The Ramsey Show - App - A Debt-Free Birthday Scream from London (Hour 2)

Episode Date: May 17, 2019

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. Dan is with us in Phoenix, Arizona. Hi, Dan. Welcome to the Dave Ramsey Show. Hey, Dave. Great to talk to you. You too. What's up? My question is, I want to quit my six-figure income job, low six figures, and become a teacher in 10 years.

So I kind of want to know what I should be thinking about. And I'm a new listener, but heard you're a math nerd as well. So what should I be thinking about? You want to become a teacher in 10 years? Yes. Why so long because there are like certain things i want to do now uh i take a couple international trips every year and that's just not doable for me on a teacher salary okay what is it that's drawing you to the classroom? I'm a big fan of economics and love teaching that, and I want to coach high school tennis.

Mm-hmm. Okay. Hmm. I always just think about my first – I'm a contrarian, so the first thing I always do is challenge the presupposition. And the presupposition is that the only way you can live out these, scratch these itches that you have is to go into the classroom and become a tennis coach that teaches econ on a state salary. And I just wonder if there's other ways to scratch that same itch that gives you the thing. I'll give you an example, okay? I'm a teacher. Yeah.

I teach for a living. Yeah, that makes sense. I'm probably one of the better paid teachers you'll ever talk to. But in a very real sense, I, you know, at least when I'm being the product around here, I'm also the CEO of the organization, but when I'm being the product, a portion of what I'm doing is

teaching. Here on the air and when I'm speaking on a stage before audiences and so forth, I'm teaching. As a matter of fact, I'm teaching on a stage before audiences and so forth i'm teaching and matter of fact i'm teaching economics a lot of that time and certainly finance so i what it comes into my mind is that uh we certainly need wonderful people in the classroom there's no question about that but there's two things blocking you from doing it and it's like you you have to go live your life before you sentence yourself to jail you know it's kind of the way this is coming down you know and but that's you

know i'm gonna i'm not gonna be able to travel and i'm not gonna have any money oh my gosh but i get to live my passion you know i just think there's got to be another way to do this. And so I'm starting to wonder, you know, is there, you know, tennis summer camps that you run and, you know, and you teach econ as a sidebar thing at the local community college just for fun or something like that? I don't know. I'm making this up on the spot. But what I'm challenging is your construct that this is the only way for you to do the things that you love to do. Working with teens, obviously, is appealing to you in terms of coaching. My son-in-law is a football coach, so I get that. And I got to tell you, those young men that come on his team, they get a lot more in football. Sure, sure. He trains them up on how to be young men that come on his team, they get a lot more in football. Sure, sure.

He trains them up on how to be young men. And he has an opportunity that is very fulfilling to be a mentor. And to, you know, they really, anybody that gets on his team has got a good thing going on. And you could be that guy, you know, that is a huge blessing to the young men or young women that you're coaching. I've had coaches in my life in athletics that were wonderful, that were life-changing people. So I don't know. I'm just wondering, is there an open market answer that allows you to maybe own your own business i don't know um and you you uh you know uh open a tennis coaching thing at the local tennis club and um and you or you open it by your own i don't know i i so i don't know that i'm going to prepare for a jail sentence which is what you the way you've

laid this out i don't because i don't i'm going to break the framework and um the only way to do that would be it's like i'm going to retire because i've got so much money and then i'm going to go do something where the money that i get paid doesn't matter um and so you'd have to just you know become wealthy during this 10-year period of time. And you may be able to. You're making six figures, so that'd be an okay way to do it. But it just, I always want to challenge that construct. Hope that helps you.

All right, David is with us in San Diego. Hi, David. Welcome to the Dave Ramsey Show. Hey, thank you. How you doing? Better than I deserve. What's up? Hey. Hey, thank you. How you doing? Better than I deserve. What's up? Hey, so when my mother-in-law passed a few years ago, my father-in-law came into about $34,000, which we recently found out he put into silver.

Oh, God. That bought about 100 pounds of it. And I think the idea is that that's going to be you know his kids inheritance he doesn't have anything else um but i know you have your feelings about commodities and since he bought it i just checked it's maybe worth a little bit more than 23 000 today um and so i figure you probably is to you're going to tell me to encourage him to sell it, but he himself is facing stage four cancer as well. I'm doing okay today, but it could be one year, two years, we're not sure. And so obviously there's a lot of emotion behind that investment.

