The Ramsey Show - App - Be Ready to Tell Yourself "No" If You Want to Win (Hour 3)

Episode Date: October 7, 2019

Debt, Insurance, Budgeting Tools to get you started:  Debt Calculator: http://bit.ly/2QIoSPV Insurance Coverage Checkup: http://bit.ly/2BrqEuo Complete Guide to Budgeting: http://bit.ly/2QEyonc Interview Guide: http://bit.ly/2BuGnZE Check out other podcasts in the Ramsey Network: http://bit.ly/2JgzaQR 

🎵 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. Thank you for being here, America. We're glad you're here.

Well, it's book launch day for the Debt-Free Degree book by Ramsey personality Anthony O'Neill. He started the day off in New York City. Fox & Friends has been doing media there all day today. And, of course, then this evening heads to Chicago. A book signing there tomorrow night at Old Orchard Center, Barnes & Noble, in the Chicago, Illinois area, 6 o'clock. Be sure and come by.

Get your book signed. We're doing a drawing for $500. No purchase necessary. Must be present to win and be 18. And Anthony's going to do a talk about how to go to college debt-free that models after the book, of course. This is a book that is available not only for the parents but even the teenagers. Beginning in the seventh grade, you begin a systematic plan. Actually, you can begin all the way back at age zero when they're born and begin saving, right?

But if you haven't done that, you can begin in the seventh grade and begin to work your way up. And Anthony will walk you through the whole process with debt-free degree. We at Ramsey have declared war on this ridiculous thing called student loans. They're completely out of control. It is now a plague on this culture, and it's time to do something about it. Anthony's new book is a bestseller. We just don't know yet. We won't know for about 10 more days if it's a number one or not.

It takes a little while to get these things out of the publishing world. It's not like the digital world. And here's the thing. We launched last Monday an eight-episode series called Borrowed Future on podcast. And so jump on anywhere you get great podcasts and subscribe and get this. You're going to be blown away by this eight episodes about the student loan world and how screwed up it is. And how the fact that you have other options has, well, it's just not been widely touted. And now it's being widely touted.

Because already hundreds and hundreds of thousands of you have downloaded that podcast, the first episode. Episode two, again, was released today with interviews by Mark Cuban, Seth Godden, Seth Godden, Meg Meeker, myself, many others. There's insiders in the business. There's whistleblowers in the business that are there. We need your help getting this to number one. It's number 10 at apple podcasts if you're an apple person go and subscribe and download the episode borrowed future we want to get it to number one because then it'll start to be even a bigger deal uh at number 10 by the way that puts it in the top one percent of all podcasts already

and it's seven days old so um you need to be checking it out it's solid uh when you listen to the first episode you're going to want to listen to every one of them it's that simple the reviews are coming in excellent information i wish i had this before i went to college and took out student loans i was told it's the only way another one says everyone needs to hear this podcast college is important but not worth financial suicide another one says, everyone needs to hear this podcast. College is important, but not worth financial suicide. Another one says, this is the first honest approach to the student loan crisis that you will hear. Not just a commentary or criticism, but real-world solutions to the number one finance challenge in America. There we go.

Nice, nice reviews. Thank you for your reviews. Post a review, subscribe, download, check it out, Borrowed Future. And I'm really proud of our team. The first Ramsey Network production that is not just one of us Ramsey personalities yakking. This is a full-on docu-series. I think we may do a documentary out of it. If the success continues, it needs to be done.

So you may see it other places as we go along, because we're not going to stop talking about this until Congress quits making these loans. And don't you political idiots tell me you're going to start forgiving loans while you're still making loans. That's so intellectually dishonest. You keep making the loans, but you're going to pay them, but you're going to forgive the existing ones. We can talk about the existing ones and what that problem represents,

but not while you're still making them. That's not even a discussion we'll put on the table. Sorry, boys and girls. We know politics as usual when we see it, regardless of which idiot party it is. All right. Omar is with us in Texas. Hey, Omar, what's up? Hey, Dave, how are you?

Good, man. How can I help? Yes, sir. Thank you so much for taking my call. I stumbled upon your videos back in November last year, and I was a student back then. I graduated in January and started working in February. Good for you.

