The Ramsey Show - App - Active Debt vs. Debt in Collections (Hour 2)

Episode Date: December 18, 2019

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Music Music Music Music Music Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumped, 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. Tracy is starting off this hour, or Trace, rather, in Florida. Hi, Trace. How are you? Oh, I've done better, Dave. How are you? Better than I deserve. What's up? So I've got over a half a million dollars in debt,

including my business debt. I'm really scared. I don't know if I need to file for bankruptcy or if this is something I can pull myself out of. I don't know. It's gotten out of control and I got stupid. So I need to figure out what my next move is. Sorry. How old are you? I'm 25. You married? Yes. You get children? No, no, no children. Okay. So tell me what kind of debt the $500,000 is. Okay, so I've got trucks. That totals about $300,000. I've got two company pickup trucks. Those equal about $75,000.

Actually, one just got repossessed yesterday morning in the middle of the night. I've got equipment that totals to about $95,000. I've got accounts, like, for parts and stuff. That equals up to about $50,000. I've got student loans for $26,000. Medical bills for about $600 to $800. And my miscellaneous stuff is about $4,500, which includes, you know, a whole department.

So what is the – you have a tractor-trailer that's $300,000? No, no, it's four dump trucks that I've got. Oh, four trucks. Okay. All right. So you're in the earth-moving business then? Yeah, I do. I do site work, and I do paving and all that good Okay. All right. So you're in the earth moving business then? Yeah, I do. I do site work and I do paving and all that good stuff.

I see. Okay. All right. And your business income has just not been enough to support all this? No. I mean, we've grossed close to a million, but we spent one point about 1.3 already. We got cheated on a job, actually two jobs, the same guy in June or July and I've leaned the properties and I've really

been have the money to go after litigation suit, you know, so I'm kind of just hoping I get paid. And so, you know, all the extra money I've had coming in, I spent it being stupid, you know, buying equipment and not really thinking about the ramifications. Now it's kind of come back to bite me in the butt. And I'm just really scared, Dave. I don't know what to do. Okay. So how long ago did you start this?

It'll be five years in February. So you bought your first truck or whatever on debt when you were 20 years old? No, I was 19 going on 20 years, sir. Okay. What was the first thing you bought? It was a dump truck. I started out with a dump truck hauling material and stuff like that. And then from then on, I started getting into other scopes of work and buying equipment. Okay.

And what will the equipment sell for if you sold it all? The trucks and all this other stuff? Well, I'm pretty upside down, Dave. Like the trucks, for example, I've gotten financed with what I call gangster lenders. You know, and, you know, there's so much interest on them that I doubt I could sell them and get back nearly what I have to pay them off for. And, you know, that's the scary part as well. So what was your best year of net profit? Last year.

Last year. What was your net profit? Brought in about just short of $100,000. Okay. Off of a million, million and a half gross. Well, last year it was about $400,000-ish. Mm-hmm. So, and then I took that money and was stupid and spent it on some more equipment

instead of saving and paying off other debt. Yeah, okay. All right. Well, I mean, there's two possible, well, three possible scenarios. One is that you simply go get enough work lined up to pay these bills and begin to pay down the debt and you get straight you get squared around on this you sound awfully hopeless on that possibility just talking to you i don't have any idea how much work you can gather in and uh well but i mean if you can bring based on what you're telling me if you can bring in

uh six or eight hundred thousand dollars gross i think you can begin to based on what you're telling me, if you can bring in $600,000 or $800,000 gross, I think you can begin to not only pay the bills but begin to reduce the debt gradually, in which case you're not bankrupt. In September, we had a dump truck that was leaving the asphalt plant, and there was a dead just going up, and he hit a bridge going 55 by an hour and destroyed the truck. And luckily, nobody was hurt, but it cost me almost $20,000 out of my pocket just to clean up the accident. So my insurance immediately dropped us.

I'm sorry, you didn't have insurance to clean up the accident? No, I did, but I had to pay out of pocket initially until the insurance reimbursed me. So it didn't cost you. It took cash flow, and then you got the money back from the insurance company. Right, right. So net, that was not a negative event. Net, that was a break-even. Yeah.

And you got rid of the truck. Right, yeah. And then they dropped you and you had to get different insurance. Yeah, it took me about a month, so we really couldn't even do anything. And I just, like, maybe about a month ago, we really started to get going again, so we were behind on everything. And I've been putting in bids for work, and a lot of it doesn't begin until the new year, springtime, so it's a little bit far out.

