21 Lessons a CFA (Who Retired Young) Learned That Dave Ramsey Does Not Teach

For what it’s worth, I retired at 42. With over two decades in financial services, a CFA designation, and a mix of real estate and investment strategies, I reached financial independence without gimmicks or shortcuts.
Unlike Dave Ramsey, I have financial credentials, I never declared bankruptcy, and I actually retired young. He is still working.
Let me be clear: I like Dave Ramsey. I think his material should be taught early in school as the foundation for financial literacy.
That said, foundations are just that, starting points. Once your base is solid, it’s time to optimize and personalize your strategies to fit your goals.
Have you ever wondered if his one-size-fits-all advice really works or if there is a different way? Keep reading as I share the steps I took differently and why they just might work for you too.
Table of Contents
Early Investing

Dave Ramsey encourages starting early, but his preference for actively managed mutual funds is a bit restrictive, and come with higher fees.
I started investing in my late teens 20s, favoring stocks. My focus was on mid cap equities that dominated their markets. I had a long enough time horizon to take on this risk, but the companies I bought, I didn’t believe were risky.
For example, in the early 2000s, I bought Microsoft stock in the 20s, when everyone was saying it was overpriced. It is now in the 400s. I never lost a dollar on any of my stock picks.
I don’t believe picking individual stocks is right for most people, but it is an area I different with Dave Ramsy.
In my mid 20s, I transitioned to a preference for ETFs over Mutual Funds. Their fees are considerably lower than actively managed funds.
Early investing isn’t just about getting in the game, it’s about playing it wisely.
Related: An Early Retiree’s Perspective on Dave Ramsey’s Blueprint To Early Retirement
Rental Properties

I bought my first rental property at 20, and it was a game-changer. Real estate offered me steady income and long-term wealth accumulation, yet Ramsey advises caution unless you’re debt-free with a hefty emergency fund.
While that’s a safe route, it can delay wealth-building unnecessarily. By leveraging mortgages wisely, I could scale my investments faster than I ever could with cash-only purchases.
Real estate isn’t without its risks, but understanding markets and tenant management makes it manageable.
For me, the rentals were a cornerstone of early retirement. My plan was to let tenants pay off the houses over a few decades, and then sell the paid off houses. That is exactly what I did.
Strategic property investments can provide financial freedom far earlier than Ramsey’s approach suggests.
Related: How to Maintain Rental Property
All-Cash Real Estate

Ramsey’s insistence on buying properties entirely in cash sounds great in theory, but in practice, it’s limiting. I actually preferred the opposite. I bought my houses with no money down.
Debt, when managed responsibly, can be a tool, not a trap. Buying real estate outright delays entry into the market, often missing out on years of appreciation and rental income.
Wealth-building isn’t about avoiding debt, it’s about using it strategically.
Related Video: Buy a House with No Money Down? Here’s How I Did It!
Early Retirement

I retired at 42 because I embraced the principles of the FIRE movement. Ramsey’s approach, by contrast, assumes a traditional work-life cycle, with retirement often delayed into the 60s.
While his focus is on debt elimination, mine was on balancing saving and investing aggressively. Early retirement isn’t just a financial milestone, it’s a lifestyle shift.
By valuing time over money, I could focus on family, hobbies, and meaningful pursuits.
Ramsey’s advice serves as a great starting point, but for those looking to retire decades earlier, a more aggressive yet calculated strategy is key.
Related: Light Your FIRE: Financial Independence Retire Early Strategies Explained
Opportunity Cost of Mortgage Payoff

Ramsey’s advice to eliminate mortgages as quickly as possible ignores the opportunity cost of tying up capital in a low-interest loan.
Instead, I focused on investing that money into higher-return opportunities like index funds and rental properties.
Opportunity cost isn’t a theory, it’s a real factor in achieving financial freedom.
Leveraging Debt

Dave Ramsey’s “no debt” mantra has merit, but it’s not one-size-fits-all. I used strategic debt to build wealth, particularly in real estate.
This isn’t the same as carrying credit card balances or high-interest loans, it’s about leveraging debt to acquire appreciating assets.
Ramsey’s caution around debt is understandable, given its misuse by many. But for those disciplined enough to manage it well, debt can be a tool for building wealth, not a hindrance.
My journey to early retirement wouldn’t have been possible without understanding the power of leverage. The key is to use debt with purpose, not impulse.
Credit Cards

