The Rachel Cruze Show - The Fastest Right Way to Become a Millionaire with Dave Ramsey

Episode Date: January 10, 2022

Pandemic proof your budget with practical advice on how to save more money, pick up a side hustle and invest your income the right way. In this episode, you’ll learn: How to keep yourself from going broke The fastest right way to become a millionaire How to start a lucrative side hustle Resources: Baby Steps Millionaires by Dave Ramsey EveryDollar Learn more about your ad choices. Visit megaphone.fm/adchoices

It's not the dollar amount. It is what you do with it that is so big. One third of the millionaires made less than 100,000, never made six figures in their life. One third of them. Yeah. Now, that's hard to do. That's mathematically tough. Hey, guys, welcome to this episode of the Rachel Cruz Show podcast.

I'm so glad that you're here. In this podcast episode, we're going to be talking about building wealth and making extra money. You're going to hear a conversation I had with my dad, Dave Ramsey, on Baby Steps 4 through 7. and we're going to talk through the quickest way to become a millionaire. Then I'll go over the best way to start a side hustle to make extra money for this year. But first, let's talk about Baby Step 3 and how to make your budget pandemic proof. Take a listen. Baby Step 3, it's, I don't know, it might be one of my favorites because when you work at it,

it's a little bit of a marathon feeling because you've just got out of Baby Step 2 paying off all your debt. But now you have the first time where you're like, okay, this is all my end. we're going to set a big chunk aside every month to build up this emergency fund of three to six months of expenses. And especially when Babyset 3 is finished, that is like the collective, I mean, if you can even just put yourself there thinking that you have no payments and you have three to six months of expenses saved in the bank, it puts you at a totally different position, emotionally, financially, everything. Like, there is just something peaceful. about completing baby step three.

So that's what we're on. That's what we're going to dive into. And one of the big questions I always get is, okay, Rachel, should it be three or six months? Like, it's this range, and there's a range for a reason. I tend to find that, again, not to be stereotypical, but usually most men are more on like the three end mark. Like, oh, yeah, three months, totally fine.

We'll be fine. We'll figure something out if something happens. Women are a little bit more conservative financially, where they'll usually say, six months feels safer. I like having an extra buffer just in case something happens. But again, could be different in your household, but that's what I tend to find.

Also, I would say if you are on commission or freelancing, if you don't have a salary that you know exactly what you're going to be getting, then I tend to lean a little bit more towards the six months. And you can even look at your expenses and say, what are the expenses that have to be paid? And if you don't know that, that means you need a budget. budgets. Yes. And every dollar is one of the best budgeting tools out there. It's free. If you don't use it, you should be using it. But to be able to really look to see, okay, what bills have to be paid no matter what?

And from there, you can kind of do the math. Multiply that by three. Does that feel good? Multiply it by four, five, or six. And just think, okay, what amount of money sounds good? So looking at your expenses is really important. So once you figure out, okay, we're going to save three, four, five, six months. then you're going to have that money in just a traditional savings account or even a money market account. And a lot of people don't like this, especially the math people out there because they're like, what? It's a lot of money just to be sitting and basically me making nothing on that, where I could put it in the market and actually get a larger return, like, oh. So what you have to remember with this is that this is insurance. It is not an investment. Okay? Remember that. It's

insurance, it's not an investment. So when something happens, I want you to be able to get to it quickly, which in the financial space, they call that being liquid to be able to get to it. So, for instance, Winston and I, we have ours in a money market accounts. I think it's with Ally Bank. I think it's an online bank. It's where we have ours. But you can look around and say, okay, you know, what gives me a little bit more return? I'm okay with you asking that question. I just, that cannot be your main focus. Because, again, this is not for investment purposes. This is for if or when something happens in your life. So remember that. So again, a traditional savings account, money market account is great. Go to your local credit union, bank online, it doesn't matter,

just go and you can check those prices. And having it there, you guys, is really important. This is a really important piece of the baby steps because when something happens, I want you to have cash available. I don't want you going back into debt because you don't have cash on you. I don't want you dipping into your 401k if something happens. Like, I want this to be able to be that you can get when you need it, because, like we always say, emergencies are going to happen. It's not an if, it's a win. So let's break down what an emergency is. An emergency is urgent.

