Coronavirus Updates

How COVID-19 Stress Validates Dave Ramsey’s Approach to Debt

Expertise: Landlording & Rental Properties, Personal Finance, Personal Development
32 Articles Written
Drowning victims, Hand of drowning man needing help. Failure and rescue concept.

There’s really no doubt about it. Dave Ramsey’s desire to eliminate all debt is a pretty attractive approach in times like these.

Want more articles like this?

Create an account today to get BiggerPocket's best blog articles delivered to your inbox

Sign up for free

While members of the financial community are offering special programs to prevent widespread evictions and foreclosures, landlords can still rack up interest and fall behind on payments with nonpaying tenants. Ramsey's approach provides peace of mind. If you are heavily leveraged, his principles can help float you through these next few months.

Maintain Personal and Business Savings

cash-savings

For instance, he and many other financial professionals recommend three to six months of personal savings for rainy day issues. Are you doing the same for your business?

Most investors build this into their cash flow calculations, accommodating a few months of vacancy or non-paying tenants. The BiggerPockets community is often working toward financial independence and/or early retirement, meaning our financial literacy may be higher than in Dave Ramsey’s target market. Many readers are able to regroup as they rely on their emergency business and personal funds.

This pandemic creates a lot of confusion and uncertainty, but the economic effects so far are similar to that of a recession. Our communities are coming together a bit more this time around. Many landlords are waiving late fees, and most are being flexible with payment plans for currently struggling tenants.

Landlords with paid-off mortgages enjoy more financial freedom but are still required to fix repair requests and pay taxes and insurance premiums. This approach leaves less liquid capital available, which can be a major drawback in recessions.

Prioritize Certain Types of Debt

If you feel you're too highly leveraged, there are still a few things Dave Ramsey suggests before calling it quits. He has no qualms in suggesting desperate measures to stay afloat in desperate times, and one of those steps is to call creditors to see what reduced payment/payment delay programs they offer and the implications of those plans.

The best decision is different for many, but strategically prioritizing debt is particularly important in today’s climate.

Ramsey suggests debt is bad in pretty much all cases. He rarely ever suggests using credit cards or taking out loans to purchase something (primary homes and few other things excepted). Most of us, on the other hand, thrive on debt. We take credit cards out for insurance policies to reap the benefits of the rewards programs, we use other people's money to profit off rentals.

Debt has helped me build a real estate business for me to retire on. I save very conservatively for my properties, but even I feel the pinch in today's economy.

Related: How to Get Out of Debt: 5 Steps Toward Healthier Money Habits

Create a Well-Weathered Portfolio

A woman holds a red umbrella on a fishing pier during a storm.

Ramsey’s approach shines in down economies. His approach to personal finance truly helps those needing a big money makeover, specifically those living paycheck to paycheck. Those threading the needle too closely with their properties may benefit from his training, as well. But if this pandemic continues long enough, many may find themselves losing money in some way.

That’s why Ramsey’s approach can create a well-weathered portfolio.

Some landlords completely disagree with this, as this approach takes up more capital, denying them the chance to purchase more rental properties. They may be able to survive with two properties even if just one of them is paying. This scales upward, as well.

Diversification can be key to many landlords, which is why no single approach is the “be-all, end-all.” My approach is a blend of the two, as some of my properties have mortgages and some don’t.

Related: Dave Ramsey’s “7 Baby Steps” Are Flawed: Get Rid of Debt Quicker Like THIS

Conclusion

Not all tenants can fully pay right now, but landlords with multiple properties are able to divert profits to otherwise uncovered expenses. Operating on debt can over-leverage certain individuals, and having fewer debts is beneficial in down economies. Dave Ramsey's approach to debt is validated for many in this case, and keeps people from suffering massive losses when their tenants are unable to pay.

Blog ad for Wealth magazine

What do you think of Dave Ramsey’s approach?

Share your thoughts in the comments below.

