The Ramsey Show - App - Advice on which Banks Give the Best Service (Hour 2)

Episode Date: May 29, 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. You jump in. We'll talk about your life and your money. It's a free call at 888-825-5225. That's 888-825-5225.

Amanda's in Danbury, Connecticut. Welcome to the Dave Ramsey Show, Amanda. Hi, Dave. Thanks for taking my call. My pleasure. How can i help so my husband and i just started baby step number two about two weeks ago cool and we have a rental property that we do generate income from about nine hundred and fifty dollars a month but if we sell it we know we can

profit about sixty thousand dollars we are wondering if we should hold on to it or if we should sell it. Okay. And how much debt do you have, not counting your homes? $147,000. Oh, so you could throw $60,000 at that. And what's your household income? $225,000. Oh, you've got a great income.

That's cool. So now that you're concentrating, you probably can knock it out. All right. Well, here's the thing. well that's cool so now that you're concentrating you probably can knock it out all right well um here's the thing at the end of the story that you're in the first few pages of the book okay but at the end of the story we would tell you to be a hundred percent debt-free houses and everything you probably already heard that right that we're going to take you there it may take you five years it may take you five years.

It may take you seven years. I don't know what you own your personal residence, but you've got a great income, and you can plow through this if you'll just stay on game. Okay? And that is your shortest path to wealth building. And then the only question is, do you want to end up with this rental at the end of that story? I personally like the rental because it generates income. We're making income on it every month. My husband goes back and forth with it. He's leaning more

towards selling it. Because he's wanting to get out of debt or because he doesn't like the rental? It's far away. It's about an hour and a half from our from our house okay um and he wants to get out of debt quicker gotcha okay long distance landlording is tougher it's tougher to be an efficient long distance landlord i own a bunch of real estate i love real estate and having you at the end of your story owning a paid for rental property i love having a paid for rental property an hour and a half away yeah not so much not that interested matter of fact you didn't buy that as a rental property it's a rental property by default it's something one of you got some other way wasn't it no we actually we did buy it as a rental oh really vacation rental uh nope my husband just wanted to

be a landlord about five years ago and we got a really good deal on it. Why did you decide to do that an hour and a half away? No, we lived closer at the time. Oh, okay. Okay. I knew something had changed, because it's just illogical. People just don't get in the car and drive two hours and then go buy a rental. Yeah.

It just doesn't happen. Okay. All right, cool. Well, here's the thing. What I would tell you, you're just starting your journey. Why don't you, let's put that decision on hold until i'll make up a date october okay and just work on your debt snowball real hard and let's see how you're doing and see how you feel okay um number one it's an hour and a half away i don't like that number on the con side of the equation number two it's not making nine hundred and fifty dollars a month it's grossing nine hundred and fifty a month but by

the time you have vacancy and repairs you don't net ten thousand dollars at the end of the year you're netting more like five or six so you're not making a ton of money on this you're doing okay but you're not like cleaning up uh it would be an okay thing to own long term but it's not as great as it feels like when you just look at the gross profits on it rentals never are it's just part of the equation uh so but on the good side you make a lot of money you're paying attention you're both having an intelligent discussion you're communicating about this if you chose to hold on to it and plow through it, I think you could do it either way. I would be fine with you doing it either way.

I'm not sure you would buy this house today if you had $60,000 sitting in the middle of the table. You wouldn't make that as a down payment on a rental of this type an hour and a half away in the situation that you're in today. So I predict you'll probably sell it in the fall, and you'll buy rentals later with cash after you get everything paid off. I think that might be where you go. But for now, it's okay to just table it, and let's see how this goes for a while. Let's work the plan.

Okay. Sounds good. Good question. Thanks for calling in. Open phones at 888-825-5225. Brett is in Denver. Welcome to the Dave Ramsey Show, Brett. Hi, Dave. How's it going? Better than I deserve. What's up? I got a question for you on where tithing fits within our budget.

