| Author |
 Topic  |
|
|
Tourney64
1000+ Penny Miser Member
USA
1035 Posts |
 Posted - 09/30/2008 : 20:10:08
|
Many of the people on the web site have heard of Dave Ramsey Financial Guru. Here's his plan for the bailout and what you can do to make a less costly bailout plan happen.
You must be logged in to see this link.
|
|
|
NotABigDeal
1000+ Penny Miser Member
USA
3890 Posts |
Posted - 09/30/2008 : 20:18:15
|
My plan. Distribute 700 billion dollars, split evenly between all eligible voters. That would automatically stimulate the economy. Tons of large item purchases (houses, cars, TVs, etc.). Why not, they just print the money anyways.... Talk about economic stimulation.
Deal |
Live free or die.
Plain and simple.
"If you love wealth more than liberty, the tranquility of servitude better than the animating contest of freedom, depart from us in peace. We ask not your council or your arms. Crouch down and lick the hand that feeds you. May your chains rest lightly upon you and may posterity forget that you were our countrymen."
- Samuel Adams |
 |
|
|
natsb88
Administrator
USA
1850 Posts |
Posted - 09/30/2008 : 20:29:57
|
quote:
Originally posted by NotABigDeal
My plan. Distribute 700 billion dollars, split evenly between all eligible voters. That would automatically stimulate the economy. Tons of large item purchases (houses, cars, TVs, etc.). Why not, they just print the money anyways.... Talk about economic stimulation.
Deal
I believe 700 billion dollars distributed evenly to every US citizen 18 or older only works out to about $3000 - $4000 per person. Not sure that would inspire the purchase of a house, but it would probably help pay down some credit card debt and make a mortgage payment or two... |
Nate
The Copper Cave
|
Edited by - natsb88 on 09/30/2008 20:32:22 |
|
|
|
Delawhere Jack
1000+ Penny Miser Member
USA
1680 Posts |
Posted - 09/30/2008 : 21:10:04
|
Dave Ramsey is a great guy. I bought his book, Total Money Makeover, and mostly followed his prescription. I have no credit card, and no debt besides my mortgage.
I think he has been providing some excellent guidance through his radio program, books, and his Financial Peace University programs. However, for whatever reason, and I'm sure it's not sinister, I think he's missed the boat by continuing to advise people to put money into mutual funds. Maybe he's an ultra optimist, and maybe (Lordy, could it be?) he is wiser than me, (wouldn't be the first time I've been outwitted ), but, given the state of the market for the last 12-18 months, I just can't see the logic in that. |
"Educate and inform the whole mass of the people... They are the only sure reliance for the preservation of our liberty." Thomas Jefferson
|
|
|
|
NotABigDeal
1000+ Penny Miser Member
USA
3890 Posts |
Posted - 10/01/2008 : 06:16:49
|
natsb88, I said ELIGABLE voters. Quite a few people over 18 are felons, or illegal, or they have some other reason to disqualify them. Even at the $3000 to $4000 level, that is more than the last check they sent out. Heck, bump it up to one trillion dollars to split, what's 300 billion more dollars anyways....
Deal |
Live free or die.
Plain and simple.
"If you love wealth more than liberty, the tranquility of servitude better than the animating contest of freedom, depart from us in peace. We ask not your council or your arms. Crouch down and lick the hand that feeds you. May your chains rest lightly upon you and may posterity forget that you were our countrymen."
- Samuel Adams |
|
|
|
Ardent Listener
Administrator
USA
4841 Posts |
Posted - 10/01/2008 : 07:57:45
|
| The idea of removing the capital gains tax really does sound good, but unless confidence is returned to the market doing so may only encourage market investors to pull out their money. And if we are going to remove the capital gains tax then we must remove taxes on all savings. |
Realcent.forumco.com disclosure. Please read.
All posts either by the members, moderators, and the administration of http://realcent.forumco.com are for your edification and amusement only. It is not the intent of realcent.forumco.com or its host to provide investment, medical, matrimonial, legal, security or tax advice and nothing posted here should be considered to be so. All rights reserved.