What's your degree in? I'm a physician assistant. Great. Awesome degree. Very cool. Okay. Yes, sir. Thank you.

So I was $150,000 in debt, 30,000 credit cards, 120 student loans. I paid off all the credit cards plus additional $10,000 in student loans. Get it, man. Get it. Yes, sir. I started a new job two months ago and my boss he offered to pay off all my student loans.

Right now it's at $110,000. He said no strings attached, interest-free loan, no terms and conditions apply. He said he told me just to pay him back. Oh, he's not paying it off. He's loaning you the money. Yes, he's loaning me interest-free.

Yeah. That's very generous, but no. No? Yeah. You know why? If you die and you owe your boss $110,000, your estate is still responsible for it. If you die and you have a student loan, it's forgiven. If you become disabled, you still owe your boss $110,000.

If you become disabled, your student loan is forgiven. And, dude, you're paying this off so stinking fast, it's unbelievable. Yes, sir. Yeah. You see, interest rate's not your issue. No, not at all. Yeah. So what's your balance today?

Today, I owe 95. Good for you. And your interest rate is what? My average is 5.6. Okay. you and your interest rate is what? My average is 5.6. Okay so if you kept a hundred thousand dollars for one year the interest would be five thousand six hundred dollars. I suspect based on the numbers you've given me you will be debt free in 12 months. Does that sound right? Well if I I mean I make 120,000 dollars I can live off of $20,000 because I have a wife and a baby.

Not quite. Okay. You just made such huge progress. Okay. So how long do you think it'll take? Two years at the most. Okay. So if it's two years, then the average during the first year would be the difference in $100,000 and $50,000.

So $75,000 would be what your interest would be charged on in the first year. In the second year, it would be the difference in $50,000 and $0,000, so $25,000. And so we're not charged $10,000 in interest. We're charged about $3,500 in interest is what this is going to cost you over two years. So interest rate is not your problem. I would not. I think your boss is being very generous. If he wants to just give you some money that you don't have to repay, I'll take that.

But no, I'm not going to take an interest-free loan from your boss. Wouldn't do it. Thanks for the call. This is the Dave Ramsey Show. Folks, let's cut through the bull. Interest rates are exceptionally low, so you're missing out if you have not called Churchill Mortgage to see if you can save money on your home loan. Lots of other companies are out there claiming great deals, but don't get lured by slick advertisements. No-cost refinance offers do not mean they're free. Churchill Mortgage has a no-bull refinance.

This means there are no hidden fees. They will shoot straight with you. Yes, Churchill can offer loans with no closing costs, different down payment options, or, of course, a traditional refinance. The key difference is you can trust my friends at Churchill to let you know what you're getting up front so you can make the smartest choice and save the most money. Go to ChurchillMortgage.com. Do it today while rates are low. This is a paid advertisement. NMLS ID 1591.

NMLSconsumeraccess.org. Equal housing lender. 761 Old Hickory Boulevard, Brentwood, Tennessee 37027. Marissa is with us in Wisconsin. Hi, Marissa. How are you? I'm good. How are you? Better than I deserve.

What's up? So currently my husband works full-time. I'm sorry, your phone is breaking up. Say one more time, your husband what? My husband works full-time, so he's the breadwinner of the house. And I just graduated college in May, and I currently don't have a job yet. So my question, we currently have the medical plan PPO, and we're wondering would it be better to have an HSA than a PPO? How healthy is your family? Usually we're pretty good, but my husband husband and i we have three kids

but generally speaking you're how old are your kids 12 and almost six okay all right and no one has any chronic illnesses though no okay good that's awesome well the hsa has two components to it, both of which are better than the PPO, if you're healthy or if you're very sick, either one. In the middle, not so much. But if you're really, really ill and you're constantly blowing through your deductible, HSAs have a lower limit on what comes out of pocket than PPOs do. And so you spend less with an HSA if you're deductible, HSAs have a lower limit on what comes out of pocket than PPOs do. And so you spend less with an HSA if you're ill.

