Christmas is coming! Christmas is coming!

I know Christmas is coming when Dave does his annual rant on the grim outlook on Christmas spending in various media outlets.   Every year a journalist or news organization releases their study and commentary on how retail spending will be down this Christmas.

Dave reads a release from CNN News that shows the average of surveyed respondents will spend $22 less this holiday season.  Here is the link to that article: http://money.cnn.com/2009/10/20/news/economy/NRF_holiday_spending/index.htm?section=money_latest

And here is their survey from 2008, which states the survey shows consumers planning to increase spending by a “paltry” 1.9% – this in the midst of a recession.  By the way, spending really WAS down in 2008 – this in the midst of a recession! http://www.nrf.com/modules.php?name=News&op=viewlive&sp_id=590

2007: http://www.nrf.com/modules.php?name=News&op=viewlive&sp_id=386 - warning of consumer’s conservative approach to shopping

2006: http://www.nrf.com/modules.php?name=News&op=viewlive&sp_id=150   - forecasts a 5% increase over 2005 in this article they called “Subdued Holiday Gains”

By the way, this year Christmas is in December.  (I’m just giving you advance notice so it doesn’t catch you by surprise).

Sunk-cost Analysis

Kathy from Ft. Worth called Dave and asked if she should take $75K out of her non-retirement mutual funds to pay off the mortgage.  Dave said “In about 30 seconds”.   One of the ways to ask yourself if you should take savings out to pay off debt is to use a “Sunk-cost Analysis”.  The Harvard Investment Newsletter describes this as a way to ask yourself this question: If you didn’t own an item would you buy it today.  Here is another way to look at how this “Sunk-cost Analysis” works:

If your house was paid for and had no debt, would you borrow $100,000.00 to invest in mutual funds?  Most people would say “No”.  But if you had $100K in non-retirement savings and owed $100K on your house it would be as if you had borrowed on your house to invest.  Pay it off and be debt free.

That still seems pretty scary to most people, but there are two advantages to paying off debt with savings:

1) You can replace savings rather quickly when you don’t have any debt payments.
2) If you really don’t like being debt free with a paid-for house you can easily get a mortgage and go back into debt.

Dave Ramsey on ABC – Economic Reality Check

Dave was involved in a discussion about the current state of the economy on ABC with Liz Ann Sonders.  Click on this link to watch the 4 1/2 minute piece from ABC News: http://abcnews.go.com/video/playerIndex?id=8869132

Listen to the wiener in the steakhouse

Never has an “I told you so” been so deserved when it comes to finances.  One year ago the media and most of the financial advisors were screaming about the downfall of the economy.  We had begun a recession, and by God we were going to make it a good one!  But there was one man who went against the grain, different than the rest, a wiener in the steakhouse: Dave Ramsey.  He was asked to appear on numerous television shows and interviewed for magazines and other radio stations.  His message throughout the gloom-and-doom: Stay calm.  Don’t sell.  This isn’t as bad as it seems.

Last week the Dow Jones Industrial average hit 10,000 points again.  We are not back to where we were two years ago and an additional 4%+ Americans are out of work, but all this pales in comparison to the news reports that caused thousands of US citizens to panic unnecessarily. 

Facts: September 2008 the DOW was at 11,139.62.  It dropped 21% by the end of the year and an additional 34% by March 9, 2009 (total 41% from September 29 to March 9).  It has since gained 65% (6,547 in March compared to 10,015 on October 14, 2009).  WOW!  Using the same calculations and dates:

NASDAQ: Lost 26% from Sept-Dec 2008, lost an additional 19% through March 9, 2009 (total loss 40%), but gained 58% since then.

S&P 500: Lost 25% from Sept-Dec 2008, lost an additional 25% through March 9, 2009 (total loss 44%), but gained 61% since then.

And there is more to come, that is almost certain.  If you review your mutual fund statements and concur with the facts that the market has increased 40%-60% since the low on March 9th, 2009 then you should join me in listening to the wiener in the steakhouse.  Don’t freak out, things are not as bad as they seem, and we’re all going to be OK.

