How Financial Guru Dave Ramsey Missed the Mark

How Financial Guru Dave Ramsey Missed the Mark December 6, 2013

I love Dave Ramsey’s Financial Peace coursework. It put our family on stable financial footing years ago, and Amy and I never fight about financial matters any more. We find plenty of other things to fight about, but that’s a different post, I suppose…

Ramsey has come under fire recently for a list of “Rich People Habits” he posted on his blog recently. The list actually was compiled by Tom Corley at a site called, which is intended to track what people of means do differently in daily life than the rest of us (aside from brush their teeth with platinum-bristled brushes, since that one’s a given).

On the one hand, I’ll agree that observing a cohort of people you want to emulate and learning from their habits makes a lot of sense, but I can see why Ramsey and Corley have caught so much heat for their most recent comparison of “poor people” habits to those of the wealthy.

There are two problems that I see. First, though Ramsey tends to be an advocate for the poor with regard to pushing back against usury lending and the like, he draws many false correlations between the habits listed below and the fact that folks who practice them are in poverty. In fact, in a recent defense of the post, Ramsey reiterated this point, writing, “This list simply says your choices cause results. You reap what you sow.”

The other concern the list raises for me is that it appears to be blind to the inherent privilege linked to the habits, as if all people had equal access to such practices and resources. Not so, Dave. Below I’ve shared several of the 20 habits on the original list (which can be found here), followed by my thoughts on where they fall short.

70% of wealthy eat less than 300 junk food calories per day. 97% of poor people eat more than 300 junk food calories per day. 23% of wealthy gamble. 52% of poor people gamble.

The fact is that junk food tends to be less expensive than fresh produce and organic options. It also takes less time to prepare, which is important for so many working poor who have children while also working multiple jobs. And this doesn’t even address the issue of food deserts, which is the term for the concentration of crappy food options (and the marketing that goes with it) in depressed communities, often with no healthy options within easy access.

As for the gambling bit, things like the lottery and bingo, which are two of the most popular types, are also marketed heavily and most accessible in poor communities. Oh, and though the poor may gamble a few dollars on a scratch ticket, the average gambling budget for a trip to Vegas is closer to $1,000.

80% of wealthy are focused on accomplishing some single goal. Only 12% of the poor do this.

It is a luxury to be able to focus on future goals. It tends to mean you’re not as focused on day-to-day survival. You also probably receive much more conditioning in a middle- to upper-income family to think about the future, and the media also tells you this is what you should do. But if you and your kids are hungry, cold or at risk of missing rent, it’s hard to plan and daydream.

76% of wealthy exercise aerobically four days a week. 23% of poor do this.

Yes, and most people who do this do so at a gym or on equipment they keep at home, both of which cost money. Yes, poorer people could simply take a jog, but in higher density urban areas this presents multiple challenges, not to mention the many working poor families who don’t get home until after dark. Rich people tend to have more flexible time to exercise, especially if they have people helping with their domestic chores like yard maintenance, fixing a broken-down car, cooking, cleaning or laundry.

63% of wealthy listen to audio books during commute to work vs. 5% of poor people.

To listen to audio books you must have the actual audio books (which cost money), a media player to play them on (which costs money), and the uninterrupted time to listen (a luxury of those who ride to work alone). Yes, you can rent some audio books from a library, but you have to be able to get there and still need a player. Not quite as simple as me downloading it to my phone from iTunes.

79% of wealthy network five hours or more each month vs. 16% of poor.

The wealthy also are the ones who are actively invited to participate in things like Rotary and the Chamber of Commerce. Why? Because they have more to offer others in attendance. They also have the time off of work more often to go to such things (try explaining to your Wal Mart manager that you need an hour off to go to your Rotary luncheon) and transportation to get there. Such networking groups also usually charge dues and even make you pay extra for meals, expect you to donate to their charitable causes, etc. Privilege, privilege, privilege.

You get the idea. Many of the stats have to do with spending more time reading, both alone and to our children. And yes, this has been empirically proven to make a huge impact on children’s development and future success. But having worked at a Catholic Charities organization in economically challenged, Pueblo, CO, we found there that many families had no books in the home.

First, they weren’t raised with it as a value in their home of origin. Second, they didn’t have the cash to buy new books, and often they lacked the time and transportation to get themselves and their kids to the library. So one of our most popular programs was placing a new children’s book in their homes once a month. Kids and parents both loved it. So Dave, if this is a great concern of yours, I’d suggest committing a significant portion of your own wealth to such a program for the poor you want to help.