I am self-employed, and my wife has separate income. She is employed, so she tithes, and then typically I'll try to finagle with the numbers and come up with something that makes sense to tithe on. It's very important to us to tithe. We've really been blessed once we started doing that. Are you doing a set of books on your business? No. It's really something that I've only recently started to take really serious. Okay. Let me stop you a second. The way to answer the question is I'll lead you to a different scripture, which says to be diligent to know the state of your flocks and herds. And you're not being diligent on running your business well because you don't have an accounting

system. So all you need to do is set up a separate checking account for your business. All of the income from the business goes into that account and nothing else goes into that account. Okay? The only thing that comes out of the business account are business expenses. Okay? Okay.

So if income goes in and expenses go out, by definition, what's left in that account, your checkbook register would become your profit and loss statement. What's left in there is your profit. So if you bring in $10, dollars on a job and you have eight thousand dollars in expenses you have a net profit of two thousand dollars you follow me correct on a particular job i don't know what you do but i'm just making this up okay then if you're going to take money out of the company in air quotes okay out of the company and bring it home that's when you would pay taxes on it

and you should set aside a fourth of any money you pull out of the business account that you think is profits to bring home and that's your titheable amount that's tithing before taxes so let's say you had that two thousand dollars there. You're going to bring $2,000 home out of your business checking account. You're going to tithe on the $2,000. You're going to set $500 aside for taxes and write a $200 tithe check on your gross before tax amount. That's what I've done for 37 years running this business. So I would not pay taxes out of my business account. No, you withhold on yourself.

Okay. Your business isn't taxable. It shouldn't be taxable. You should have an LLC, a sub-S, or a sole proprietorship, none of which are taxable. All the taxes pass through to you. So I've set aside a fourth when you bring home money. And when I bring home money, I set aside my money. And when I bring home money, I set aside my taxes. And when I bring home money, that's when I tithe. Because if it's still in the business

account, it might end up being expenses and it's not tithable or taxable then. That's a technical answer. We don't want to get too caught up in it, but that's a technical tactical answer of how I go about it. Did you know that if you combine the data breaches that have occurred in the past 12 months, almost every American has had their personal info compromised or hacked? Over 50% of our listeners and viewers tell us that they or someone in their family has been a victim. And 70% of those folks have had it happen more than once. See, this is unbelievable. Once thieves get your info, the risk never goes away, and they can use it whenever and however they choose.

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That's Zander.com or 800-356-4282. Well, you probably heard that we have a really big giveaway going on this month, the Ramsey Fuel Your Summer giveaway. But only so many folks can win. The good news is even if you don't win a prize, you can still win with money in other ways. Saving on insurance? Well, that's a big deal. You need to go to DaveRamsey.com slash ELP.

That stands for Endorsed Local Provider. Click on Insurance and shop your car and homeowner's insurance. You know, lots of people save $800, $900 a year just by using an ELP to shop among several different companies and get the best possible deal. DaveRamsey.com, click ELP, click Insurance for ELP, endorsed local providers. They're insurance people in your area that are brokers, and they shop among many different companies. They're not a captive agent to one particular company. Julie's in Dayton, Ohio.

Hi, Julie. Welcome to the Dave Ramsey Show. Hi there. Hi. Thanks for taking my call. My pleasure. What's up? Okay. So I believe in your system. I'm working hard at it. I've listened to it for quite a long time, but you know,

in phases you go in and out, but I'm back, right? So I do pay for everything with a debit card. So I don't owe anything except for my car and my house and this is my dilemma so I'm 58 when I retire sometime soon you know five six seven years who knows but I'm a realtor so I'll probably work forever anyway but regardless I want to be set up I did work for AT&T for 15 years so I do have like $300,000 in my IRA. And I do have Social Security because I put my 35 years in, if you know what I'm saying. So, you know, the $2,300, the max. Of course, they take insurance out of that, so it gets whittled down a little bit depending on the age.

I get that. And then my dilemma is I'd like to downscale. I'd like to pay cash for our house. I went to Denver for a while, probably eight years, and I hit it pretty big. I had about 150 sales there and kept that cash, put some in my IRA, and then paid cash. I'm sorry. I don't understand why you have a dilemma. What's the dilemma?