Ramsey advocates cutting up credit cards entirely, but I see them as a tool when used responsibly. For me, credit cards offer rewards, build credit history, and provide buyer protections.
The trick is paying them off in full every month to avoid interest and fees. Ramsey’s approach is excellent for those struggling with debt, but for others, it’s overly restrictive. Credit cards, when managed wisely, can enhance your financial toolkit.
They’re not inherently bad, it’s all about how you use them. Credit cards have been a helpful resource in my journey, not a financial pitfall.
Related Video: 27 Credit Card Perks Most People Don’t Use (But Should)
Tailored Approach

Dave Ramsey suggests a one-size-fits-all approach to emergency funds: 3-6 months of expenses. While that’s a solid starting point, I prefer a more tailored method.
I track our rolling 24-month expenses to determine an emergency fund that aligns with our unique financial situation. This provides a buffer that fits our lifestyle and offers peace of mind without overfunding.
Ramsey’s approach is great for simplicity, but personalizing your safety net ensures you’re not leaving money idle unnecessarily. It’s not about breaking the rules, it’s about bending them to fit your life.
Quality of Life Spending

Ramsey’s strict budgeting during debt repayment often limits experiences, but I emphasize meaningful, low-cost activities. Family trips to the library, board game nights, or free local events offer great value without breaking the bank.
These moments create lasting memories and reinforce the idea that joy doesn’t always come with a price tag. While Ramsey’s advice is great for those climbing out of debt, I believe it’s essential to balance financial goals with enjoying life along the way.
Frugality shouldn’t feel like deprivation. The goal is to live well now and later, without compromising either.
Related: How To Be A Good Dad: Be Present
Avoiding Lifestyle Inflation

Both Ramsey and I stress the importance of avoiding lifestyle inflation, but my focus extends further into stealth wealth. This means living modestly even after achieving financial success to avoid unnecessary judgment or expectations.
Driving an older car or living in a reasonably sized home doesn’t just save money, it keeps life simple and stress-free. Ramsey’s advice here is solid, but stealth wealth adds an extra layer of strategic planning.
It’s not about hiding your success, it’s about protecting your priorities. The less you signal wealth, the more you can enjoy it on your terms.
Giving Back

Ramsey emphasizes consistent tithing, but I prioritize giving time and resources, especially during the early stages of financial freedom.
Volunteering at local organizations or mentoring others has been far more fulfilling than monetary contributions alone.
While generosity is crucial, I believe it should adapt to your current circumstances. Giving back doesn’t always mean writing a check, it can mean sharing knowledge, time, or skills.
As financial freedom grows, so does the ability to give more effectively. The key is to make giving a part of your journey, not just a destination.
I also challenge Ramsey to follow his own advice. I know he donates a lot to his causes, but I want to challenge him to stop empire-building and instead donate the rest of his life to changing financial education in the school system.
Do it for free. Pay it forward. I am, and my net worth is tiny compared to his.
Related: 13 Common Habits of Millionaires (How Many Are You Doing?)
Nuanced Tax Planning

Ramsey simplifies taxes by focusing on debt elimination, but my approach dives deeper into strategies like depreciation and tax-loss harvesting. Owning rental properties, for example, offers tax advantages that amplify returns while reducing liabilities.
These aren’t advanced tactics, they’re accessible to anyone willing to learn. Ramsey’s approach is excellent for simplicity, but leaving tax benefits untapped is a missed opportunity.
Knowing how to use tax laws to your advantage can fast-track financial independence. This isn’t about gaming the system, it’s about using the tools it gives you.
Flexible Budgets

Budgeting, to me, is like dieting, it only works if it’s sustainable. Ramsey promotes rigid budgeting, but I believe flexibility leads to better results.
My approach allows for adjustments as life changes, whether it’s an unexpected expense or a rare splurge. A budget should guide you, not restrict you to the point of frustration.
Tracking spending and reallocating as needed keeps financial goals on track without feeling restrictive. Flexibility turns budgeting from a chore into a long-term habit that works.
Related: 20 Habits You Can Start Today To Achieve Financial Freedom (Like I Did)
Using Spreadsheets

While Ramsey encourages simplicity with envelope systems or apps, I rely on detailed spreadsheets. Tracking every penny gives me a clear picture of cash flow, investments, and future projections.
It’s not about obsessing over details, it’s about staying informed and prepared. Spreadsheets allow for customization, letting me focus on what matters most to my financial goals.
Ramsey’s simplicity works for beginners, but spreadsheets offer a deeper level of control. For those who love data, they’re a game-changer.
Related: My Relationship with Money: The Hoarder Mentality That Led to Early Retirement
FIRE Lifestyle

