If you do not play, I believe you that your core values would not change (although I am still a skeptic, the fact that you do not play allows me to give you the benefit of the doubt). I understand what you are saying and agree that Trent seems like the type that is well grounded enough not to change. But my mere point is that it would be really hard for anyone not to change with “limitless money.” For the record, lottery does not equal “limitless money.” Obviously, this is all hypothetical since “limitless money” does not and cannot exist. I am humble enough to admit that I would change with “limitless money” or at least my true “core values” would become more pronounced and exposed by such “limitless money.” To the extent that those core values are different from what I believe them to be, I would have “changed.”

First thing I did after becoming debt-free was to invest some. Without the financial planner, though. Unless you can find a free one, I find the process of learning about investing as enjoyable as investing itself.

Then, I would “do something” next. Personally, I treated myself to a trip to Mosocw, Russia!!

And finally, give. Keep track of it all so you can get the tax benefit, but absolutely, give.

Thanks for the info

as for my hierarchy…it’s the way i GIVE, not LEND. so if i GIVE, it means i expect nothing in return. i help all on the list. it’s just that i’m going to help in that order.

for crying out loud, how can i do any good for anyone if i neglect my own personal needs first? i won’t do anyone any good, dead! (and when i say needs, i’m referring to something more like the 7 basic human needs)

like i stated earlier, i wasn’t going for judgement from those of you who wish to read more into words than what is actually written. in future posts, i’ll try to be more specific and formal as opposed to the informal style i like…

(like lower case i’s for example)

;-p

2. Dave’s estimation of market returns is way too high: he promises people almost guaranteed 12% return. He also uses this number as if it were compound annual return rather than average i.e. if you get this return every year. This is very different. If the market gains 100% one year and loses 50% the next, you compound annual return is 0%, not 50%.

3. Dave never talks about the risks associated with stocks nor does he ever mentions that past performance is no guarantee of future results. He suggests to people to put most of their money outside of emergency fund into stocks. A more reasonable approach is NOT to keep any money you may need within next 5 years in stocks. It’s also reasonable to reduce your exposure to stocks as you get older. You probably heard about all these retired people who lost much of their 401K value in this crisis. They may as well have listened to Dave.

4. Dave has NOT predicted this crisis nor does he have any history of good investment decisions. Now, many experts missed it too, but there were a few who saw it. I know a number of non-experts who foreseen it and got out. But generally when people say that someone is good in investing, they mean someone with a track record of good investment decisions. I don’t remember anybody mentioning any good investment decisions Dave made, did you?

5. In one of his “ask Dave” answers he suggested to a 65-year retired old guy to put most of his money into stock mutual funds. This was before the crash. This is wrong. A retired guy shouldn’t be that exposed.

6. Dave made his money in his business of giving advice on how to get out of debt. Before that he was in real estate. He hasn’t made money in stocks like, for example, Buffett. Nor does he have any kind of financial education. Why would you consider his investment advice any better than that of any guy on the street?

Exactly. That’s often the problem with “giving” in this country. People aren’t really giving, they are just doing something with the expectation of quid pro quo.

Then they are frustrated when they don’t get something back.

When you give, you give…freely with no expectation. Otherwise, it’s not giving, it’s some form of “investing” in which you hope to harvest a return of some sort.

So many people give in so many ways each day and we all benefit. People often forget that.

Doing something, no matter how small, for another is what it’s all about. Yea, it’s hard at times because so much of the world seems ungrateful (you hold the door for people and not only do they not say “thank you,” bu they knock you over going thru)and there is so much lack of grace and expectation that one wonders if it’s true that no good deed goes unpunished.(People are even penalized for their good gestures in this chaotic world we live in. Think about all the people who no longer help others who are sick because they could get sued.)

But giving is about our intention. Not an outcome or result or response.

I’ve read far too many articles, books, etc. that keep touting how giving results in you getting. We know that isn’t the case, especially if we’re talking literal profit. If it were, there wouldn’t be non-profit organizations!

Money is energy. Like everything else, you have to think about how you use it to create a better world. Beyond the circle of immediate gain.

If you look carefully in life you’ll see that giving (money or otherwise) is never tied to how much money people really have (Hey, Bill Gates gave little money to charities until he got married and had kids.) We all know people with billions who only donate because it’s a tax deduction and people who cannot deduct what they give, but do it anyway.

If you want help, your modest income friends will be the first to offer. Your rich friends? Rarely are they the ones who open their wallets unless it’s a direct benefit to them. Not all, but most.

