The Ramsey Show - App - Belief Doesn’t Override Math (Hour 1)

Episode Date: October 18, 2022

Dr. John Delony & Ken Coleman discuss: Working hard vs. being truly successful, When it's time to go full-time with your side hustle, Avoiding bankruptcy, Saving up for a downpayment, Why cash-out refinancing is a terrible option. Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Девочка-пай What is up? This is the Ramsey Show, broadcasting from the Pods Moving and Storage studio here in Franklin, Tennessee. It's a show where America hangs out to have a conversation about your money, your life, your work, your relationships, your mental health, anything that's going on in your life. We're here to talk to you about it. The call is toll free, 888-825-5225. I'm John Deloney, joined here by bestselling author and good friend Ken Coleman, and we're talking about relationships, life, work, whatever's going on in your life.

Give us a buzz, 888-825-5225. Hey, Ken. Yes, sir. I heard you just finished, walked out on your show. That sounded bad. You didn't walk out on your show. You just finished recording your show. Just wrapped up, yeah.

And walked in. Yeah, wrapped up is much better. That's what we were talking about today. I know you like that. Yeah, I heard you announce this, and I was like, man, tell me about this. Why working hard won't help you be successful it was a little bit of a uh play on words here but we wanted to to kind of focus on this obsessive hustle culture that you and i see on social media and there's a lot of influencers on social media have a lot more followers than you and i let me be very fair who preach hustle hustle hustle i'll sleep when I die, work hard, work hard, work hard,

work hard. And first of all, you and I both are fans of hard work. But what I was saying today, we kind of led off with hard work in and of itself. Just I'm going to work hard is no guarantee for success. No. At all. Right. And what it could do is actually burn you out faster, harder, and leave you in a place where you are completely confused and frustrated. And so you and I, I mean, you know, famed psychologist Mihaly Csikszentmihalyi. Oh, yeah, yeah. I practiced that name many, many times to be able to say it. I believe he's Hungarian, but he is well known, as you know, as the father of flow.

And flow was a term that he used to describe what I teach on the Ken Coleman Show. I call it being in the sweet spot. But he actually coined the term flow because of the distinct characteristics that he found in 30 plus years of research. What it feels like, looks like to experience flow in your work and he compared it to a true form of ecstasy a mental ecstasy and so we talked about that today which is and so about what I said was that working hard is actually not the focus the focus ought to be to work smart. And we've heard the phrase, work smart, not hard.

And I actually do believe that. But what I said was, and I want to know your thoughts on this, that when we work smart, in other words, get in our unique sweet spot, as I teach, using talent, what you do best to perform passion, work you love, to then produce results that you care deeply about. Now all of a sudden i'm working smart and as a result the effort comes along with it well and efforts towards a thing

it's not just effort you don't have to worry about working hard when you're doing this thing that you care deeply about it's the point it just happens in fact you have to have people pull you out of that work so you can do your other things like you have a family that's right and so uh we went through and and i'll give this to you because you can look at it he said those were the eight characteristics and it's really fascinating when you look at it yeah like he actually studied it yeah and those are those characteristics so we unpacked that on the show today so i stumbled stumbled across, man, a great resource is the two guys at the Minimal Revolution. Oh, yeah. They're extraordinary.

Is that what it is? Are minimalists friends? No, not the minimalist. James, will you check that out? It's the Minimal Revolution. It's not the Minimal Revolution, and I check it every single day. Anyway, these are two economists who are very thoughtful thinkers and with the incoming ais ai begins to transform the workspace over the next 10 or 15 years artificial um

learning machine learning they note if your whole idea whole identity is based on how hard you work, on just hustling and grinding and grinding and grinding, when a machine can go 24-7, 365 with no breaks, you lose. Good luck. Good luck, right? So if your whole identity, and we all want to be Rudy. We all see ourselves as underdog. We want to be Rudy.

Sure. But Rudy was working towards a thing, right? Towards a passion. And his whole identity wasn't, it was in I'm going to serve the team, right? And I'll keep showing up and keep showing up. Here's what I want you to comment on, because you deal with this. I mean, this is square in your lane, is the mental and emotional relationship health.