Your car breaks down. Yeah, it's urgent. Yep, yep, got to fix that. A new dress for your sister's wedding. Nope, not urgent. Sorry. Unexpected. Your anniversary?

Nope. You know when your anniversary is. Every year, Christmas, birthdays, you know they're coming. Yep, not unexpected. A long-distance funeral? Yes, unexpected. Also, an emergency has to be necessary, okay? So a root canal, yeah, I'd say that's necessary.

Taylor Swift tickets? No, no, not necessary. You can't tip into your emergency fund for that, even though every part of my heart wants to say yes. We have to be adults here, people, and we have to say no. And even when you look back on this year, you guys, look at the pandemic. I know it's something that keeps getting brought up in conversation over and over and over. But it's true.

Like, this is something that had so many emergencies in it, right? For people's health, job loss, all of that. So an emergency fund was really, really helpful during that time, for those of you that had it. And I love hearing your stories on having an emergency fund, because a lot of you share your victories over in the Rachel Cruz show community on Facebook, and it's amazing, amazing to hear your stories and your life and how this stuff has actually impacted you for the good, which I love hearing.

So, for example, Lindsay said, y'all, this is why an emergency fund is so important and why it's a must. My newlywed husband and I are on our cross-country honeymoon, towing our camper from New York to California, back to New York. We've had an absolute blast. However, there were a few hiccups along the way.

I broke my foot while getting out of the truck in Las Vegas. Ouch. And now we're making our way back to New York and made it to Omaha, Nebraska for a wedding, and then our transmission went out. So not only did we cover my wheelchair expense for my broken foot, we're able to figure out what's next for our truck, camper, to get us home. Emergency funds are crucial.

Who, girl, that is quite a honeymoon. but thank goodness for the emergency fund. Dionne said, emergency fund. I am here in Dallas, and my pipes froze under my 1925 pier and beam house. The repairs were less than the insurance deductible, so I wrote an $800 check without a problem. Peace of mind. Paula Joy said, thankfully, I had an emergency fund to fall back on during the pandemic.

I was sick and off work two weeks. My job only paid me for one, didn't sweat it. because I listened to Mr. Ramsey. Keep hearing and hearing and applying. It works. Love you guys. It's proof. It's proof.

And you know this. Stuff is going to happen. You know life happens. And it costs money usually. It was what stinks. But having that emergency fund in place turns a crisis into an inconvenience. When you have the money, it's amazing. And if you have to dip into it, that's okay.

That's why it's there. It's there to be your buffer. But I would say, go back. and refund it. Make sure you keep that amount that you want in there. So if something else happens, you're able to take that money out. It does. It just gives you such peace of mind. And please, please, don't forget, it is insurance. It's there for when something happens. This is not to get rich. This is not your retirement fund. No, this is there to help catch you when things happen. But the emergency fund, it's one of the steps I love the most. It is. It just gives peace of mind.

Okay, so we've been talking about the baby steps, and we're towards the end of them, you guys. So I thought I would bring the man who came up with them. Dave Ramsey back on. Welcome back. Thank you. So glad you're here. Okay, so we have been talking about, again, the baby steps and how this is the proven plan to help you, not just get in control of your money, not just to get out of debt, but ultimately to build wealth. And your new book, Baby Steps Millionaires, is out.

It came out yesterday. Yeah. Congratulations. Thank you. So great. And this really walks through the wealth-building aspect of the baby steps, which is where we're at right now in our series here on the show. And so that is Baby Step 4-7.

So Baby Step 4 is funding 15% of your income into retirement. Babyset 5 is funding Kids College. Baby Step 6, paying off the house early. And Baby Step 7, building wealth and being extremely generous. So I love that this is like the exclamation point at the very end. Because up until this point of the Baby Step 1, say Bep one, two, and three, you're working to save money in your emergency funds, you're getting out of debt, all of it, right?