My dilemma is we bought a $415,000 house, and I put $225,000 down on it. What's your household income? Probably $200,000. I am a critical person. Well, that's the thing. I mean, you can't pay it off overnight. Shouldn't I just downscale now? No, you make $200,000 a year.

You have a great house. You only owe $200,000 on it. You're 58. That's correct. But you're 58. By the time you're 63, have it paid for. Okay. See, I've been worried about that.

You like your house? I love my house. Okay. And my husband's older, but he's in great shape and everything. And his income is guaranteed because he has VA, Social Security, and union. How old is he? But mine, I worked very hard for it. And how old is he?

Very, very young, 77. Okay. And when he dies, all this money dies, right? That's right. Okay. And that leaves you with $350,000, and I assume no life insurance. Correct. But I have the $350,000 plus another $100,000 plus my...

Plus you make your household incomes $200,000 as long as he lives, okay? Right, but I also have my... I have two rentals, so... What are they worth? And there's the equity in my house. What are they worth? Together, probably... Together, about $100,000. Okay, all right. Well,, together about a hundred thousand.

Okay. All right. Well, here's what I would do. I would work diligently to pay off your home and between the two and both of you agree on that and say, okay, five years from today, he's going to be 82. You're going to be 63. We need to have this thing paid for. If we do not, and he passes away, you may want to downsize.

Well, and I can downsize in one of my rentals, because that was our home before we went to this home. Well, maybe, maybe not. I don't care about that. But the point is, you don't need to be sitting on a big mortgage if all of his income leaves. No. That's right.

No, I don't. That's why I want. But you can always make that decision if he were to pass away. If he lives five years and you live five years and the house is paid for, you're set. Right. Right. Yeah. So let's not sell it today unless you just hate it.

No, I do love it. I wanted to sell it. He doesn't want to sell it. He loves it. Right. Well, live there. And he can live there as long as he lives. Right. That's right. want to sell it he loves it right well live there and and he can live there as long as he lives just tell him the way to get to stay in the house is stay alive yeah

i'm getting old so old jokes are working for me these days but right there with you but i've been i've been feeling bad about it because i wanted to pay cash or i want you i want you to pay it off okay And I want you to quit spending money on a bunch of other stupid stuff and you don't need another car. Get that car paid off and then let's start. Then you and he together go, okay, there's $200,000 here. Five years, that's $40,000 out of $200,000.

You need to be doing that or more. If you did $50,000 a year extra on the house out of your $200,000, that's four years the house has paid for. All right. That's a great way to look at it. By the way, I drive a Jeep, not a Cherokee.

I know, but you have payments on it, and you're 58. I know. Pay it off. Pay it off, and don't you dare go buy something else on payments. You haven't got time to fall off the wagon again, sister. You need to ride the wagon now ride it all the way out okay but that plan will work for you you're doing good you guys got a great income as long as he lives so um you know and that and if you get in a pinch you can

always sell it later and i'm gonna stay there and see if this works good question Open phones at 888-825-5225. Abe is in Nashville. Hi, Abe. Welcome to the Dave Ramsey Show. Hi, Dave. Big fan of the show. Thanks for having me on. My pleasure.

How can I help? Yes, sir. I just graduated high school. I'm not actually from Nashville. I'm from Mount Juliet. But I went through your foundations and personal finance. Oh, the high school curriculum. Awesome. Yes, sir high school curriculum. Awesome.

Yes, sir. I'm a big fan of that. A whole lot of stuff that high school students need to be hearing in that. Thank you, sir. Yes, sir. But I have some questions today about college. I'm going to be starting college in the fall. Great.

Where are you going? Originally, I had hoped to be going to Liberty University for four years, and that would have cost me about $132,000. Right now, I have no income myself. I'm unemployed, but I'm getting a job in the next few weeks. All my income is from my parents. They both have an annual income collected about $140,000, but we're completely out of debt. We have a paid-off house, no payments on any cars, and right now they have saved up for me about $102,000.

