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5 Reasons Dave Ramsey’s Scared of the FIRE Movement

5 Reasons Dave Ramsey’s Scared of the FIRE Movement
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Are you deciding between the Baby Steps and FIRE? Well, there’s really no contest.

It’s no secret that big finance gurus like Dave Ramsey and his team have grievances with the FIRE Movement. On his radio show and on social media, they are clear that they do not recommend the “drastic” methods of the financial independence retire early (FIRE) community.

Dave Ramsey

There are many die-hard Dave Ramsey fans and FI-ers, alike. From our experience, many people start with Dave Ramsey’s principles and convert to financial independence followers once they do their research.

We started this way ourselves and were able to get our finances in order during college. Dave Ramsey helped us to pay off over $35,000 of debt during school while also cash flowing tuition and everything else.

However, we quickly realized that the Baby Steps and Financial Peace University weren’t for us because of the cut and dry rules. Honestly, while Dave Ramsey’s teachings help some, they can never apply to everyone. We believe that there is no one correct way to approach your finances, and this is something Ramsey fails to realize.

Dave Ramsey vs. FIRE

For those who don’t know, the Baby Steps are as follows, in order:

  1. $1000 in an emergency fund
  2. Pay off all debt, except the mortgage using the snowball method
  3. Build up an emergency fund worth 3-6 months of expenses
  4. Invest 15% of income for retirement
  5. Save for college
  6. Pay off the mortgage
  7. Build wealth and give like no one else

Dave Ramsey sternly disagrees with the level of saving FIRE seekers achieve. What he fails to realize, however, is that many of his principles align with FIRE values, with a few key differences.


While this list is short, it’s also significant. Both groups agree that financial independence is the ultimate goal. Dave Ramsey and FIRE followers also believe in keeping expenses low so that you can pay off debt and save up for an emergency fund, retirement, and children’s education. They also both believe in working in a career that you don’t hate every day. (doesn’t everyone?)


Dave Ramsey has said many times that he plans on working until he’s not physically or mentally able to anymore. He believes that other people should continue to work, as well. On the other hand, the FIRE community encourages people to pursue their passions, whether that is retiring early or working at a job you love.

Ramsey also favors the debt snowball method of paying off debt so people can build momentum and feel a sense of accomplishment quickly. However, I think this is an insult to people’s intelligence. The reason that most people get into debt in the first place is instant gratification.

Not only is the debt snowball method just lousy math, as the FIRE community agrees, but it’s also giving those people the same sense of instant gratification. So, they aren’t learning from their behavior. The debt avalanche method usually makes more sense – paying off highest interest debt first, so you pay less overall.

One of the most significant differences is that Ramsey suggests saving 15% of household income towards retirement. Whereas, people who follow the FIRE lifestyle save as much as they can and try their best to live on as little as possible. It’s not unusual to hear that families or individuals are saving 50% or more of their income as we do.

As we’ll discuss later, Dave Ramsey absolutely hates credit cards. He has said hundreds, if not thousands, of times that credit cards are not a wealth-building tool. However, if you take a look at the FIRE communities’ travels, you could definitely say we are building a wealth of memories and culture by utilizing travel rewards to our advantage.

The ultimate variance comes down to choices: Dave Ramsey unrealistically believes that everyone should follow the same path while the FIRE community understands that everyone’s journey is different.

5 Reasons Dave Ramsey’s Scared of FIRE

Check out this video where Dave Ramsey judgmentally responds to a caller on his radio show who wants advice on how to invest for financial independence and early retirement.

In my opinion, the words of Dave Ramsey speak for itself in this one. Here are five reasons that Dave Ramsey is scared of FIRE. And we think, rightfully so.

Early Retirees are Lazy and Won’t Contribute Anything to the World

“At 40 you’re never going to work again another day in your life?” His feelings about FIRE rang clear in this one.

He encouraged the caller to “have a goal of doing something at some point.” He also doesn’t believe that it’s a blessing not to have anything to do with your life. Boy, that’s harsh – and oh so far off. Who really believes that retirement is the same as not having anything to do with your life?

What Ramsey doesn’t realize is that he has FIRE all wrong. Retiring early gives you something to do with your life. Without needing to sit behind a desk from 9 to 5, the options and opportunities are endless. The reasoning for early retirement isn’t always that you hate your job.