So I'm busy trying to keep busy doing small stuff. One of the ways you can turn the corner, and I don't know if you're going to make it without bankruptcy, but bankruptcy is not going to solve your problem unless you're just going to walk away. I mean, you can just throw them all the keys, sign bankruptcy papers, and walk away. That's what that would do. And then you're basically an unemployed 25-year-old that drives a dump truck. Yeah.

And you start again. That's an option, okay? The second thing you can do is you can prioritize and say, all right, what is the most important thing that I need money for? That's food for you and your wife. The second most important thing, that's lights and water at your house. What's the next most important thing? Pay the rent or the house payment at the house.

So we take care of my own home first. Those are some basic things. You can make enough to do that. The money past that, then, let's prioritize and say, all right, which of these vehicles do we really need to fight to keep? And the other ones we're going to try to sell, but they may repo them. But the ones that we're going to fight to keep are the ones that we pay the payments on the ones we don't fight to keep we can't pay them and they're either going to take them or we're

going to get them sold or some combination thereof and um so you know you could just say i'm going to pick dump truck these two dump trucks and there's one piece of equipment and that's what i want to come out of this with and i'm going to keep all of that current. And I'm going to fight my way through. And if I can scratch and claw and make enough to pay the other stuff, I'm going to. But I'm going to take care of my household first, the core set of equipment second, and the other ones, the other things we're going to do if we can do them. And you protect your marriage, sir.

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Hi, Francisco. How are you? I am great, Dave. I'm honored to be on the phone with you. Thank you. You too, sir. How can I help? Well, I'm in a bit of a unique situation.

I purchased a home. It's a mobile home. And it's in an area where they actually, I don't know that they go up in value, but they at least keep up with inflation. No, they don't. The land under them might, but the mobile home doesn't. Well, okay. No, they don't. The land under them might, but the mobile home doesn't. Okay. You got land under it?

The land is for rent. It's in a very, very desirable city. Yeah. The rent area might be very desirable. But, okay, go ahead. But anyhow, the mobile home I purchased was not financeable. So I took out unsecured debt to purchase the home. I owe about $50,000 across three different loans. We've paid off about $30,000 so far. And using the debt snowball, just aggressively getting at it, one loan is $22,000, two for $13,000, and one for $4,000.

At the rate we're paying off, we're going to be done with it in two years. Good. Okay. My question is, having the $1,000 from Baby Step One has been great. We haven't used a credit card in I don't even know how long. Cut them up. Best thing ever we ever did. But at what point, I wonder, should I stop to do baby step three? When you're through with baby step two.

And now the home debt is all, all the debt is home debt. So you can put the mobile home debt wherever you want to put it. It's so small. What's your household income? We make 70 a year. Okay. You're going to be debt free in two years, which is very normal for someone working the debt snowball. Right.

That's what you told me. And then at that point, we would own the mobile home. Yeah. And so if you want to make this Baby Step 6, you can make it Baby Step 6 if you want to. I don't care because it's your home. But it sounds like it's such a small amount of debt, and they're in such small increments, and you're going to be done in two years. I wouldn't. I'd just call it Baby Step 2, and I'd just treat it like it's credit card debt, because it is.

Okay. And go about it that way. Yeah, that'd be my plan. And the other thing I want you to consider is I don't think this is a good long-term plan. I think ten years from now, you're not going to be glad you've been living in a mobile home for ten years. I don't care if you're in an area where the real estate prices are masking the fact that you are living in a mobile home.

Well, the rent there is so cheap, and we'll be able to save up to buy a home cash. That's what I want. That's what I said, 10 years. As a 10-year plan, this is not a 10-year plan. If it's a few more years and you're just going to save like crazy and pay cash for a home at some point or put a substantial down payment on a home, a traditional built home that's going to go up in value in a traditional way, that's true. But, you know, there are mobile homes in Malibu that sell for a million dollars. But the mobile home isn't what's selling for a million dollars.

It's the fact that it's sitting on dirt in Malibu. The dirt is what's selling for that. And so the real estate that's in and around this mobile home is masking the fact that it is deteriorating, it's going down in value, and it's not a good long-term play. Now, instead of doing rent, you want to call it your short-term play? That's okay. It's a little more expensive than I like, but you can justify it that way.

