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I got rich on credit card points!

The David (as I fondly call the entertainer Dave Ramsey) is known for his hyperbole. And his "my way or the highway" view on all things financial. One of his more memorable quotes is "No one ever says they got rich off of credit card points." It seems to me that if I say so, [...]

The David’s Biggest Mistake

If you have a teenager in the house, you're likely to hear the expression,"that's the stupidest thing I've heard in my life." A few things come to mind, "I guess you haven't listened to some of the people I worked with," is one, but I can't keep from saying,"make a list and see if the [...]

Average Return vs Compound Annual Growth

Every so often, it's time to look at the terms that we use when discussing financial matters. I'd like to take a look at the terms 'Average Return' vs 'Compound Annual Growth.' These two phrases sound similar, yet the results can be quite different. The math isn't complex, so we'll start with a simple example. [...]

Dave Ramsey Confuses me

A week ago I wrote Dave Ramsey Scares me, for the fact that he forecasts the US stock market to grow at 12% as far as the eye can see and I think his disciples are ill-served by such prognostications. Over the past week, I thought some more on this. This is the same guy [...]

Dave Ramsey scares me

Dave had published his expectations that the market would grow 12% on average and right until 2000 there was little reason to dispute this. Only, there was something wrong with Dave's math even then. There's a difference between the long term CAGR (compound annual growth rate) and the average return. Let me explain. If in [...]

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