Dave Ramsey

Dear Dave,

I’m 21 and make $45,000 a year. I’ve heard about your 100 percent down plan to buy a house. I’d like to know more about this and where I should put the money I’d be saving.


Dear J.P.,

I like the way you think! But there’s really no big “plan” to what I’m talking about. It’s not rocket science. It’s just a matter of saving like crazy and living on rice and beans for a few years so that you can save up the cash to buy your home outright.

If you’re looking at buying a place in less than five years, I’d put it in a money market account. In this case, you’re not going to be saving long enough for the interest to be a good friend. Your best buddy is going to be a low-key lifestyle.

If your timeframe is more like 15 or 20 years, then you should look into a mutual fund. Most people don’t stretch the idea out over that period of time, but if you do you’ll get some great help from a friend named compound interest.

I don’t beat people up for taking out a 15-year, fixed rate mortgage. But I’m always for people living like no one else so that later they can live like no one else. Go for it, J.P.!

- Dave


Dear Dave,

At what age do you stop paying your children’s life insurance? My son is 24, and he’ll be getting out of the Navy next year and starting college. My daughter is currently in college, and we’re paying for her education in addition to her life insurance.


Dear Sandra,

I think you need to scrap the whole concept. You don’t buy life insurance for kids. A small rider – just enough to cover burial costs – on your policy will do the job in the event that something tragic happens. And make sure you’re using a good, term life policy.

When your kids are out on their own, that’s when you turn everything over to them and let them live their own lives. This means paying the bills and any insurance they need!

- Dave


Dear Dave,

How should a new, small business that competes with larger, established companies sell their services?


Dear Anonymous,

You know, it’s really not that hard to beat a bigger company. If you connect with a customer professionally and at the heart level you’ll win most of the time.

Start out with a superior level of service, and a vastly superior team around you. Quality people are an essential component – especially with a small business.

Make them part of the dream and the vision of what you’re trying to accomplish. It makes all the difference in the world when the people representing you actually care about the business and the customers, and take the time to create real relationships with them.

And, of course, a better price doesn’t hurt, either!

Dave Ramsey

Dave Ramsey is a personal money management expert, popular national radio personality and the author of three New York Times bestsellers.
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