If you don't go to the doctor a lot, you spend less too because the premiums on the insurance are much lower. And so you're not going to the doctor much. Now, if you kind of hang out in the middle where your out-of-pockets are $3,000 to $5,000 a year, the PPO can end up cheaper. But if you have $10,000 out-of-pockets or $1,000 out-of-pockets for docs in a year, the HSA is going to come out a lot better because the premiums are cheaper than the PPO. I've had an HSA, knock on wood.

I've not had any major health problems, Sharon and I. We've had one since they started back in the Bush administration. They were originally called MSAs back in the day, medical savings accounts. I've had one since back there, and I put money into the savings portion of it every year, and I've never taken any out because I've not needed it. I've actually got a couple hundred thousand bucks in there now because I've been doing it a long time. So you can use the savings portion like that later on after you get yourself out of debt. But for right now, you don't need to use the savings portion.

You would just use the lower premiums to help you accomplish some of your other goals like build up your emergency funds. Right. We currently have our – we're on step two. We just started class last month, which we love. Well, that's your biggest risk time on an HSA because it has a higher deductible. And so if you have a $5,000 hit and you got $1,000 out of pocket, you're going to be in scramble mode, okay? But I took the risk then.

I recommend taking the risk if your family is pretty healthy. But if you have a pretty healthy, you know. But if you have a $10,000 or $20,000 event, you know, you're going to have a $5,000 probably out of pocket. That's probably what your out-of-pocket is. Might be seven, might be six, might be four. They're different ones, but they're all right in that range. In the meantime, you've got cheaper insurance. And as soon as you get into Baby step three and you build your emergency fund

from then on there's no question that the hsa is going to be much better for you again unless you have someone in the family that's very ill so that's what you're facing so good question thank you for joining us open phones at 888-825-5225. Victor is with us in Texas. Hi, Victor. How are you? Hey, Dave. I'm doing better than I do myself. Good.

How can I help? It's an honor. I'm talking to you. You too. So, Dave, I made a hard decision that it's probably one of the hardest financial decisions I ever made. I had a business that went south. I had a bunch of credit card debt and a couple of auto loans on it. Long story short, the bank sent me reaffirmations for two other vehicles.

Reaffirmations? You filed bankruptcy? Yes, sir. Chapter 13 or 7? 7. 7. Okay. And what do you owe on the vehicles? In one, I owe $50,000, and the other one, $80,000.

No, toss them both the keys. You don't reaffirm that. Why would you reaffirm that debt after you just filed bankruptcy and that's why that's what i was a thousand dollar car man and get started again what's your income what's your household income uh well with the business is close to 200 okay and you filed chapter seven, making $200,000 a year, and you made it through? Yes, because we was in the course of doing business, so most of the debt was business debt. Yeah, but there must have been a bunch of other debt.

Yes, there was. How much? How much? Non-business related debt was about $80,000. Well, you filed on the business as well, right? Yes. Okay, so what was the total size of the bankruptcy, sir? About $280,000.

And you make $200,000 a year, and they let that go through. I'm really shocked because I thought the Chapter 13 means test would throw you back into a 13. When was this filed? A couple months ago. Okay. And it's been approved by the court. Have you had your meeting of creditors yet, your 941? Yes, sir.

And so you're clear other than these reaffirmations. Okay. No, you do not reaffirm an $80,000 car or a $50,000 car. No. You know, you make $200,000. Whatever you can scrape up cash for, go get you a car with cash and stop borrowing money. Stop borrowing money. That's what I was thinking.

Yeah, exactly. I was thinking about going to the FBU, and it's a very scary time. Yeah. Are you married? No, I'm not. I'm divorced. Okay. All right.

How old are you? 47. What kind of business is this? It was a transportation business. Is it gone? Did you close it? That would be the plan. I thought you were making $200 a year. Are you talking about profit?

Are you making a profit of $200 or gross revenues? No, no, I'm talking about with my salary plus the business no i'm talking about gross revenues on a business that you own or profit on a business i was not i was not making a profit obviously so and oh it wasn't obvious to me you ask you what you made you said 200 you you meant gross revenues though yeah okay i got confused okay now i'm now so basically you're losing money on this and you're gonna drop it and walk away and go do something else yes sir in the bankruptcy i got you so what are you gonna do uh it work okay cool what can you make doing that um i can make over a hundred a hundred

thousand on that how quick um fairly quick i have a good network good good good for you okay do you have any uh you shouldn't have had you might have you're in texas so you might have some money uh that they allowed you to keep how much did they allow you to keep in cash anything uh well about you know just four $4,000. Okay. So you got a little bit of money to go get you a car to get around until you get your income going, right? Yes, sir. Okay, cool. Yeah, toss them the keys, man.

