Friday I am flipping through the channels waiting for the news to start just before five, when I catch the sub line on the TV; “Oprah’s Debt Diet.” This grabbed my attention enough that I sat and watched the remaining five minutes.
I’m not sure of everything that was discussed as I only watched five minutes; however, what David Bach said in those five minutes I found amazing. His basic game plan for eliminating credit card debt was to purchase a house with no money down. Once you build enough equity to acquire a home equity loan, borrow the money to pay off the debt.
That is a perfect plan; excuse me, I mean a perfect plan for bankruptcy. You should never buy a house if you have any consumer debt at all. Additionally, if you buy a house you need to put at least twenty percent down to avoid PMI. I, like Dave, prefer the one hundred percent down program.
Breezing through David’s site, it looks like he has a couple of good suggestions, and talks about the fundamental problem of living on less than you make; however, after his home buying advice, he has zero credibility with me!
There are two big “Daves” in the personal-finance world. One of these “Daves” is, for most things, realistic and dead on the mark.
The other Dave now makes me cringe with his advice. He’s been on a downhill slide for a while now, and his credibility with ME evaporated long ago. Which is too bad, because at one time, I thought that many of his ideas had value.
He didn’t get a whole lot of face time on the Oprah series you speak of … which was just fine by me.
Comment by Michael — July 16, 2006 @ 11:42 pm
I have spent most of the weekend on Dave Ramsey’s forums and there are a lot of people that absolutely agree with you. Several of Bach’s suggestions have been thouroughly laughed at over there as well.
Comment by Joel — July 17, 2006 @ 12:20 am