So you're focused on that. Now, these steps, you kind of do all together, except for baby step seven. And so when you look at this plan overall, what made you come up with it? How did you kind of come about, okay, these are the baby steps? Because I feel like a lot of people in the financial space have changed their strategy over the course of their career. And this is tried and true to the point that I even, should we tell them, I even tried to change baby step one years ago during one of my bookwriting processes.

And I was like, can we change baby step one where they save more money? And you were like, no, no, we're not changing the baby steps. I did. I asked to change the baby steps. But you have not shifted from it. So talk through like the process of creating those and why they still work even today. The beautiful thing is, is that these days we're meeting, I mean, with almost 10 million people having gone through Financial Peace University and 8.5 million total money makeover books sold,

I meet tens of thousands of millionaires because they followed this. Yeah, like tens of thousands. It's not like two or something. I mean, I meet them everywhere I go, and they are baby steps millionaires. That's why we ended up doing this book, because we wanted to make sure everybody understand. Because here's the way the whole thing started. I didn't start as the get out of debt guy.

I started as the I want to be wealthy guy, and I want to show other people how to be wealthy. And then I figured out the fastest way to do that was get your money back instead of giving it to other people. And so instead of paying everybody in payments, like a guy I was talking to that day, he goes, we just got rid of all our payments, and our payments were $1,482 a month. He goes, if I just invest $1,482 instead of giving it to Toyota Motor Credit and MasterCard and Chase and whoever else, then Sally Mae, then I'll be rich.

Well, that's how it's all started. Baby Steps 1 through 3 were how to get to be an investor. And you get to be an investor, you become wealthy. But everybody wants to jump over and start with being an investor. And you can't be an investor when you don't have any money. So, baby step one is $1,000 in the bank. Two is get out of debt because that gives you all your money back, your most powerful wealth building tool, which is your income.

Then you build an emergency fund to keep little things from coming along, little emergencies from knocking you off your investment plan. But the whole thing is to set up baby step four, the investment plan, and five is a subcategory, kids investment plan for the college. And they get the house paid off, which then accelerates it one more time because they don't have a house payment. You just invest a house payment. You're going to be so rich and unbelievable.

Right, right. You know, so 4, 5, and 6 are intentional long-haul marathons. One through three are gazelle intensity fast, knock it out quick, sprints. And 4-5 and 6 are simultaneous, as you said. So here's the thing. The average household income in America is $60,000. You invest 15% of that from age 30 to age 65. You're going to have $5 to $10 million in your Roth rate race.

And so if I'm 10x wrong, you're still a freaking millionaire. Right. You know? And so this causes you to be wealthy, is what it's going to be. amounts to. But it's the steadiness and a substantial amount of money being invested that you can't do when you're in debt. Yes. So I know most people watching are in Baby Step 2. Yeah. A lot of them are because most people in America are in Baby Step 2. Yeah. Yeah. They get out of that stage, right? But the reason we keep bringing up Baby Step 4 is that's why you're doing it. It's why you're clipping

coupons. It's why you're not going out to eat. It's why you're not going on vacation. It's why you're a gazelle intense so that you can get to here. Yes. And you get to hear so that you bill wealth so that you change your family tree and you can be outrageously generous. But here's the thing. The math on this is slam dunk. I mean, it's not even a question of whether you're going to be there or not, if you follow all the way through. So that would be my question is that for a lot of people, you can just hear the like, I just don't know if we'll ever get there. God, we're still in so much debt. The idea of being a millionaire, I feel like today, it can feel like it's just, that's just not me, right? What would you say to that person? If you start, maybe,

