It's small, it's concise. It answers all of the important questions about everyday finances. Of course a lot of it has been said before but the format of this book makes it a super quick and easy read for those that may be intimidated (or just lack the time/focus) of reading one of the thicker books in his collection.
I'll go ahead and share two of my own personal take-aways (yeah, stuff I've already known but am actually focusing on during this point in my life):
Take Away One: Buy Used Vehicles with CASH
"Americans have a 'love-fest' going on with their cars. Where else can you find people flat broke, living paycheck to paycheck, with two vehicles in their driveway less than two years old?
The average monthly car payment is $378. If you only have one car payment you're shelling out almost $5,000 in one year. Investing $378 per month in a good growth stock mutual fund from age 25 to 65 will be worth more than 4.4 million!! A one-time investment of $25,000, leaving it sitting for 30 years (same terms) would net you more than $495,000. Hope you like your SUV!!"
Advice: Buy a car 2-3 years old with CASH instead of financing a new vehicle. Ramsey stresses the point that cars loose most of their value in the first two years so only the SUPER RICH should buy new cars.
I grew up thinking only new cars were good because I never knew much about maintenance or cars in general but my car is 5 years old now (it was paid off early) and it's still runs like new! I figure if I can keep a car like-new than other more car-knowledgeable folks must have amazing 1-2 year old cars! Plus thousands of leased-cars are turned in each year often with very low mileage and in superb condition.
Action Plan: I really do plan on driving my current paid-off trustworthy Honda for as long as I can (hopefully another 5 years!?) but in the meantime I'm going to build up that cash-for-car fund so when the time DOES come that it needs some TLC and/or I need to throw in the towel and purchase another ... then I can pay cash for something pre-owned.
Take Away Two: Invest in ROTH IRAs
"Because the Roth IRA growth is tax-free, you'll get to keep all the money in your Roth IRA"
Of course, the benefits of Traditional IRAs vs ROTH IRAs may be different for individuals (for example if you are not self-employed and your employer matches your investment aka Free Money... it may be worth investing in the company IRA before the ROTH).... but in the case for most of us investing in a ROTH IRA is a win-win because it's likely we're going to be in a higher tax bracket as we get older and closer to withdrawal time it would be beneficial to pay taxes up-front instead of on a huge lump-sum later.
The great thing is the government is increasing the amount we're allowed to invest each year so in 2008 we can put up to $5,000 in a ROTH IRA as long as we've made at least that much income. You can even get someone a ROTH IRA as a gift... that could eventually grow to hundreds of thousands of dollars if they leave the $ in there! Now THAT is the gift that keeps on giving!!
Action Plan: Finish rainy-day emergency fund then fully-fund a ROTH-IRA this year and every year following at the maximum amount. Research and think about gifting ROTH-IRAs vs giving gifts that depreciate and do not hold value :)
Well... there's MUCH much more in this little book packed with straight-forward $ advice.... so pick up a copy for yourself and pass it around when you're done!