I'm not bothering with this. He's got stage four cancer. Just help him fight cancer. Just pray with him, walk with him through his illness. If he was going to have this investment for 30 or 40 years and we're just dealing with a healthy guy and we just need to have an argument over Thanksgiving dinner about it, I might try to get him to understand how stupid this is but right now it's just i mean it let's

just say this okay if you guys have a peaceful wonderful relationship for the time he has left for a year and a half or two years and this silver becomes worth zero that's okay the silver is not on my list upsetting him having a big argument is not on my list of things to do with a guy that's in stage four i got other i got other stuff to do with that guy i'm just want to love him right i want to walk with him and love him well and take him fishing and sit in a deer stand with him whatever it is he wants to do right um that kind of stuff and so um silver is not a big deal and you know and my granny used to give me uh savings bonds for my kids college and as soon as i could i would cash

them out and put them in a mutual fund because they suck and uh so but but i never argue with my granny about it because you don't argue with granny if you're smart um she just said how's those savings bonds doing and i told her the truth. They're doing great. Since I cashed them out and put them in mutual fund, they were. But I didn't tell her I did it. I just did it.

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for free for two weeks laura is with us in kenton ohio hi laura welcome to the dave ramsey show hi mr ramsey thank you for taking my call. Sure. What's up? I have a question. My husband is still employed, and he started taking his Social Security. And we were wondering if we should take the Social Security and invest it, or should we use it to pay off our mortgage? You should take every dollar you can find and pay off your mortgage as fast as you possibly can. How old are you two? He's 70 and I'm 60.

Okay. And how much do you owe on your home mortgage? $59,000. And what's your household income? About $70,000. Okay. And how much do you guys have saved in your nest egg for retirement? About $60,000. Okay. And how much do you guys have saved in your nest egg for retirement? About $60,000.

Okay. All right. Well, I really want that house paid off as fast as I can because it stabilizes your whole retirement. And then from that point, as soon as it's paid off, then I would invest aggressively. So any money you can find in your budget, whether it's from Social Security or anything else, I'm going to steadily be doing my normal 15% into retirement of your household income. We call that baby step four. And every other dollar I can find, I'm going to throw at this house.

I'd really like you to get that house paid off in about three years. Well, if we throw all the Social Security towards it, we could have it paid off in about three years um well if we throw all the social security towards it we could have it paid off in two good i think good do do that and more then let's get because as soon as it's paid off you know he's 72 then and you're uh 62 um then we can add to your 60 000 nest egg because you don't have a house payment anymore oh that would be great yes it would yeah because see the the house is your largest expense your home housing on your budget is your largest expenditure and so to stabilize from age 60 to age 90 to stabilize your retirement or 95 or however long you you know you plan to live um is to stabilize that cost and it not be going up and it be no longer an issue all we got to do is pay the taxes and

insurance man that just makes retirement that much sweeter and and so yeah i'm having a a nest egg built and a house paid off when you get to retirement are like baseline things you want to knock out. So, good job. Thanks for the call. Mark's with us in Phoenix. Hey, Mark, welcome to the Dave Ramsey Show. Hey, Dave, thank you for taking my call. Sure, what's up?

So, I've got a question for you. I recently got a windfall from an inheritance from my grandpa and i really don't know what to do with it um how much i'm in the fight about well about 350,000 and i also have about you know 350 saved up wow look at you wow Wow. Okay. And so are you following our stuff, like our baby steps and all that? Do you know what I'm talking about? Yeah, I am. I've been watching your show for a couple years now and just, you know, following it. I don't.

I used to rack up bills on my credit cards, but I've stopped that. I own my cars paid off in cash. You have a home mortgage? Yeah, I have a home mortgage, but that's the only debt that I have. I owe about $200,000 on it. Okay. All right. So my net worth is around like $750,000.

Excellent. Very good. Okay. But at this moment, you've got, with this inheritance coming, about $700,000, right? Yeah. yeah. So it's kind of a no-brainer to write a check and pay that mortgage off. But the thing is, I'm 25, you know, and I don't have my degree yet. What's that matter?

