Dave Ramsey's advice, at least some of it, can
probably help some people, especially those who are deep in debt.
But I think it's advice that wealthier people who understand money and credit would not take.
As Peter Schiff told me years ago, if a bank is going to lend me $500K at less than three percent for 30 years, it makes sense to take them up on it, and then not make any special effort to pay it off in advance.
That's because if I know anything about money management, I can make much more than three percent a year with that money, and the much more that I make will in turn compound year after year. The interest on my monthly mortgage payment will be a pittance compared to what I can earn by putting that money to work rather than locking it up in a house.
Now I say that, but in practice
I've paid off my houses in Auburn and then here in Florida, because I derive an inordinate amount of psychic income from being debt free.
But lately, now that I've really come to understand this, I'm very happy to take cheap money and multiply it.
This is a long preamble to my main point, which is: it is okay to borrow for your business. It's not stupid or wrong. If it's what
the situation calls for then do it, without feeling like a loser because Dave Ramsey tells you not to.
The problem is this: you want to grow your business, buy some new equipment, or stock up on inventory, maybe even open a second location. But the bank offering you the loan wants you to put your personal assets -- your house, your car, your savings -- on the line.
No,
thanks.