Dave Ramsey - be careful

Yeah, I've heard Dave Ramsey.

But he doesn't always give sound advice.

But as far as debt goes, he's pretty right-on and here is what Dave Ramsey will tell you in a nutshell...

1. If in debt, stop paying off all debts and then start paying them off, one-by-one, starting with the smallest one first.

2. Once you pay off the smallest debt you have, move on to the next smallest debt you have and repeat until you are completely out of debt.

3. Beans and rice, rice and beans.

4. Never finance ANYTHING except for a house ever again. If you cannot afford to pay for things up front (and not with a credit card), then you don't need it because you cannot afford it.

But there's one piece of bad advice he continually gives. It's about life insurance. He says you should never pay more than $1 per year per thousand dollars of coverage on a life insurance policy. Therefore, if you have a $600K life insurance policy, you should never pay more than $600 per year in premiums. So if you pay by the month, it should not be costing you more than $50/month in premiums.

He says if you are paying more than $1 per thousand per year, then you are paying WAY too much for life insurance.

Well, I pay about $9.50 per year per thousand dollars of coverage!!!!!!!!!

So, I went to the website he mentions all the time (Zander Insurance, or something like that) to look and see if they could find me some better coverage where I would pay only $1 per year per thousand dollars of coverage.

You guessed it, I could not find it.

Maybe he forgets to mention that you must be in 110% perfect health and a non-smoker and 14 years old? Not sure. But he never explains himself on that topic. He makes it seem as though anyone, anywhere, in any condition should never pay more than $1 per thousand per year. I have tried shopping as one in perfect health and it's still hard to find insurance that will only cost me $1 per thousand per year.

Is this bad advice? You bet. Because in the few months I have listened to him he has never explained himself. He just says if you are paying more than $1 per year per thousand, you are paying more than you need to pay for life insurance.

Um. OK, Mr. Ramsey. Please find me a policy that fits that advice and I will change my mind. Until then, I'll have to label that as purely bad and unrealistic financial advice.

Gotta watch those radio talk show hosts. They love to tell little lies in order to keep sponsors happy and they are not usually the "gurus" they make themselves out to be. I could go on and on about financial radio talk show hosts that give bad advice but I'll just stop right here.

You are better off NOT getting financial advice from a radio show, by and large.