Money Rehab with Nicole Lapin - Fact-Checking Dave Ramsey

Episode Date: June 28, 2022

Nicole found a Reddit thread about financial expert Dave Ramsey that she found upsetting to say the least. If you’ve ever been burned by a financial expert, this episode is for you.  Here are some of Nicole’s favorite peers in the financial literacy space: Tiffany Aliche and Mandi Woodruff: https://brownambitionpodcast.com/ Barbara Corcoran: https://podcasts.apple.com/us/podcast/business-unusual-with-barbara-corcoran/id1378685290  Rashad Bilal and Troy Millings: https://www.youtube.com/c/EarnYourLeisure 

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Well, it doesn't. Charge for wasting our time. I will take a check. Like an old school check. You recognize her from anchoring on CNN, CNBC, and Bloomberg. The only financial expert you don't need a dictionary to understand. Nicole Lappin. I stumbled upon a Reddit thread last night that I found really upsetting.

It brought me back to a problem that I had over a year ago, and I wanted to take today's episode to share what I needed to hear then, because this post has hundreds of comments and responses. And so it seems like there are people out there who need to hear this now. This thread was for people who have been hurt by financial personality Dave Ramsey and his advice. If you've explored financial literacy online, I'm sure you're familiar with Dave Ramsey. He's been doing a radio show for decades where he gives scholars advice on money questions. He's famously anti-debt to the extent that he advises against people even opening credit cards. And he tends

to integrate very conservative political views and Christian religious beliefs into his financial advice. His show is quite popular and he's affected a lot of people, but not always for the better. Here are some of the injuries from the Reddit thread that caught my eye. And just a warning, there's some really strong language that won't be appropriate if you're listening with kiddos. Here's one from Reddit user IndependentBug1209. This motherfucker has caused so much harm to my life. As a condition of getting married, we had to go through his course, not just anywhere, taught by my in-laws. They are millionaires. They believe every single word that

comes out of this man's mouth. He has given them license to just be fucking money-obsessed assholes. My wife is chronically ill and can't really have a full-time job. We used our entire savings on medical bills just to try to find out what was wrong. And instead of helping with the millions they have, they only ever give financial help. They just judge us for not being rich. And they judge her for not having a real job. And you should hear how they talk about the people

in the FPU classes they teach. Ugh, those people say such nice things about how helpful my in-laws are and how they can help them with their budget. But behind their backs, they just constantly belittle and talk shit about how ridiculous those people are with their money. And fuck Dave. That piece of shit tells people making minimum wage to just get three jobs if that's what it takes to be like him. He treats people with credit card debt like they're just lazy spendthrifts,

despite the fact that it's almost impossible to survive without credit card debt just for things like doctor's visits. And his stupid business moves are not the same as people trying to make it, but he treats them the same. Not to mention that business bankruptcy for rich people, which he was when he went through it, is not the same as just being broke and filing bankruptcy. He's a total piece of shit and uses the Bible to teach people how to be greedy and get rich at all costs. After all, the entire point of his company is to teach people how to get rich one day. Then Donna Noble Smith weighed in. My old church did Financial Peace University workshops. There was some useful stuff in there about budgeting and saving, but it was definitely geared towards people who had a steady,

livable income and could budget their way out of debt rather than anyone who was in actual need. I also really hated the implication that people who are poor are that way because they are too dumb to budget properly. Add in the element that it's also seen as ungodly to squander God's gifts by being poor and it's an icky mess. Redditor RedHerring25 said, I did his workshop and did the math.

If I had followed his plan exactly and nothing else had gone wrong, I wouldn't have even started saving for retirement until 42. I threw the advice in the trash. Other things went wrong, so I'm glad I did. Another Redditor chimed in and said, My dad taught Ramsey's courses. You literally had to pay Ramsey for certain courses and had to buy a whole kit to teach. Probably put us further into debt. Here's another one from Cotton Candy Peeps. I've always held the opinion that he is a borderline scam artist. He charges people who are in desperate financial situations, exorbitant amounts to give them advice that is so extreme that it is virtually not even really

doable. These comments brought me back to an issue I had with Dave Ramsey personally over a year ago. When the stimulus checks came out during the pandemic, he said, quote, I don't believe in stimulus checks because if six hundred or fourteen hundred dollars changes your life, you are pretty much screwed already. You got other issues going on, end quote. I addressed this comment in Money Rehab episode four, do you have to pay taxes on unemployment? In that episode, I told you how hearing a so-called financial expert say that people who could use a few extra hundred dollars are screwed brought me back to my childhood financial trauma. It brought me back to those long nights where I couldn't sleep because I was so hungry.