But don't get this up in your head that this is a smart 20-year game plan or 10-year game plan. It's not. I wouldn't do it long term thanks for the call gabriel is with us in ohio hi gabriel how are you gabriel i'm good how are you good how can i help um so i was going over um our retirement with me and my husband we're going over it our question is is the pension part of the 15%? Are you contributing to the pension? He said he has to. Yeah, so you have mandatory pension contributions of how much? It was about $300 on the paycheck I saw. I'm just getting into this. I don't know a lot about it.

I'm sorry. Okay. Do you have any idea what percentage of his pay he has to contribute? I don't. He said what he's contributing is the minimum, and he makes about $1,300 a check, and it's $300 of that. That's pretty substantial. Yeah. It didn't really seem like the right amount to me. Yeah, it sounds really, really high, even for a mandatory contribution. So I'd look into it and learn about it, and I would put as little into it as I can.

Now, here's the problem with a pension. You have absolutely no control over it, and when you die, you get nothing. Okay? Okay. When you put money into a 401K, you totally control the investment. You can move it if it's a bad investment. you can take it in or out if you have to or want to and when you die the money's still there for your family and so i don't count pensions the same way towards the 15 in baby step four that i would because you don't have control over them. And because when you die, there's nothing there.

So if you want to count, like, let's say he's putting 10% of his income in there. Okay. If you want to count it like half of that towards his 15% that he should be putting in, that's fine. But I wouldn't count it like dollar for dollar. Does that make sense to you? Yep. Absolutely.

So give it some weight, but I wouldn't give it 100 cent on the dollar weight when I'm calculating because I want you to be putting enough money in that you control and you have a say over that you retire with dignity. We're controlling our own destiny here. That's the game plan. All right, Arizona is calling. Tori is with us. Hi, Tori, how are you?

Hi, I'm great, Dave. How are you doing? Better than I deserve. What's up awesome okay so i just recently got into all your videos and podcasts and things like that we're trying to get out of debt recently got married back in march um back in august we purchased a car from our in-laws for three thousand dollars come to find out yesterday that it has about seven thousand dollars worth of work to do to it oh bull and i know no there's no way so there's no you can't do seven thousand dollars worth of work to a three thousand dollar car what are you talking about it's a it's a hyundai

genesis it's kind of one of the nicer hyundais yeah so what do they want to do to it i'm not that's really good with cars but i know there's a bunch of broken parts. And we took it to Christian Brothers, which is a local automobile mechanic place out here that's really true to their word. So we know that they're not, like, pulling our teeth or anything, and they actually show you videos. Yeah, well, I'll actually tell you that I don't care who it is. Anybody suggests you spend $7,000 on a $3,000 car is a moron. Yeah, I know. So about 1,500 of it is labor. So everything else is just parts. Well, I mean, it sounds like they've blown an engine. It's like, so the steering wheel got

stuck so we can't move it. Pretty much like little things like it pulls to the left. So a bunch of the, just everything that makes it work properly, there's like little cracks in it, so we just have to replace a bunch of little things, but they all add up to be bigger things. I wish I had the paper in front of me so I could read you exactly what was wrong. Okay. Well, number one, I think this is a bad diagnosis. No intelligent person would spend $7,000 on a $3,000 car. Yeah.

So what you would do is just sell this car to a junkyard for $500 and take the money you were getting ready to spend on repairs and go buy you another $3,000 car. Yeah. Now, that's my question is that we don't have that kind of money saved up. We're trying to get out of debt. We have about $6,000 left in debt before this whole situation happened that we were planning on paying off. So we weren't planning on having to get a new car for at least a couple years because we thought

this car was going to last us yeah so my question is is um we do need that mode of transportation and because we don't have that money to either repair it or buy a new car we don't really know what to do in this situation you have your thousand dollars saved yes we do buy a thousand dollar car or spend a thousand dollars on that car and get it running enough to limp along without doing $7,000 worth of repairs to it. It's asinine to suggest that someone spend $7,000 on a $3,000 car. Support a small business this holiday season that does business right. I'm talking about Grip6 Belts. It's the only belt you can get online with no holes, no flap, and no bulk. And the buckles come in really cool designs and are interchangeable.

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GRIP6.com. Our question of the day comes from blinds.com. They have a 100% satisfaction guarantee, which is kind of trippy. It's a different kind of a guarantee, even if you screw up. Now, most satisfaction guarantees are if they mess up and you're not satisfied. But if you mismeasure the blinds and they come in, they don't fit, or you come in and the color is just, ugh, can't do it, pick the wrong color, they'll remake your window blinds free. You get free samples, free shipping, and with the new promos they run all the time,

you'll save even more. Use the promo code Ramsey, the largest seller of window blinds on the Internet. Blinds.com. Great company. Our question is from Brian in Tennessee. Dave, I'm working on my debt snowball. I have everything listed from the smallest debt to the largest. My largest debt is my student loan of $74,000.