John, I see people working towards status. Yeah, oh gosh. And so, like, we show up at picnics or soccer games or whatever, and it feels like all of our conversations, and I'm chief on this, chief center on this, if I'm not careful, we start talking, how you doing? It's like, oh, I'm so busy. And then all of a sudden it's a competition

for how busy we are. And I just feel like the busy culture is killing our souls. What are your thoughts on that? It's a strange world we found ourself in where we're not judged on our, when we're not judged on our output on what we're actually put into the world, we're judged on, well, did you work hard? How's your effort? And that has turned into, well, I'm putting more effort than you are. I am effort king. Oh yeah, I'm effort

king. I've been there too, man. How's work? Man, it's busy. Life's busy. Oh yeah, I'm really busy too. What a dumb way to interact with another person. We've made our self-worth about how hard we work. Yeah, and it comes in from the first in, last out, right? Of course. That was the 80s and 90s. If you'd be the first one in or the last one to leave,

and that turned into the cap social, like the work capital is butts in seats. That's right. Right? Yeah. And you lose the person who's making connections who's actually making calls going visiting people doing doing good work man and you and i share this we share this fact we we do this at our building wealth events we kind of take questions from the crowd on this but you know what i'm trying to teach on the ken coleman show as a part of ramsey when we talk about you know money and life, excuse me, life through the lens of money, relationships and work, it's that success is the wrong metric,

right? Significance is the metric. And what I mean by this is every human is significant just by being a human, but your work contribution, it's, it's about what is significant to you. The school teacher is just as successful as the president of the United States. Right, right. Because in her world, this is what she wants to be doing, and she's able to provide and, and, and, fill in the blank. It's results, mission, and it's heart, passion-based. And so if we can get to the point, and what i'm trying to do is just help people see what's your unique contribution that matters to you because you see how it matters to others and that purpose isn't about us no no hey here's here's what's important when you when you're

defining what's important to you yeah it's also important to create a world where that is okay it's not a great point we run in this is the show exists because people say i want to create a world where that is okay. It's not- Great point. And this show exists because people say, I want to be a teacher. I was put on earth to be a teacher, but I'm driving a Lexus. And sometimes a Lexus car doesn't fit with a teacher's salary. That's right. It's the teachers who say, no, I want to be a teacher.

I'm a Corolla person. Yep. And I'm going to look up in 38 years, I'm going to be a millionaire, right? Because I created a world where my dream could exist. And by the way, to your point, they're the third largest group of net worth millionaires, according to the Ramsey Solution study of over 10,000 net worth millionaires. So, you know, I'm really trying to drive this because we're more than ever, we need boundaries, man. And so what you're helping us with and you and I combine on that. We are too too redefining what work is yeah and what if your identity is i'll just outwork you cool man a

robot's coming wow get yourself a good counselor and a good doctor because you're gonna need it but if you're yeah good a good a good heart surgeon but if your philosophy is i'm gonna find purpose i'm gonna find meaning i'm gonna work hard to get there. Now you're onto something. we are back this is the Ramsey show 888-825-5225 and before Ken and I were talking about the minimal revolution I don't know why I said that it's the marginal revolution with Tyler Cowen and Alex.

It's just a news source, a blog source that I go to, just a couple of great thinkers who have some provocative ideas on things. Don't agree with them on everything, but I do love their informed opinion. Marginal revolution. Well, we all need more margin. I mean, if you just go down the list. So you just turned me on to him. Folks, he was going nuts in the break talking about him, and you daily digest these guys. Every single day. That's where I get my news. That's where

