What type of credit card do you use when booking cruises?

[pacruise804]

11 hours ago, RocketMan275 said:

I've taken the Ramsey class and I've taught it as well.  Dave used to be on talk radio in this area so I've listened to many of his broadcasts.  What is important is Dave's target audience.  These people do not pay off the balance, they pay the minimum due.  A common caller goes like this: "we have 5 credit cards and all are maxed out.  We have an SUV and a pickup, both on lease.  Two years we took out a home equity load to pay off the credit cards and now we have a loan there and the credit cards are maxed out again."

 

If, many on this thread, you can get a Chase Sapphire Reserve Card, you're not in Dave's target audience.  Still, taking his class is worthwhile because he teaches a lot of stuff on basic budgeting and beginning investing (mutal funds).  This class fills a void in our formal education programs that don't cover basic financial issues like compound interest.  

 

One of Dave's most important points is this: both spouses need to be involved in managing the finances.  Family financial meetings are a must if budgeting is to work.  Yes, Dave is big on budgets.  We did our first family budget during his class and a budget is the cornerstone of financial success.  Having a workable budget is far more important than credit v. debit cards.

 

I absolutely agree with both of these statements.  I also find his re-worked budget (EveryDollar) to be almost useless (oddly enough for a plan that focuses on budget).  I really like You Need A Budget (YNAB), which even has a method for tracking credit card spending - I don't use that portion, but like that it is there if we ever decide to go back to credit.

 

My husband and I weren't Dave's target either (only mortgage debt when we took his class and had decent investments, but were still working on Baby Step 3).  We were already doing many of the things he suggested, but wanted to be even better with our money.  Others in our class were in a similar situation of wanting to be good stewards, and one couple who we are still good friends with I know use credit cards regularly.

[ducklite]

11 hours ago, RocketMan275 said:

I've taken the Ramsey class and I've taught it as well.  Dave used to be on talk radio in this area so I've listened to many of his broadcasts.  What is important is Dave's target audience.  These people do not pay off the balance, they pay the minimum due.  A common caller goes like this: "we have 5 credit cards and all are maxed out.  We have an SUV and a pickup, both on lease.  Two years we took out a home equity load to pay off the credit cards and now we have a loan there and the credit cards are maxed out again."

 

If, many on this thread, you can get a Chase Sapphire Reserve Card, you're not in Dave's target audience.  Still, taking his class is worthwhile because he teaches a lot of stuff on basic budgeting and beginning investing (mutal funds).  This class fills a void in our formal education programs that don't cover basic financial issues like compound interest.  

 

One of Dave's most important points is this: both spouses need to be involved in managing the finances.  Family financial meetings are a must if budgeting is to work.  Yes, Dave is big on budgets.  We did our first family budget during his class and a budget is the cornerstone of financial success.  Having a workable budget is far more important than credit v. debit cards.

We don't have a budget.  We just intuitively live within our means (including savings for long and short-term needs and wants) and always have. 

As to the investing, we have managed accounts.  We let the experts (with our high-level oversight) take care of the day-to-day wealth management.  They are paid based on the value of our accounts, so there is an incentive to perform their duties well.  We couldn't manage our investments as well as they do, and even after costs wouldn't have grown them nearly as profitably.

[ducklite]

11 hours ago, AlanF65 said:

The social media apps track you and know if you are in a grocery store, they have the ability to send you a coupon for xyz product at a discount while you are in the store. The minute detail they get from likes and mentions along with searches and purchases puts today's shopper at a massive disadvantage. Online retailers prices change based on inventory, demand and what link got you there.   

 

Who the heck walks around a grocery store looking at their phone waiting for a coupon to show up?   Or even looking at social media?  

 

By the way, you can turn location tracking off on any app you don't want to track you.  I have an extremely limited number of apps I allow to track me.  Google maps, Find my phone, Weather (so I can be alerted to tornado warnings), there might be one or two more.  I would rather not get the coupon for $.50 off which I won't see until later that day anyhow than have them tracking me.  

[2wheelin]

41 minutes ago, ducklite said:

We don't have a budget.  We just intuitively live within our means (including savings for long and short-term needs and wants) and always have. 