There's no reason. Why would you take on an $80,000 debt or a $50,000 debt? No. No. Well, my question was, you know, whether this is morally correct, but I already filed. Yeah but I've already filed. Yeah, you've already filed. I mean, if you want to get into the moral discussion,

you can have that with yourself and God later if you want to go pay it back. But you don't have to. I don't impose that on someone else. I went back and paid mine back, but it was like 10, 11 years later. It took that long for my wife to be okay with it. She was that pissed but um uh but i felt i felt like god i felt like god told me to but i don't tell other people they have to do that if i don't impose that on someone else i live in a lot of grace and i extend a lot of grace so

dude right now you just need to heal you need to get your income started let's not worry about morals and paying it back right now you're in a bankruptcy just walk away from the debt start fresh and if you want to get stood up and later on you want to look back and go do that Let's not worry about morals and paying it back right now. You're in a bankruptcy, just walk away from the debt. Start fresh. And if you want to get stood up and later on you want to look back and go do that, you can do that later. But you don't have to worry about that right now. Get you a car and get you a job and walk away. This is the Dave Ramsey Solutions Company page on LinkedIn has over 100,000 followers.

That's over 100,000 potential like-minded people our team communicates our current openings to. We also post on LinkedIn Jobs because we know the right person will have an impact on our company for years to come. And LinkedIn Jobs matches the right person with the right job. It's no wonder a hire is made every eight seconds on LinkedIn and over 600 million members visit LinkedIn to make connections, learn and grow as professionals, and discover new job opportunities. In fact, LinkedIn members add 15 new skills to their profiles and apply to 35 job posts every two seconds. Get started today with LinkedIn Jobs and get $50 off your first job post.

Visit LinkedIn.com slash Ramsey. Terms and conditions apply. In the lobby of Ramsey Solutions on the debt-free stage, Travis and Carissa are with us. Hey, guys, how are you? Good, how are you? Welcome, welcome. Where do you guys live? We live in Minotaur, Nebraska. Minotaur, Nebraska.

What's that near? Scotts Bluff. Scotts Bluff. What's that near? Cheyenne. Cheyenne, Wyoming. Military, Nebraska. What's that near? Scotts Bluff. Scotts Bluff. What's that near? Cheyenne. Cheyenne, Wyoming. Yep. Now you got something I know.

Okay. Well, welcome, guys. We appreciate you coming all the way to Tennessee, all the way over here to do a debt-free screen. Yes, sir. Yep. Love it. How much have you paid off? We paid off $54,023.

Good. And how long did this take you? 12 months. Wow. And your range of income during that time? $100,000 to $110,023. Good. And how long did this take you? 12 months. Wow. And your range of income during that time? $100,000 to $110,000. Excellent.

What do you guys do for a living? I'm an auto body collision repair technician. And I am a research analyst. Okay. Very, very cool. Good for you guys. Excellent. What kind of debt was the $54,000?

You name it. Student loans, uh consumer debt house remodel car loan medical bills you guys were like normal yeah how long have you been married uh coming up on 10 years oh wow okay good for you all right and 12 months ago, something happened. What lit the fuse on this? Well, what really lit it was my company offered SmartDollar. Oh, cool. So that really was our catalyst to say, okay, we're ready to go. Okay.

So you took the class at your company. For those of you that don't know out there, Smart Dollar is an HR benefit offered by companies all over America. Millions of employees have access to it now. What's your company name? It's called Mr. Cooper. Okay. Well, Mr. Cooper? Mr. Cooper.

Mr. Cooper, as in MR. Yeah, Mr. Cooper Home Loans, yes. Okay. Well, Mr. Cooper, thank you. Yes, thank you. This is awesome. Yes, it is. Very cool.

So an employer doing something good for their employees. What a cool idea. Absolutely. Wow. So you took the class at your work, and that got you started. So she comes home from work going, hey, look at this. Yep. What'd you say?