A longtime writer and consumer of all things related to the FIRE (financial independence retire early) movement, Chris Prit went from working 50+ hours a week to less than 20 thanks to her real est...
Read more
    Tom Phelan Real Estate Investor from Key West, FL
    Replied 5 months ago
    If I hear about Dave Ramsey one more time, ... oh well. Having no debt is probably better than having debt in any downturn. However, Albert Einstein never said, “Debt is the scourge of the earth”.” But he did say, “Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it.” I believe Einstein would have made a similar statement if asked about the benefits of 1031 Exchanging coupled with the use of financing to create more Appreciation, Depreciation and Tenant paid Mortgage reduction over a prolonged period, e.g. 30-years. The Rich have long known this and the not so rich have never fully understood it or didn’t even know the 1031 Exchange existed, Realtors® included. “In America there are two tax systems, one for the informed and one for the uninformed. Both systems are legal." Justice Learned Hand I’d rather retire with six or nine SFHs obtained through a systematically strategy of 1031 Exchanging with a 50% LTV than an "All Cash" approach and ending up with one or two properties.
    Florence Malm
    Replied 5 months ago
    Awesome 👍 thanks
    Chris P. Rental Property Investor from East Coast
    Replied 5 months ago
    I definitely hear what you're saying, Tom. But a highly leveraged approach why many people aren't able to weather the storm. It's also why so many lost their houses in The Great Recession... not the only reason, of course, as bad lending practices contributed to this, among other things. There are many landlords who are having troubles making their mortgages because their tenants aren't able to pay the rent. As I mention in the article, I wouldn't be where I am now without leverage and truly believe it's a wonderful wealth-building tool, but our business depends on tenants being able to pay. I personally don't buy into Dave's approaches all that much myself, but concede his ideals definitely prevent people from losing their shirts in down economies. With 30M+ out of jobs right now, I see a lot of comments from people who don't seem to be affected by the current climate. I'm definitely happy for them! That doesn't mean that many aren't, though, which is why we need to ensure we're taking the appropriate level of risk.
    Tom Phelan Real Estate Investor from Key West, FL
    Replied 5 months ago
    Sarah, That's why it is important from people with stretched budgets know recent changes by the IRS allow for withdrawals up to $100,000 from one's IRA without penalty or immediate taxes's and three years to repay. If they cannot replace the withdrawn funds at the end of three years then taxes are due unless it's a Roth IRA. This can be a lifesaver allowing one to make mortgage, car payments, even mortgage payments on investment properties. One can also borrow up to $100,000 from a Company 401(k) without penalty and five years to systematically repay.
    Florence Malm
    Replied 5 months ago
    Thanks!
    Bill Ung New to Real Estate from Rosemead, CA
    Replied 5 months ago
    Great insight on this Tom, I think Dave Ramsey's book was the first financial book I ever laid eyes on around 3 years ago, and it was first very appealing. However with the knowledge of how the smart and informed use of debt can create so much more wealth, there's no real right answer, just a less or more riskier approach based on one's own knowledge and judgements!
    Wenda Kennedy JD from Nikiski, Alaska
    Replied 5 months ago
    Actually, I'm feeling very blessed right now. I believe in very low or NO debt levels. My friends in our Landlord's Association are into high LTVs. I've been warning them for years about the dangers of those high commercial loans. They laughed at me and told me I didn't understand real estate. So, they refinanced and bought more units. I retorted that I remember 1990 when almost everyone I knew who went the OPM route ended up in bankruptcy court with their hats in the hands. And I have war stories about 1980 when we went from 12.5% to 22% mortgage interest rates overnight. Talk about hitting a brick wall! Now, suddenly, I'm considered to be a very smart woman in that group. Go figure. This virus is a black swan I didn't see coming -- but there had to be something out there. It's is that time in the normal cycle...
    Sonja Sevcik
    Replied 5 months ago
    Wenda - I agree! Good job!
    Tanyal Bricthorn
    Replied 5 months ago
    Totally agree. 100% equity has been my strategy for the past 10 years or so and it's working out very well. And given the stupid low interest rates these days, the "risk free" income is a decent return.
    Rob Cook from Powell, WY
    Replied 5 months ago
    I believe Leverage is the #1 benefit real estate investing confers upon us, and without getting in the weeds of how much is too much, I believe the MORE leverage the better. But, only if the investor has staying power to survive downturns. So as always "one size fits all" applies to this discussion. E.g., If you own half of your properties outright, and have the other mortgaged to the hilt, you can probably survive a downturn, even better than a smaller scale investor who owns a only a couple of properties with lower leverage. And if an investor has 6 months of liquid reserve cash set aside, it makes everything different.
    Derrick Kabanuk Rental Property Investor from Colorado Springs, CO
