Fail Forward
Dave Ramsey on how he turned his life around and a critique of my portfolio.
What’s up you guys, it’s Graham here! Woo-hoo, last week, we crossed 18,000 subscribers!
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The housing market cool-off continues in several cities as the federal reserve seems poised to increase interest rates by 0.75 percentage points later this month, which would further increase mortgage costs. During a Q&A at the Cato Institute, Jerome Powell announced that the FED will continue raising interest rates ‘until the job is done’. Also, did you guys know that the FED is working on its own instant payment system named ‘FedNow’? The system is likely to be launched around mid-2023 and will supposedly be cheaper than wire transactions. To be honest, this had kind of flown under my radar, so I am curious to know what you guys think about ‘FedNow’. Lay it out in the comments!
Last week also saw Apple announcing their new iPhone, and I learned that nearly a third of Apple’s revenue comes from its wearables; more than the Mac and iPad! Further, Elon’s feud with Twitter continues as he attempts to terminate the deal citing Twitter’s severance payment to a whistleblower as a violation of the merger agreement.
Outside of all this, personally, for me, last week can be summarized in a single picture.
That’s right, not only did I get to meet my real estate Idol, Dave Ramsey, but I also got him to review my investment portfolio and listen to firsthand how he turned his life around at the age of 28 after declaring bankruptcy.
Meet The $700,000,000 Man Who Lost Everything
Dave Ramsey is a household name for most Americans, however, even some of my viewers might not know all his endeavors. Dave is most popular for his nationally syndicated radio program, ‘The Ramsey Show’, where he mainly provides personal finance advice to live callers. He is also a prolific real estate investor, who, like me, got his real estate license right out of high school. After going through bankruptcy in the late 80s, he turned his life around and has now amassed a real estate portfolio of nearly $600 Million.
In my first video this week, I meet and discuss with Dave Ramsey regarding his lifestyle, disdain for credit cards, reaching a milestone of $1 Million in donations, dealing with guilty expenditures, and how he built one of the most successful personal finance businesses in the world. In a fascinating conversation, he reveals the lessons he learned from interacting with Billionaires and how almost all of them found their success by growing a business and taking it public. Dave cautions how the climb towards building a successful business is always going to be difficult, but in the end, it will turn out to be a gratifying journey.
However, the biggest takeaway from the meeting was his advice on ‘Failing Forward’. He emphasizes that pretty much every successful person stands on a pile of failures, and how 90% of his ideas didn’t pan out, but the 10% that worked out made him who he is today. Dave also describes how the digital world has provided so many new opportunities for our generation and gives personal insights on how to start a successful business, so make sure you watch this one!
Dave Ramsey Reacts to my $25 Million portfolio
In my second video, Dave Ramsey takes a fine comb through my investment portfolio and describes in detail how he would modify it. We go through most of my major asset classes.
Real Estate - This is my bread and butter and consists of a substantial portion of my portfolio. Here I describe how I purchased my first two properties for around ~$70,000 each without a loan, which are now worth nearly $380,000 each. Many of my properties are in California and ever since moving to Las Vegas, I have been planning to sell them off. Dave discusses how I should consider moving them to 1031s to save on taxes. In the video, I also elaborate on improving the overall valuation of a house by changing a wall and how I managed to live essentially for free in my other house. Dave suggests that at this point, I should consider some commercial properties as well.
Equities - My stock portfolio is worth ~ $6.5 Million, which mostly consists of index funds and international stocks. I also hold nearly ~$1 Million worth of individual stocks and Dave describes his philosophy on why he does not do stock picking.
Crypto - My crypto investments, which were worth nearly ~$1 Million at their peak are now worth $450,000. I am overall net down on my crypto investments and Dave discusses the sunk cost fallacy.
Cash and Debt - My cash holdings and debt positions are nearly equal right now and Dave suggests that he would have paid it off instead of being in debt.
You guys have been asking for an update on my portfolio and I think this gives a summary of the present scenario. I also go through some of my niche investments in startups, cars, and watches, so don’t miss this one!
Sidenote
It’s been an incredible learning experience to meet and discuss with someone like Dave Ramsey, but I am curious to know what do you guys think of his ‘Failing Forward’ approach. Do you agree with his approach of paying off debt first and not picking individual stocks? Let me know in the comments!
So that’s it for my Sunday round-up. For the new folks here, in this newsletter, I give a quick recap of whatever you may have missed over the week on Sunday, and on Wednesday, I will be doing my deep-dive article on one of these topics.
See you next week with another bunch of exciting videos!
And force of habit - please like and share this article to help others find the newsletter and grow our community.
Saying Dave made his money off real estate or radio is misleading.
On the interview he mentioned how the real money was in the free publicity and using that airtime as a tool to sell other services.
He doesn't have 1000+ employees to do a radio show. He made his money off courses, training, books.
That's like saying Meet Kevin makes money from YouTube and real estate... Sure... But really it's the educational courses and brand deals.
I haven't had the chance to watch the videos in detail yet, but IMO Dave Ramsay's name on anything is an immediate turn off. Not that he doesn't have some great ideas, but his brand is so cultish and preachy.