The Financial Whisperer to Trump’s America
BRENTWOOD, Tenn.—On a Tuesday afternoon in January, an audibly anxious young man—Chris from Midland, Texas—finds himself live on the air explaining his economic struggles to a perfect stranger. Chris, 28, is a truck driver and the family breadwinner; his wife is a stay-at-home mom. They have accumulated $14,600 in credit card debt and borrowed twice that much from their retirement account. They owe $59,000 on an SUV that is worth $46,000. His annual salary of $60,000 can’t buy a shovel big enough to dig out of the hole. Feeling strangled by the financial stress, Chris is turning to someone for help: Dave Ramsey, whose radio show a friend has recommended.
“The car is gone. It’s insanity. It’s absolutely nuts. It owns you,” Ramsey says in his cigar-smoky southern drawl. With millions of people listening, he orders Chris to sell the SUV and the couple’s other vehicle—a paid-off pickup truck with a value of $15,000. Then he instructs Chris to take out a $5,000 loan for a clunker to drive while paying down other debts. “You guys are in such bad shape that I’m scared for ya,” Ramsey says. But, he adds encouragingly, all is not lost. “When I was your age, I was going broke and going bankrupt. And I had to start completely over, with little babies, and my marriage was hanging on by a thread. And I was so scared, I couldn’t breathe,” Ramsey says. “You can clean this up, dude. And I can show you how, if you’ll do what I teach you to do.”
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Ramsey might not be a household name in Washington or New York, cities where the chattering classes worry about their blue-chip stocks portfolio and wonder whether “economic anxiety” in the heartland really propelled Donald Trump to the presidency. But for the past 25 years—and especially in the decade since the recession—this Tennessee realtor-turned-talk-radio-host has spent his time considering nothing but economic anxiety, walking tens of thousands of callers through a nightmarish gauntlet of debts and defaults, job layoffs and pay cuts, underwater mortgages and punishing student loans.
Beloved for his down-home manner and direct, time-to-take-your-medicine approach, Ramsey is the pro bono financial adviser to millions of Americans who otherwise could never afford one. Privately owned and self-syndicated, “The Dave Ramsey Show” is carried by more than 600 stations and heard by more than 13 million listeners each week. Despite that scale, the relationships he forges with listeners can be intensely personal; people travel from every corner of the country, and occasionally from around the globe, to visit Ramsey in person and thank him for changing their lives. He makes himself readily accessible, hosting three hours of his eponymous call-in program every weekday from a glass-encased studio on the first floor of the Ramsey Solutions headquarters here in suburban Nashville.
When Ramsey listens to America talking, what does he hear? Two hours before he goes on air that Tuesday afternoon, I ask Ramsey about that term, “economic anxiety.” He hesitates. “If you define economic anxiety as, ‘Do I think I can get out of my mess?’ … there is probably more of that out there now than when I started doing this 25 years ago,” Ramsey says. “And it’s kind of disturbing.”
Sitting in his wood-paneled studio, flanked by copies of his best-selling books and a Tennessee Volunteers football helmet autographed by Peyton Manning, Ramsey laments about something more fundamental: the loss of a certain kind of can-do thinking among the people who need it most. He is a conservative, fiscally and culturally, and sounds cautiously bullish about the economy under President Donald Trump. But he worries that more and more Americans of all political persuasions have become economically paralyzed, and are mistakenly looking to the government to help them solve their problems.
“There’s more of a hopelessness than I think there was,” Ramsey says. “If you don’t believe you can do it, you won’t do it. So as cheesy as it sounds, there’s a real reality in this discussion to hope. Does somebody believe that if I plant corn, I’m going to grow corn? That if I sell my car, take an extra job, get on a budget, don’t go on vacation, don’t go out to eat, and use all of that to clean up my debt, will it actually work? … That has more to do with hope than it does math.”