Now, with scholarships, I could have done four years at Liberty without loans and without any student debt, but the thing I'm thinking about doing is taking two years for free on the Tennessee Promise. That would save me about $60,000. And then transferring back to Liberty after those two years for an additional three years. And that would set me up instead of just two BFAs, but with my master's as well. And my parents are letting me keep whatever's left over from that fund after i'm done with college what are you studying i'm going to be going into music okay good well liberty is a good place to study that and uh a master's is what you'll need depending on what you're going

to do in music especially if you're going to teach um so um yeah i love your plan the only thing i want you to do is be very careful that your community college hours are accepted by Liberty. Yes, sir. That each of the credits line up with what you need for core curriculum to knock your first two years out. Yes, sir. And so make sure that the community college is connected exactly one-for-one tradeoff. And that you don't need to be going, even if the class is free, you don't need to go take a class that Liberty's not going to accept towards your major.

Yes, sir. So just make sure that that does. And what he's talking about, folks, for the rest of you around the country, is Tennessee currently has 100% community college free. So you can go first two years free to community college in Tennessee. So it's an excellent, wonderful program. So, yeah, I definitely would do that. And I love the idea that you're lining this up, you're thinking it through.

Your parents are obviously debt-free people. They're thinking it through with you. You've got your field of study laid out. You know exactly what you're going to do and how you're going to do it. Man, you're way ahead for a guy your age. You're rocking it. I'm proud of you. You've got your field of study laid out. You know exactly what you're going to do and how you're going to do it. Man, you're way ahead for a guy your age. You're rocking it. I'm proud of you. Very well done. I would do exactly

what you laid out. Thanks, Abe. This is the Dave Ramsey Show. Thank you. Thanks for joining us, America. We're glad you're here. Open phones at 888-825-5225. Our question of the day comes from Blinds.com. They have a 100% satisfaction guarantee. It means even if you mismeasure or pick the wrong color, they will remake your blinds for free.

You get free samples, free shipping, new promos every month. You save even more. Use the promo code RAMSY to get the best possible deal. Today's question comes from joe in minnesota what are your thoughts on a credit union versus a bank my wife and i recently married both currently use a bank for our debit accounts we've talked about switching to a credit union with our joint account are there any pros or cons for either? The community bank, a small town or regional bank, or a good-sized credit union, either one are just fine.

What I would never use is a super, super small, like a one-person operation credit union because they don't have enough features to do your banking well with in most cases. It would be very unusual. But there are some very good, very sophisticated credit unions. As a matter of fact, most of them are. And I never would use a mega bank. I never would use Fifth Third, Bank of America, Wells Fargo. I mean, no. Why in the world anybody does business with them is beyond my imagination.

You're treated like a number. They're crappy in everything they do. It's just awful. So, no, I don't have any money with any of those things. So either one. You will find the community bank and the credit union do not treat you like a number. They will know you if you go in there physically. Even if you just go in there once or twice, you'll meet the president of the bank or the credit union or the manager of the branch or whatever, like in the old days when we did banking.

You do want to make sure they've got good online stuff because most of us do our banking online now. Uh, and so you want to lay that all out. Uh, but yeah, I, what I'm looking for here is just a level of service and where they're not just so hell bent on shoving credit cards and car loans down your throat. Because as soon as you walk near a bank, when you get home, there's like four pre-approved offers in your mailbox. And they, they just, I mean, it's like you're playing with snakes all the time and you're just going to get bit if you're not careful so stay away from the big guys and look for a little guy that has a good enough level of sophistication oftentimes credit unions by definition are not for profit and all that means is that the profits that they make are plowed back into services, increasing services or free services.

So you'll often find things like free checking, slightly higher interest rates at credit unions on your savings accounts, slightly lower interest rates if you were to borrow money, which I don't tell you to do. But you'll find credit unions a little bit cheaper on a lot of things most of the time, even than the good community bank, but always cheaper than the big mega banks because they have one goal in life at the mega banks, and that's take your money. That's their mission statement.