I get my news. I love it. I'm in it. It's fantastic. I'm going to do it. All right, let's go to Susan in San Antonio. Hey, Susan, what's up? Good afternoon. Thank you for taking my call. You got it. What's up? How can we help? So basically, I've been in the medical field for 30 years. And back when, right before COVID hit, I started out on a venture to open a day hab for intellectually disabled adults. And we were going fine, but then COVID hit and everything shut down. And since then, it's pretty much been stagnant because I've put in the 501c3, been waiting on funding, can't get the funding. So I'm going to just throw it to the wolves and start it up in January. I don't know if that's a good idea or not. I just need somebody from an outside source to go, yeah, and walk me through

the steps that I'm not crazy to go ahead and go from a full-time job to a part-time job and take this on as a full-time venture. All right, well, let's just let's stay in the level of uncertainty that you just presented. What are you uncertain about to where you feel you need to call two other people and get their opinion? So is this a good idea? What are you concerned about that might be a bad idea? The biggest concern I have is that when I started this venture, it was basically from my heart and I was doing it for free and hoping that getting it going, doing it part-time and for free, that eventually we would get funding. We would get clients that would start paying and things would move on. Now I'm

looking at going into this and trying to get paying clients immediately, not a ton of them, just a handful of them to get started, and hoping that that will bring the universe together to get 501 finally off of some government desk that we can then go after the grant money that is sitting there. So are you financially independent or in a position where you can go without income for six months to a year? I can go, I got a fully funded emergency fund of five months. But that's for emergencies. I'm totally debt free. If I keep my part-time job, I can financially make it for my expenses that I have currently. So you have a part-time job that you think will keep you afloat and not make you dip into the emergency fund,

which I want to stipulate emergency funds are not to be used as a bridge fund to start a venture. Correct. And I truly believe, I work full-time now. I have been very frugal and have made myself to the point where what I'm making would be covering my monthly expenses with some extra. Here's what I wanted to ask that question because I wanted to see where your mindset was. But I got to tell you, if I were your son or your brother or your close friend, and I would not be true to who I am as a professional to give you advice to do this, this is doubling down on what has not been a successful bet so far. And it's not wise. And I think that it could put you in a really tough situation financially, emotionally, mentally.

I'll let John comment on what could be the downfall of this. But what I get most concerned about is someone turning a dream into a nightmare because they didn't wait long enough. They didn't do it the right way. And a dream, which this is a dream, and your heart is so good, and this is coming from a wonderful place. But it doesn't remove, passion doesn't remove the need to have common sense and to test things and try things and scale and kind of take your time with it, starting small and growing slow. And take your time with it, starting small

and growing slow. And I think you're frustrated and I understand why you're frustrated, but I would just tell you, those are all of the reasons, John, why this is a big red flag to say, no, do not move from the full-time job and go all in and push your chips in the middle of the table right now. I don't think it's wise. Yeah, Susan, belief doesn't override math. And when you say, I believe this will work out, that scares me to death. I want you to know, and I want you to have some spreadsheets

and some, here's what this is going to cost, and here's my marketing expenses, and here's what my tax bill will be, and here's how many paying customers I need to get through month one and month two, you're going to find yourself with zero emergency fund left. You're going to be even more down

than you are right now. And the bigger problem is you're going to be wondering why the universe didn't show up for you because you put all this good into the world. I had a counseling professor tell me something once and the way she said it, I didn't get how profound it was until I was thinking about it later that night.

You can help people and charge them money. And we have this idea that if you are in the helping profession, that especially mental health profession profession especially helping those on the margins those with special needs that you should basically do it for free or you shouldn't charge any money do you have that sense because i get that that you are trying to do these things for free because you want to help people out the least of these and what's happening is you're sacrificing yourself and your ability to run a business and you're going to end up crashing everybody at that time. Do you feel that, Susan, or am I off? Part of it, yes.

The other part of it is that here in the communities that I live in, because I don't actually live in San Antonio, the south of it, we have no resources for these intellectually disabled adults. Um, and I'm trying to model it, um, after some very successful, um, companies that have started where basically they give these guys a job. We come in and, uh, say the job is making paper just to make it simple, that everybody has a hand in making this paper and then we sell it and they get a paycheck and we get some profits off of making

the paper. That's right. And that's, you know, I'm starting grassroots because we don't have anything like it in our community or even within a 50 mile radius of where we are. So Susan, let me ask you a question on that because I think right now my advice to you is to turn some rejection into redirection. So instead of doing it yourself right now, and I know you say there's no resources, so let me pull back a little bit. So in your community, you're saying there's not even some local county, municipal, state government services, and it may not be doing what you want to do, but they are at least serving those adults.

