<prompt> Human: Ive been a DR fanatic for about two years now. I consider myself super-duper familiar with everything he says, so much so that I could run his show if I had the radio personality. Hes been incredible at motivating me to budget, stay out of debt, and save a ton of money. I make 22k a year, Im a 27-year-old grad student, and Im finally in a position to start investing--first time in my life. This year, I can max out my Roth IRA and am trying to absorb as much as I can. Anyway, I had been aware that he had taken heat for his promise of 12 returns that the average, right? -_- , his advice to pay a financial advisor who will take a chunk of your earnings, and his advice to invest in growth stock mutual funds. I am something of a cultist and love big philosophies and big ideas, and Im very stubborn to change my paradigms. But...after really doing some research, Ive got to give Ramsey up as my one-stop shop. Funny, how all it takes is a chink in the armor of a very stubborn cult personality like DR to throw all his advice into question. Hes not the personal finance messiah I thought he was, and Im re-evaluating everything hes taught me. 1. Dave recommends tithinggiving 10 of your net as though it is morally obligatory. Its not. Im one of those Bible-thumpin fundies like Dave himself, but Ive got to say there isnt even a biblical basis for thinking that tithing is morally obligatory unless you are a member of a church that requires it, in which case you should honor your contracts. Its part of the Torah, which isnt supposed to apply to Christians. The only relevant Bible verse says that God loves a generous giver, which isnt a specific command to do anything. And for people drowning in debt, whether religious or secular, who are supposed to sacrifice everything unnecessary to fight their dire situation, now is not the time to give. You should stop giving if you need to save yourself.2. Daves Baby Step 1 says, Start an emergency fund with 1000 dollars. I understand why a starter EF is important, but its such an arbitrary number, isnt it? What if youve got a family of five kids, and everyone has chronic medical problems? Surely 1000 is not enough for them. The problem with this advice is that the minimum EF should at least be based on the familys expenses, just as the fully-funded EF is. A better Baby Step 1 would, IMO, go something like this: Start an emergency fund with one-months expenses.3. Baby Step 2 says to use the debt snowball to eliminate ALL debt with gazelle intensity. I do love the gazelle intensity part of his advice--work extra jobs, sell unnecessary expensive crap, dont buy anything you dont need. Thats great. And as for the debt snowball vs. debt avalanche debate, I understand the arguments for both sides, and, unless I were in a situation where Id be letting really high-interest debts sit for a long time, Id honestly use the snowball, myself. Moreover, it seems perfectly sensible to invest up to the employers match in a retirement account, taking what can be considered a huge pseudo-return on your investment, before paying off low-interest debts.4. Speaking of debt, never using debt Daves ultimate commandment means no FICO score whatsoever, which means a mortgage will be incredibly difficult to acquire later. Now, I dont have much experience with credit cards, and Im bored at the idea of paying for stuff with a credit card only to have to remember to pay it off with my checking account--it seems so tedious, so someone suggest to me a ritual that will make it seem less so. But it does seem that if youve got a responsible person, who isnt in debt in the first place, like myself, why not build credit in a safe, controlled way so that you can get sick mortgage rates later?5. As for debt itself, I definitely agree most forms of debt are dumb if you cant pay it back right away. I cant be convinced that going into debt for a car is ever a good decision. As for student loans, I still havent made up my mind, but Im leaning towards the thought that unless youre getting a useful degree and youve got a career in mind, dont take out loans for college. 6. Baby Step 3 says to complete the EF three to six months expenses. Now, I know that rpersonalfinance recommends completing an EF before paying off debt, and Id love to hear the reason why. You guys also recommend 12 months, and Id love to hear the reasons for that, too.7. Baby Step 3b says to take no more than two years to save aggressively for a 20 down payment on a house, or else to spend no more than five years to save aggressively for a 100 down payment on a house. All of this is with gazelle intensity, so youre supposed to not be investing at all during this step. As for the 100 down plan, I like the idea of buying a house fully in cash, but I dont like the idea of not investing during that time period. As for the 20 down plan, this number makes sense because it avoids PMI. What do you guys think of his advice to get a 15-year fixed-rate mortgage? I would guess that PFs advice is to go with the 30-year if you cant maximize retirement while investing on a 15-year rate? I looked at the wiki but couldnt see any clear recommendations. What do you guys say?8. Baby Step 4 says to invest 15 of your gross to 401k match first, then a Roth IRA until completed, then back to the 401k. Seems legit to me, and it seems like most others recommend this magic 15 number, though Im not sure where it comes from. Can someone explain this?9. Speaking of retirement investing, Daves recommendations seem like crap. First, hes got this infamous line that the stock market averages 12 returns, and he uses that number to project the growth of peoples investments. Now its true that the arithmetic yearly average of the SP is about 12, but online calculators tell me the geometric average is about 9.5. Its only the geometric average that matter when projecting how ones investment will compound. Now Dave even admits that 12 is the arithmetic average, but he still uses it to calculate 40-year returns! Dave would gain a lot of respect from me if he admits his mistake here, because its so obvious hes wrong. Second, he recommends growth mutual funds, which seems inconsistent with his own philosophy. Dave teaches that one should be risk-averse and not play with fire, and should therefore choose investments that are stable long term. The best candidates for this purpose, however, are index funds, not mutual funds! Dave, the man that wants to keep things simple for people that dont understand money, should really just suggest that people invest in a safe SP 500 index fund. But hes sooo adamant that growth stock mutual funds are the only way to go. SMH. Now I dont think its because hes got a conflict of interest because his endorsed advisors pay him commission for referrals and they sell mutual funds--I somehow doubt thats a significant part of his income--I honestly just think at this point that he just isnt a smart investor. I mean, he conflates arithmetic and geometric averages--come on!10. Baby Step 5 says to invest in kids college fund. Dave says 2000 a year. I dont have kids, but when I do, Id love to be able to pay for both their undergrad and grad school, so I wouldnt mind maxing the crap out of my options. Dave recommends an ESA, which I dont know much about, but I get the impression that its rather limited compared to a 529. I wonder, too, whether maxing out retirement account should take precedence over the college fund. I wouldnt want my kids to have to take out a student loan.11. Baby Step 6 says to pay off the mortgage with gazelle intensity. This step does not seem rational, because it could take several years to complete which would forego good years to maximize ones investing. But, say you can max out your accounts, PF--is there any reason to prioritize paying off your house sooner rather than later?12. Baby Step 7 says to save for stuff you want, to invest maxing out retirement accounts, doing other kinds of investing, to give, and to have fun. Youre supposed to come up with your own ratios between these categories. This seems quite sensible to me. All in all, I love the man, and I love the straightforwardness of his advice, as theyve brought me to a place where I can begin serious investing. But hes so damn stubborn, and any deviation from his Baby Steps or any step within his Baby Steps he sees as foolish. Im grateful to him, though, for getting me into PF. I can finally start investing this year, maxing out my Roth IRA--Im looking at the Vanguard SP 500 Index Fund--and I really dont foresee myself retiring as an academic. Heres to a bright future.  <response>: Id steer clear of DR, and his claims of 12 stock returns through his personal advisor network. This is pretty simple stuff. 