Take your money, as much of it as they can get. It's what they're for. It's their very reason for existence. You can read their mission statement, and it isn't serve the customer. It's maximize shareholder return. It's take money, make a profit, as much as they can possibly squeeze out of your head. So just don't do it. Now, the credit unions are, you know, don't be fooled by the fact they're not for profit

because everything that's not for profit makes a profit. Not for profit is an accounting entry. A not for profit that doesn't make a profit closes. So charities, churches, anything that runs as a not-for-profit is an illusion. That is an IRS designation. It all brings in more than it pays out or it closes. Pretty simple. Okay, so there's nothing inherently holy about a not-for-profit versus a profit. So you don't get that card with a credit union.

But the banks all gripe and they go, well, it's not fair. They're not-for-profit. And they go, well, all you got to do is lower your profits and you can compete with them, dude. You know? Well, they can provide services because they're not-for-profit. Well, they just plow their profits back in so that they didn't make a profit, and they gave extra services to the customer. You could do that as a commercial bank, but, you know,

you're too dadgum focused on milking the cow all the time. So, you know, you just got to think this through. Anyway, all that to say, I'm ambivalent between credit union, small town, local bank, community bank, regional bank. Anywhere in there is fine with me as long as you can find somebody that gives you the proper services and that gives you the conveniences and you can develop some kind of a relationship with. I have a local banker here that is a personal friend of mine that has had my personal checking account for almost 30 years. And she's a friend of my family.

And when she changed banks a while back, I opened accounts with the other bank. I followed her. That's what you're looking for, is that. I have zero loyalty to a stupid bank. I have a lot of loyalty to her because when I'm out of town and something's screwed up, she jumps on it and fixes it, right? This is what you're looking for is somebody that actually gives a rip and doesn't treat you like a number.

And that's just unheard of at stuff like Wells Fargo or Chase or Bank of America, the Fifth Third. They don't know how to do that. So that's what you're looking for. Good question. Good question. Good question, Joe. Thanks for emailing that in. Nicole's with us in Milwaukee.

Hi, Nicole. Welcome to the Dave Ramsey Show. Hi, Dave. Thank you for taking my call. Sure. My question is, my husband and I this year opened an HSA with his company, and we're approaching the threshold where you can begin investing it. And I was wondering, one, is that safe to do while we're in debt?

Should we just contribute to it, or should we invest it? And if we should invest it, how much should we invest? I wouldn't put anything in it when you're in Baby Step 2. Okay. No, there's no need. You don't need to be putting money in your 401K, and you don't need to be funding your HSA. The HSA covers only health insurance deductibles. Medical costs is all it covers.

It won't fix the transmission on your car. And if you're in Baby Step 2, you don't even have a fully funded emergency fund yet. Right. And you need that before you fund your HSA. So, really, all the hsa is for you guys today and when i started it was the same way for me was um you just uh you're just using all it is is a high deductible lower premium health insurance plan and later on you'll do the actual savings part but i would only do that after you had maxed out other stuff you know okay so i want

you to get up into baby step four five six before we start talking about putting money in that thing okay so would we treat an hsa when we get to uh you know saving 15 for retirement does the hsa count as part of that i wouldn't okay because it can, you know, the only way it gets used for retirement is you don't spend it on medical. Okay. The purpose of it is to pay medical bills. Okay. Now, later on, like when you get to baby step seven all the way out and you're maxing out everything to keep the government's hands off of money and you're putting everything into every retirement thing you can, you max out your HSA. Then I actually have done that for many years.

I've got like 200 and something thousand bucks in my stupid hsa because we'd never get sick knock on wood and so all we've done is it just is another account that's growing tax deferred and it was a tax-free or a tax deferred entry into it if i spend it on medical it's tax-free and if i get to 65 i can actually pull it out like it was a stinking IRA. So I'm just loading the thing up because it keeps the government's hands off of that little bit of money. Every year I can put that much more in. Something else, it's another IRA for me.

But that's after you get to baby step seven, after you've got your house paid off and everything else, and you're just trying to maximize tax benefits of different plans to keep the government's hands off of it so you get to keep your own money. Isn't it weird how much time we spend trying to keep our own money? The weird world we live in. This is the Dave Ramsey Show. Thank you. Chris is in Nashville. Welcome to the Dave Ramsey Show, Chris. Thank you for taking my call, Dave. I hope you're having a blessed day.

