If you are a person who is in debt, and who is struggling under the burden of it, then the Total Money Makeover: A Proven Plan for Financial Fitness is probably for you. The book is authored by Dave Ramsey, who has a wealth of practical experience related to these matters. The author and his work are both considered in the following paragraphs.
About Dave Ramsey the Author
Dave Ramsey proves to be a man who understands how money actually works. He has experienced both the upsides and the downsides of it personally. Having owned and managed a four million dollar valued portfolio of real estate, Dave later ended up filing for bankruptcy before once again achieving the coveted status of millionaire. The man has seen all of the sides of high rolling finance, both good and bad, and lived to tell you about them.
Dave Ramsey learned all about money through painful experience, the hard way. This experience is the elusive underlying factor that has transformed him into a best selling author on the New York Times’ list, as well as into a nationally syndicated television and radio host. He has become famed for his advice that some would consider simplistic and old fashioned, much like your grandmother would tell you to do. His mantras turn out to be live and survive on less money than you actually make, save money as much as you can, and do not get into personal credit card debt.
The Total Money Makeover Book’s Premise
True to his no nonsense and straightforward nature and approach to life, Dave Ramsey’s Total Money Makeover is exactly what it claims to be. Overflowing with good, solid, and even old fashioned financial advice, his Proven Plan for Financial Fitness is also paired with a number of encouraging tales of the individuals who actually followed his advice to attain financial success.
Some of the subjects in these stories aspired to and reached greatness, while many others are still working on it. Yet all of them prove to be in far better condition now than they were before following his methods, and they all attribute their successes to Dave and his common sense wisdom for first escaping from the prison of debt and then going on to build up wealth.
The book itself is about two subjects, as mentioned. These are how you can get out of debt, and how you can accumulate wealth using simple and basic investments. You will find that it does not get more complicated than these two themes. The author himself claims that that The Total Money Makeover is neither complex nor sophisticated. He also correctly maintains that his advice for you is not original or unique. The strength of the man and his work instead lies in the fact that he effectively engages you in both a fascinating and encouraging way.
The Total Money Makeover Book’s Breakdown
In the start of the book, you quickly see that Dave Ramsey is very negative about debt in all of its many forms. He spends a good amount of time suggesting that you take an honest appraisal of where you are financially and that you do not lie to yourself in the process.
He goes through a number of money and debt myths that actually keep you from attaining a healthy financial state. He also covers several roadblocks that you have to get around in order to achieve your financial goals in life. The first of these is escaping from ignorance. The second is letting go of your old strategy of keeping up with the Joneses.
The Total Money Makeover’s Baby Steps
Following these initial mindset changes, Dave encourages you to face your ignorance problems head on using his baby steps plan. The first step in this plan is for you to quickly amass a one thousand dollar emergency pool of money. Once you have achieved this, he has you begin rolling the debt snowball. This concept is not unique to him, as others have suggested it earlier.
It revolves around a system for paying down your smaller debts first before rolling your ex payments forward to tackle the next largest debt until eventually, all of your debt balances are paid down. What he does do well is explain the plan, how it works for you, and its inherent benefits that it offers you. He offers numerous examples to encourage you too.
After you have escaped from debt, Dave Ramsey goes on to give you a plan for paying off your final and largest debt, the mortgage on your house. He then offers practical suggestions for building up your wealth, so that you can live the life of which you have always dreamed. This is not any kind of rocket science manual. But it is extremely effective in its simplicity.
One thing that Dave covers well in this book is the fact that this may be simplistic advice that he is offering you, but it is not easy for you to follow. You can easily grasp his basic concepts. You will not find it simple to put them into practice, particularly if you are among the many legions of Americans who are addicted to spending too much money and utilizing debt to pay for everything. Great discipline is actually required of you to stick with his plan.
A Critique of the Total Money Makeover Book
One charge that critics have leveled at Dave Ramsey and The Total Money Makeover centers around his virulent hatred of both debt and credit. It is easy for you to understand where he is coming from with his entirely negative perception of debt, but debt can have its practical uses that entail benefits.
Many savvy investors utilize debt to build up leveraged investments, such as margin stock or bond portfolios or multiple mortgage properties. In utilizing leverage, you are actually taking on debt to increase your potential profits by obtaining a larger investment than you would be able to without the debt. Corporations and wealthy private investors do this successfully all of the time.
Credit also has its uses when you handle it properly. Using frequent purchasing points from credit cards, you are able to get cash back on purchases, or to work towards significant rewards like airplane tickets. With a twelve or eighteen month no interest charges credit card offer, you can make a larger purchase that you save to pay off before the interest grace period expires.
The key for you in doing these types of things lies in having the discipline to pay them off, so that you do not become burdened down holding a large and draining debt position in the end. Based on the upsetting statistics that Dave offers in the Total Money Makeover though, it is easy to understand why for the majority of Americans, debt is more of a weapon of financial mass destruction than it is a useful tool.
For you who struggle to control your spending and pay down your credit cards after you use them, you should follow his advice in its every small detail.
The end assessment of David Ramsey’s The Total Money Makeover: A Proven Plan for Financial Fitness is that for you readers who are struggling beneath a mountain of personal credit card debt, you require some real assistance. If your pay checks are never enough to even keep up with your bills, then his work has some terrific advice to help you. Following it, you can restore your financial health and even attain financial fitness.
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