    Replied 5 months ago
    That’s about how I see it. Leverage is great, but being leveraged to the hilt is like letting it all roll at a gambling table. And after all, we can’t take it with us, so why set ourselves up for a disastrous situation. Leverage is a good tool to build wealth but there is a lot to say about balance in all aspects of life.
    Chris P. Rental Property Investor from East Coast
    Replied 5 months ago
    This is very true, Rob!
    Jonah Freedman Rental Property Investor from Ithaca, NY
    Replied 5 months ago
    There are many ways to play this real estate game. The whole Dave Ramsey approach only works if you live in area where houses are cheap or you have a super high paying job or you take years to buy a house. Seeing as I am in neither of those places debt was the only way I could get ahead. Yes its scary now but I actually feel more confident that I can get through this because I used debt and have 50 doors instead of 3 or 4. Which I was able to achieveI in less than 10 years that would be impossible without taken on lots of debt. I am actually in the process of going into more debt right now. I am refinancing my properties in lower rates and pulling cash out. I don't really see the value of keep much more then 25%-35 equity tied up in a property as long as the property cashflows. I would rather pull that cash out to use for more purchases or to help me survive months with out paying tenants. I guess time will tell, but I really think good debt is one of the biggest advantages real estate offers for the common person to become wealthy.
    Florence Malm
    Replied 5 months ago
    Great one there!
    Kris Patel Investor from Arroyo Grande, California
    Replied 5 months ago
    Get virus n recession proof property, such as drug store or student housing. Former is paid by corporate guarantee , and second guaranteed by parents. Cannot go wrong.
    Tanyal Bricthorn
    Replied 5 months ago
    A large percentage of both of those types of property are currently non-performing.
    JL Hut Investor from Greenville, Michigan
    Replied 5 months ago
    I did it all wrong. Sorry, I don't have 200 doors. I started out 40 years ago with low leverage, after 10 years I started paying off all debit, at the 20 year mark I was debit free, business and personal. Now at 40 years I own 20 single family Class A homes that clear about 10k a year each. I know, I did not do it right, but I sleep well at night. Economic cycles have been around for hundreds of years, don't be surprised when things turn down. History is a great teacher. In a book that is thousands of years old, it says " if you owe another man, you are his slave" You thought they did away with slavery? Not in America. Fire your master, be FREE. JL
    Derrick Kabanuk Rental Property Investor from Colorado Springs, CO
    Replied 5 months ago
    Sounds like you did it right to me! I try never to put myself in a box when it comes to strategy. You are cash flowing quite nicely and you sleep well at night. What more can you ask for. It’s good to be grateful for what we have in times like these. I say let being the Warren Buffett’s to, well..... the Warren Buffett’s. :) We only have ourselves to impress anyway.
    Chris P. Rental Property Investor from East Coast
    Replied 5 months ago
    It doesn't sound like you did anything wrong! There are multiple ways to success in this business and as you mentioned, you're sleeping well! We all have different risk tolerances, and I tend to hate debt and want to pay it off quickly. On the other end, leverage is definitely a great/faster way to build wealth. We don't need 200 doors to get by. Heck, I did it on 14 doors! And I know some who achieved FIRE with even less. Love your input on how you got here, and congrats!
    Kris Patel Investor from Arroyo Grande, California
    Replied 5 months ago
    Forgot to add, go maximum leverage to get maximum depreciation on drug store. I had DSCR of 1.17, with 4.50% COC.
    Mary White Rental Property Investor from Klamath Falls, OR
    Replied 5 months ago
    I think Dave Ramsey is just good at packaging up common sense for those that struggle with it. He gives people an ear for them to talk about predatory lenders, deceptive college counselors, etc, then shames them and bullies them into action. Of course people prefer the conservative approach when their scared. However his ideas of taking 30-40 years of consistent hard work to retire are simply out of date. I have read his materials and practiced his approach for a while before breaking free and thinking for myself. Leverage has changed my life and Dave Ramsey has taught me nothing.
    Tanyal Bricthorn
    Replied 5 months ago
    Dave Ramsey's wisdom is best suited for people who are deep in consumer debt and trying to pull themselves out.
    Roman M. Investor from Miami Beach, Florida
    Replied 5 months ago
    I have seen a lot of investors on BP trying to buy as many units as possible even if they only cash flow $100 to $200 per door each month. This was their primary goal and I am sure it works well is a perfectly balanced world. I can only imagine now what a nightmare this have become for someone who owns 50 to 100 units that cash flow $100-$200 per month (if tenant pays rent) and now most of the tenants can't pay rent and you can't evict due to eviction moratorium. It's a perfect storm to financial disaster. I never liked this approach as I did not want to have that many tenants to begin with and so many mortgage payments to pay but I never thought that an epidemic could do this. I think having less units that have either no debt or little debt is far more advantageous.