I am. How can I help? My question is, my wife and I are on step three, thank the Lord, and I'm kind of a planner. So we bought a home back in 2016 before we started the total money makeover and got a 30-year fixed. So I'm jumping a little ahead of myself here and going into baby step six. And this is probably a stupid question dave but it would it be worth refinancing it to a 15 year or paying extra on the principal as if i was paying a 15 year mortgage it has the exact same effect yeah if you pay a 15 like a 30 and i mean 30 like

a 15 meaning you calculate your 15-year payment principal and interest you compare it to your principal interest payment on 30 the difference is 214 dollars and 32 cents or whatever the number is i just made that up then you would take that amount and add that as extra principal payment every month and you will pay it off in exactly 15 years. Okay, so it's the idea of that. Yeah, and you don't go through the refinance cost to do that, to convert a 30 to a 15. The only reason you'd go through refinance costs

is if you get your money back by a lower interest rate. Now, if you can drop your interest rate, then we'll talk about refinancing, and while you're at it, do a 15. But in order to go from a 30 to a 15, is your interest rate competitive? What is it? I mean, it's 4.25. I can't see.

You're not saving a fool with it. That's right. That's about what the rates are right now. That's what I recommend to my wife. Yeah. Yeah. Okay. Thank you very much, Dave.

I appreciate it. And here's what's going to happen, okay? Yeah. The reality is when you get to baby step six, you're not trying to pay extra like a 15. You're trying to pay extra like a seven. Right. Because you're just chunking money on this thing, and you're trying to knock the whole stinking debt out. It's not a systematic thing to where you're doing an actual 15. Now, if you want to convert to a 15, you know, in your mind as your first step in baby step

six, I'm stepping steps here, but you see what I'm saying? While you're doing four, five, and six, if you wanted, the first thing we're going to do is we're going to start paying like a 15. We're going to put 15% of our income away. We're going to do kids college. And then when we get extra money, we're also going to throw it at that. You know, that's fine. But the reality is you're probably going to pay off your college. And then when we get extra money, we're also going to throw it at that. You know, that's fine. But the reality is you're probably going to pay off your home in seven years if you're typical of our listeners.

Okay, so if I understand you correctly, I can pay like I'm paying a 15-year mortgage now while I'm going through those steps. And then once I get to those steps, put everything on? On to that, is that what you're saying? Well, when you're in baby steps four, five, and six, what you're doing is 15% of your income is going into retirement at baby step four, right? Correct. Yes, sir. And then kids' college is five, and extra money is going at the mortgage. Right. Now, that can be extra money that looks like paying it off in seven years.

I don't know how much extra money we got. Right. Or how irregular your income is. If you get like a $10,000 bonus at the end of the year, you're going to chunk that on that mortgage probably because you probably got the kid's college going on a rhythm and you're just getting any extra money. So it's going to end up being a little bit of hodgepodge. There's probably going to be very few months you actually only pay it like it's a 30-year mortgage.

Yes, sir. I'm following you. Because the overflow past four, five, and six run simultaneous, and the overflowing past four and five is always dumping on six. Does that math make sense to you? Yes, sir, it does. Yes, sir, it does. Thank you.

So you're going to wash right out, man. You're doing great. You're going to kill it. Congratulations. Love it. Open phones at 888-825-5225. Thank you for joining us. Andreas is with us in New York.

Hey, Andreas, welcome to the Dave Ramsey Show. Hey, Dave. Thanks for taking my call. Sure. What's up? So my wife wants to start a business, and I'm a little bit hesitant about it because it would pretty much eat up all our savings. Okay. How much savings do you have?

It's $140,000. Whoa. What kind of business is she wanting to start? Daycare. Okay. Does she have anything going in that area now? Well, she has a lot of experience. She's been doing that for about seven, eight years.

