Comparing Dave Ramsey’s and Warren Buffett’s Advice on 4 Key Financial Topics

2014, CA, Chairman/CEO of Berkshire Hathaway speaks during the 2014 Most P, Laguna Niguel, October 8th, USA, Warren Buffett
Krista Kennell /

Whether you are new to the investing and personal finance space or have been following expert advice for years, you have likely come across the names Dave Ramsey and Warren Buffett. The two are considered absolute gurus when it comes to anything financial.

Ramsey made his name helping people get out of debt. Buffett, known as the “Oracle of Omaha” is considered one of the most successful investors of all time. The two financial experts have given a lifetime’s worth of advice through websites, interviews and other mediums. We searched for their advice on everything from investing to retirement. Here is what they say about these key financial topics.


Dave Ramsey is all about keeping things straightforward and easy when it comes to investing. According to his company Ramsey Solutions, his main investing principle is, “Get out of debt and save up a fully funded emergency fund first.” He says that you should build an emergency fund of “three to six months of expenses before you start investing. No exceptions.”

Warren Buffett’s investing strategy is also simple, but perhaps not easy. In addition to him being widely quoted as saying the number one rule is to never lose money, he also encourages investors to stick with what they know. 

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In a now-famous 1996 letter to Berkshire Hathaway Inc. shareholders, he says the goal of an investor should be to purchase “a part interest in an easily-understandable business whose earnings are virtually certain to be materially higher five, ten and twenty years from now.” He continues, “If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes.”

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Both financial masterminds recommend avoiding debt altogether or getting out of debt if you can. Ramsey is well-known for his advice on just how to get out of significant amounts of debt. He advocates using the debt snowball method

To become debt-free under this strategy, Ramsey says you need to first “list your debts from smallest to largest regardless of interest rate.” Then, “Make minimum payments on all your debts except the smallest.” Next, “Pay as much as possible on your smallest debt.” Finally, “Repeat until each debt is paid in full.”

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Buffett suggests that individuals, particularly young people, avoid debt. At a 2004 annual shareholder meeting he said, “Even though we issue lots of credit cards and everything, we’d say, probably, if I had one piece of advice to give to young people, you know, across the board, it would be just to don’t get in debt.”


Here is where our financial experts may differ the most. As noted in his Mortgage Loan Do’s and Don’ts, Ramsey firmly believes, “Your home loan should be a conventional, fixed-rate mortgage with a 15-year (or less) term.” He cautions, “Do not get a 30-year mortgage! A $175,000, 30-year mortgage with a 4% interest rate will cost you $68,000 more over the life of the loan than a 15-year mortgage will.”

Buffett, on the other hand, believes in the 30-year mortgage. He told CNBC, “If you get a 30-year mortgage it’s the best instrument in the world, because if you’re wrong and rates go to 2 percent, which I don’t think they will, you pay it off.” He continued, “It’s a one-way renegotiation. I mean it is an incredibly attractive instrument for the homeowner and you’ve got a one-way bet.”


Finally, both experts offer sage advice about saving for retirement. Ramsey provides a three-step plan on how to do it. First, he says, you need to “set a goal for your retirement savings.” Next, you should “invest 15% of your income into tax-advantaged accounts like a 401(k) and Roth IRA.” Lastly, you need to “Max out your 401(k) and tax-favored investment options.”

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Buffett is known for his 90/10 strategy to maximize retirement savings. He explained in a 2014 letter to Berkshire Hathaway shareholders: “My advice to the trustee could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard’s).”

He adds, “I believe the trust’s long-term results from this policy will be superior to those attained by most investors — whether pension funds, institutions, or individuals — who employ high-fee managers.”

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