    JJ P. Real Estate Agent from San DIego
    Replied 5 months ago
    We have 10 Class A homes and no debt. I'm sleeping well even though if I break down my tenant profiles, I have 30% very likely to pay, 40% with average resources , and 30% likely to struggle. But we didn't just magically get to the no debt position. In the last downturn, about 10 years ago, we leveraged our paid for home and took out bunch of other loans and bought the rentals. We made some bold moves during our wealth building phase, ie: gambled big and won big. This move catapulted us into a current NW over 5M. We had 8 or so mortgages going at once and roughly a million dollars in debt. Bit by bit, dollar by dollar, we paid them down and finally, one by one, paid them off. Every paid off mortgage was like getting a huge pay raise, and we snowballed it back into the next one. How we spend our money is something that we are in control over. I see no reason to have 100 doors. It's just 90 more problems than I have right now. Living a good, peaceful life is a worthy goal. If you're leveraged, you're juggling a lot of balls in the air. That might be the only way to get started, but it's worth considering de-leveraging asap as a crucial part of your strategic plan. How rich do you want to be? It's important to know when enough is enough. Do you want to clear 5 grand a month? Less? 10? 20? What else do you want to do with your time, besides wealth building and management? My goals were high, but not insatiable. Definitely one must watch out for the ever moving target. It's so tempting/ego boosting to just keep working for more, but do you really need it? One Class A home with a minimal mortgage earned through knowing your market (swooping up the deal), good negotiations and getting great rent because of your sweat equity is, in my book better than 3 lesser/ problem properties with the same equity and same or bigger debt. I think it's important when you're building your wealth through RE to have a couple of exit plans. It's good to go big, but not so big that you've grown too fast and can't weather a storm. We have a terrific lifestyle with a light workload and plenty of resources. Plenty of time in our household for hobbies, travel, working on projects, reading, sunbathing and the like. We buy what we want and enjoy the way our time is spent. We're content. There's more than enough $$ to enjoy to the end. donate a few properties to charity and still leave multiple houses to the kids to build their futures.
    Chris P. Rental Property Investor from East Coast
    Replied 5 months ago
    JJ- I really love the comment "My goals were high, but not insatiable." This is very similar to my approach as well, and while having 200 doors is great, it sounds very cumbersome to me. But not to all, of course. The great thing about having 200 doors is the diversification, so even if someone is heavily leveraged, hopefully if just 50% of their properties are performing, they can still get by. It's a difficult line to walk, though. Congrats on your success!
    JL Hut Investor from Greenville, Michigan
    Replied 5 months ago
    JJp, exactly, you understand. Rentals are managing people, people are uncontrollable variables. Big leverage, low margins with variables you cant control in a down market equal headaches. I would would rather have low leverage, high margin when I cant control the outcome = more restful sleep. If you sleep well with high leverage, then you have not been through enough market cycles and dont know your risk, or your Warren Buffett, but this weekend he said he is a net seller. If he is not a buyer, then hopefully you understand the message he is sending you.
    Lisa Weathers Real Estate Investor from Charlotte, North Carolina
    Replied 5 months ago
    Wow, I could have almost written the exact same post! Very similar story and thought process. I used mortgages and HELOC loans in the beginning to buy 11 SFHs, but around 2008 got to the point of “enough”. Then started the process of using the snowball method to put almost all the profits to getting them paid off. Fortunately all my renters paid last month, but was prepared (and very comfortably able) to reduce or perhaps even forgive a rent payment if a tenant lost a job. Even during this time, I sleep well at night and have no worries about weathering the storm.
    Joe Scaparra Investor from Austin, TX
    Replied 5 months ago
    Quit invoking Dave Ramey principals', especially when they don't apply! You say you blend his principals with other leverage principals that he does not endorse. You can't be half pregnant, I'm sorry, either you apply his principals, or don't use his name to get click bait. Dave Ramsey ABSOLUTELY disagrees with your principal to blend your investments using some leverage!! Therefore, USING HIS PRINCIPALS, you and most all of us would NOT own investment property unless our principal residence is paid for AND we then pay CASH for the investment property BUT only if it did not exceed 15% of our overall investment portfolio. For example, if we did happen to have our house paid off, and we had another $300,000 in the Vanguard 500 index fund (for which he recommends and, oh by the way, is down significantly during this crisis) then he would give his blessing to invest $45,000 (15%) of the stock fund to buy a property CASH ONLY. Give me a break! On this website DAVE RAMSEY name should never be mentioned!! Also, no true investment real estate professional is recommending you LEVERAGE TO THE HIILT! It is about building wealth, hopefully with positive cash flow. Cash flow that you build up a reasonable cash reserve to handle downturns and or unexpected repairs or non payment situations. Yes the fragment of investors who invest in real estate primarily for appreciation at the risk of negative cash flow, then yes this crisis may cause them significant problems but they should be well aware prior to any crisis. Lets give Dave Ramsey a rest. But lets do emphasis the need to build in conservative estimates and necessary reserves when building our real estate portfolio so that someday we might actually become financially independent!!! Cheers!