It is currently listed last. Currently, by the way, student loan is itemized. There are amounts that are smaller than some of the other credit card debts that I have. Should I pay the student loan off as a line item or treat the student loan as a big total sum? You don't do your debt snowball by category. You do it by loans. And so if your student loans are broken up into $22,000, $4,000 loans, then you list them out as $22,000, $4,000 loans. You don't list them by category.

In other words, if you had two car payments, $20,000 and $10,000, you wouldn't list it as a $30,000 debt. You'd have a $10,000 car and a twenty thousand dollar car and so you break it out by the actual loans not by the category the reason for this is real simple personal finance is 80 behavior it's only 20 head knowledge so we have to manage behaviors if you were met if you weren't managing behaviors i mean if you're managing behaviors you wouldn't have gone into credit card debt because no one consciously sits around and goes hey i think it'd be really smart to be 28 in debt paying 28 interest to buy an ice cream cone you know but stupid but we do that stuff all the time right and so but you don't

you're not doing that with like math skills you're doing that because your behaviors are out of control and so you fix it with a behavior fix not a behavior or not a math fix so you want to see the progress. No sane human being will keep doing something which they can see absolutely no progress on. If you go to the Y and you work out five hours a day and you quit eating any food and you don't lose any weight, you will go back to eating food and sitting on the couch. You have to see progress for your pain or you won't keep engaging in the pain. You have to live like no one else so that later you can live and give like no one else. That's what this is about. So all that to say is I want you to pay out the smallest student loan because i want you to draw red lines through this and keep the keep the debt snowball on the refrigerator and see all those red

lines all those all the progress you've made how you've moved the needle on this it's a big difference it makes a difference all right ethan is with us in te. Hi, Ethan. Welcome to the Dave Ramsey Show. Hey, Dave. It's an honor to be here. You too, sir. What's up? I'm 29 years old. I live in a camper trailer that's paid off.

I'm debt-free. I'm doing a combination of Baby Step 3B and Step 4. If I continue that, it'll take me five years because I want to do the cash down, 100% cash down on a house. So if I do 15% of into a Roth IRA and save for the house, it'll take five years. But five years, it seems like a really long time in this camper trailer. So I was thinking taking my investments down to like 7% or 8%, and then that'll only take three years. What do you make? Like $32 a year, after taxes.

Okay. So I can save like $1,000 a month. How old do you say you are? That's $400. $29. Okay. What do you do for a living? Run my family's business.

What kind of business? We have like a restaurant, gift shop, candy shop. We make chocolates, Reuben's,, excellent Rubens, sausage, cheese. Okay. How can you sell more? Improve online sales probably. Mm-hmm. Now, I want you to lay in place a game plan where your $32,000 income becomes $132,000.

And that changes this equation, doesn't it? Yes. Now, it's not going to happen instantaneously, but if we take you from $30,000 to $40,000 to $50,000 to $60,000 to $70,000 to $80,000, over the next, every six months you bump $10,000 or something because you actually find the keys to the kingdom in running this business instead of running it the way it's always been run, which is creating a sucky income for you. Yeah. Then we start to solve a lot of these problems because I want you out of that camper trailer

too. That's a little weird. Yeah. It's tight. Yeah. Doesn't exactly make you an eligible bachelor. Yeah. That's another thing.

Come on over to my place, baby. It's a camper. Yeah, I don't think so. So, yeah. Well, you know, sometimes when people are doing Baby Step 3B, for three years or less, they put nothing baby step four so that answers your quite your original question but i walked around on the other side of the question and added income to this equation which i think is a very important part of your discussion in your life

yeah in other words you projected all of this at 32 000 and I'm not willing to let you live at $32,000. If five years from now you're still making $32,000, you need to go get a different career. Okay. Because it's not working, dude. Agreed? Right. Yeah, I've thought about it. You don't want to be 74 years old still sitting there selling taffy, making $32,000.

Right? Right. So we've got to figure out some online application. We've got to get some other markets opened up. We've got to create some media around this, get some social media moving, start putting some stuff on YouTube on how you make candy and why it's different and what's cool about it, and everybody wants your recipe, or everybody wants a piece of whatever it is you produce there.