Right. You've got $700,000, you have a $200,000 mortgage. You pay off the mortgage, you've got $500,000 left. You're 25 years old, and what kind of income are you making? Well, that's the thing. I'm kind of between jobs right now. I'm in the banking business. And, you know, when it comes to, like, helping others with, like, finances and stuff, I'm good with it.

But when it comes to myself, I'm so emotionally attached to my money that I don't even know what to do with it in a sense so okay okay well like i've got i've got my um emergency fund set up and everything um but most of it most of it is in cash in the well apparently a high high yield savings account yeah which sucks okay which really sucks yeah i'm getting about two and a half so what is your career plan if you're 25 and you're between jobs? What are you going to be doing when you're 35? I'm leaning towards a financial advisor position. That's kind of, you know, I'm in business, finance, and things like that. So I want to become a financial advisor advisor and you're qualified to do that

yes yes okay um i've got my security licenses um you know i'm interviewing with a bunch of institutions right now to get my series seven good good all right yeah click some of our smart investor pros in the area and see if you could get on with one of them that'd be a way to do what you're talking about doing. Okay, so let's say here's where we are. You have $500,000 sitting in cash, which is a wonderful thing to have, and your house is paid off, and you're 25 years old, and you don't have a single debt in the world, and you have an emergency fund.

Am I on the right track here? You are. Okay, and you're going to make enough making you're going to make enough you're going to work enough to where you don't need this money to live because you're going to earn enough income to live on right right okay and so uh at that point you're you're down to uh investing it and giving it and enjoying it which is the only three things you can do with money. You need to spend some on you, not a great amount, a small amount, but something that's just a little bit frivolous and just straight-up fun. If you like travel, it's time to take that trip.

If you love cars, it's time to buy that one, whatever it is. That's what I was kind of leading up to. I love to travel. I have a wife and a seven-month-old daughter. Great. We're kind of limited on travel. We might be able to do a trip here and there. But I have a dream car that I've always wanted to buy,

and I'll never buy it brand new because I know that's the stupidest thing to do. What is it? But it's a 2016 BMW M3, and it costs about $45,000. So buy it. Just buy it, pay cash for it, and be done with it. Yeah. And sell your other one and drag. Make that your daily driver.

It's a great car. Beamer's making a good car right now. I mean, they're fun. Yeah. My son's daughter-in-law just bought one. They didn't buy that one, but they bought one the other day. It's a great car. Yeah. I it's it's a non-issue you have 500 000 bucks and i paid for house that's worth 300 000 right yeah i owe i have about i mean so and you're 25 freaking years old

you're in good shape man you're in good shape now so let's enjoy some of it. Let's be generous with some of it. And let me just tell you, if you invest this calmly and wisely into good mutual funds, you enjoy some of it, and you give some of it, and you pay off your house, your grandfather's going to be sitting in heaven smiling going,

yeah, that turned out. And that's one of the measures you use when you get an inheritance. Are you going to act with that money in a way that makes the person that left you the money proud? Does it honor their memory? And your grandfather was a man of wisdom. Otherwise, he wouldn't have left his grandkid 350 grand. In the lobby of Ramsey Solutions, Julie is with us. Hey, Julie, how are you?

I'm fine, thank you. How are you? I am better than I deserve. Welcome. So where do you live? I live in London, UK. In London, England? Yes. And you came here to do your debt-free scream? I did. Specifically came here just to do this? Yes. Oh my goodness. Wow. It's nice to meet you, sir. It's an honor to meet you. I mean, we've had folks that were international do debt-free screams before in person or on the phone. But I don't know if anybody ever came here just for this. They usually found it as an excuse while they were doing something else. No, I had to come. Wow.

Very fun. Very fun. Well, congratulations. How much debt have you paid off? I've actually, it was done in dollars. So I've paid off $47,091. And it was done over a period of 29 months. Okay.

Very cool. And your range of income during that time? It was $59,000 to $85,000. Okay. And you've converted it from pounds to dollars or euros to dollars. Okay. Yeah. Wow.

Look at you. Cool. What do you do for a living? I work in administration, so HR operations. Okay. Very cool. And what kind of debt was the $47,000? It was a lot.