    Chris P. Rental Property Investor from East Coast
    Replied 5 months ago
    Yikes, Joe! This article seems to have hit a hot spot for you. Perhaps you haven't seen some of the articles I used for source material here, but he does, at times, recommend certain "good debts," one of which is mentioned by Erik. Same similar theme. Perhaps you misunderstood- I'm not saying he recommends some of the items you mention above. Rather, I mention how blending certain ideas can/has helped weather storms. As mentioned, I wouldn't be where I am now without leveraging debt. Many can't (and wouldn't/shouldn't) purchase houses outright, as it's not a sound financial decision when it comes to cash flow/leveraging options. That completely makes sense, but I believe you discount the investor's personality a bit too much. As other members have highlighted, risk tolerance is a huge factor in certain financial decisions. What's right for you or me is not right for someone else. I personally do not follow Dave, but can concede is ideas can be effectively applied to real estate investments and help people weather times like these.
    Erik W. Real Estate Investor from Springfield, MO
    Replied 5 months ago
    I agree that the author of this post tried to do a Dave Ramey-ish version. When he said the following, "Ramsey suggests debt is bad in pretty much all cases. He rarely ever suggests using credit cards or taking out loans to purchase something".... I pretty much stopped reading. Dave Ramsey NEVER recommends credit cards. Ever. Period. Never. Not for anything. The ONE TIME Dave doesn't yell at people about planning ot use debt is to purchase a principle residence, with a minimum of 10% down (used to be 20%; he relaxed that a little about 5 years ago), the payment must be no more than 25% of take home pay, and on a fixed rate, 15 year mortgage. That. Is. It. Period. Anyone who says otherwise hasn't carefully listened to, read, or understood Dave's materials. It's fine to DISAGREE with Dave Ramsey, but to pretend like you know it and then blend it into an article on using debt to invest in real estate? Nah. Caveat: Dave does allow refinancing debt in a few very limited scenarios: when it saves you interest on existing debt (not necessarily lowering your payment), or when you have to borrow enough to sell an asset (usually a car) where you owe less than it's worth. It is important to note, though, that in both cases you never take on a penny of additional debt. It's either having the same amount of debt with less interest, or it's less debt in total because an asset was sold.
    Chris P. Rental Property Investor from East Coast
    Replied 5 months ago
    Hi, Erik. I think you may be misunderstanding what is being communicated in this article. You mention you stopped reading near the beginning. I explain a bit more in my response to Joe, but perhaps the rest of the article will shed more light on the topic and help highlight the benefits of thinking more like him (at appropriate times) in a business environment. There's no one size fits all solution, and it seems like you've been very successful going the path you chose, which is great! Others have reached their goals doing the exact opposite, which is also great!
    Sonja Sevcik
    Replied 5 months ago
    During my Commercial Banking days I had some awesome real estate investors. They had portfolios over $50 million. They didn't really have debt ... not much ... 50% or less combined LTV on assets (and one could argue that the best investors undervalued their properties on their financial information). They especially didn't have much debt on assets held for longer than 10 years. They had all got into the biz at the end of the 60s and through the 70s. When they wanted to buy something ... it was pretty easy to say yes or push credit underwriters hard ... even when things were bad.
    Geraldo Holter from Chattanooga, TN
    Replied 5 months ago
    dave Ramsay principles are sound and useful for a lot of Americans( majority some would say). He does not disagree with real estate and in doing the baby steps, mortgage on real state investment that are cash flowing are not to be paid until you have your home mortgage paid off. I agree with his debt free approach but sympathize more with the good debt and bad debt of R kiyosaki and understand and use leverage in a good way.
    James Williams from Olympia, Washington
    Replied 5 months ago
    Why does everyone want to praise Dave and Chris during a pandemic? Their model is designed for passive, conservative, and average 9-5 working people who are terrible with debt.
    Vaughn K. from Seattle, WA
    Replied 5 months ago
    As others have said, Dave is the right message for a certain type of person. A lot of people don't like to admit that different people have different abilities, different risk tolerances, etc.