If you give without expectation, you never lose anything.

Trent: You state “I wouldn’t really become a different person even if I had limitless money.” I hope you are right, but based on my knowledge of human nature, I suspect you are wrong. Let me ask you a question: If someone offered you “limitless money” would you take it? If you would, then you would change. If you would not, then you would not have changed. Think about it.

**

I also like keeping score. My net worth sometimes takes a hit even when I don’t make a major purchase (hello, plummeting stock market). Actually, the way I calculate my net worth, I don’t even include the money I’m using to save up for things like cars and vacations, so it doesn’t plummet when I finally spend that money I’ve saved. It was already pre-spent in my head, though of course since it’s not actually spent yet, I could still change my mind.

Oddly, I do include my car. It’s good to remember that the value is going down, but it’s also good to remember that the current value can be added to my next-car savings for a more realistic view of what I can actually afford.

**

I also agree with simple investing. Frankly, I wouldn’t trust a financial advisor farther than I could throw him. I admit I’m biased because I disagree so utterly with what one recommended for a friend of mine. I’ve enjoyed learning more, making my own mistakes on my pathetically small amounts of money and now feeling more confident about controlling my medium amounts of money. I don’t want to learn all about how to judge a company but I am a big, big fan of diversification. It’s so exciting that mutual funds and REITs are available to the general public these days. And online savings accounts!

**

I wouldn’t say there’s just one “pinnacle point.” I think there are many, many victories that feel good on the personal finance road. So far I’ve been thrilled when:
* I got my first car
* I lived on my own without any parental handouts (living at home) or governmental handouts (financial aid)
* I paid off my student loan
* I increased my donations to my full goal of 10%
* I bought my second car with cash
* I bought a real house that I could imagine living in forever if necessary
* My car broke down on a road trip and I just put it in the shop, rented another car, and continued my trip as planned (boy, did I feel rich!)
* My salary surpassed that of a first-year teacher (for a couple of years, anyway)
* My IRA savings exceeded my pension (for a couple of years, anyway)

In the future I look forward to more
* Paying off my house
* Retiring early (the crossover point)
* Having enough investments to be as well diversified as I would like.

On the other hand, I haven’t had any debts other than my mortgage for decades now and I don’t have any dependents, and it really doesn’t feel I’m building wealth like crazy (except the past couple of months with the stock market recovering). That’s probably because I read too many financial blogs of people with twice my income and because my current goal is retirement (an extremely expensive goal). I think I will feel like my money is quickly piling up once my mortgage is paid off (in 3.5 years), but meanwhile, my money is only accumulating slowly. Of course, I am also accomplishing a lot more pricy goals than I was in my student days.

**

I don’t actually think giving away money is fun. I think of it more as a duty. I am so much better off and luckier than most people in the world that it just seems wrong to hog all my money to myself. Sometimes I think I should donate all but the amount I really need (probably at least 50%, maybe 80%). Sometimes I want to give away as little as possible so I can have more fun myself. I have compromised on 10%, which is pretty far above average but still leaves me most of my money.

It’s true that I don’t actually see the results of most of my giving. I give to far away organizations that help preserve the environment, empower poor people, help abused people, subsidize pain research. Then I read a few stories from these organizations but it’s not the same as when I subsidize my siblings when they are poor so they can join us on family trips. It doesn’t really affect me personally like that.

As far as donating my time, I don’t actually want to physically help with what I consider to be the worst problems. I am afraid to fight persecution and abuse and don’t want to look. It’s depressing to see starving and abused people. I don’t want to learn biochemistry. What I’m better at is tutoring math and being a scout leader and teaching first aid classes—helpful, perhaps even somewhat life changing, but not really all that huge in the grand scheme of things.

**

I do like the idea of doing something, of course, even while you’re pulling yourself out of debt. At first you can have fun mostly only in cheap and free ways, but you can still have fun. There are so many fabulous opportunities. We have easy access to great books, movies, and music (in libraries). Access to great art as well as scientific and historical findings (in museums and libraries). So many games and sports have been invented that there’s bound to be one you like. We have access to an amazing number of foods, even out of season. It would be a sad, sad thing to have only one priority (even if it’s personal finance).

A donation of $50 to the Fred Hollows Foundation can pay for an operation to restore a blind person’s sight. A gift of $50 to your best friend will get him what? A handful of CDs, or books, or maybe last year’s iPod.