It was student loan. It was family members. It was rent. It was everything and everything It was family members. It was rent. It was everything and everything except for credit cards. Okay. All right. And so I'm intrigued. How in the world did you get connected to us in the UK? Ironically, before I got connected to you guys, I was living life. I was living life.

I was living life. I was living beyond my means. And then I got made redundant. And in the process of being made redundant, I sort of lost my way. I didn't have money to pay for anything. I was on benefits. I think you guys call it government assistance. Right.

Redundant meaning you were laid off from your job. Yes. was made yeah i was laid off okay um so i literally hit rock bottom because what i was getting from the government to assist me to live wasn't enough to survive on i had to move out and move in with my brother. At some point, I had to go to the food bank and sort of pick up some food from there. And it felt so embarrassing because I'd never been in a situation where I depended on somebody else. I'm the older sister out of my family, so I was very much the mature one. I was the older one. I was meant to have the most common sense, but I didn't.

So the journey started like that. It was such a terrible time. I went through depression. It was horrible. I really hit rock bottom. And it took a long time for me to get a job because I was getting rejected I was getting rejected because I was too I was too qualified so even when I tried to do jobs lower than my original pay scale I still had too much experience nobody wanted to invest in me

eventually I got a job in January 2016 I still hadn't heard from you and I still hadn't learned my lesson. And it was my month birthday, 2016 May, and I decided I deserved a new car. Even though I'd gone through what I went through, I obviously hadn't learned the lesson. And it was the introduction. While I went to go and look at a car, I was meant to be signing the documentation for it. A friend of mine randomly called me. And before I signed on the dotted line, she said said to me how much are you in debt by that's the first time anybody had asked me that question um and it was the best question she could have

asked me she got she encouraged me to watch your programs to listen to you she encouraged me to come up and set up a budget um so I listened to total money makeover from youtube i'm sorry that's okay you're fine i should have bought the book but i'm sorry it's all good um so literally i listened to it over youtube and it changed my life and i couldn't i couldn't go back and eventually when i calculated how much debt i had which is equivalent to £36,000 in the UK. That's quite high. I cried because I'd never thought I was that much in debt, but I knew it was hard

because even paying rent, I was in arrears. I'd just spent stupidly. So were you born and raised in the UK? I was born in Uganda. In Uganda. Yes. So I'm from Uganda.

I went to the UK when I was nine. Oh, okay. So everything I've learned has been from the UK. Yeah. Okay. And that has been a great journey, but I think that my ignorance was not. It just, I should have known better especially as my younger brother is wealthier than i am well it feels like we all should have known better so i'm

glad that we were there for you and that you found some youtube clips that helped you come along oh yeah i became a youtube crazy oh you're one of the crazies. Yeah. You're hardcore. Yeah. Yeah. So, watching us live then. Okay. Yes. I've got my family watching live.

They couldn't make it today, so they're watching live. Fun. Well, hello, family. All right. So, you bought a car in May. No. This is May. So, this is your birthday, I heard.

It is. Today's my birthday. Happy birthday. Thank you. What a way to celebrate. It is. Travel to the birthday. Happy birthday. Thank you. What a way to celebrate. It is. Travel to the States and declare your freedom. Yep.

I love it. Yeah. That is very cool. So when do you fly home? On Sunday. Okay, cool. So I'll be moving on Sunday. And although I visited three different states, and I'm glad you welcomed me all. I'm good to go home now.

I bet. I bet. Okay. All right. If you're in Nashville this evening, we're going to buy you birthday dinner. Oh, I will make sure I'm here. Okay. Nashville has a great food scene, and there's several of the celebrity chefs in the area

that are friends, and we're going to get you in on one of those and let you have an incredible birthday dinner. Thank you. You come all the way from the UK. We've got to buy you dinner on one of those and let you have an incredible birthday dinner. You come all the way from the U.K. We've got to buy you dinner at Southern Hospitality. Thank you so much. Wow. Well, congratulations. Yeah.