    I have friends that are great people, but I'd NEVER suggest they try to run their own active business. They aren't the right kind of people for being the boss, or planning and executing all the stuff that is needed even for a simple small business. Such people might be okay for conservatively investing in RE though, as IMO it's simpler than most businesses to understand and to do profitably. However these same people should not be trying to do sophisticated, complicated, exotic financing real estate deals. They'd fall apart if anything ever went wrong. Others are sharp enough and stern enough to take such risks and deal with the consequences, good or bad.

    Well, some people are the type of person they can't even handle a conservative real estate investment... Or managing their credit cards. Those are the types of people who need Dave.

    The funny thing is that it isn't ALL tied to even just being "smart" per se. A lot of it is personality type, or just having common sense. Even smart people will sometimes learn the wrong habits, and Dave can help break them of those, but if they eventually have the right mindset they don't need to STAY in Ramsey mode their whole life either. Ramsey mode is good for those that don't have much common sense, aren't that good at math, and not too ambitious. Nothing wrong with being any of those things, we all have to play the hand we're dealt, but it's not something to aspire to either if you can be/do more.

    Personally, I've never understood the all or nothing, black or white thinking thing. IMO the only thing that makes RE worth investing in is the long term, stable, low interest, safe leverage that can be used. The returns in an all cash situation are not great, and one might as well just buy mutual funds. That said, if one has a low risk tolerance you can always maintain conservative LTV ratios. There's basically no risk at 50%, yet you still gain a fair amount of advantage with that level of leverage. RE has basically never dropped that much in any economic turmoil ever (maybe a few specific markets during the GR), and at 50% you should be cash flowing like CRAZY. If you want to be extra careful you could even have half the properties 100% paid off (No lien = no repo possible), and the others nearly to the hilt. Then you will still have half your properties even if EVERYTHING went wrong.