It brought me back to being in credit card debt. It brought me back to wondering if I would ever get out of that cycle or the cycle of living paycheck to paycheck. When Dave Ramsey told people they were screwed, I had a visceral, physical reaction. I felt those hunger pangs that I thought I had forgotten about. I felt the anxiety in the pit of my stomach, and I felt angry. Advice is, by definition, given to people who need help. Financial advice isn't consumed by people who have their finances figured out. Rather, it's for people who are struggling. And today, during a global pandemic and recession, there are millions of Americans out there right now who are hard-pressed to make ends meet. That doesn't mean they're bad. It doesn't mean they aren't smart. It means that

they're in the middle of a battle, likely not for the first time and likely for a combination of macro and micro economic issues that won't be fixed in time for the dinner they're struggling to put on the table. This isn't my first issue with Mr. Ramsey. I've watched videos where he addressed criticism and said, and this is a direct quote, I don't care what your theories are about money if you're broke. You're just arrogant and stupid. You write a money blog and no one cares what you think. End quote. Does this sound familiar to you? I think we all knew a schoolyard bully like this. Someone who made you think they were smart only by making you feel dumb. Also, it's easy for Dave

Ramsey, who is a millionaire, to say that someone's stupid if they're poor. But Dave, why don't you pick on someone your own size, sir? Come for the rich bitch herself and see how big and smart you are. And beyond the fact that it's just plain cruel to call someone who is financially struggling stupid, it's also irresponsible because by the nature of what Dave Ramsey does, people come to him when they're vulnerable. When I was broke and hungry, $600 would have made a big difference to me. And if someone I looked up to who called themselves a financial expert told me I was screwed, I would have believed them. I would have probably given up. I never would have put myself on the track to financial freedom if I thought that

financial freedom was impossible for me. That's what makes Dave Ramsey dangerous. I've also been disturbed by reports of how he treats his own employees at Ramsey Solutions as evidenced by several lawsuits against him. For example, one former employee alleges that she was fired because she told her supervisor she was gay, an allegation that Ramsey Solutions denies. The most infamous lawsuit was filed by former employee Brad Amos, who said he was fired for following COVID-19 guidelines. According to Amos, when the U.S. was starting to lock down, Ramsey called 900 people to an in-person meeting at their office in Tennessee. As the Washington Post points out, this in-person meeting happened only days after Tennessee Governor Bill Lee declared a state of emergency. Amos said he had to ask consistently

to be able to work from home because he was high risk. And once his supervisor finally gave in, Amos was told he would be temporarily demoted until he returned physically to the office. Amos also says that Ramsey Solutions provided a real estate agent to help him sell his home, which he never asked for. And the real estate agent was from Ramsey's network of so-called endorsed local providers or ELPs. Amos's lawyer stated, quote, these ELPs pay money to Ramsey for the privilege of being an ELP. In turn, Ramsey promotes these ELPs to their employees and on their shows, end quote. That has conflict of interest written all over it. Before on the show, I've talked about how

it's important to find financial advisors who are fiduciaries, which essentially means that the advisor has agreed to put their clients' financial interests before their own. Setting up a pay-to-play system where providers pay Ramsey to be recommended to clients and employees is putting Ramsey's financial interests before all others, period. And I will say a spokesperson for Ramsey Solutions has denied all of Amos' claims and has said that the company followed all COVID-19 laws and regulations. They also deny that Amos was fired because he wanted to adhere to said guidelines. They say that Amos' bosses told him he wasn't a good fit for the company because he, quote, displayed a lack of humility and would stand off to the side all the time.

I'm sorry, but does standing off to the side all the time sound like social distancing? One allegation Ramsey Solutions does not deny is that they fire employees for having premarital sex. Ramsey Solutions has said that they have fired at least eight employees for having premarital sex, including a pregnant woman. sex, including a pregnant woman. And yet, when a Ramsey co-host, Chris Hogan, cheated on his wife with multiple women, including an employee at Ramsey Solutions, he was not let go. He stayed for three more years until the couple went through an ugly public divorce. But Ramsey Solutions didn't even turn a blind eye to the affairs. In fact, they did the opposite. According to Hogan's ex-wife, Ramsey Solutions demanded access to confidential therapy documents so that the company could, quote, fix their marriage. Believe it or not, this is just the tip of the iceberg. Former employees have called the Ramsey Solutions workplace cult-like and have described the onboarding process as indoctrination. Beyond cult-like, there have been reports that the staff meetings are just plain scary. Like the time the Daily Beast reported that Dave Ramsey himself drew a loaded gun in a staff meeting.

Now, please don't misunderstand me here. I'm not going to rag on Dave Ramsey just for the hell of it. In fact, I love to support other financial experts. It's not like the financial literacy space can only have one expert. This is not the Hunger Games of nerds. have one expert. This is not the Hunger Games of nerds. Experts who promote financial literacy should all be working toward the same goal. We should want to help people achieve financial freedom. And if all financial experts are genuine in that mission, that means we're all on the same team. But he is not. I know that Dave Ramsey has helped a lot of people.

There are many fans out there who have gotten more control over their financial lives because of Mr. Ramsey's advice. And that is, of course, very positive. But this episode is for those who weren't helped. The ones who posted on this Reddit thread that have been hurt, taken advantage of, and felt screwed. For today's tip, you can take straight to the bank. You are not screwed. If Dave Ramsey's advice isn't a good fit for you, find someone who's a better fit. There are many other financial experts who have once felt financially helpless too, who will meet you with extra kindness and compassion. There are experts who remember those hunger pangs, the ones who hold the pain of walking through financial flames

deep in our sense memory. We are the ones holding buckets of water for those still battling them. And we'll link some of our favorites in the show notes. Money Rehab is a production of iHeartRadio. I'm your host, Nicole Lappin. Our producers are Morgan Lavoie and Mike Coscarelli. Executive producers are Nikki Etor and Will Pearson. Our mascots are Penny and Mimsy. Huge thanks to OG Money Rehab team, Michelle Lanz for her development work, Catherine Law for her production and writing magic, and Brandon Dickert for his editing, engineering, and sound design. And as always, thanks to you for finally investing in yourself so that you can get it together and get it all.