For an illustrious media figure with an estimated net worth of $55 million, Ramsey is convincing as an everyman. Bespectacled and balding with a crown of white hair to match his goatee, the 57-year-old has a round face and an untamed cackle. He is fond of phrases like “daggum sure” and “friggin’ awesome,” and tends to quote Jesus and his grandmother more than any economist or business mogul.
Like other financial gurus, Ramsey built his empire on a fairly straightforward insight (“debt is dumb”) given a catchy name (“the seven baby steps”) and applied to more or less every customer. That doesn’t make it bad advice: The foundation is drafting and following a monthly budget down to the dollar, ensuring that every penny has a purpose. Once you’ve put a real number on your discretionary income and disciplined yourself to spend it according to plan, Ramsey promises, you will find yourself climbing out of debt—and then building wealth—faster than you ever thought possible. “Live like no one else now,” he likes to say, “so you can live like no one else later.” This austere approach has earned Ramsey celebrity status in the self-help universe. In addition to the radio show, there’s a collection of books—The Total Money Makeover is his best-seller—and, for the truly committed, a nine-lesson course, Financial Peace University, which covers everything from paying down debt to planning charitable donations. The class costs $129 and is taught online and by FPU graduates at more than 5,000 locations nationwide, primarily churches, schools and nonprofits.
Today, Ramsey is the No. 3 talk-radio personality in America, behind only Rush Limbaugh and Sean Hannity.
Ramsey has his share of critics. His projections of stock market returns are overly rosy, some say, and his insistence on freezing retirement savings until escaping from debt (mortgage excluded) robs workers of free money in the form of employer 401(k) matching. Most reliably, these critics argue that his “debt snowball” method—which recommends paying off debts from smallest to largest—costs people cash by leaving them with higher-interest loans for longer. A body of academic research, however, from Northwestern to Texas A&M to Boston University, suggests Ramsey’s program is an effective psychological strategy: Clearing each successive debt, no matter how small, creates the motivation needed to tackle the bigger ones.
Ramsey is successful in part because he is relatable, having once bottomed out himself: As a hot-shot real estate investor in the 1980s, he went bust when the market went belly-up. After filing for bankruptcy, Ramsey sought out feedback about what he had done wrong, compiled the best advice and turned it into a seminar at his church. It wasn’t until a serendipitous guest appearance on local radio that he and others saw a much wider appetite for financial guidance—a discovery that launched a quarter-century radio career, as well as a simulcast Fox Business show from 2007 to 2010, and appearances on everything from “60 Minutes” to “The Oprah Winfrey Show” along the way. Today, Ramsey is the No. 3 talk-radio personality in America, behind only Rush Limbaugh and Sean Hannity; his show is the cornerstone of the Ramsey Solutions empire with 650 employees spread across a sprawling campus.
The Ramsey faithful who make the pilgrimage to Brentwood, Tennessee, are free to camp out in the lobby of the Ramsey Solutions headquarters and watch him broadcast the show live; he comes out for hugs, handshakes and selfies at commercial breaks. The true die-hards star in Ramsey’s trademark segment, the “debt-free scream,” in which they announce how much they’ve paid off, over how long and how they did it, before shouting: “I’m debt-free!”
There were no screamers on the day I visited, but plenty of fans were paying their respects—including Sam and Sheryl Christner from Alaska. The couple started listening to Ramsey as newlyweds, took his nine-week course and say he still serves as their de facto financial adviser. “I’ve never sat down with a professional,” Sam tells me. “I don’t need to—Dave fills the gap.” Another tourist, Jordan Archibald, a high school senior from Portland, Tennessee, is currently taking Ramsey’s class. In fact, a lot of students these days are taking Ramsey’s class, and not always by choice: Five states require high schoolers to take some financial planning curriculum before graduation; Ramsey Solutions has a team actively lobbying more state governments to do so.
I now have to spend more time talking someone into believing they control their own destiny than I used to,” Ramsey says.