Step two, with great gazelle intensity and deep sacrifice, and you're going crazy to get out of debt. And your only reason to get out of debt is to get out of debt, you're probably going to run out of gas. That's a good goal, but it's probably not a big enough, noble enough goal to cause you to go through the sacrifice you're going to go through in the 18 to 30 months that it takes you to knock every piece of debt out of your life. It's hard. and for me, I had to have a bigger carrot than simply being free. I wanted the carrot of, I want to be rich, so that I can do some stuff for me and mine, and so that I can be unbelievably generous,

and so I can be stable, and I have controlled the controllables, and it's not I want to be rich because I want to be a jerk, it's not that, it's not that, it's not that, it's not that, it's not that, but I want the things that wealth will do, and getting out of debt is just one of the ways I get there. Yes, yes. It's the best way to get there. And so that will give you the power.

If you really start to believe, if you go, I don't really care if I build wealth or not, you're probably not going to get out of debt. Because it's too hard. You have to have something big to pull you through the hard. But the people that go, I'm getting out of debt because I'm going to change my family tree. I'm getting out of debt so that I never, never am here again.

So I can build this wealth. Because if I had a million dollars, here's what I could do. And if I had $10 million, I could do 10 more of those things. It's exciting. It's energizing. gives you a lift. And so that's what people really need to get their hands around is it's not that money's important. It's what money does. Yes. It's important. We talk about that a lot here where that money is a tool, right? It's to help you create a life that you love. It's to help other people.

And it is. It's this tool in your life that helps. So when it's the thing that is sucking every bit of energy out of you and it's controlling you and it's exhausting, it's working the wrong way. And so that idea of being debt-free, no one telling you what to do, you actually have the power to do stuff. and then you actually have the money to go and invest. Like, yeah, anyone, anyone can do this. But it is, again, sitting on this couch right here, just talking through it. We're not right now doing the nitty-gritty of it. And so people are like, no, but I have obstacles.

There are things that I see. There are people you talk to every day on the radio. And so what are those obstacles that you see that people they might face when it comes to building wealth? How ordinary people built extraordinary wealth and how you can do is the subtitle. I've met people from every race, every sex, every national origin, every area of the country, virtually every profession. Every income level. Every income level that have become millionaires. A few years ago, we did this huge, massive survey of millionaires, we found that 97% of the millionaires, that's all of them, okay?

3% didn't understand the question. I mean, you know, 97% of the millionaires said they control their own destiny and that believing that they could do it was everything. And I believe Americans can still do this. That's what they said. When we surveyed the general public, 69% said they believed it could be done. So what's the difference? Well, the millionaire's done it so they know it can be done, number one.

But number two, the point is belief is everything. And that's the problem with the barking dogs out there in our culture. There are yep, yep, yep, yep, yep, you can't do it anymore. You can't do it anymore. America's broken. American's screwed up. There's racism. Yes, there is.

There's sexism. Yes, there is. There's regionalism. Yes, there is. There's division within the politics. Yes, there is. It's nasty out there. People are not kind.

People are not good. It's bad. Okay? Go do it anyway. Because people just like you, in spite of all of that, just the same color as you, Same age as you, same career field you're in, have gone and done it. But they believe they could.

That's the problem with these barking dogs is they're making people lose their hope. They're making them believe that they can't do it. And I get so irate with these people in politics and with these movements that steal people's hope and say, you can't do it anymore. And people go, well, I can't do it anymore. The only way to become wealthy is inherited, which is statistically absurd. bird. Yeah, yeah. But that hope piece, I mean, I'm not kidding. I'm like that. It's the biggest obstacle, you guys. And hearing that, take that in for a second, because I think

we all have good days, we have bad days. But if you start to find yourself to be in this constant state of mind of thinking, I can't, or it's never going to happen, it's never going to happen, it's never going to happen. It's never going to happen, probably won't happen then. Like if that's what you believe, really. And so shifting that mindset is, so how do people do that, right? If they are in a situation in their life where they think, gosh, everything's stacked against me. There's no way. What are the things you would say to help direct them into a better pathway? I think you have to have no inputs because your inputs, you know, garbage in, garbage out, and your inputs are your closest people around you. And if they're all negative, if all your

