Sam Kwak vs Dave Ramsey : HELOC Rant

Alright, it's time for us to Face off with Dave Ramsey. In this video, we're going to react to Dave Ramsey's rant on a Home Equity Line of Credit (HELOC)

In one of Dave Ramsey's video, he shares his opinion on the HELOC and how an estimated number of 1.6 million people will be borrowing against their equity using a home equity line of credit (HELOC).

Dave mentions a few points that we are going to provide commentary as well as rebuttals. One thing to remember is that Dave's audience has a habit of borrowing money to buy depreciating liability such as boats, clothes, cars, and or a brand new TV. None of these items are income producing assets unless they can be monetized through a business.

Our focus is to use the Home Equity Line of Credit (HELOC) to pay off other existing debt as well as acquiring appreciating asset as well as income-producing investments.

😃 Thanks for Subscribing & Liking our Video!

📰 Want to read more tips & tricks about real estate investing,

The Kwak Brothers are millennial real estate investors who have acquired over 76 Units of Rental Units and have raised over $20,000,000 in the capital for their real estate deals. They are based out of the Chicago-land area and they are dedicated to helping ordinary people become real estate investing champions and rockstars! They specialize in owner financing negotiations and multi-family rentals.

📋 GET OUR FREE OWNER FINANCING CHEAT GUIDE KIT:

📊 GET OUR FREE HELOC STRATEGY CALCULATOR & EBOOK:

💻 JOIN OUR FREE FACEBOOK MASTERMIND GROUP:

GET SOCIAL WITH US:

#realestateinvest #entrepreneurship #thekwakbrothers

========================
Video Created by:
Chris Dorsano - Creative Director

---DISCLAIMER--- The suggestions, advice, and/or opinions that are given by Sam Kwak (The Kwak Brothers) are simply opinions. There are no guarantees of set outcomes. Listeners, guests, and attendees are advised to always consult with attorneys, accountants, and other licensed professionals when doing a real estate investment transaction. Listeners, guests, and attendees are to hold Sam Kwak, Novo Elite, Inc. and the Kwak Brothers brand harmless from any liabilities and claims. Not all deals will guarantee any profit or benefits. Listeners, guests, and attendees are to view and listen to all materials and contents furnished by the Kwak Brothers as a perspective based upon experience.

[rickphan-thephanoflifeshow]

Respectfully, Dave’s advice is meant to keep people out of trouble. Right or wrong, his assumption is that people will do bad things with debt. When educated and discipline is applied, debt becomes leverage that can speed up your financial goal. It took me 5 years to save $100K. It took me less than 12 months to make over $100K my first year in real estate. All of that $100K was done through OPM...debt/leverage. That is a huge difference in time.

[BritBrat]

Dave Ramsey is against going into debt period! Most people are not very good with money. So his rant is for the majority of people.

[sstewart]

I have watched and recommended the total money makeover to a lot of people. However, the HELOC strategy and HELOC stupid are two different things. I suggest watching the video link and seeing the HELOC strategy before trashing this idea. The goal of using the HELCO as Sam is suggesting is not the way someone is going to use the HELCO like Dave knows a majority of the people do. But once you watch the HELOC as a strategy, it may also help you do the math as to why Dave thinks paying for a house outright is smart. (or anything else that is amortized.) Each of these guys has one goal, to get rid of debt and live in a debt free house. One is disciplined to use debt as leverage and use the risk to their advantage in a very planned out way. The other knows that a majority of people cant stick with a plan.

[GeneralChangFromDanang]

I would never borrow money against my home for my business. It would really blow to lose your source of income AND your house if something goes wrong.

[travismcpherson]

I'm with Dave the fastest way to pay your debt is to pay the principal!!

[drewby]

I have been following the Dave Ramsey Baby Step Plan and it has definitely been very beneficial. Its a great tool in the arsenal of getting out of debt with learning how to discipline your attitude towards money. I also have been making money to put back and set aside for real estate investment and talking to my business banker, the HELOC mortgage is seeming to be a great fit for what we are trying to do. Everyone should know where they stand financially and how disciplined they are with their spending and investment habits. Dave does come across very arrogant and strike, a bit of a brute. He's mostly sharing from personal experiences from doing stupid things with money. I admire anyone who can be very transparent about losing everything, going bankrupt, yet being able to find principles of biblical advice to bounce back and help millions of people do the same. Kwak brothers have awesome tools to further in the investment real estate world. I'm taking the well rounded advice to make the best decisions that fit my lifestyle and what I know I'm able to handle. Their has to be some level of discipline on either side.
Just my 2 cents.

