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One Size Fits All?
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“One size fits all” would be wonderful for me. All of my Dockers slacks would be a 36-inch waist forever instead of my keeping multiple sizes based on the number of buffets visited!

The one size fits all statement just won’t work in my profession. While “relaxing” on I-285 in rush hour last week, I happened to tune into the Dave Ramsey Show, and his program motivated me to write this article.

When his show started, you hear a statement that he is not giving financial or legal advice, only his opinion as host of the show. That disclaimer usually leads into multiple phone calls where he advises the caller to buy a certain type of life insurance or invest in growth mutual funds. Surprise – Mr. Ramsey has no licenses for insurance, securities or planning designations. Rest assured that if I was on the air and repeated some of his advice, I would get to go “downtown” and have a chat with the Insurance Commissioner or Securities Regulators.

Is Dave Ramsey’s advice all bad? Absolutely not! Not carrying debt is a very worthwhile goal for a family. Maybe congress should be enrolled for his courses on debt management. Properly structured debt can be very beneficial in certain situations, however.

Regarding insurance, I totally agree with insuring your income with disability insurance. You have a better chance of incurring a long term disability than dying prior to age 65.

Those who have worked with me over the years know I am a big fan of large amounts of death protection during your early earning years. I carried $1,000,000 of Term Life Insurance while my sons were growing up and that was in the 1980s and 1990s. Term life for young adults has become so inexpensive, not protecting your family makes no sense at all.

“One size fits all” doesn’t fly with me in the life insurance arena. Dave feels you will not need life insurance in retirement as you will be self-insured from the steady growth of your investments. That’s a real stretch.

Following his investment philosophy which is a one size fits all plan just doesn’t work for everyone. “Pay Yourself First” is good advice and something I should have done more of. Buy term and invest the difference sounds good, but make sure you invest the difference.

Over the years, Dave has emphasized an average annual return of 12 percent for mutual fund investors. That just doesn’t happen every year, particularly when down years hit. The average return of the Standar and Poor’s 500 for the past 25 years ending Dec. 31, 2015 was 8.25 percent including dividends and inflation.

Another “one size fits all” problem I have is his mutual fund recommendation of only aggressive growth, international, growth, and growth & income funds. He doesn’t recommend Stocks, Bonds, Real Estate Investment Trusts (REITs), Exchange Traded Funds or Annuities. Someone who follows that plan without first determining their risk tolerance will have some sleepless nights.

A true positive Ramsey brings to the show is that people who participate in the discussion are thinking about and acting on the attainment of financial independence. Far too many people in our country expect someone else to provide for them and we have some 50 years of the government doing just that to thank.

One last thing to point out is that he recommends working with a professional investment advisor. “You are paying them for advice and the ability to teach you enough to make smart decisions about your investments.” There’s a one size fits all statement that makes good sense!

Mike Lassiter is a Chartered Life Underwriter and Chartered Financial Consultant. He is a Licensed Insurance Counselor and a Registered Investment Advisor. He can be reached locally at 770-786-2781.