Maybe you want to work on a side gig that you’re passionate about. Perhaps you want to donate your time.

  • Travel the world?
  • Spend our limited time alive with friends and family?

I guess Dave doesn’t value any of these things.

While Ramsey continues to flesh out his disapproval, do you want to know the FIRE community’s response would be? They’d support that he loves his business and that it’s what he wants to spend his time on. Why? Every person values different things, and that’s ok. However, he doesn’t extend the same courtesy to everyone else.

Early retirees are anything but lazy. They’ve put in a lifetime of work into a small portion of their years and are very fortunate. It’s most certainly a blessing to not have to trade your time for money.

What’s Dave Ramsey scared of here? He’s scared of the FOMO (fear of missing out). He says, “I’m 56 and have no desire to retire.”

Want to see when you can retire? Check out our FIRE Calculator.

Being Free of the Chains Will Negatively Affect Your Health!

In the video, Ramsey says that he had a thirty-one-year-old friend who “got fat” after he sold his business and stopped working.

Now, this comment completely baffles me. Weight gain can be a result of many things: medical issues, activity level, diet, etc. But, the level of activity one engages in at a desk all day surely can’t beat an early retiree’s.

Motivation is a critical factor in health maintenance, and an early retiree is more likely to be up and moving doing the things they enjoy.

In other words, Dave Ramsey is scared that retiring early will leave everyone with nothing to do but sit on the couch all day eating Twinkies waiting for a health scare.

Endorsed Local Providers (ELPs) Will Lose Out to the Index Fund

Ramsey partners with local businesses to provide services like financial planning, insurance, and tax services. They are called ELPs because Dave Ramsey recommends them for upholding to “high standards.” Or so he says.

This is a “pay to play” style platform, where ELPs have to pay Dave Ramsey each month to be a part of his network.

Many of these providers are known for their push to actively managed mutual funds. These investments attempt to beat their benchmark’s returns through a high turnover of the stocks within the fund. However, it results in higher expense ratios and sometimes, taxes and fees.

As many FIRE enthusiasts realize, index funds tend to perform better over time. They are considered the best option long-term because they have low turnover, which results in lower fees and taxes.

Ramsey recommends a financial portfolio containing the following investments:

  • 25% International
  • 25% Growth and Income
  • 25% Growth
  • 25% Aggressive Growth

Alternatively, FIRE enthusiasts love the Vanguard Total Stock Market Index Fund. In other words, VTSAX = life.

Needless to say, Dave Ramsey is scared of FIRE taking away the kick-backs he receives from ELPs as the index fund overtakes the active fund.

Too Many Choices

Many listeners of his radio show are appalled by Ramsey’s judgmental behavior and rants. He believes that finances are his way or the highway and that anyone who ignores his teachings is dumb.

Check out 10 Epic Dave Ramsey Rants here.

He ignores perspectives that contradict his own and puts people down for it. It’s not rare to find him chastising a caller on the air. He is using scare tactics to influence the way people think about money to save his brand.

For him, it’s easier to have one checklist of Baby Steps. However, it shows his inability and unwillingness to adapt to changes in the financial space.

The amount of flexibility the FIRE mindset provides is desirable, and his history may not help him much longer. Plus, there’s only helpful support coming from the FIRE community.

Needless to say, this shows that Dave Ramsey is scared of losing his dedicated following. They say the grass isn’t always greener on the other side, but in this case, it definitely is.

Credit Cards are Evil!

Roughly 40% of households have consumer debt due to the irresponsible use of credit cards before tidying up their finances. In result, Dave Ramsey encourages everyone to cut up their credit cards and pay them off as soon as possible to tidy up their finances.

Cash is king, as he would say. He boosts the use of debit cards and cash spending envelopes instead.

Now, this is the complete opposite of what FIRE followers believe. Most value the efficiency and safety benefits of using a credit card. Oh yeah, and who could forget the strategic means of cashback and mad travel rewards?

What Ramsey doesn’t account for is that not every person loses the ability to control their spending. The fact that a person could be financially savvy and pay off their credit card every month baffles him.

When he was younger, he went into so much debt that he was bankrupt. Picking up the pieces is scary and left a significant scar on his mindset.