I don’t want to make excuses for anyone. We all can, at some points in our lives, transcend our circumstances and achieve amazing things. But to presume both that the proverbial playing field is level for all players, and also to draw the false correlation between all of these habits leading to wealth-making, rather than seeing how so many of them are byproducts of existing wealth, is myopic, privileged and fairly offensive.


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  • Jimmy James

    As someone who has lived years with absolutely no expendable cash and also lived years with a fair amount of expendable cash, I really identify with a lot of your comments. I’ve always told people that it’s so much easier to manage your money well when you actually have some money to manage. When you can’t think past meeting your basic needs, it’s hard to get inspired about making plans for the future. Thanks for your thoughts.

  • Evelyn

    I love this piece, esp. the last paragraph. Based on your experiences / research, I’d love to see a follow up piece that takes each point and suggests solutions – much like you did for the reading one, but then for some of the others. Urban gardens in food deserts etc.

    Another flaw with Ramsey’s thinking IMO is the simplification of homogeneity: all the wealthy are the same, all the poor are the same. I know it’s obvious, but there are degrees of each, and urban poverty has different issues from rural poverty. The degree to which people feel at risk from violence also shapes their decision making.

    Anyway, keep up the good work 🙂

  • Frank

    I don’t think this is about a level playing field. It will never be level. It’s about the wisdom of choices. Everyone can start make better choices including the poor.

    Ramsey’s made an excellent point let’s not miss the significance of it by focusing on the wrong things.

    • Mr.R

      Half of his points are a result of people being wealthy. It’s not like these choices made them wealthy. Do you think a poor person can afford to network 5 hours? Do you think a poor person can afford to eat organic foods or have access to such? Many actions of the poor are for survival minus the lottery heh.

      • tearfang

        granted on the networking point, but not on the organic. The list doesn’t mention organic it talks about junk food potato chips sodas that sort of thing, and yes poor people really can afford not to eat those- junk food (chips crackers, sodas) are a lot more expensive than real food. Audio books yes are expensive- but not if you check them out from the library (granted the selection limited in such cases). The gambling difference is dramatic. I have to agree with Frank it that the point is that choices make a difference. Most of these choices very much seem like choices every working person in the 1st world can make if they really want to.

  • Boo

    Americans do not understand poverty. Either we believe we are poor when we are not, or we think the poor should just stop being poor.

  • Plutosdad

    Looking at the original list, talk about being blind to privilege! It reminds me (almost) of the horrible Forbes oped this past year on advice for young black men.

    Telling poor people they are making bad decisions is not only border level insulting, but it ignores a lot of research that shows they are making perfectly valid decisions for people at their level of resources or environment. Telling poor people to exercise, read more, or just move out of the food desert (to where?) to buy better groceries is useless.

    Here is a great article with links to other research.

    this is more of a anecdotal article that is similar:

    One disheartening fact that comes out is: even if Ramsey were to go a step further and provide resources and advice to the poor to actually act on these goals does not help as much as we’d like due to the cognitive impairment created by not only having to scrounge for day to day living expenses, but things that cannot be undone such as having a high stress childhood which has been correlated with lower IQ and problem solving ability, growing up with lead poisoning the environment (same), whether they have the sensitive version of the CHRNA4 gene or not, etc.

  • gimpi1

    I posted this on another blog about Mr. Ramsey. I hope no one minds the pick-up, but I think it might be relevant to the conversation:

    I had a blazing fight with my husband’s friend about Mr. Ramsey. I found his belief that anyone could overcome poverty following Mr. Ramsey’s advice offensive, due to my upbringing. I was raised in poverty by severely disabled parents.

    I describe the difference in how I grew up and how my life is now as, “the difference between being poor and being broke.” To be poor is to have huge obstacles in your path, blocking you at every turn. It’s having no options, no real choices, and very little hope. When I was growing up with a father suffering from traumatic brain-damage and a mother who paraplegic due to childhood polio and suffered from rheumatoid arthritis, I was poor. There was not much my parents could do to change our situation.

    Being broke is middle-class poverty. You don’t have all you need NOW, but you have options. You can moonlight. You can study, economize, and pay down debt. There is hope. As an adult, I have been broke. I was able to make things better through disciplines not too different from what Mr. Ramsey teaches.

    Mr. Ramsey’s advice works well when one is broke. His advise is worth almost nothing when one is truly poor. For that reason, perhaps, he appears to refuse to acknowledge the existence of true poverty. That, I find offensive. It’s real. There’s more of it than any of us in the States want to admit. And, by refusing to see it, we have an excuse to not do anything about it.