Of course, your best friend is likely to remember your gift and thank you, and maybe give you a gift in return, whereas the formerly blind person lives in “Africa or wherever” and probably won’t ever even find out who you are. If you want to take that distinction into account in choosing what to do with your money, that is your right, of course. But call it what it is: You’re not being unselfish with all that giving to the people closest to you – you’re being selfish.

He is referring to the point when the income generated by your investments (stocks, bonds, rental property, etc) is equal or greater than the income generated by your regular job.

That’s the point at which theoretically at least you could quit your job and keep the same lifestyle. To me that’s Financial Freedom.

Being debt free is good, but is nowhere near close to the “Pinnacle Point”.

i have a belief of the “circles” of importance around me. this is my priority list of what order to “take care of things” (right or wrong, don’t care to be judged on this, it’s just the way i think)

1-myself (if i’m not healthy,wealthy,wise, i can’d do anything for anyone)

2-spouse,kids (they are my major motivator)

3-immediate family/real close friends (mom,dad,siblings,best friend)

4-non-close family/friends (blood still thicker than water, friends were there for you at some point, point of helping this group is that these people shape you and were probably there for you too in some way)

5-neighborhood (protect your home/apt/belongings thru networking with neighbors)

6-community (want to have a good town, school system)

7-county/state (part of your identity)

8-country (yeah, USA finally matters at this point)

9-foreign countries of ethnic origin (your heritage)

10-third world countries-children (poor children in africa or wherever)

11-at this point, it’s everyone else pretty much

- so if i ever have a massive windfall, it trickles down according to this priorty list

He invested in stocks, bonds and real estate, never anything fancier. He selected his own investments, always purchased real estate for cash and only bought high dividend paying stocks. All buy and hold for decades.

No speculative plays, no micro management, no financial planners, no investment advisors, no leveraged plays, and not even any tax sheltered plans. Like I said, old school.

This guy was a simple man from humble beginnings, and had no college education. But he had a nose for value, and no tolerance for b.s. By the time he reached old age, he had investments worth millions, all accumulated through patience and simplicity.

He was living Rich Dad, Poor Dad decades before the book was written.

I’ve taken Ramsey’s advice in the past and it has worked. He introduced me to the snowball concept and I paid off over 15k in credit card debt that way. My wife and I have both said that we’d like to donate more to our church and the charities it supports. We’ve donated time and money, but want to give more. I’ve done pretty well in the past few years and we’d really like to give more back.

We also like our fun (luxo vacation in Mexico at the end of June, for example) and while my investments are conservative, I’m up 5% for the year. I’d like to see what else I can do.

Dangerman, I’m curious why you say Dave Ramsey is not good on investing. I’m not disagreeing with you, just curious on your reasons for that statement.

I don’t think I agree with “if you own less than $10 million in investments and things are so complicated you’re using a financial planner, it’s time to simplify”. A financial planner is not the same thing as an investment broker, although many (most?) of them do that as part of their jobs. We outsource a lot of research to our financial planner. Most of it is stuff we could do ourselves but just don’t have the time for. We make sure we understand the reasons for her recommnendations and make the final decisions ourselves, but she does a lot of the legwork. It’s sort of like hiring a cleaning person. Yeah, sure, I could clean my house myself but I don’t have time and don’t like it and would rather budget to pay someone for it.

Getting back to the book, I think my husband and I are both really looking forward to being able to give significantly once we get out of debt and get into the wealth-building step. It was really enlightening to read in the book what kinds of things normal, middle-income people were able to accomplish once they got rid of debt and were able to invest over the long-term.

“if i were to pray for money, it doesn’t seem to come to me. but when i give it away deliberately asking nothing in return…it seems to come back to me.”

Dan, even if that were true (and we both know that it’s not really), that’s a pretty poor reason for giving. Giving is supposed to come from the heart, with no expectation of anything in return. Dan, if your intention is to spread the message that people should give more, I think suggesting that they’ll profit from it is the wrong way to go about it.

Regarding this chapter, I kind of disagree with Dave’s conclusion that there are only 3 meaningful things to do with money (invest it, have fun with it, or give it away). I think it’s really just the one thing: have fun with it. The only reason to invest it is to get more of it. If you just take that new, extra money and invest it again, there’s really no point. At some point, you have to spend it.

As for giving it away, well to me, that falls under the “have fun with it” category. For some people, giving away money is fun, so it’s really the same thing, in my opinion.

At the end of the day, the only meaningful thing we can do with our money is have fun with it. We invest to get more so we can have more fun. We give it away because some of us think that’s fun (others might have a different idea of “fun”). But it’s really just the one thing: fun.