I said, let's do it. I was always on board to pay off debt, and we started doing the smart dollar. And we heard about you before from my father and that just added fuel to the fire and we just started rolling with it well now the class is free because there are companies paying for it so now you're doing it for sure right yeah game on yep okay so you dove into the lessons yes and what did you learn what was the big thing that caused you to be able to bust loose like you did because this is an impressive number, y'all. Thank you. I think a lot of it was we learned a really important word, no. Yeah.

Full sentence. For me, that was huge because I'm a people pleaser. I'm always trying to go above and beyond, and no is a complete sentence. And no, it's not in our budget. It's just not there. Yep. So I think that was our biggest. So which one of you is the nerd?

Which one is the free spirit i i think she's the nerd okay all right but but she likes to buy stuff for people yeah okay so that's a generous for sure yeah i got you okay cool so uh you start you go through and you had to learn the word no what else did you learn a budget a real we thought we knew a budget but now we really know what a budget is yeah so every dollar has a name now every dollar has a name and if that money is gone then guess what everything's gone and we'll make do with everything else with what we got yep now the every dollar budget is included with smart dollars i'm sure you used it too yeah that was awesome so easy to track and drag and drop, and budgeting is so much easier now.

Wow. Very cool. How long have you worked for that company? It'll be 13 years. Wow. Okay. Might be the best gift they've ever given you, huh? I couldn't disagree.

Wow. Because, I mean, you paid off $54,000. Yeah. Nice raise! Yeah. For sure. Yes, it is. Very cool. Yeah. Good for for you guys i'm so proud

of you thank you so who were your biggest cheerleaders while you were doing this um my parents were one of them really big cheerleaders so they already knew about it they knew about it his dad is the one who first told us about it and we were like yeah okay we're doing just great jokes on us yeah and my family was too we didn't tell a whole lot of people about it but the people who did know they were they were game in for us now sometimes people at work don't talk to each other about it when they're going through it because it's a little embarrassing to talk about at work right and sometimes they get real close and talk about it real openly which was yours um i think for me after i had started sharing my story that

we were using it and we were budgeting then a lot of people well a lot of my teammates were like really how are you doing it and now we have a couple other teammates who are getting signed up and starting budgets and we actually have a family member who's on board with it too so oh cool yeah very good yes okay so you kind of broke the ice and got things moving then. Okay, good for you. Well done. Very, very well done. So if somebody just walks up to you and they never heard of Smart Dollar

or EveryDollar or Dave Ramsey or any of that, and they say you paid off $54,000 in 12 months, what do you tell them the absolute two or three things they have to do if they want to do that be ready to tell yourself no and everybody else no set up a budget make sure you got a name for every dollar you got and communication yep communication is key this was a hard year wasn't it yes it was very hard i mean you sacrificed yes you pushed down on this hard you know what was the hardest part of the year i would say the side hustling that we were doing okay that was the hardest you know being away from the kids and the kids had to sacrifice because we weren't there what was the best paying side hustle you had? My wife's side hustle.

What was it? So I started catering. I started making enchiladas and pork chili, rice and beans to get us out. My mouth just watered. And tortillas and that. That was so neat because we would do big orders every month, and that pulled in anywhere from $500 seven hundred dollars each time we did it and that didn't count us doing little side gigs or anything else so that was that was our biggest

yeah it really was i love it yeah i love it i bet they're good too i think so yeah i bet that's awesomeness very cool yeah that's really important so it was 12 months really hard it was was it worth it oh gosh yes so how does it feel now that you're free amazing amazing way amazing like just your shoulders feel free like you can breathe again you know for sure just uh it's just so it's so surreal it's really surreal just even still it's it's like okay something comes up we have it covered we don't have to worry oh where are we going to get the money for this or where are we going to get the money for this it's it's not like that anymore and that's such a relief so you said you're married 12 years right uh coming up on 10 coming up on 10 years i'm sorry and uh have you ever been debt free

during your marriage no no not even close total opposite so what do you say that your employer for giving you this gift thank you thank you thank you thank you love it yep that works well we got another gift for you a copy of chris hogan's book everyday millionaires you're on track to be that that'll be your next chapter in your story and i love it the uh homemade tortilla everyday millionaire baby coming up i'm just saying i think i think there's a future here i might be wrong i hope so good stuff good stuff well way to go and you bring the kiddos with you we did we brought our kids with us and give us their names and ages so this is is Solara, and she is eight. This is Quentin, and he is nine.