friends say, the little man can't get ahead, then that becomes a reality. You're a little man, a little man can't get ahead. I can't get ahead. And I'm so dumb, I've been a millionaire twice in this system. I had to do it two times. So I can, I'm proof the little man can get ahead. I grew up to Antioch freaking Tennessee. Okay, shut up. Call the ambulance. Really? I mean, seriously. And then I went broke, which proved I was an idiot. So, you know, then I got to do it again, you know. And so I had double doses of negative around me. But you got to put people around you that go, yes, this can be done. And no, it's not going to be easy, but yes, you've got what it takes. A great way to do that is great books. Read wonderful books from people who have done it. I mean, there's lots of really

cool stories of people. I mean, the guy that started Domino's Pizza, when he came back from the war, ended up in a homeless shelter. And he'd become one of the wealthiest people in America, you know, on professional sports teams. Started Domino's Pizza. Came out of a homeless shelter.

Don't tell me it can't be done. I mean, there's story after, story, after story, after story, after story. They're everywhere. So give those as your inputs. I mean, read about people like Colin Powell and Condoleezza Rice and read about these people that came from backgrounds that were not privileged backgrounds and overcome the obstacles, the isms, because they're there.

For sure. You just got to beat them back. Well, people like me, I mean, I'm such and such. I can't do it. Why? Somebody just like you did do it. So you've got to find those people, get some friends around you because you're going to become who you hang around with.

Be careful. If you're hanging around with Debbie Downer, you are going to be Debbie Downer, too. I mean, there's no way around it. You've got to limit your time with negative ninnies. And then you've got to read and get inputs, and you have to find true stories of people like you that did it. and you put those on the wall of your mind, and that becomes your inputs,

and it's not false, it's not positive thinking. This is stuff that really freaking happened. Yeah, it's the reality of it. Yeah, no, which I think is so great. So what would you say to someone who says, okay, well, I am in a certain profession. You've hit on this a few times, but I want people to know out there the different professions

that have become millionaires. Like, professions, you went and think, oh, that's the type of profession that's going to make me a millionaire, but because of the decisions they made with their income, it did. Here's what's so interesting. Here's how the powerful belief is. Okay?

So the survey that we did of 10,000 millionaires, the largest piece of research ever done on millionaires in North America, said the number one profession among all the millionaires that we surveyed was engineer. Number two was accountant. Number three was teacher. Number four was manager. Number five was a lawyer. Doctor and banker didn't even make the top five.

Okay. And neither did NFL or NBA or professional sports. or a rock star. Now, they are a lot of those millionaires, but they're tiny, tiny percentages of the number of millionaires out there. The typical millionaires, an engineer account and a teacher. That's the typical millionaire. Now, I put that on Instagram, of course. All right, so here's the thing. That's data. In other words, that's what's called a fact. It's not in question. And then I get all these teachers email me back who are negative ninnies. They're just trashing us in the comments going, well, you don't know anything about being teaching.

here and you don't know anything about this. And I'm like, no, I just know that the number three fact. That's what came out of the survey. I don't know anything about the law of gravity, but I do know that every time you jump out of a building, you will hit the sidewalk. I mean, it's a fact. It wasn't like we were having a conversation. It wasn't a dispute.

It wasn't like, do you think you can? It was stating a fact. But their belief was so negative. I said, you know, you know, teachers don't make any money. The teacher, you don't make any money. And yet a policeman married to a teacher, all. over the place in the research. Interesting.

All over the place end up being millionaires. But you can't, you know, you're going to that field. You're not going to get there. It's like both of those are process-driven people. Engineers are process-driven people. Becoming a millionaire's a process. We find that associated with it. Yeah, yeah.