So very proud of you. So what do you tell people the secret to getting out of debt is? Remain focused. It's hard. I'm not going to lie. It is hard, especially if you're doing it by yourself and your family is not really supporting lie. It is hard, especially if you're doing it by yourself and your family is not really supporting you. They don't understand

it. You may lose some friends along the way, but it's okay because it will be worth it. Who are your biggest cheerleaders? My family. They are so amazing. We have a large family. My grandparents

gave birth on just my mother's side. There's 12 aunties and uncles. Oh, wow. Yes. So we're a large family. So you have lots of brothers, sisters, lots of cousins. Yes. Okay. Yeah. So three boys, well, two boys underneath me. And then I have a few others above me. Yeah. Okay. Very cool. Very cool. Well, congratulations. How's it feel now that you did it? I can't tell you how free I feel.

I mean, I wouldn't be here if I hadn't paid off my debt. And I wouldn't have traveled the three different states. And now I'm starting my journey for the next chapter of my life. I feel like that was the end. Now this is the beginning and I'm so happy for it. Well, we're proud of you. Thank you. You're an absolute hero.

Very well done. We've got a copy of Chris Hogan's book for you, Everyday Millionaires. You're on your road to be that. That is the next chapter for you. You will never go back you are done yeah you are done yeah very proud of you all right julie all the way from london england just specifically on her birthday to do her debt-free scream in our lobby what an honor

for us thank you so much thank you 47 000 paid off in 29 months, making $59,000 to $85,000. Count it down. Let's hear a debt-free scream. Three, two, one. I'm debt-free! I'm debt-free! Yes! This is how it works!

Oh my goodness. And you gotta love the power of podcasts and YouTubes. And they go everywhere, don't they? That's so good. So good. Thank you, God. This is the Dave Ramsey Show. thanks for joining us america tony is with us in portland oregon hi tony welcome to the dave ramsey show hi dave thanks for taking my call sure what's up um i'm wondering if it's

okay for my husband to accept a temporary position to relocate our family across the u.s Sure. What's up? You're going to relocate across the United States for a temporary position? Yeah. I mean, there must be some reason to think about this i mean there must be some reason you all are considering that because it sounds kind of weird yes well there's a few reasons we want to get out of the area and move to the location a new location uh-huh and what are those where what what is appealing about the new location um we do have some family in the area it's a lower cost of living um there's better schools out there for our children and um we want to get away from the liberal policies that we're living under right now

and get to a more conservative area okay i'm with'm with you. Head out. Okay, that's cool. It sounds like you would make this move anyway, that you're not making it exclusively for this temp position, so that if the temp position doesn't work out, he would look for a job not in Portland, Oregon, but instead in the area that you're moving to. Yes. And he would have done that anyway, is my point. So it sounds like this.

Yeah. In other words, if you were moving somewhere, if you loved where you are, and you were moving to a place that you didn't necessarily care for just to get a temp position, well, no, that'd be strange, you know? Yeah. a temp position well no that'd be strange you know yeah because you're i would want a permanent position before i would make a move but this is an area that you would consider living in anyway and you guys are just gonna say to yourselves well if this doesn't work he's gonna what field is he in um he's an equipment operator um working for the va right now and he would be accepting a position at the at the va also oh okay so he's like you're saying he's like a dozer or crane operator

um yeah and what city are you talking about moving to um around atlanta not in atlanta but a little north of it. Okay. And so, I mean, there's enough construction going on in that area that he could probably get a job not with a VA operating heavy equipment, couldn't he? Yes. Okay. So, yeah, I'm gone. Let's go. Let's do it.

Okay. Okay, and as far as how we take care of our debt and the equity that we might get from our house, the little bit of leftover, what would be the smartest way to do to take care of everything? Well, the first thing you've got to do is pay for the move out of that money, right? And then when you get the move and you get settled, spending as little of the equity as possible, then we're going to use that equity once you get the move and get settled to apply it to wherever you are in the baby steps, which would be clean up debt, make sure you have your emergency fund in place. But let's use the money first to make the move because that's a long move. And so you're going to have some costs there and you're going to have some deposits and things with utilities and rents and so forth on the other end but i would just move over there and rent something right now and use your equity to become debt free and to make the move and then let's settle in and start thinking about saving up and buying a house and get his

job stable and all that kind of stuff. So, hey, good question. Thanks for calling in. Kim is with us in Raleigh, North Carolina. Hi, Kim. Welcome to the Dave Ramsey Show. Hey, Mr. Ramsey. How are you? Better than I deserve.