Thus, Ramsey is scared of the FIRE community’s love of strategic credit card churning and hacking as a result of his prior experiences.

The Point

While all of Dave Ramsey’s “rules” in the Baby Steps and Financial Peace University could be coming from a good place, again, nothing is one size fits all. FIRE is a much better option for those who need the flexibility and support to work on what they want their financial future to look like.

If you’d like to learn more about how to get started on your FIRE journey, be sure to check out our FIRE Guide and free eBook.

Did you start out as a Ramsey Baby Stepper? Have you moved on to FIRE? Leave a comment to let us know where you are in your journey towards financial freedom.

This article originally appeared on Your Money Geek, and has been republished with permission.


Saturday 16th of November 2019

I listen to Dave and I mostly agree with your article. I wouldn't say he's afraid of FIRE or that he has FOMO he is definitely financially independent. He chooses to continue working because he is making a difference in people's lives and he is called by God to manage his wealth to serve others. The nice thing about his program is that it's free and you don't have to take everything he dictates. I think for someone in debt his plan is a good path because there's such an extreme shift from being in debt and living the lifestyle that goes with it to the save 60% or more of your income for early retirement. To say one must choose one or the other is not true. It's a continuum. I strive to get better and will take all the advice Dave Ramsey or the FIRE movement will give me!


Saturday 16th of November 2019

And I'll add that I think his fear for FIRE seekers comes from his misguided idea that retirement means sit on the porch and quit leaving the house. Once I'm not working I plan to stay engaged with my community by volunteering regularly and taking classes to keep my mind sharp. I bet if Dave took the time to get to know some early retirees he'd see that they are just as driven and engaged as they were when they were working!


Thursday 26th of September 2019

For me, FIRE is all about freedom. I do not love my day job, but the pay is good. I do like that. I am concerned about being an old engineer. I don't see as many of them as I would like, and my plan is to be prepared for that. FIRE means options. FIRE is freedom. Even with work as it is, it would be that much less stressful with the knowledge that I don't have to be there. When I do retire, it will be to hobbies and other options. Hopefully some will earn me extra money, but who knows. I know some folks blow up, weight wise in retirement, and others fade away. I have family members that have done that. I think it comes down to the individual, and when Dave fears it for others, he's projecting his own fears on them.

Sam @ How To FIRE

Tuesday 1st of October 2019

Thanks for stopping by our site, GENX FIRE! It sounds like your retirement will be filled with your hobbies and maybe a side hustle. That's definitely something to look forward to 🙂


Thursday 26th of September 2019

When you need an initial plan to get out of debt, Dave Ramsey is one of the best starting points. We've had several friends get out of debt and reshape their finances because of his baby steps. However, I don't think they completed all of them.

Unless you're the type of person who keeps repeating financial mistakes and lacks the self-discipline to stay out of debt, it's only natural to eventually jump on the FI route.

Especially once you realize the peace of mind of knowing you can quit your 9-5 job if you really want to (like when senior leadership changes/ the company gets bought out/ or decides to relocate to another city and "forces" you to move if you want to remain employed).

Sam @ How To FIRE

Tuesday 1st of October 2019

Thank you for reading, Josh! It's great to hear that your friends were helped by Dave Ramsey. We started with him ourselves and quickly moved on to FIRE. Do you see that path happening for your friends?

And, I couldn't agree with you more about the flexibility FIRE provides. By following the principles, I was able to quit my 9 to 5 back in July to pursue our side hustles full-time. So, I'm extremely grateful!

Kim @ The Frugal Engineers

Thursday 26th of September 2019

Great comparisons. I started out with Dave Ramsey back when I was paying off credit card debt. His methods are helpful if you need a swift kick in the pants to wake up financially. Now I'm a FIRE enthusiast and not afraid of credit cards that are paid off every month. It's an evolution for sure.

Sam @ How To FIRE

Tuesday 1st of October 2019

Thanks for checking out the article, Kim! I definitely agree that Dave Ramsey is the kick that many need to get started. And, it's great to be able to responsibly utilize credit cards for the points/rewards. We use them for travel hacking more so than cash back at this point. 🙂

Marie C.

Thursday 26th of September 2019

Excellent article!

Sam @ How To FIRE

Tuesday 1st of October 2019

Thanks for reading, Marie!