good financial advice to people who are bad with money and bad advice to those who are already good with money.

An example of poor advice is when him and his daughter (co-host Rachel Cruze) said we should not take President Biden’s $10,000 of student debt relief.

They said: “write a check and pay off your student debt if you have it before Biden can relieve $10,000 for you.”

I’m not paraphrasing there; that’s word-for-word advice from Cruze.

The kings of “make sure you take the full IRA match from your employer because you’re missing out on free money if you don’t,” said to pass on a free $10,000.

Yeah, don’t take everything Ramsey and his team say for truth. It can be very flawed.

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