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Wednesday, October 1, 2008

Dave Ramsey's site

William and I have been doing Financial Peace University at church. This is a class to teach us how to handle our finances in a way that allows us to meet our needs, honor God and build wealth over time. It is really making a difference for us and we are learning so much. Dave Ramsey made millions in the real estate business and lost it all during the housing crunch in the 80's. He fought tooth and nail to come back from financial ruin and now is sharing his insight with others who want to succeed the right way. He, being the financial common sense go to guy, now has on his site his take on what we as a country should do about the so called financial crisis. I have e-mailed all my congressmen about this and I pray that the right thing will be accomplished. If Americans would wake up and read their Bibles they would see that the borrower is slave to the lender and strive to never borrow again. William and I have made a pact to never borrow again with the exception of a mortgage that we can afford and we will work our butts off to pay that off early. Peace comes with knowing that no one can come and take the stuff you worked so hard to earn for your family. The following is his common sense plan to get out of this mess:
Years of bad decisions and stupid mistakes have created an
economic nightmare in this country, but $700 billion in
new debt is not the answer. As a tax-paying American
citizen, I will not support any congressperson who votes
to implement such a policy. Instead, I submit the
following three steps:

Common Sense Plan.

I. INSURANCE

A. Insure the subprime bonds/mortgages with an underlying
FHA-type insurance. Government-insured and backed loans
would have an instant market all over the world,creating
immediate and needed liquidity.

B. In order for a company to accept the government-backed
insurance, they must do two things:

1. Rewrite any mortgage that is more than three months
delinquent to a 6% fixed-rate mortgage.
a. Roll all back payments with no late fees or legal
costs into the balance. This brings homeowners
current and allows them a chance to keep their homes.
b. Cancel all prepayment penalties to encourage
refinancing or the sale of the property to pay off
the bad loan. In the event of foreclosure or short
sale, the borrower will not be held liable for any
deficit balance. FHA does this now, and that
encourages mortgage companies to go the extra mile
while working with the borrower—again limiting
foreclosures and ruined lives.

2. Cancel ALL golden parachutes of EXISTING and FUTURE
CEOs and executive team members as long as the company
holds these government-insured bonds/mortgages. This
keeps underperforming executives from being paid when
they don’t do their jobs.

C. This backstop will cost less than $50 billion—a small
fraction of the current proposal.




II. MARK TO MARKET

A. Remove mark to market accounting rules for two years
on only subprime Tier III bonds/mortgages. This keeps
companies from being forced to artificially mark down
bonds/mortgages below the value of the underlying
mortgages and real estate.

B. This move creates patience in the market and has an
immediate stabilizing effect on failing and ailing
banks—and it costs the taxpayer nothing.




III. CAPITAL GAINS TAX

A. Remove the capital gains tax completely. Investors
will flood the real estate and stock market in search
of tax-free profits, creating tremendous—and immediate—
liquidity in the markets. Again, this costs the
taxpayer nothing.

B. This move will be seen as a lightning rod politically
because many will say it is helping the rich. The truth
is the rich will benefit, but it will be their money
that stimulates the economy. This will enable all
Americans to have more stable jobs and retirement
investments that go up instead of down. This is
not a time for envy, and it’s not a time for politics.
It’s time for all of us, as Americans, to stand up,
speak out, and fix this mess.

3 comments:

Kay said...

We love Dave Ramsey here at our house too! He has really changed my way of thinking about money over the last year. We have been working on getting all of our debt paid off. We now only owe on the car and of course the house. I'm hoping to get the car paid off by the time our baby gets here in May. I loved to see the debt snowball as it got rolling!

Kay said...

We love Dave Ramsey here at our house too! He has really changed my way of thinking about money over the last year. We have been working on getting all of our debt paid off. We now only owe on the car and of course the house. I'm hoping to get the car paid off by the time our baby gets here in May. I loved to see the debt snowball as it got rolling!

Anonymous said...

I am on the Dave Ramsey plan too!! Common sense really - but in such a practical, in your face way that makes you slap your head and say "duh, I should have known that!!" :)