    IMO there's just no reason to not at least do that. Maybe as you're really getting up there in years in your late 60s or 70s let it coast on down to being paid off even a little more than that if you really want... But not if you're younger. It's just throwing away growth without really even gaining any safety since the 50% LTV is essentially 100% safe anyway. Just my 2 cents.
    Chris P. Rental Property Investor from East Coast
    Replied 5 months ago
    I completely agree about the personality type. I actually discovered Dave Ramsey long after I'd discovered BP, Mr. Money Mustache, and other similar sites. His approach is great for people trying to get out of debt and stay out of debt, and his target audience (as I mention in the article) isn't quite the average real estate investor, but some of us feel a lot more comfortable applying his principles to businesses as well. But, as I said, I absolutely wouldn't be here without leveraging debt. I am not a follower of Dave, but can certainly concede the usefulness of his ideas in times like these.
    Vaughn K. from Seattle, WA
    Replied 5 months ago
    There's a time and a place for everything! And I would add a person for every approach too! For the guy who just wants to work a job, buy a house for himself only, not think about or learn about investing of any sort beyond tossing money in his 401K at work... Dave is not a bad guy to follow. I myself could never stand to be that kind of person, but for those that are kind of pre-destined to be "that guy" they will do themselves more harm than good trying to be clever with debt. It's something you really have to learn about to do right, and most people just don't have the interest to learn the difference between good debt and bad.
    Toni Husbands Investor from Chicago, IL
    Replied 5 months ago
    I agree with you Sarah. His approach/message isn't for everyone. But dang it if I'm not a happy camper that I found Dave Ramsey years ago. We dumped $100K of consumer debt and have two renal properties now. Both have mortgages, but we did work on building our emergency fund. One of my tenants just contacted us - loss her job. We're going to restructure her lease to give her more wiggle room to ride this thing out. She's helped us pay down the mortgage for the last 5 years. We have 7 left to go on this property. So I'd rather keep her as a great paying tenant. I use debt to acquire properties, but prefer to look to pay off mortgages as aggressively as possible with the idea of going into our 50's and 60's with no/low debt and cash flowing rental income. However, I'm looking to buy a few more properties in this current climate.
    Scott Scoville Investor from Sacramento, CA
    Replied 5 months ago
    Hey Sarah, Definitely agree. I am of the mindset to keep my bad debts low (i.e. credit cards, etc.), but leverage where it's safe (i.e. home loans). Currently, I've spent my time paying down credit cards and student loans, and setting money aside for my next real estate investment. The market is softening, and I'm looking to get my Debt to Income and Credit on point before making my next investment. All in all, I agree with Dave Ramsey on some points, and disagree on others. Enjoyed the article by the way. Scott