And this little guy is Weston, and he's almost two. All right. Very cool. Well, that's a good why right there. Absolutely. That's a good reason to do all this stuff. Have they been practicing their debt-free screen? Yep.

They have been. Solara, are you ready? Are you ready? You ready? Just shake your head. Are you ready? Quentin? Just shake your head. Are you ready? Quentin's ready.

All right, good, good. Weston's definitely ready. Yeah. All right. $54,000 paid off in 12 months, making $100,000 to $110,000. It's Carissa, Travis, Quentin, Solara, and Weston. A life changed, a family tree changed thanks to their employer. Count it down.

Let's hear a debt-free scream. Thanks be to God. Three, two, one. We're debt-free! We're debt-free! I love it. Way to go, you guys. That is fabulous. Fabulous. go you guys that is fabulous fabulous young guy asked me the other day said dave you got a great company here he said i just started hiring people what i do with my team and i said love your team

just love them just love your people these guys put smart dollar in like this for their employees it's loving your team well guys this is the dave ramsey show Just love your people. These guys put smart dollar in like this for their employees. That's loving your team well, guys. This is the Dave Ramsey Show. our scripture of the day isaiah 40 31 but those who hope in the lord will renew their strength they will soar on wings like eagles they will run and not grow weary they will walk and not be faint tolstoy said the two most powerful warriors are patience and time absolutely well october is insurance coverage checkup month yeah we need a month for everything right uh well you know what insurance is having the right coverage is like part of being an adult right so many people don't know this but there's about 10 kinds of coverage that you might need based on where you are in life and there's a

bunch you don't need and we've built a tool that will show you what you do need to add, drop, or adjust in about five minutes. It's completely free to use. We'll even rank your list by importance and email it to you so you can get your plan moving fast. We call this the coverage checkup tool, and it's completely free and takes about five minutes. The coverage checkup tool. Now, we get letters all the time like people from people like bianca who just took the checkup and she found out her family didn't have enough life insurance they got better coverage and got it so cheap that uh well guess what

they're not paying a dime more now they got more coverage for less money per thousand and so they ended up getting the right amount of coverage just because they bothered to look at it so what do you do here well get your phone out and you text the word checkup to 33 789 or you can visit davramsey.com slash checkup let's text the word checkup to 33 789 that's simple zach is with us zack's in arizona hi zach how are you hey dave how you doing better than i deserve what's up hey so me and my wife have been working our behinds off the past four or five years paying off crazy debt and we're actually doing real good right now we're at about baby step five six great um she's got uh she's got about two three hundred thousand dollars in stock that she gets as her bonus wow and we were trying to figure out what to do with

it i got a kid that's in uh high school now, and we're thinking about college and stuff like that. But this stock that's out there, we're worried that if the stock price goes down, that we're going to lose a boatload of money. So do we leave that stock where it's at? No. So what are you going to do with it? Are you going to use it for college?

$200,000 or $300,000? $200,000 or $300,000? $200,000 or $300,000, that's a lot of money for college. I was thinking. How much do you owe on your house? No. So we're pretty much 100% debt-free. We owe 80 on the house. Yeah, I thought you...

No credit card debt. Okay, so you owe 80 on the house, but your household income is what? Oh, between $200,000 and between 200 and 250 a year okay and you have zero debt other than 80 000 on your house none of any kind right we just saw well i have my my six years left on my legacy plan which is child support for my son okay but that's not a debt you just have to pay child support okay yeah and what else you have any debt no we're we have three to four hundred thousand in a 401k plan gotcha how old are you fifteen thousand in an emergency fund yeah how old are you we're 43 what's the house worth?

$250. Good, good. Well, you're in really good shape. And you have a 17-year-old, and what other kids do you have that you're going to pay for college? No, I have a 14-year-old who's a freshman in high school. Oh, okay. And he's the only one. So you have one set of college to pay for. Okay.

