Read La transformación total de su dinero: Un plan efectivo para alcanzar bienestar económico by Dave Ramsey Free Online
Book Title: La transformación total de su dinero: Un plan efectivo para alcanzar bienestar económico|
The author of the book: Dave Ramsey
ISBN 13: 9781602551114
Format files: PDF, Epub, DOCx, TXT
The size of the: 336 KB
Edition: Grupo Nelson
Date of issue: July 1st 2008
Reader ratings: 4.3
Loaded: 325 times
Read full description of the books La transformación total de su dinero: Un plan efectivo para alcanzar bienestar económico:
Ramsey presents some sound financial principles in the book, but it came across as a sales pitch because he mentions his other books and live events, and practically every other page contains a lengthy testimonial from people gushing about their Total Money Makeover. I skipped all of these since I'm looking for practical financial advice, not feel-good stories.
I didn't like Ramsey's strict no-debt stance. The only exception he allows for is a 15-year fixed-rate mortgage. Although I agree that most people are better off avoiding credit cards because they can't resist the temptation to abuse them, I like to use cash-back and other rewards cards to pay for the things I'd be purchasing anyway. I don't think I spend more money simply because I charge purchases rather than dropping cash or using my debit card. For example, I paid my college tuition on my credit card and earned 1% cash back on thousands of dollars. I also charge all my gas purchases, and make 5% cash back. Did I spend more on tuition or drive more than necessary because I had charged those purchases instead of paying cash? I didn't perform a scientific experiment to determine that, but I'd guess not.
The Steps of the Total Money Makeover
1. Set up a $1000 emergency cash fund
Sacrifice, work extra hours, and sell stuff to get the money.
Keep as paper bills or in a savings account.
Don't put it in checking or any other account or investment.
2. Pay off your debt snowball
List your debts, smallest to largest.
Pay them off.
3. Finish the emergency fund
Must cover 3 - 6 months of living expenses. 3 months if you have a truly steady job, otherwise 6 months.
$5,000 - $25,000
Put in Money Market with no penalties and check-writing abilities
4. Invest 15% of gross income in retirement
Don't count any company-matched funds.
Don't count on Social Security.
Use these accounts, in this order:
1. 401K if company matches.
2. Roth IRA.
3. growth-stock mutual funds:
25% large cap
25% mid cap
5. Save for college for your kids
Use these accounts, in this order:
1. Educational Savings Account (ESA) in a growth-stock mutual fund
2. If you want to save more, use a flexible 529 that allows you to choose your funds
6. Pay off the house mortgage
Spend every extra dollar you have left after setting aside for living, retirement, college, and mortgage.
Don't keep a low-rate mortgage just so you can invest at a higher rate. After you pay taxes on your investment returns, and factor in the additional risk that the mortgage debt brings, it's not worth it. In the long term, you'll come out ahead by being debt-free.
7. Build wealth
At this point, you're completely debt-free.
The next step is the Pinnacle Point: when your money makes more than you do.
There are 3 good uses for money:
Guilt-free enjoyment, if you can afford it.
Don't try to time the market.
Choose simple mutual funds and debt-free real estate.
Giving it away can be the most fun you have with your money.
Winning at money is 80% behavior and 20% head knowledge.
"If you will live like no one else, later you can live like no one else."
Debt brings risk, not prosperity. You can't leverage debt to build wealth.
You don't need to build credit because you won't use it if you follow the Total Money Makeover.
Credit card rewards aren't worth it. You end up spending more in unnecessary purchases and interest payments than you make back in rewards. No one ever became rich from credit card rewards.
Choose high deductibles for auto and home insurance.
Make a will.
Choose a term policy, not Whole Life or Universal Life insurance.
Don't prepay your kids' college expenses. You'll make higher returns by putting this money in mutual funds.
Buy a house for 100% down, or if that's absolutely not possible, get a 15-year fixed-rate mortgage.
You don't have to wait until retirement to do what you love. Get a job that you enjoy.
A college education improves the quality of your adult life and career. But, it doesn't ensure a job or success.
If you have cash or a scholarship, go to college. But pay cash; avoid student loans.
Don't get a 30-year mortgage with the intention of paying it off in 15 years. You'll find other things to spend your money on. Having a 15-year mortgage forces you to pay off your home in 15 years.
Don't pay points on your mortgage, since you're just paying interest up front.
Your house payment should be less than 25% of your take-home pay.
Don't lend to friends. If you must give your friends money, give it as a gift. Loans ruin friendships.
"Wealth will make you more of what you are", whether you're a jerk or a generous person.
"The love of money, not money, is the root of all evil." You have a duty to possess wealth to ensure that it's used properly.
Recommended percentages for allocating your money
Charitable Giving 10-15
Read information about the authorDavid L. Ramsey III (b. September 3, 1960) is an American financial writer, radio and television host.
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