New book review–
Dave Ramsey teaches and preaches a gospel of debt elimination. He stresses the negative aspects of personal debt and teaches people, many of whom are deeply in debt, to get out of debt and gain financial independence through austerity coupled with debt elimination followed by systematic investment.
Ramsey starts by discussing the problem – how debt buries people, severely limits their options, puts undue stress upon them and destroys relationships and marriages. He goes on to describe many of our dearly held American beliefs about debt as myths propagated by industry and the finance to enslave Americans and take a large share of their income in interest every day. He teaches that debt is not a tool and that the rich become rich not through debt but with cash.
He then provides a step by step plan for gradually eliminating all debt through what he calls Baby Steps. First is the creation of an emergency cash fund to cover all those unplanned events from car breakdowns to pregnancy to layoffs that people use as reasons to rack up credit card debt and second mortgages.
He also emphasizes the importance of using smart insurance to cover emergencies to further avoid incurring debt.