5 Signs Dave Ramsey’s Money Advice Isn’t for You, According to Experts
Written by
Cindy Lamothe
Edited by
Zuri Anderson
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There is no shortage of Dave Ramsey fans out there. Many have found the money guru’s methods to be helpful in their financial trajectory, but this doesn’t necessarily mean his advice will work for you.
“His methods, which he promotes as a universal approach to personal finance, often fail to consider the complex realities of many people’s economic circumstances today,” said Dennis Shirshikov, professor of finance at City University of New York and founder and educational leader at iTutor.
Below are the top signs Dave Ramsey’s money advice may not be right for you.
If You’re an Entrepreneur or Want To Invest in Real Estate
According to Erik Wright, owner and CEO of Buy My Home Nashville, Ramsey’s strict “no-debt” approach can be counterproductive for real estate investors and entrepreneurs.
“In my experience managing multiple rental properties and flipping houses, strategic use of mortgages and leverage has been essential for building wealth,” Wright argued. When used responsibly, he explained that mortgage debt can multiply returns and accelerate wealth creation through real estate.
“I’ve personally seen investors miss out on significant opportunities because they strictly followed Ramsey’s anti-debt stance without considering the nuances of different types of debt,” he added. “My own journey illustrates this perfectly.”
When he started his real estate career, Wright followed Ramsey’s advice to avoid all debt. He said this severely limited his ability to grow his portfolio.
“I could only purchase properties with cash, which meant waiting years between acquisitions,” the CEO noted. Once he learned to use mortgages strategically, Wright acquired properties and significantly increased his investments.
“Today, my rental properties generate substantial passive income while building equity — something that wouldn’t have been possible following a strict no-debt approach,” he continued.
The cash flow from these leveraged properties has allowed him to expand his business far beyond what a cash-only strategy would have permitted. Shirshikov equally agreed.
“[Ramsey’s] absolute prescription to have no debt, for instance, can easily miss the possibility for judicious use of leverage to potentially boost investment returns via a diversified portfolio approach,” Shirshikov said.
“In my experience, whether I am guiding clients with unique financial profiles or not, forbidding debt frequently holds growth potential back.”
You Want To Leverage Business Credit Cards
“[Ramsey’s] advice about universally dangerous credit cards overlooks their practical benefits for business owners,” said Wright.
“As someone who regularly manages property renovations and business expenses, I’ve found that business credit cards offer essential purchase protection, reward programs, and cash flow management tools.”
The key, he explained, is using them responsibly rather than avoiding them entirely.
“I regularly use business credit cards for property improvements and pay them off monthly, earning significant rewards while protecting my purchases,” Wright said.
You Want Financial Buffers Beyond an Emergency Fund
Wright said Ramsey’s one-size-fits-all emergency fund recommendation of three to six months of expenses may not work for business owners and real estate investors.
“From my experience managing multiple properties, I’ve found that having access to lines of credit and maintaining strong business relationships with lenders provides better financial security than keeping large amounts of cash idle,” he said.
Wright noted that real estate investors often need much larger reserves to handle multiple property repairs or vacancies simultaneously.
“I maintain various financial buffers across different vehicles, including cash reserves, lines of credit and liquid investments, which provide more flexibility than a simple emergency fund,” he added.
You Don’t Want To Solely Invest in Mutual Funds
“[Ramsey’s] investment advice, which focuses solely on mutual funds, misses the power of direct real estate investing,” Wright highlighted.
“Through my years of property investing, I’ve consistently seen returns that outpace the stock market, especially when factoring in leverage and tax benefits.”
He said real estate also offers unique advantages like depreciation write-offs and the ability to force appreciation through improvements — benefits that aren’t available with mutual funds.
“I’ve helped numerous clients build significant wealth through strategic real estate investments that wouldn’t align with Ramsey’s investment philosophy,” Wright shared.
The ‘Debt Snowball’ Approach Doesn’t Work For You
While psychologically appealing, Wright said the “debt snowball” method isn’t always the most financially sound approach for business owners.
“In my business operations, I’ve found that prioritizing high-interest debt while maintaining lower-interest productive debt (like rental property mortgages) creates better long-term financial outcomes,” he explained.
Wright said this strategic approach to debt management has allowed him to grow his business while maintaining a healthy cash flow.
“Many people have found success with financial strategies that differ from Ramsey’s teachings,” he continued. “While his advice can be valuable for individuals struggling with consumer debt, entrepreneurs and investors often need more sophisticated financial strategies.”
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