You become a site that people want to visit when they come around that area, and we just create some buzz and some stir, and we get some things moving around this business, and that's what I want to see you do because suddenly you buy a house then in two years for cash, and it's even a better house than you were planning on. Right. So, I mean, think about what it does to your numbers if you go from 30 to 60. Yeah. Like instantaneous, right?

I mean, changes everything. Because you're not asking for an expensive home. You're thinking about a modest home. Yes. And we could even go expensive if we got our income up. So I'm not saying it. I think it's some of both. I would, for three years or less, stop the baby step four in order to save money to pay cash for a house or a down payment for a house.

Three years or less is baby step 3B. In the meantime, during that three years, let's really turn up the heat inside your brain on what we can do to get this business moving at a whole different level. Hey, man, it's an honor to talk to you. Merry Christmas. Thanks for calling in. You're a guy that's willing to pay a price to win. I always like helping people like that. I mean, any guy that's willing to live in a camper trailer to get her done, that's a guy who's willing to pay a price to win.

It's not a whiner right here. This guy, he's got his sleeves rolled up he's punching stuff right making it happen so hey again thank you for your call merry christmas to you erica's on twitter dave do i attack active debt and then work on the debt in collections or listed smallest to largest no matter what no i run two debt snowballs when you have stuff in collections. I run the first one is active. Clear off all the debt you're actually paying payments on. And then when you're debt-free on all the active,

then you work your smallest to largest on your stuff that's in collections. And you do not pay payments on it. You settle it lump sum. See an old $2,000 debt there. You offer them $500 or $700 and settle it. L see an old two thousand dollar debt there you offer them 500 bucks or 700 bucks and settle it lump sum in writing no electronic access to your checking account on old collections debt it's a really bad idea this is the dave ramsey show Thank you. Joseph is with us in Utah. Hi, Joseph. Welcome to the Dave Ramsey Show.

Hi, Joseph. Welcome to the Dave Ramsey Show. Hi, Dave. So I've heard you say that we should be spending 25% of our take-home pay on our mortgage and interest payment every month, but I haven't seen a good definition of what exactly counts as take-home pay. After taxes. Okay, so I am a Department of Defense employee, and so we do have FERS that comes out. Do we just include that, count that as a tax? Is that a tax?

It's not optional. It's a retirement plan, but it has to come out. Yeah, I wouldn't count it. It's like 4% of our check. Yeah, I wouldn't count. I would not count retirement. I'm saying after your income tax and state tax and payroll tax, whatever, FICA, whatever you've got to pay on all that, then that's your take-home pay. The rest of it is retirement. Like, I don't count 401K in that.

I don't count health insurance in that. It's not your literal take-home check. I mean, you could count it if you want to because you don't have it as an option the point here is not that you know 25 you're going to be rich and if you do 27 you're going to be bankrupt that's not the point it's not like this you know there's a boiling point it's 212 degrees or something the idea is don't end up with a house payment that leaves you no freaking money at home you know that sounds good it's a high don't be house poor and so you know you can't save to buy your next car so you end up with a car payment don't be house poor so you don't save don't save any money for christmas and then you end up putting christmas

on a stupid credit card you know and that'smas and then you end up putting christmas on a stupid credit card you know and that's what happens when people end up with a house payment that's you know 40 of their take-home pay they can't breathe and that's what i'm trying to avoid there so you know if you want to be plus or minus furs at four percent or whatever that's fine because it is mandatory it's not like you can adjust it 401k you could actually stop it technically you could actually stop it. Technically, you could stop health insurance. I wouldn't tell you to do that.

But if you had to pay your house payment, you can't stop FERS. So, you know, you could do a plus or minus on that. But that's the whole concept. It's not a nuanced, perfected formula or something. but it's not you know it is close enough that you don't want to be at 30 or that somehow you know you're necessarily unusually bright to be at 20 or something you know 25 really does work it should it should leave you room in almost any household budget to prosper that. And that's the concept we're looking for is to just don't be house poor. Good question for clarification, though, Joseph.

Thanks for joining us. Kate is with us in Kansas. Hi, Kate. Welcome to the Dave Ramsey Show. Hi. Thank you so much for your time. I appreciate it. Sure.