Think positive. |
|
|
|
Ant
Penny Hoarding Member
USA
894 Posts |
Posted - 10/01/2008 : 08:00:17
|
quote:
Originally posted by Delawhere Jack
I think he's missed the boat by continuing to advise people to put money into mutual funds.
I agree, although I think he's not alone in regards to that bit of advice. There are some good funds out there, but I do think he should urge his readers/listeners to diversify. I think that a lot of folks now have the impression -- and again, this is not just due to Ramsey -- that contributing to a 401(k)/IRA kept entirely in a mutual fund (or funds) = sufficient retirement planning. Most people couldn't tell you who their fund manager is, or what's in the fund, or how often the stocks are turned over, etc. It's just not as simple as "pay yourself first", etc., unfortunately. Although that's a good start. |
Lovely dimes, the liveliest coin, the one that really jingles. --Truman Capote
Coins are the metallic footprints of the history of nations. --William H. Woodin |
|
|
|
Ant
Penny Hoarding Member
USA
894 Posts |
Posted - 10/01/2008 : 08:07:03
|
I. INSURANCE
a. Insure the subprime bonds/mortgages with an underlying FHA-type insurance.
Government-insured and backed loans would have an instant market all over the
world, creating immediate and needed liquidity.
b. In order for a company to accept the government-backed insurance, they must do two
things:
1. Rewrite any mortgage that is more than three months delinquent to a
6% fixed-rate mortgage.
a. Roll all back payments with no late fees or legal costs into the
balance. This brings homeowners current and allows them a
chance to keep their homes.
b. Cancel all prepayment penalties to encourage refinancing or
the sale of the property to pay off the bad loan. In the event of
foreclosure or short sale, the borrower will not be held liable
for any deficit balance. FHA does this now, and that
encourages mortgage companies to go the extra mile while
working with the borrower—again limiting foreclosures and
ruined lives.
2. Cancel ALL golden parachutes of EXISTING and FUTURE CEOs and
executive team members as long as the company holds these
government-insured bonds/mortgages. This keeps underperforming
executives from being paid when they don’t do their jobs.
I like these two suggestions, but not the suspension of the capital gains tax. |
Lovely dimes, the liveliest coin, the one that really jingles. --Truman Capote
Coins are the metallic footprints of the history of nations. --William H. Woodin |
|
|
|
swusc
Penny Hoarding Member
USA
553 Posts |
Posted - 10/01/2008 : 15:15:16
|
#2 on the remove market to market rules
If I tell you my house is worth $1,000,000, but someone will only pay $100,000. What is it worth? You can write any number you want on a piece of paper, but other banks are going to know it isn't worth that. They know you aren't solvent, and still wont lend to you. Just because you say you are on a piece of paper don't mean crap. If David Ramsey thinks it does, then I want to discuss borrowing some money from him.
#1
That will totally screw over taxpayers. Yet the banks will love it. If I was a bank, then I wouldn't insure anything, but the crappy loans. So unless you make that insurance very costly...i am going to stick the government with all the losses. At least under the Paulson plan, the banks have to take a hit from PAR. The insurance plan doesn't allow the government to make any of the profit, but take all the losses. That sucks badly for taxpayers.
The Fed target rate is 2%, but the actual rate is around 6%. The Fed has lost control. They keep printing money, doing swaps with other central banks, and etc, but the overnight rate doesn't drop. The whole Treasury yield curve under 3 years is below the Fed's target overnight rate. No one will lend to anyone. The banks don't trust each other to be able to repay the loan, so what should be near risk free has 4% risk premium. That is killing the commercial paper market, which companies have to have to survive. I read that AT&T couldn't get paper issued for more than overnight. That is awful for business.
You must have a plan that makes the banks solvent quickly. (the CEO pay them pretty much removes that quickly part, which is why Paulson is against it) The government should get the assets for less than they are worth, but pay more than market price. It is a win, win for the government and banks. The government gets an asset for say 80 cents on the dollar, but the banks get a price above what the illiquid market will pay. If you think the mortgages will bring in $100 Million in present value dollars, then the government should pay say $80 million. The bank might only be able to get $50,000,000 in the market place for them. You have injected $30 million into the banks by buying the mortgages. Warren Buffett said the government would make money on the bailout plan. Why does everyone keep acting like it is money spent. It is money invested.