For other people? Right, for other people. Okay. Why does it cost $140,000 to open a daycare? No, it doesn't. That's just the amount that we have. And the daycare that she wants to open up, the location, would probably cost around $60,000 to keep afloat. So it would be $60,000 in expenses every month. I'm sorry, why would you not make more than you

have in expenses? Oh, no. No, of course we might, but nothing is certain. I mean, this is after, if we have 88 kids, let's say, because it can hold max 100, then we can make $20,000 a month profit. However, that's all if, if, if, if. Yeah, that's if you get it grown to that. Right, right. Okay. Well, I'll tell you what we do around here when we run a business here, obviously, and when we launch a new project, it's kind of like y'all are launching a new project there. We try to take bite sizes rather than gulps and what's scaring you is this is a gulp i'm going to find

a way to cut this up a little smaller and start this thing a little smaller and grow it even if i have to move it i'm going to start in a cheaper smaller building that i rent and don't spend a bunch of money on and get 30 kids or 50 kids. And then I might move it and try to get to 100. But to start ground zero up to 100, I don't think so. Right. I mean, originally this money was supposed to be for a house. Well, I mean, I'm okay.

As a couple, if you decide to open a business instead of a house that's fine but the only reason you would do that is if it made you more money right right and the only way you're going to know that is if you do some trial and error because there's three rules of business everything costs twice as much as you think takes twice as long as you think and you're not the exception okay those are the three rules and what she's looking at is only the fully loaded daycare the full upside potential of this she's not looking at all the downside the time that the uh codes inspector came in and it cost you an extra 30 days to get open because you're screwing around with bathrooms you know and that's that's the

reality of opening something right yeah and so take your time start smaller and let's let's let's what we call proofed text it which means put this in the marketplace as a smaller project and prove that the marketplace is going to respond and let's get that profitable and then we'll grow let's walk we run. This is like signing up for a full marathon and you never run around the block. Right. And that's what's scaring you, and that's wisdom on your part. It's not you're trying to kill her dreams. I'm not trying to kill her dreams.

I want her to do it. I just want her to do it more incrementally, which lowers her risk substantially and your risk substantially. But if she can make this profitable and can make $20,000 a month, that's $250,000 a year. Ding, ding. We want to do this, right? Definitely. I just, you know, I'm just.

You're just doubtful that that's going to be as easy as it sounds. Yes. You're right. It's not. To start with, there's going to be 88 screaming kids. There's nothing easy about this so good lord just shoot me lord bless people who want to do stuff like that i'm just thankful she's on this planet because i ain't doing it oh my gosh yeah. Take an incremental baby steps, and that'll give you wisdom to do it.

Make it make money, and then make it. You can plow all the profits back in easier than you can clean out your savings. Every profit dollar can use to grow the business. There's nothing wrong with that. I've put a large number of our profits back into this business every year growing it expanding adding team members adding whole new product lines and all of that was just profit and we just dumped it right back in we didn't take it all home and eat it you know and so you can do that with this thing you don't have to take it all home so i think you're right to be hesitant

on the big gulp let's not do the big gulp let's do the small bite and that's how we do it around here and that's really good business acumen as a matter of fact hang on i'm going to send her a copy of christy wright's book business boutique uh equipping women to make money doing what they love the whole business boutique movement around christy is absolutely amazing oh hey madison ask her if she wants to come to nashville The whole business boutique movement around Christy is absolutely amazing. Oh, hey, Madison, ask her if she wants to come to Nashville to the business boutique event in the fall. We'll give her a ticket, too. Okay?

Alright, that puts this hour of the Dave Ramsey Show in the books. Zach and Madison filling in for James and Kelly, who are both not working this week. I'm going to abuse them to no end while they're not here. I abuse them when they're here, so why not? There we go. Hey, that puts this hour in the books.

Hey guys, this is Blake Thompson, Senior Executive Producer of The Dave Ramsey Show. Did you know over 15 million people listen to The Dave Ramsey Show every week? And a lot of those people listen to one of over 600 radio stations across the country. To find a station near you, head to DaveR Ramsey show every week. And a lot of those people listen to one of over 600 radio stations across the country to find a station near you, head to Dave Ramsey.com slash show.