Okay. Hi, thank you so much for your time. I appreciate it. Sure. Okay, so my question is, should my husband consider changing careers, a job that he loves and feels called to do but leaves our family struggling financially, or do we kind of scrape by and wait it out for about two more years until all the kids are in school and then I can work, you know, more hours part-time during the day? C, none of the above. He should find a career that he loves where he makes more money. Okay. You know, this is a false dichotomy that you're presenting.

Life doesn't work the way you presented it. The only possible way he can be happy is to work this one thing where he makes less and our family struggles. That's just not the way things work. What is it that he wants to do that he loves? He's a teacher. He's a teacher. So am I.

Yeah. But I make more than he does. Yeah. So there's a lot of ways to skin a cat is my point. Now, he's a teacher now. What is it he wants? That's what he wants to do is teach? Yes.

I'm sorry? Yes, that's what he wants to do. Okay. Yes, that's what he loves to do. And what's he doing now? That is what he does now. That's his current position. But he would switch careers to something that he hated?

Right. And I don't know. We just don't know if we should pursue something different that would make more money. Oh, I see. Okay. I got you. I thought it was the other way around. I thought he was doing something he hated and he was going to go down in pay to be happy.

Okay. All right. So, okay. Well, then, you know, what I what i would do is like hook him up with ken coleman and start asking him ken coleman type questions which are uh you know what is it about teaching that he loves is it the kids yeah somewhat is it the high he gets when the light bulb comes on over the top of someone's eyes most of us that are all over the top of their head you know like in the cartoons, most of us that are

teachers, we, you know, we teach for that reason. I stand in front of an audience so that I get to hear that audible thing where I hear them all get it when I'm covering something, you know, sometimes it's through humor, sometimes it's through a story or sometimes it's through tears, sometimes it's through something here on the air. But what is it that scratching his itch about teaching? I love to teach people. It's what I do. I've got a gift of teaching. It's one of my spiritual gifts. And I suspect your husband does too.

And I wasn't just being smart aleck about me making more, although I do. But the point is there's a lot of ways to teach other than a third-grade classroom at a public school, and I can't eat, I can't feed my kids or whatever. I don't know what he's doing or what he's making, but there's nothing lacking in dignity about what he's doing. That's fine. But what I start asking myself is, what is it that's jazzing me about what I'm doing,

and in what setting could I do the same kind of thing and make more? Because sometimes what you're doing is you're doing a good thing in a wrong place, and that can shift your whole set of career goals. But it's a different way of thinking through these things, and so, you know, that, uh, you know, that, that's what you want to avoid. Hang on. I'm going to have Kelly give you a copy of Ken's book, the proximity principle, check out Ken Coleman's materials and his, uh, his podcast. He'll be a big help to your husband on this. But, um, um, by the way, the, uh, number four of the top five professions that we found among people who retired everyday millionaires was teacher.

And it wasn't that they were some kind of weird teacher like me. I mean, they were classroom teachers. They just were very steady and very careful with their money, and they chose the school system they were going to teach in wisely teacher beat doctor in the millionaire study as a probability to become a millionaire very interesting lawyer was number five doctor was number seven engineer, one and two. So that's what we found, and we stayed 10,000 millionaires. So, folks, you've got to watch the way the culture gives you a narrative on these career things. Like here's another narrative that you have to think about.

Well, I want to do ministry, so I'm going to work for a non-profit which pays me 60 of what i could make at a for-profit you ever heard somebody do that in other words i'm holy and so i'm going to take a pay cut because i'm more holy than somebody that works at a for-profit. Well, let me help you with this. Not-for-profits are not in the Bible. Not-for-profit is a tax designation by the IRS. A not-for-profit that doesn't take in more than it spends closes. All not-for-profits make a profit.

On paper, they have to. It's a tax designation, not a holiness designation. So you can decide to be in ministry. One of the sharpest guys I know is a bone and joint doc in my area. He's a friend of mine. I saw him this weekend. Prays over every one of his patients before he operates on them. He's a wealthy doctor.

You know what he's got? A holy ministry. Not technically a not-for-profit. And he didn't take a pay cut to do it. And he's holier than most of you so here's the thing guys where you work doesn't make you holy and not for profit is no more holy than a for profit it's how you do what you do that makes it holy see there's a whole different mindset just messed with some of you, this whole paradigm. This is The Dave Ramsey Show.

Hey, it's Kelly, associate producer and phone screener for The Dave Ramsey Show. If you would like to do your debt-free scream live on the show, make sure you visit DaveRamsey.com slash show and register. We would love for you to come to Nashville and tell Dave your story.