Absolutely. And I think, again, people take dollar amounts so often and say, well, it's a certain dollar amount of salary or this or that. So automatically you make assumptions, right? Now, will it take a longer mathematical scale with a smaller scale? Sure. Absolutely. But just because someone makes a million dollars a year doesn't make them rich,

they could be spending $2 million and living below their means. So again, you guys, it's not the dollar amount. It is what you do with it that is so big. One third of the millionaires made less than $100,000, never made six figures in their life. One third of them. Yeah. Now, that's hard to do. That's mathematically tough.

Yeah. I honestly was surprised by that. Yeah. I thought we were going to see $100 to $200 was the typical, which it is. I mean, it's two-thirds of them are over $100. Sure, sure. 100 to 200. But the number of them making 500, 600, 600, 700, 700, almost none.

It's crazy. Almost done. I love it. Okay, so part of being a millionaire and doing all this, winning with money is not just for you, like we said earlier, but it really is for other people. And there's some cool stories in here about people's outrageous generosity that you're able to do, which is a big part of this, you guys, a big part that we talk about, I feel like here on this show a lot, but that generosity piece, the giving piece is

so serious, of course to say, but it's something money can't buy. Like, there is something about it. of what it does and how you change other people's lives and it changes you. It does. So what are some of those? One of the, one, I mean, because you always go back to where you came from. I mean, I always want to help people like I was. You know, I want to get to that guy, that little redneck hillbilly crazy kid, you know? I want to get to him and make him believe he can win.

Because somebody did that for me, right? Somebody spoke a new input into my head when I was that little guy, you know, and it made me not that little guy anymore eventually. And so, like, African-American Lady Jackie is one of our stories in many, many stories in the book of real people that did this. She remembers being on welfare. She remembers the kids not having enough money for food. You know, she remembers shortages and problems and stress.

And so, you know, Jackie's always going to help. It's single mom's. Yeah. I mean, she's got hard because she was one. And she also is the poster child that says you can do this. So she can give them hope more than I can because I've not been exactly there. Right, right. I've been over here and I can show you data and I can show you what my story is.

I did it. But I've not been exactly there in that nuance. And so you always end up when you're going to be generous. It somehow you always have a heart for where you came from. Which I love that. Love it so much. Well, the book, you guys, it's out, and I'm so excited about it. So excited.

Babeseps Millionaires. And again, hopefully, and my prayer with this book is that it does it. It interjects that hope that it's possible to win with money wherever you are. And you can buy the book wherever books are sold. And thanks for being on. Thank you. you coming back. And again, check out ramesseysolutions.com.

Again, if you want to buy the book or reminder of the baby steps and walk in this process for you too to become a baby steps millionaire. All right, if you're saving up for your emergency fund or you're paying off debt, that is a great time to get a side hustle. So one of the keys to winning in a side hustle

is think of your specific skills and take advantage of them. What you are naturally good at, it's going to be your best bet. And remember, the word hustle, it means work. Okay, so it is. It's some extra work. I feel like side hustle has been glamorized a little bit,

but it takes a lot of sacrifice and a lot of work. But also in the end, you get some extra money. Again, I can help you with your debt snowball or fund your emergency fund faster. So when you're thinking about a side hustle, think about three different things. Number one, time. How much time do you have to put into it?

And be realistic about how much time is involved before your side hustle during it and after. And think about what you're actually making per hour when you consider all the time involved. So this is an important factor because you obviously want the most bang for your buck, so be mapping all of that time out that will help you. Number two, talents.

It could be something that you're just really, really good at it. So think about crafts or tutoring or bookkeeping. And if you're able to go this route and take your talent and make money doing it, that is amazing. So do that. And then lastly, think about your targets. So what's your main goal for getting a side hustle? Are you just earning extra cash to pay off debt

and fund your emergency fund, get some more income in? Or are you kind of want to just start something on the side because you're hoping that it can turn into a small business later? So know what your end game is. And the great thing about side hustles, you guys, there are so many, so many. There are some that you compare with different companies with your time and effort, some things you can just start on your own,

but there are so many ideas. So think about driving for Lyft or Uber. Think about delivering food, groceries, or packages. So companies like shipped, Instacart, Amazon Flex, Grubhug, DoorDash, so many companies doing that. A lot of tutoring online as well. And this has really become a big niche with the pandemic and school shutting down.