As to the investing, we have managed accounts.  We let the experts (with our high-level oversight) take care of the day-to-day wealth management.  They are paid based on the value of our accounts, so there is an incentive to perform their duties well.  We couldn't manage our investments as well as they do, and even after costs wouldn't have grown them nearly as profitably.

I don’t believe anyone would suggest not using an investment manager. The point is that you need to educate yourself enough to know what they are doing (oversight).

We live intuitively within our means as well, but that ability comes from years of practice and learning the difference between needs and wants. Way too many people were never taught that.

Many people could benefit from Ramsay’s advice without giving up credit cards. He is so much more than that.

[RocketMan275]

1 hour ago, ducklite said:

We don't have a budget.  We just intuitively live within our means (including savings for long and short-term needs and wants) and always have. 

As to the investing, we have managed accounts.  We let the experts (with our high-level oversight) take care of the day-to-day wealth management.  They are paid based on the value of our accounts, so there is an incentive to perform their duties well.  We couldn't manage our investments as well as they do, and even after costs wouldn't have grown them nearly as profitably.

I've heard about 'intuitively' living within your means.  You would be surprised at how much you can save by developing a budget and tracking expenditures. 

There have been many studies of managed investing.  Very few show a significant advantage in investment return.  You would do much better choosing a few low cost index funds.  Managed investing is just another example of trying to beat the market.  Good in theory but poor in practice.  The ones who get rick from managed investments are the 'experts'.   

[RocketMan275]

48 minutes ago, 2wheelin said:

I don’t believe anyone would suggest not using an investment manager. The point is that you need to educate yourself enough to know what they are doing (oversight).

We live intuitively within our means as well, but that ability comes from years of practice and learning the difference between needs and wants. Way too many people were never taught that.

Many people could benefit from Ramsay’s advice without giving up credit cards. He is so much more than that.

Some Ramsey instructors do make a big deal about having the class shred their credit cards.  I never even once suggested such an thing.  Credit can be a good tool for some just as it can be financial poison for others.  

Dave argues that debit cards are a substitute for credit cards.  They may even be the superior choice in some cases.  However, they are not a panacea.  

For example, the time we were informed that my mother in law was in a terminal state in Germany.  Have you ever tried to book the next overseas flight without a credit card at 2AM on a Saturday night?  

[ducklite]

36 minutes ago, RocketMan275 said:

I've heard about 'intuitively' living within your means.  You would be surprised at how much you can save by developing a budget and tracking expenditures. 

There have been many studies of managed investing.  Very few show a significant advantage in investment return.  You would do much better choosing a few low cost index funds.  Managed investing is just another example of trying to beat the market.  Good in theory but poor in practice.  The ones who get rick from managed investments are the 'experts'.   

We're doing just fine, thanks.  And no, we wouldn't save anything with a budget.  We have worked and saved to be in a financial place where we are able to do what we want to do within reason.  We aren't much into material things and tend to spend most of our discretionary income on experiences.  Travel, theater tickets, tickets to see our favorite sports teams play, etc.  We can afford it, so why wouldn't we?

At our last meeting with our financial adviser we were told that we could retire at 59 1/2 and still not use up about half of our savings in our lifetime, living the same life we are living now.  Because we want to travel extensively when we retire, we'll work a few more years.

 

I don't want to have to take the time to pour over financial things, which is why I pay someone to manage it for me.  They have done very, very well for us, even in market downturns.  At this point we've become more risk adverse and have shifted our strategy into a more stable portfolio.  We've been doing this for 30 years and have ridden out bear and bull markets ahead of the game.  We and our advisers and wealth managers have obviously been doing something right.

[pacruise804]

@ducklite I'm glad you have a process that works for you.  I personally would have more stress if I didn't budget, but that's what works for me (plus I'm a bit of a numbers nerd and actually enjoy doing finances 🙂 ).  We plan to fully retire by 60 and we should never touch principle barring a major medical expense.

 

We've each done what works for our families and it reinforces that there isn't only one way to build and keep wealth.

[RocketMan275]

8 hours ago, ducklite said:

We're doing just fine, thanks.  And no, we wouldn't save anything with a budget.  We have worked and saved to be in a financial place where we are able to do what we want to do within reason.  We aren't much into material things and tend to spend most of our discretionary income on experiences.  Travel, theater tickets, tickets to see our favorite sports teams play, etc.  We can afford it, so why wouldn't we?

