Tom and Brendan have an interesting topic this week for the Mullooly Asset Management podcast. Radio personality Dave Ramsey tweeted something from his account yesterday that stirred up quite a reaction in the financial community. Ramsey’s tweet was about retirement planning and said, “Saving only $100 per month from age 25 to age 65 at 12% growth = $1,176,000. Everyone should retire a millionaire!”. Tom and Brendan analyze this statement by Ramsey, and point out some good attributes and flaws that they see with it.
People tend to enjoy Dave Ramsey and his personal finance talk because he is a real straight shooter. Clients don’t enjoy being confused by financial jargon, and this is something we agree with at Mullooly Asset Management. The main message behind Ramsey’s tweet was that he thinks people should be SAVING MONEY. We are totally on board with this simple bit of retirement planing advice. We always urge our clients to get out of debt, save money, and NEVER STOP PAYING YOURSELF. Financial planning revolves around saving money, and that should never go overlooked.
The “haters” to Ramsey’s tweet mainly criticized his statement by saying it is preposterous to suggest finding an investment that returns 12% for 40 years. To be fair, their point is accurate. Another flaw that can be found in Ramsey’s tweet is that we have no idea how much things will cost in the future. We only truly know that it will be more than it does now.
We feel as though the main point behind the tweet is more important and valuable than the numerical information though. Many Americans should be doing a better job at retirement planning. A Business Insider article published this week stated that 30% of American families have no savings account. That is a truly scary statistic.
Here at Mullooly Asset Management we always like to drive home the message of saving responsibly for your future. Retirement planning should not be taken lightly, and that means paying yourself each month. Dave Ramsey sure did stir up a lot of emotional responses with his tweet this week, but the message of saving money was a good one.