By the way, I’ll brag too.  Check out two posts from last year: 700 points for $700 Billion Dollars  and Word Of The Week: Dividend

A Balloon Artist

The final call in the 2nd hour of the Dave Ramsey Show on 10/8/09 caught my interest.  He called himself a “Balloon Artist”.  Having never heard anyone classify themselves that way so I decided to do a search.  I found the caller’s website: Jason Vaughn from Arnold, MO is the Balloon Artist at http://www.higherhopeentertainment.com/ .  Go check out some of the pictures and posts he has, it is really interesting.

I also found this site: http://higherhope.balloonhq.com/ which has a bunch of pictures of his work as well.  Some of these are REALLY creative!

He also posted three PodCasts last year which you can listen from the website or search for “BalloonCast” in iTunes.

Follow him on Twitter at: http://twitter.com/higherhopedecor

No reward – except PRIDE

Dave read someone’s blog on the air Tuesday.  Yes, he read someone’s BLOG on national radio.  This is probably the first time I’ve ever heard him take something like this from a website that was not already an established public figure or new article. 

And what a blog post it is.  Blake Thompson (producer of the Dave Ramsey Show) brought the letter to Dave’s attention after seeing a huge response on Twitter.  Here is his Tweet (including the link to the blog post):

Blake: @patdryburgh this is a your Twitter standing ovation. Great story, great Dad & great motivation for others. http://tr.im/ARLb   (The actual link is http://patdryburgh.com/post/205848198/my-greatest-accomplishment-ever)

The “Love Drawer” gets a new name

During last week’s radio show Dave talked about the “Love Drawer”.  This name was given years ago to describe a drawer or safe box that held wills, financial papers, burial instructions, phone numbers & passwords, all kinds of information that would come in handy after death.

Admittedly, Dave Ramsey didn’t like the name very much either.  So in this day and age of “Twitter” and “FaceBook” the listeners spoke.  They began to send in their own suggestions on what this collection of important documents should be called.  By the end of the week four suggestions were put to a vote – a Twitter/FaceBook vote.  Listeners could submit their favorite via the social media networks, and a winner was announced on Monday.

The candidates were:

• I.C.E. Box (I Cared Enough Box)
• V.I.P Drawer (Very Important Papers)
• Legacy Drawer (my favorite)
• Final Peace Drawer (Dave’s least favorite)

And the winner is:

THE LEGACY DRAWER

A good man leaves an inheritance for his children’s children, but a sinner’s wealth is stored up for the righteous – Proverbs 13:22 (NIV)

Interview – Dr. Thomas Stanley

September 30, 2009: Dave had the opportunity to invertiew Dr. Thomas Stanley about his new book “Stop Acting Rich”.  Everyone should listen to what this gentleman has to say about who millionaires are and why many of us aren’t.  Both of Dr. Thomas Stanley’s previos books were intense, incredible studies and this one sounds like it will be another home-run.

And, of course, Dave has the book on sale through his website (click here).

Dave Ramsey Show wins Marconi Award

The Dave Ramsey Show was awarded the Marconi Award: Network/Syndicated Personality of the Year 2009.  Here are some interesting links:

Press release (article) by Radio World: http://www.radioworld.com/article/87798

Fox Business Network (TV) promo: http://www.youtube.com/watch?v=6QTpScnDAck

Behind the Scenes photo of award recipients: http://tweetphoto.com/zc9xaljh

YouTube interview with Blake Thompson & Lara Johnson on how the show has grown over the years:

http://www.youtube.com/daveramsey#play/all/uploads-all/1/_6zMljmgb-8

New sign outside Financial Peace University Plaza:

http://twitpic.com/jr4k9

Service Oriented Talk Radio is recognized!

Dave’s Rant: C4C Buyer’s Remorse article

Another great “Dave’s Rant” that I’m sure you have already heard or seen.  If you did not hear him read the article by William Jeanes (click here for link to the article) then you have to check it out.  You can find Dave’s Rant in the 2nd hour of his 9/23/09 radio show.  The article was well written and William Jeanes has some good horse-sense.  Go check it out.