We have a major problem with the banking system. Congress is taking forever to do something and they are make it a very hard sell to the banks. If you make it to hard on the banks, then they will just wait until they have to use the program. That doesn't help lending, which is the whole point. That means we are still going to spend/invest the money, but get less for it.
Congress is listen to the people. Well most people are clueless to the problem.
-SWUSC |
`Everybody is ignorant. Only on different subjects.' Will Rogers
"This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the "hidden" confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard." Alan Greenspan, 1966. |
|
|
|
eharrison
Penny Pincher Member
USA
234 Posts |
Posted - 10/01/2008 : 15:15:32
|
Dave is a cool guy but I'm pretty sure that he advises putting money anywhere BUT PMs so in that respect he has missed the mark. However his stance on debt is great! DON'T GET INTO ANY!
|
Freedom is popular
That's why I voted
Ron Paul! |
|
|
|
Tourney64
1000+ Penny Miser Member
USA
1035 Posts |
Posted - 10/01/2008 : 18:55:34
|
His stance on putting money into growth mutual funds is a long-term strategy. In the short term it doen't look to good. You have to take the good with the bad. If you can't afford to keep the money in the market long-term, then you shouldn't.
I listen to him daily and watch him on TV. I have bought several copies of his book "Total Money Makeover" for family. I am debt free except for the mortgage and that is being paid off early. |
|
|
|
Ant
Penny Hoarding Member
USA
894 Posts |
Posted - 10/01/2008 : 19:40:30
|
quote:
Originally posted by Tourney64
His stance on putting money into growth mutual funds is a long-term strategy. In the short term it doen't look to good. You have to take the good with the bad. If you can't afford to keep the money in the market long-term, then you shouldn't.
The issue is not to choose an investment for the long haul. That's a well-established planning solution. The issue is that Ramsey is such a strong advocate for mutual funds.
Several points to consider:
1. There are so many options out there, but I think some (many?) of his listeners don't diversify. And if a person does not diversify, not just within funds, but across the range of investments, he might end up with less for retirement than he expected.
2. More people are in stock-based mutual funds now than ever before. Yet I'd argue that the average person could be better served by diversification among two or three options (money market, PMs, bonds/T-bills to name a few). Ramsey is like the guy who only has a hammer -- everything looks like a nail.
3. Add to this the fact that the fund representatives at investment firms have no fiduciary duty toward investors in a fund. They are salesmen. It's a little like trusting the guy at the car dealership to pick out a model that's right for you.
4. One last thing Ramsey might consider before advising his audience to invest in mutual funds is that the great majority of funds have only been in existence for a very short time. Couple that with the fact that in several fund families, the stocks within the funds might only have been in the market for a few years. There's not a long history there.
5. Much of Ramsey's audience is composed of folks who have just worked themselves out from under a ton of debt. They place a good deal of trust in his advice. They might not be aware of all the options, or aware of the benefits of other options. Ethically, he needs to inform listeners/readers about the pros and cons of a variety of investments. It's not enough for him to be glib and call CDs "Certificates of Depression", for example.
None of these are reasons to run from funds. You can make a ton of money in a mutual fund. One I had great luck with was Templeton's BRIC fund. But it's misleading for Ramsey to give the impression that one can put one's money in a fund and forget about it.
Having said all that, I think Ramsey does an EXCELLENT job of helping people get out of debt and stay out of debt. That is his real strength. |
Edited by - Ant on 10/01/2008 19:53:10 |
|
|
|
Tourney64
1000+ Penny Miser Member
USA
1035 Posts |
Posted - 10/01/2008 : 20:07:08
|
| He said that go with an investment firm that has the mind of a teacher instead of just selling to you and insulting your intelligence. He also looks for mutual funds that have long track record of 8% or higher growth. Yes, and he suggests diversifying. |
|
|
| |
Topic |
|
|
|
An Answer to the Bailout Plan
Forum Locked