You can even become a freelancer and work that you're already good at. So if you're great at social media, maybe you can be a social media manager or a writer, graphic design, bookkeeping, photography. You can teach English. If you're bilingual, you can use that skill

if you know sign language. I mean, there are so many options out there. You can even be a translator and you can make up to $30 an hour. You can even write out transcript for Rev. So you take transcript from an audio file and you actually move it to text. You can become a virtual assistant and you can make anywhere from $15 to $25 an hour. You can become an online proofreader and make up to $35 an hour. If you're really great at music, you can give music lessons and you can

charge anywhere from $25 to $40 an hour. You can be a fitness instructor. You can become a sports coach. You can babysit. You can house sit. You can pet sit. You can dog walk. Maybe you just go in clean houses. You can make a lot of money doing that. Or you could wash cars or detail cars. You could shovel driveways. You can mow lawns. You can do yard work. I mean, the options are endless, you guys, for side hustles. There are so many great options out there. So to get started, you want to narrow your options to about, I don't know, two or three. And then really do your research. I would reach out to companies. I would talk to other people who have done this before and really get some of that knowledge in place. And then you want to create a checklist of what you need to get started. So do you need to get qualified? Do you need a certification?

What supplies do you need? Are there any upfront costs that you need to put into your budget? All of that stuff is so important. And also, don't go into debt to make extra money. I don't want you going backwards to try to get a surplus, okay? And then once everything is in place, it is time to earn some extra money. Now, one question I do get is, okay, when is it time to turn my side hustle into a small business?

Because for some people, that is their dream to own their own business. So a couple of things to think about. If you feel like you're working two full-time jobs, because usually you are, you may want to think, okay, this time thing, I have 24 hours in a day, and I don't have enough time in the morning and night to really do what I want. I need more time. And especially if you're turning down work because your plate's already full,

something to think about. Also, the money piece, obviously, is very important. Can you live on what your side hustle makes right now? Christy Wright always uses the analogy, which I love, of a canoe and a dock. And it's like, you don't want to jump and have to swim out to the canoe. You want to be able to balance for a little bit.

It's going to be a little unsteady. And then you just want to take a step into it. You don't want to feel like you're taking this big leap. So the financial part of this is very important. And I don't want you to just assume, okay, well, if I'm going to just dive in full time and invest more time and invest more money, it's going to grow. You want to have a pattern of your side business actually working. And then some people ask, okay, well, when is it a good time to turn my side business, a sole proprietorship, into an LLC? Well, most people are okay with just sticking to a sole proprietorship because it's free and it's easy and you don't have to jump through any crazy hoops.

However, maybe you've gotten to a place where you've grown a lot and you want to. to protect your savings and other assets, or maybe your financial advisor has mentioned that you could save on taxes by moving over to an LLC, or maybe you simply just need a legal structure in place to take on larger clients and contracts. So those are a few reasons why you want to turn your side gig into an LLC. And you guys do not forget to budget for taxes. You want to set aside 25% from your side hustle, whether again, you're doing door day. or online tutoring. It doesn't matter.

Make sure you set some of that money aside and you budget for it. And if you're not using every dollar, you need to sign up for every dollar. It's our free budgeting app. And it's amazing. It's going to help you with setting aside taxes like we're talking about,

but it's also going to make sure that extra income you're making on these side hustles are going to where you want it to go to. Side hustles, I love them because they help you knock out your money goals. It may ignite some passion in you, and it is so, so exciting. And you got this, you guys.

You can knock out. out your money goals so much faster when you're bringing in that extra income. Well, if you've been thinking about starting a side hustle, I hope that helped you so much. I want to thank my dad, Dave Ramsey, for being on this episode. And thank you guys so much for listening. If you've not subscribed to this podcast, make sure hit the follow button. And when the spirit leads, you can leave a review. As always, make sure to take control of your money and create a life you love.