Would that be, that would be true. There's somebody that's serving these adults, but maybe not the way you want to. Is that true or false? It's more on the false side because they have very, they only accept a handful of clients and only the very severe clients. Right. So you want to help the gap, right?

Those in the middle that don't qualify for exceptional services, but that can't just walk up and go get a job on their own. Correct. They basically are latchkey adults that have no supervision, but they don't have the mental capacity to take care of themselves without some supervision. Here's where I'm trying. So, so there, but there, you need to go to the pockets in your community that are aware of these adults and are serving them maybe in a different way than you want to. And here's the, I want to give you a practical encouragement, Susan. Um, I still want you to stay in your full-time day job, but I want you to

say, all right, instead of trying to do it all myself, I'm going to go and see if I can connect some needs together. So I want you to think, here's an exercise, a homework exercise. For you to think of jobs that are open right now that are having a hard, that companies are having a hard time filling because it's happening. So it could be everything from fast food restaurants to the home improvement store, whatever. Who needs to hire and they're having a hard time? Who are the leaders over there? And then who are the families over here? And how can I connect the two?

I think this was more of an activist role to give this another calibration, another way to do this. I love it. So instead of having to have all the overhead, come up with the products, what you are is you become a resource coach. And then learn how to turn it into a business once I actually make it happen on the ground.

And you promise these people who are going to hire them, I'll walk alongside these clients, I'll make sure they're doing good work and they're taking care of business. And now you're helping these folks. Right. In a way that's not going to cost you everything. Thanks for your heart, man.

We need more people like you out in the community, Susan. We'll be right back on The Ramsey Show, 888-825-5225. I'm John Deloney, joined here by my good friend Ken Coleman. We're taking your calls on money, life, work, mental health, whatever's going on. 888-825-5225. Let's go out to Terrence in Cleveland, Ohio. What's up, Terrence? How you doing?

Good. How are you, man? I've been better. How you doing, man? Oh are you man? I've been better Oh man, what's up? So I'm currently faced with the idea of filing bankruptcy I currently have about $70,000 in debt I make about $20,000

a year. I've been working for about a year now I was in a nursing home for a year before that and as of now I was in a nursing home for a year before that. And as of now, I just had a recent bad incident. My car was stolen back in August. And with the repairs, I've defaulted on my car note. I actually got two months deferred already. And now I have to pay a large deductible to get it from the mechanic.

And I'm still, you know, faced with the car payments, which is more than half of my monthly income right now. And I've been considering filing Chapter 7 to remove a lot of my debts and try to start over, because it's to the point where I'm not able to save anything at the end of the month yeah Terrence can I ask you what are you doing for a job right now I'm a custodian okay and you just did I hear you right you're making about 20,000 yes okay and then you said you were did I hear you say you were in a nursing home I was yes do you have any physical limitations right now that would keep you from doing any other type of work than being a custodian? Well, I have heart disease, minor neurological deficiencies. My endurance is very low, so I have to expend my energy twice as much to do normal functions.

Is the custodial job, I don't want to assume, but is it a physical job? Obviously on your feet a lot and doing a lot of physical labor? I mean, yeah, but I work at my own pace. I got employed through this organization called Vocational Guidance, and it's pretty much geared towards disabled persons like myself. Okay. Another couple quick questions here. How much do you owe to get that car from the mechanic? What would be the fee you've got to pay to get it back?

$1,000. $1,000. And what would you say the car is worth versus what you owe on it? It's worth about 20 and I owe, and I owe $35,000. I'm sorry, you broke up. You owe what? I owe $35,000, and the car is only worth about $20,000. Okay. All right.

The reason I went that direction, John, and Terrence, the reason I'm asking you about what you're doing and what your physical limitations are is because even though you have limitations, and I know you went through an organization that's trying to help you out, man, I'm willing to stake my entire name and reputation on the fact that you should be making and you can be making way more than $20,000, which would help us in this financial situation to come up with a thousand dollars to get the car. Then we could sell the car, get a smaller loan. It's the only time we recommend loans, maybe from a credit union and to pay off the rest of the loan and then start fresh.