What's up? Awesome. My husband and I are currently on baby step number two. We have about $24,000 in debt, and we have a life insurance policy that we took out on our oldest son about nine years ago. The cash value is about $40,000 now. So I was wondering if we should take that out, cash it out, and put it into a college fund instead. And then my husband even suggested us putting it towards some debt and just getting it out of the way.

Agreed. Yeah, I would pay off the debt, make sure your emergency fund's funds in place and then start building his college fund when's he heading to college um well we have about probably eight eight or nine more years oh good and your household income is what um well we're currently bringing in a little over 50 until i go back to work in august so and then there'll be what um and then we'll probably be up more in the 80,000 okay very cool so if you didn't have any debt and you're living on a budget and you had an emergency fund that would put you at baby steps four five and six we call it i don't know if you've heard of that yet but the baby step four is you start putting 15 of your household income into retirement

five is we start addressing kids' college. And any above that we can find, we throw at the house and pay off the house. But it sounds like we would lean in on that college savings really hard to make sure that we replenish what has been used here from this whole life policy. But I'm definitely canceling in trash value life insurance. I don't ever keep that stuff around. Oh, okay. So it's best to go ahead and cash it out and make the war something more beneficial.

Okay. Exactly. And, you know, by freeing up your household income, not going into debt, or not having debt payments, as long as you stay on a budget and use what used to be those payments to build your retirement and his college, then you're going to come out way ahead as a result of this move mathematically. Now, if you pay off the debt and you half-butt manage your money and you spend everything and you don't do any investing for retirement or college, then this was a bad move. Do you see what I'm saying?

I do. Yeah, so you've got to follow through and do the budget, and the two of you have to follow through and do the budget and the two of you have to be working together and work those baby steps hold on i'll send you a copy of the book the total money makeover madison will pick up and if she if you don't already have one we'll send you one and it'll show you exactly how to do this barry is with us in saint louis hi barry welcome to the dave ram Show. Hey, Dave. Thanks for taking my call.

Sure. What's up? Hey, we live in kind of a depressed economic area. We have a decent home, and we have no savings, no retirement, no emergency fund, no anything because we've had to start over because of a health situation and because of a loss of a good job. I make about $30,000 a year, family of seven. I'm getting a structured settlement, and my wife wants to take all of that money and go buy a bigger, better house.

We have no savings, no retirement, no investments, no nothing. What do I do here? So what is your current home worth? My current home is worth about $80,000. I owe about $54,000. And what is she wanting to buy? Something in the $200,000 range. Okay.

And how much is your structured settlement? We don't know. That's another settlement? We don't know. That's another thing. We don't know for sure. We're expecting probably $250,000 or less. Okay. All right. And how many of the seven children live at home still?

I actually have nine children with five at home. Okay. We adopted children through foster care. So I'm guessing she's a full-time mom. She is a full-time mom. Okay. And I'm guessing it's a little tight in the house you're in. Well, yeah, really.

We've lived in tighter situations, but I've got a story and a half, four-bedroom with a full basement, big lot, big garage, siding, brick trim. Okay. Decent. What is it that she wants that the other house has? Probably more of a kitchen situation for her, I would say, would make her happier. Okay. What about renovating your kitchen instead of moving? Thought about building on a little bit, probably.

Okay. I mean... My issue is here, too. I've got a $430 house payment, which is unheard of. Mm-hmm. Mm-hmm. My house payment's dirt cheap. Rent in my town is $700.

Mm-hmm. Yeah. Okay. Well, I don't mind you guys using some of this money to better your quality of life. That's an okay use of it. It just needs to be done wisely. And generally speaking, guys can live under a bridge. We don't need much.

And ladies need to enjoy some of the other lifestyle things a little bit more. I don't get why we paint my house as many times as we paint my house. I don't get it. But it's okay. We've got the money. So in this case, you've got a certain amount of money you can allocate to a better quality life, and that is probably a good thing to do here. I don't know exactly what that looks like, but we certainly don't want to spend it all on that.

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