So here's an interesting exercise. Number one, what I'd do today is i'd cash out the stock the first thing i would do with it is i'd pay off your house now you're a 100 debt free you're on a budget making 250 000 a year you can probably cash flow most places he would go to college but you've got another 200 000 left over or150,000 left over after you pay off your house to do other stuff with, right? So you can start investing for college aggressively, and you can have a big pile of money for college in addition to a great income, and you'll have a tremendous amount of wealth because you're going to make $250,000 a year.

In the next five years, you're going to make a million and a half before this kid goes to college. So you're going to be able to send the kid to college, right, without any trouble. But we've got to be intentional. We have to be careful to do it. But you make plenty of money mathematically to do it without any trouble. Now, so then the second thing I would do, first thing is cash out the stock. Second thing is I'd pay off the house. The third thing is I would sit down and start to look at actual schools.

Now, it won't be the same cost today as it is five years from now, but just go and say, where do we think Junior might go to school? And let's look at what they cost. Right. So he's going to a community college for the first part. He gets scholarship, tuition's free because he's a local in the area. And then he's more than likely going to transfer to texas tech to finish it out okay or if he wants to go to texas tech for four years you've got the money right and i'm splitting the money with

i'm splitting the bill with my uh with his mom my ex-wife even if even if you pay for it and she you know even if she can't pay for it you you just pay for it. You've got the money. You're fine. So you've got $250,000. We take $80,000 out. We pay off the house. That leaves $150,000 that we can earmark for this and other wealth building. And then you go to Texas Tech's website. You figure out what it costs there.

Whatever the tuition is, my guess is it's probably around $10,000 to $12,000, $13,000 a year right now, something like that. It's about double that for housing, roughly. Okay? So if you have a $13,000 tuition, you probably have $26,000 a year times four is $100,000. Okay. So if you take $100,000 and you set it aside, this kid goes to school for, you know, set aside $100,000 of your market in your mind in a mutual fund growing, this kid will go to Texas Tech and you can pay 100% of it all four years, including housing.

Now, that's assuming my numbers are right. But, I mean, you see what I'm doing. So the third step after you paid off your house, first step is cash the stock out second step pay off the house third step is actually study texas tech find out what it actually costs and find out what it costs to live there while he's going to school and go ahead and lay a budget out for four years and earmark that much money and set it aside and you can check that box it's done now you just move on with your income right right and so if it's a hundred hundred fifty thousand bucks and you set that in a mutual fund even if it's not in the kid's name even if it's not technically a college fund it's just your mutual fund and you said we're not

touching this this is the college fund you're done you can check that box you're over okay and then with the remaining 120 000 That's what I'm talking about. You said there's $250,000. I used $80,000. That only leaves $175,000. You're going to use most of that $175,000 for Texas Tech for four years, including housing, and I'm going to go ahead and set that aside now. Okay.

Now, you don't have to save anything else for college ever. You make $250,000 a year. You don't have a payment in the world. Now you go about the business of becoming very, very wealthy and outrageously generous as you go along. But college is done. Your retirement is well underway. You're fine with your retirement. Keep adding to it, of course.

Max it out. And now you start investing and you increase your generosity factor. And, you know, so here's my prediction. If you stay on this track and you stay out of debt and you stay on a written plan, a detailed plan where you make your money behave, you're 43 now. In 21 years, you're going to be worth in the neighborhood of $10 million. That's where you'll be at 64 years old. But you make $250,000, dude. You ought to be.

Okay? Now, most people make $250,000, blow it all, and they don't have anything. But you ought to be. So you're going to change your family tree if you stay on track. I'll prove it to you. I'm going to send you a copy of the book, Everyday Millionaires, and it'll outline exactly what I just showed you. And Chris Hogan wrote this book. It's from the study of the largest study of millionaires ever done in North America, Everyday Millionaires. Hold on. I'll send you a copy.

That puts this hour of the Dave Ramsey Show in the books. Our thanks to James Childs, our producer. Madison filling in for Kelly. I am Dave Ramsey Show in the books. Our thanks to James Childs, our producer. Madison filling in for Kelly. I am Dave Ramsey, your host. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. 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 National and tell Dave your story.