But one of the things we've got to do is get you into a place where you can make more income, but not have all the physical exertion because you do have some physical limitations and and i want to try to help you on that we may not be able to solve it all on this call but i at least want to put that out to you so that you have a mindset that you don't have to look at chapter seven to get out of this mess do you understand what i'm saying i know you feel like that's the only option you have left how does that hit you how do you push back if there's some pushback something that john and i don't know it's been very depressing you know dealing with it all and i never even considered filing bankruptcy ever in my life. Sure. So, Terrence, filing for bankruptcy, if we look at the data,

has a lot of external consequences besides money. And you're feeling it right now, right? It feels like it's going to be this big freedom and this big release. And there is a release to it. But, man, what it does to your psyche, what it does to your ability to navigate certain things moving forward. It's just such a burden. It's very similar to divorce.

I'll never recommend somebody get divorced. That's a decision someone's got to make on their own. And I don't ever recommend that somebody file for bankruptcy simply because I know the downstream consequences are so heavy. Sometimes it's your only option. Dave's talked about it.

He did it. And he is probably one of the last in lines to say, Hey, he went and developed a plan so that nobody ever has to go through that. Right. Um, I've spent my career up until I joined Ramsey solutions, working with people, um, with learning exceptionalities and with special needs. Did they place, does this agency place you in a place where they said, this is all you can do? Because right now, and I look at the wages at even at,

at minimum wage places are paying double minimum wage in certain places. They're paying a lot more than $20,000 a year to work fast food right now, or to drive Uber. And I'm thinking, I'm trying to think of a couple of places that you could work and then get another job driving around where you could just listen to music or listen to podcasts or talk on the phone. And if you have those days where you're just worn out, you can stay at home. You don't have to work that shift if it's Uber or if it's Uber Eats or if it's one of those Lyft or anything like that. My question for you is this, instead of just saying all I'm ever going to do is be able to do $20,000 a year, do you have a mentor or a friend or someone

who will walk alongside you that's outside of the agency that you trust, that you said, hey, we got to figure, I got to make more money and I need your help looking at jobs, applying for jobs, going to interview with jobs. Would you be willing to walk alongside me? Is there somebody else that would help you with that or is the agency all you got? Not at the moment. They're literally all I have right now, I haven't even considered trying to find other people of that caliber to talk to. Okay. Well, Terrence, I want to challenge you on something because John and I know you can get out of this. I know you can. And we want you to borrow our belief. If you just got John and I today, I'm telling you, Terrence, yes, you have the physical limitations. But John is right.

We're talking Walmart and Target, late shift, something like that. You can make as much as $18, $20, $22 an hour. Not only that, Kroger just announced. I don't know if you had, but I'm giving you ideas to where you go, wait a second. The world is much bigger than this agency just placing me somewhere where they have a relationship because more money changes your life dramatically am i right or am i wrong you're right i mean i want you just for a second to imagine making twenty dollars an hour how would that change your life it wouldn't worry you so much come on man you'd be able to get that car out of the mechanic pretty quick. And John's right. I mean, what people are paying.

Listen, and can I tell you this? I want to paint a bigger picture. Walmart, Target, just two big companies. They are also giving tuition reimbursement to where not only are you working to make more money, you could take the next chapter in your life and get qualified for something, and they're going to reimburse you. So you've got to know there are more possibilities for you and you can get the car out of the mechanic and you can pay the debt off. You can walk through this and we're going to walk through this with you.

Let's give you Financial Peace University. We're going to gift you a full year of that and I want to give you the book, Dave's book. He sold six million copies, something like that, and counting. Total money makeover. If I give that to you, will you promise to read it? Yes, I do. Do you believe, Terrence, that you can come out of this? I mean, yeah. I believe in myself.

Let me take one step below what Ken's saying. You've been told you're less than, haven't you? I have ever since I got sick and suffered a traumatic brain injury and all of that stuff. That's right. My practice has been very sharp. You've been told you're broken. You've been told you're less than. You've been told you go over there.

And Ken and I are both calling bull crap on that. We believe in you more than you do. And I want you to believe in yourself as much as Ken and I do. Stay on the line. We're going to get you these tools in hand. And man, trust us. There is light on the other side of this thing. We're so proud of you, brother.