Congratulations on your good fortune.  I am firmly convinced that most will improve their financial situation through budgeting and pursuing their financial future through low cost index funds.  Your Mileage May Vary.

[Toofarfromthesea]

22 hours ago, AlanF65 said:

The social media apps track you and know if you are in a grocery store, they have the ability to send you a coupon for xyz product at a discount while you are in the store. The minute detail they get from likes and mentions along with searches and purchases puts today's shopper at a massive disadvantage. Online retailers prices change based on inventory, demand and what link got you there.   

 

 

I don't disagree with this, but it has nothing to do with whether to use a credit card or not, or whether using a credit card causes you to spend more than using cash.

[ducklite]

1 hour ago, RocketMan275 said:

Congratulations on your good fortune.  I am firmly convinced that most will improve their financial situation through budgeting and pursuing their financial future through low cost index funds.  Your Mileage May Vary.

I do agree that for people with poor impulse control and those not able to separate needs from wants, budgeting can help.  More than anything it can help people who aren't in the habit of saving to automatically do so.

 

As far as not hiring a professional, I look at it this way.  I'm the CEO of my life.  Just like a CEO, I hire the best people to work for me, because I can't be an expert at everything.  Hiring a wealth management company is like hiring a plumber.  They are the people with the years of training who will get it right without making rookie mistakes that end up costing more than hiring someone to do it right to begin with.

 

 

[RocketMan275]

11 hours ago, ducklite said:

I do agree that for people with poor impulse control and those not able to separate needs from wants, budgeting can help.  More than anything it can help people who aren't in the habit of saving to automatically do so.

 

As far as not hiring a professional, I look at it this way.  I'm the CEO of my life.  Just like a CEO, I hire the best people to work for me, because I can't be an expert at everything.  Hiring a wealth management company is like hiring a plumber.  They are the people with the years of training who will get it right without making rookie mistakes that end up costing more than hiring someone to do it right to begin with.

 

 

You do realize that most studies have shown the experts do no better than an index funds?  The investment fees are too much of a drag on performance.  I'm not advocating investing in individual stocks.  Index funds are far superior in most cases.

[iancal]

Credit cards have no impact on how much we spend.

 

Life  is all about choices.  We are responsible for our choices.  I have little patience with people who blame the increasing consumer credit stats on ease of credit, credit cards, whatever.  It is a cop out.

Edited February 8, 2020 by iancal

[ducklite]

4 hours ago, RocketMan275 said:

You do realize that most studies have shown the experts do no better than an index funds?  The investment fees are too much of a drag on performance.  I'm not advocating investing in individual stocks.  Index funds are far superior in most cases.

And again, you do realize that I don't want to take the time to manage those.  We are more than pleased by the performance we have gotten for the price we have paid.

[ducklite]

2 hours ago, iancal said:

Credit cards have no impact on how much we spend.

 

Life  is all about choices.  We are responsible for our choices.  I have little patience with people who blame the increasing consumer credit stats on ease of credit, credit cards, whatever.  It is a cop out.

Exactly!  We have about $180K in available credit lines and currently owe $301 on one card for a plane ticket purchased two days ago, and about $2000 of a combination of normal monthly spend (gas, groceries, an oil change, a medical bill, and some items related to our upcoming cruise on the Sapphire Reserve.  All of it will be paid off this weekend--before the next billing statements even arrive.

[Stateroom_Sailor]

16 hours ago, RocketMan275 said:

You do realize that most studies have shown the experts do no better than an index funds?  The investment fees are too much of a drag on performance.  I'm not advocating investing in individual stocks.  Index funds are far superior in most cases.

 

I would put the same criteria on "the experts", as you do mutual funds: a lengthy history of outperforming the market.  Who cares if someone is cherry picking the other way?

[Stateroom_Sailor]

What we all need is the "Dave Ramsey Rewards Visa", that denies all impulse purchases, gives cash-back towards your Roth IRA, and a little automated lecture when you call in to make a payment.

 

 

[RocketMan275]

7 hours ago, Stateroom_Sailor said:

 

I would put the same criteria on "the experts", as you do mutual funds: a lengthy history of outperforming the market.  Who cares if someone is cherry picking the other way?

