The Calculation for Rochester, Minnesota (Dave Ramsey Misery Index)
Rochester Minnesota is best known as the home of the famed Mayo Clinic. The Mayo Clinic compromises a good share of downtown Rochester and is the biggest employer in the city. Rochester Minnesota is also the home of UMR, University of Minnesota Rochester, which emphasizes health education and professions. UMR is a small new university that is challenging the way universities are run. Weather in Rochester Minnesota includes all four seasons, cold in the winter, mild in the fall and spring, and hot in the summer. Rochester is listed in the top places to retire by Forbes magazine.
The Dave Ramsey Misery Index consists of two numbers made out in the form of money lost due to Dave Ramsey’s advice related to home purchases. (All numbers are based on an after tax calculation) They are as follows:
- Home Price Appreciation (Calculated based on actual data per market) I calculated the actual price difference between the median home list price in October 2011 (when I read Dave’s advice about home buying) and the median home list price for February of 2015. This area is represented by Rochester, Minnesota. The median home list price increased 22% for that time period. Using the example of a $149,500 home in that market as of October 2011, the same home would cost $33,500 more or $182,000 as of February 2015. (Information gathered from Zillow Real Estate Research )
- Higher Mortgage Payment. The second number is the difference between what the mortgage payment would have been in 2011 and what the mortgage payment is now, calculated over the life of the loan secured in 2015.
Expressed in numbers the Dave Ramsey Misery Index for Rochester, Minnesota would be as follows:
- Home Price Appreciation $33,500
- Increased mortgage payment next 360 months $55,826
TOTAL MISERY $89,326
Each time I post a new misery index it will be for a particular community showing the misery Dave Ramsey has caused his followers
regarding his advice to wait to purchase a home. Back in 2011 I was screaming at the top of my blog posts and videos that it was time to buy a home, an investment property or a primary residence. With interest rates as low as they were and home prices at unbelievable prices it was almost impossible not to see the writing on the wall as to what was going to happen. It has happened. Going forward it appears to me that we are faced with a high probability of increased inflation. With that being said, it is still a good time to buy while interest rates are low and before prices go higher! And, please don’t listen to Dave Ramsey when it comes to buying a home. His advice has created a lot of misery for folks.