Terrence, somebody needs you to show up and be the best version of Terrence that the world has ever seen that's where we want you to get to This is the Ramsey Show, 888-825-5225, and it's an exciting day. Our Building Wealth live event has been such a hit this fall and selling out all across the country that today we're announcing new spring tour dates. That's right. You can join Dave Ramsey, Rachel Cruz, George Camel, Dr. John Deloney, and Ken Coleman in Indianapolis on February 16th,

Austin on February 23rd, and Anaheim, California on May 2nd. Despite what you hear or see on the news and internet, building wealth is still possible. We'll walk you through a simple but proven plan so you can build lasting wealth and reach your financial goals. Don't wait to reserve your spot. We only have 200 VIP tickets available for these events that include a meet and greet with Dave and the rest of the gang. Recap of tour dates. Indianapolis, February 16th.

Austin, February 23rd. Anaheim, May 2nd. Building Wealth live tickets start at $39 and they're going to sell out fast. Go to RamseySolutions.com slash events to reserve your seat today. All right, let's go to Sonia in Austin, Texas. What's up, Sonia? Hi there. Hi there. What's up? Okay, so I'm in the process of doing the seven baby steps, and I've completed baby step number three, but I'm kind of stuck.

I'm not sure if I should be investing. Oh, it is the next step, but I'm not sure if I should be investing or if I should, I'm current, we're currently saving up for a house. So I don't know if I should put all our money into like saving for a house or start the baby step number four while saving up for the house. So we actually, after years of listening to folks walking this plan, we actually created Step 3B or 3.5. And it is somebody in your situation who wants to do a sprint to save up for the down payment of their home.

They're going to pause everything and take 18 months, 24 months, and knock out a down payment. We're going to put everything towards it. We're going to crush everything and take 18 months, 24 months, and knock out a down payment. We're going to put everything towards it. We're going to crush it and go get it. And then once we get that down payment, we're going to settle into steps four, five, and six. Got it. Okay. And then also, what's the best place to finance a mortgage loan?

Would it be through my bank that I've been with them for like over 10 years or like a credit union? My most recent transaction was with Churchill Mortgage. That's who we have recommended for years and years and years. And I'll tell you this, my experience with Churchill was, here was my first conversation with my mortgage broker. He said, I refuse to let you do a deal that's going to not be in your best financial interest. He said, I'm not going to take your money if it's not going to help you and your family out. That's how they started the conversation with me. So I've got high trust in them.

That's where I would start, a Churchill mortgage. Okay, sounds good. And then that 20% is also what y'all are recommending? Between 10 and 20%, yeah. 10% and 20%, yeah. Between 10% and 20%, yeah. I know in some markets, like Austin, it's just lost its mind the last few years. 10% would be the bare minimum. 20% gets you in without having to pay PMI, which is just a pain,

watching your money go to somebody else's, to secure somebody else's loan, right? Got it, yeah. Sonia, I wanted to get some real-time data from you, if you don't mind. What are housing prices doing right now in Austin? Oh, they're through the roof. Oh, still going up, not coming down at all. Yeah, no, not at all. Wow.

How far along are you to the down payment that you want? We currently have $18,000 saved, and we're trying to look into saving 50 to 60K. We're trying to do a 20% down payment. Great. So if you just hit the gas, you'll put everything towards it, you worked extra jobs, how quickly could you all knock that out? I'm a travel nurse, so my pay varies.

Oh, so three weeks? Yeah, no kidding. No, we were thinking about a year before we can hit that $60,000 mark, hopefully. Do you have little ones in the house? I do have a one-and-a-half-year-old. Okay. So, yeah, y'all figure out how we're going to make this work for a year, and as a travel nurse, you could go make some bank and just save it all and really get into a place there and get

yourself set up nicely down the road it's fantastic yeah okay well thank you yeah way to go Sonia that's impressive yes awesome thank you so much guys oh you got it you got it Ken when you guys were how did you guys as your family manage 3B? Well, 3B for us was a little bit different than the traditional. All right, because we had already been debt-free in our home in Atlanta. Ah, okay, gotcha. So then when we sold and moved up here. Just a matter of moving it over.