Index funds do not pick stocks.  You'll find few 'experts', if any, who outperform the market over a lengthy history.  You might want to read "A Random Walk Down WallStreet" or "Bogel On Mutual Funds".  Or, then there are many experiments that match the 'experts' versus throwing darts.  Essentially, the fees charged by the experts do not add performance and simple index funds are better over the long run.

[2wheelin]

59 minutes ago, RocketMan275 said:

Index funds do not pick stocks.  You'll find few 'experts', if any, who outperform the market over a lengthy history.  You might want to read "A Random Walk Down WallStreet" or "Bogel On Mutual Funds".  Or, then there are many experiments that match the 'experts' versus throwing darts.  Essentially, the fees charged by the experts do not add performance and simple index funds are better over the long run.

Mine does, for the last 40 years. We work together to make choices and 99% of the time follow his advice. No part time market watcher has more insight than a financial team. And yes, I am looking at net returns.

[RocketMan275]

12 minutes ago, 2wheelin said:

Mine does, for the last 40 years. We work together to make choices and 99% of the time follow his advice. No part time market watcher has more insight than a financial team. And yes, I am looking at net returns.

Versus what benchmark?  You should be skeptical of performance measures chosen by a team of professional 'experts' who often are selective in choosing benchmarks, etc?  Besides, even your team's statement of performance will include this:  "Past performance is no guarantee of future performance". 

 

The point is the performance of any team is mostly the result of random chance.  Look at performance of mutual funds.  It is indeed rare for the best performing mutual fund to repeat.  Why should your team be better than any other team?

 

This is the bottom line: there is no secret, magic way, to beat the market.  Any such claim is a somewhat disguised claim of the ability to predict the future.  Do you think that is possible?

 

It has been proven that index funds are the superior investment vehicle.  There is no reason to pay an 'expert', just buy the market.

[Stateroom_Sailor]

8 hours ago, RocketMan275 said:

 

It has been proven that index funds are the superior investment vehicle.  There is no reason to pay an 'expert', just buy the market.

 

Sounds like using "experts", puts you on Santa's Naughty List.

[RocketMan275]

1 minute ago, Stateroom_Sailor said:

 

Sounds like using "experts", puts you on Santa's Naughty List.

Perhaps, but the 'experts' sure do like spending the fees you pay for their 'expertise'.

[2wheelin]

11 hours ago, RocketMan275 said:

Versus what benchmark?  You should be skeptical of performance measures chosen by a team of professional 'experts' who often are selective in choosing benchmarks, etc?  Besides, even your team's statement of performance will include this:  "Past performance is no guarantee of future performance". 

 

The point is the performance of any team is mostly the result of random chance.  Look at performance of mutual funds.  It is indeed rare for the best performing mutual fund to repeat.  Why should your team be better than any other team?

 

This is the bottom line: there is no secret, magic way, to beat the market.  Any such claim is a somewhat disguised claim of the ability to predict the future.  Do you think that is possible?

 

It has been proven that index funds are the superior investment vehicle.  There is no reason to pay an 'expert', just buy the market.

My benchmark is “how much more are my investments worth this year than last year” and I guarantee you that over time it averages way more than index funds. Are you saying YOUR investments are GUARANTEED based on past performance?

My team is better because I don’t invest in a mutual fund and then ignore it. There is no random chance involved with their educated advice.

Yes, there is no secret, magic way to predict the future but when I look back over the years and see that I have netted a lot more than the “market” growth, I am pretty happy with my strategy. 

There is no proof that index funds give better returns than every other investment.

You do yours, and I’ll do mine.

[That sinking feeling]

On 2/7/2020 at 2:35 PM, RocketMan275 said:

I've heard about 'intuitively' living within your means.  You would be surprised at how much you can save by developing a budget and tracking expenditures. 

There have been many studies of managed investing.  Very few show a significant advantage in investment return.  You would do much better choosing a few low cost index funds.  Managed investing is just another example of trying to beat the market.  Good in theory but poor in practice.  The ones who get rick from managed investments are the 'experts'.   

Must be very easy to live within your means when you can also afford investments with stocks etc.

[RocketMan275]

4 hours ago, That sinking feeling said:

Must be very easy to live within your means when you can also afford investments with stocks etc.

First, you learn to live within your means. Then you can afford to invest.