[BR-vpdz]

I do see where both sides are coming from, but I lean more towards DR with this stuff.


You can payoff a mortgage in 5-7 years by aggressively paying extra into the principal each month. Much less complicated, fewer moving parts, keeps Murphy and his cousins further from your personal finance. In addition you aren’t paying interest on two loans and have all your cash tied up in a HELOC where the bank ultimately controls it instead of you. Refinancing or selling the house is also easier without a Heloc. It just seems like there are a lot more ways to lose with the Heloc method than there are to win.

Slow is smooth, smooth is fast. Keep it simple. Paying off debt early is a result of discipline, not sophistication.

[ecc]

Borrowing money to pay off debt is riddled with potential pit falls when murphy shows up. Just keep it clean & simple by paying more towards principal every month & you will accomplish the same thing. The goal is to pay off the house a quickly as possible now you more cash available to start up a business or whatever else.

[phonxayphonseya]

Debt! Debt ! Debt! It’s doesn’t matter you are borrowing money! Doesn’t matter what it is call.. when responsible people’s borrow money they pay it back timely, when irresponsible people’s borrow money they go broke and it get worst from there.. Ramsey message is in point..

[jpadila]

This is not a face off. If it were a true face off Dave would be here to respond. And you can guarantee Dave would have a lot to say in response to this guy.

[nyglg]

Looking at the Student Loan Debt and Credit Card debt in this country it's easy to agree with Dave's assessment of most people. Most Americans aren't good with money.

[dreicher]

I believe a line of credit can be a good thing if used wisely and a bad thing if not. More often than not, I have watched as friends abuse this and it ruins them. I also believe being debt free is very liberating. The pandemic has hurt the economy and I am sure there are people who got behind on their mortgage payments. Think of how much less of a burden they would have gone through if they lived within their means (100% debt free). Now I think there are good exceptions to having a HELOC, but I also believe more bad times are coming and this is not the time to get into more debt. As the dollar weakens, property taxes and insurance will certainly rise to the point of being a burden. After all BlackRock is gobbling properties up at an inflated value. Do you honestly see property values becoming affordable if they do not want us to own anything? Or do you honestly believe taxes and insurance will not continue to skyrocket? I have never ever ever had property taxes and insurance go down. Even in the 2008 housing crash. Or do you not see the dollar will crash soon? While I would normally agree with you (I love your channel) my age and experience tells me this is not the time to take any chances. Get your ducks in row. Pay everything off. Be prepared to weather the financial storm coming.

[alexandermcafee]

Don’t think I’ve ever heard anyone follow and execute Dave’s plan/advice and regret it. Or wish they borrowed more money/stayed in debt longer. That’s people earning 2k a month to 320k a month.

[irocitZ]

I've never borrowed money against my house for any reason, I've learned to just be patient. I simply save up and use my own money, for instance I love cars but there's nothing I like that much that I'm willing to go into debt for, that seems to work for me. I'm pretty certain that's how Dave would do it.

[firebirdlover]

I agree with Dave, because I understand human nature. For every one person who successfully uses your HELOC strategy effectively 5 will just end up further in debt. You really need to spend time talking about how dangerous of a strategy it is if you don't have the discipline to see it thru or if life happens and you find your income dropping unexpectedly.

[jeraldbagwill]

The heloc velocity plan is interesting, but I think what Dave is saying is get out of debt, save the money and pay cash for whatever. His plan is about having patience and not trying to add debt.

[paulstutsman]

I stopped using my HELOC as much when I got my Whole Life IBC policy. Dave's head would probably explode if he saw this comment.

[debugengineer]

I like Ramsey, he is a very conservative guy however I like also build other sources of income . Thank you

[derrick]

:57 soon as I heard this I knew how it was going to go. Dave is not dealing with ppl who historically use money properly therefore something like this that has the potential to be a huge pitfall he will not advise to his audience. He is all about using money safely not maximizing growth regardless of risk

[DebtEliminationNow]

Great video Sam, I think unfortunately you have people commenting on something they don't understand what the heloc will allow to do to eliminate quickly and at an extreme cost savings in interest. Very basic point don't borrow to 100% capacity and use it for the sake of borrowing . Use to eliminate debt.