Ramsey’s plan aligns with traditional work-life cycles, but I prioritize the FIRE lifestyle, buying time back for family and meaningful experiences. Early retirement isn’t about sitting idle, it’s about pursuing passions and being present.
For me, this meant stepping away from corporate life in my 40s to focus on my kids and hobbies. Ramsey’s plan is ideal for stability, but FIRE goes a step further, redefining retirement as a phase of active engagement.
Time is the one resource we can’t make more of, so using money to reclaim it is priceless. FIRE isn’t just a goal, it’s a way of life.
Related: 9 Mental Shifts for a Successful FIRE Journey (According To Early Retiree)
Tailored Teaching

Ramsey’s advice for teaching kids about money is helpful but generalized. I tailor lessons to my kids’ developmental stages, ensuring the concepts are age-appropriate and practical.
For younger kids, it’s about earning through chores and saving for simple goals. Teens learn about investments, taxes, and the power of compounding. Tailored teaching ensures they’re equipped for real-world decisions, not just theory.
Financial literacy isn’t one-size-fits-all, it grows with them, just like their understanding of life.
Calculated Risks

Ramsey’s advice is tailored to a risk-averse audience, but I embrace calculated risks, especially with rental properties and leveraging debt. Risks, when managed well, often lead to rewards far greater than playing it safe.
For me, real estate investments required research, planning, and a willingness to take chances. Not every move paid off, but the ones that did made all the difference.
Calculated risks aren’t about recklessness, they’re about informed decisions that push you forward. Knowing when to step out of your comfort zone is key to financial growth.
Multiple Income Streams

Ramsey assumes a steady, single income, while I focus on diversifying income sources. Real estate, side hustles, and investments created a safety net that no single job ever could.
Relying on one income is risky, especially in an uncertain economy. Multiple streams provide stability and options, even in tough times.
Ramsey’s advice is solid for debt repayment, but for long-term wealth, diversification is essential. Financial freedom isn’t just about what you save, it’s about what you earn, too.
Related: Why Income Isn’t the Biggest Hurdle to Retiring Young
Use of Tools

While Ramsey simplifies financial strategies, I see the value in advanced tools like HSAs, index funds, and tax-efficient accounts. These aren’t just for the wealthy, they’re for anyone willing to learn how they work.
Tools like these optimize growth and reduce unnecessary expenses, fast-tracking financial goals. Ramsey’s simplicity is effective for beginners, but ignoring these tools leaves money on the table.
Understanding and leveraging them can elevate your financial strategy. The more tools in your kit, the better equipped you are for success.
Opportunity Cost

Every financial decision has an opportunity cost, a concept Ramsey doesn’t emphasize enough. For example, every dollar used to pay off low-interest debt is a dollar that could grow in the market.
This isn’t about ignoring debt but about balancing priorities for maximum growth. Opportunity cost drives my decision-making, ensuring resources are used where they have the most impact.
Ramsey’s advice is great for eliminating financial stress, but evaluating opportunity costs unlocks smarter strategies. Financial independence is about optimization, not just elimination.
Flexible Baby Steps

Ramsey’s Baby Steps are a great framework, but I find them too rigid. Financial goals aren’t linear, life happens, and flexibility is key. Adjusting the steps to fit personal circumstances keeps progress steady without unnecessary stress.
For example, I prioritized investing while carrying a manageable mortgage, which deviates from Ramsey’s order but worked for me.
The steps should serve your goals, not the other way around. Flexibility turns Ramsey’s foundation into a customized plan that evolves with you.
Related: A CFA’s Take on Dave Ramsey’s Baby Steps: A Young Retiree’s Comprehensive Analysis
Mutual Fund Return Expectations

Ramsey often claims mutual funds can yield 12% annual returns, which is overly optimistic, and perhaps misleading. While historical averages for the S&P 500 hover around 10%, those returns don’t account for inflation, fees, or taxes.
My approach is more conservative, using realistic projections of 6-8% for long-term planning. Overestimating returns can lead to under-saving or risky assumptions about future growth.
It’s better to plan with realistic expectations and be pleasantly surprised than to overreach and fall short. Setting achievable benchmarks ensures a financial plan that’s grounded in reality.
Smarter Paths to Financial Freedom

Dave Ramsey provides a strong foundation for financial stability, but building on that base opens new doors to freedom. My journey reflects a personalized approach that balances aggressive strategies with calculated risks.
Ramsey’s advice inspires discipline, but flexibility and optimization make the process faster and more rewarding. Financial independence is about making your money work for you, not just avoiding mistakes.
The best plan is one that evolves with your goals and priorities.
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