The controversial financial advisor made waves after slamming “‘faux rich’ Americans on Tiktok.
The TikTok Finance Sphere
Personal finance expert and radio personality Dave Ramsey has been garnering attention and backlash in the last few months for the impassioned rants, debates, and lifestyle advice he shares in TikTok videos.
A Critic of Pretenders
Most recently Ramsey shared a video criticizing Americans who exaggerate their wealth by pretending to have more money than they do.
“No Stinkin’ Money”
“Stop acting rich,” he told viewers bluntly. “You don’t have any stinkin’ money.” Instead, he urged people to adopt a modest, minimalist lifestyle as the best way to save money.
A Wealthy Facade
The crux of his argument was that outward appearances often hide a person’s economic situation. He argued that many people who make substantial six-figure salaries still end up “broke” because they spend too much money on flaunting wealth and appearing richer than they are.
“Big Hat, No Cattle”
Ramsey called this phenomenon “big hat, no cattle,” a famous Texan phrase that can translate to ‘all talk, no action,’ and otherwise refers to someone who wants to cultivate an image of themselves that has no basis in reality.
Research Supports It?
While some would argue that his claims are exaggerated, or only apply to a small minority, the truth is more complicated. In fact, to some extent, Ramsey’s latest rant is supported by research – particularly where younger Americans are concerned.
Wells Fargo Survey
A survey by Wells Fargo earlier this year suggested that many supposedly affluent Americans exaggerate or outright lie about their finances to appear wealthier than they are.
34% of Millennials
Researchers found that 34% of “affluent” millennials – millennials who have more than $200,000 in investable assets – go to great lengths to appear wealthier than they are. This is compared to 20% of their affluent Gen X counterparts.
Dressing to Impress
29% of these millennials also admitted that they spend money on high-ticket items just to impress the people in their lives.
Funded by Loan and Credit
Another 41% told Wells Fargo that in spite of their affluent status, much of their lifestyle was funded with credit cards and loans. 40% have taken on more debt than they would like.
Avoiding Criticism
Ramsey went on to argue that some people pretend to be wealthier than they are to avoid being criticized or belittled by their peers. In his eyes, this is an issue entirely incongruent with financial success.
“People Are Broke”
“If people aren’t making fun of you, you’re probably not on track,” he told viewers. “ Because people are stupid. People are broke.”
7 Baby Steps
He went on to express the importance of prioritizing actual wealth accrual over perceived wealth in the eyes of other people. In the video, he also included an outline of “7 baby steps” to reach financial security.
Some Disagree
Despite the practical, and seemingly obvious advice, a number of critics responded to the video, pointing out that Ramsey’s strategies were not applicable to every financial situation.
Quality Over Security?
Commenters argued that being overly frugal and strict with your money would lead to a lifestyle that had to be endured rather than enjoyed, pointing out that quality of life is just as important as financial stability.
Harsh Critics
It’s far from the first time Ramsey has been criticized for his blunt, brash, and conservative financial advice. Earlier this month a slew of young Tiktokers took to the platform to slam his tips, calling them “a bunch of crap.”
Out of Touch
His younger critics called him out of touch with the economic realities that most Gen Z and Millennial Americans are faced with, including record-high inflation, high cost of living, stagnant wages, and a prohibitively expensive housing market.
Trending Hashtag
Across Tiktok, users began posting videos with the hashtag #daveramseywouldn’tapprove, with footage of them doing things that purposefully contradicted his financial advice.
Ramsey Hits Back
Ramsey fired back at his younger critics, telling Fox News Digital “There’s a segment of them [younger generations] that just sucks. They’re just awful. They live in their mother’s basement, and they can’t figure out why they can’t buy a house because they don’t work.”
“An Excellent Generation”
He also acknowledged that the majority of young Americans were “an excellent generation.” “What we’re seeing with both of them is there is a segment of them that is very serious and very good with their money,” he said. “They believe in saving. They believe in investing. They believe in the free enterprise system.”
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The content of this article is for informational purposes only and does not constitute or replace professional financial advice.