It was a function of taking that equity. Gotcha. We still rented for two years, and I tell people this all the time. It was less about the money at that time. It was more about what's the right location where we're going to be and when you got three little ones we had let's see ty would have been third grade chase first grade and josie was a kindergartner so it was like let's rent uh for at least a year and figure out where in middle tennessee do we want to land and it ended up turning to two years for saving so it was a kind of a hybrid 3b and uh and then we found the right place and and we're able to move into that

so um it's hard for folks to wait um but i gotta tell you for us uh waiting two years and renting i don't look at that as throwing money away it was a huge decision for us uh financially as well as just um i don't know what this uh geographically it just allowed us to to lock into the right place because we knew we're going to be here a long time that's awesome all right let's go to nelson in atlanta let's see here hey what's up nelson hi good morning good afternoon good afternoon yeah we can hear you what's up man? Here's my situation. I got an opportunity to refi. I don't know if you want me to mention the company or not,

but it's a cash out refi. They say they would pay off all my credit card debt, which is around $45,000, $50,000. They would pay off my truck. They would pay off my second mortgage. All in all, it was a mortgage. The interest rate would go up to $6.75 from Florida.

The payment... Nelson, Nelson, Nelson. This is a horrible idea. Terrible, terrible idea. Someone is using the skin off of your butt to put money in their wallet. Don't do it. Okay, it's cash out, reply.

Don't do it, don't do it, don't do it. You're going to make a list of your debts and smallest to largest, and you're going to probably have to go for a walk around the neighborhood and weep a little bit, and then you're going to get after it. Yeah. There's not a shortcut or a hack through it, man.

Well, please don't do this. I've talked to several people and they more or less say what you say. I'm getting an increase in salary. When I started, my income will increase by 20,000. Good. So over a hundred thousand a year, people and they more or less say what you say i'm getting an increase in salary when i started my income will increase about 20 000 good it's over 100 000 a year i'm a retired veteran so my job and my social security and everything it'll help me out good well i'll be asking this i am using a company i hate nelson talking to the phone please i am using a company that's

helping me that gives me legal protection. Do I have to worry about legal protection with these credit card companies? Just pay your bills, man. Yeah, no, you don't. No, pay your bills. Okay, well, I really appreciate you telling me all that. Hey, if you join one of these refi companies, what they tell you is don't pay your bills anymore.

Don't pay your bills. don't pay your bills we'll take care of it from here you just send us a big chunk of money and we'll take care of all this stuff um yeah i did that once what a nightmare i screwed up everything don't do it it's almost like a right it's almost like a bankruptcy don't do it don't do it it's actually all marketing language you know i've heard dave describe it way. It's like moving your pile of debt from one part of the yard to the other part of the yard. It's still debt. I want to just get real practical here for a second on two things. Number one, you don't need legal protection from the credit card company.

What you need to do is get, as John said, very serious and say, I'm going to tackle this thing, and the baby steps will help you do it. And so you take the smallest debt of all of the debts. I wrote down you hit $45,000 to $50,000 in credit card debt. You have a truck and a second mortgage. What's the debt on the truck? I think it's like $30,000-something, maybe. What's the truck worth?

It paid off for second vehicle. It's a 2018 Ford F-150, so it's got about 7 000 miles on it i didn't ask you that i'm just saying how much is it worth uh worth i mean selling it i don't know i'm looking for f-150s right now it's about 45 000 bucks all right so if john's right and he usually is i'm selling that truck and i'm gonna go get myself an older truck. You can get a fine truck for $15,000. Boom. We just knocked out $30,000 in debt. Then you call the credit card companies up and you go, hey, here's the deal.

I am going to pay you back. You don't worry about any harassing phone calls. You start paying it off. Get really serious about knocking those credit cards out and you'll get there. Don't look for hacks when it comes to nutrition, working out, your money, your relationship. Don't look for hacks. Go right through the middle of it. You can do this.

Hey, it's John Deloney, co-host of The Ramsey Show. Did you know over 18 million people listen to The Ramsey Show every week? A lot of those people listen on one of our 600-plus radio stations across the country. To find a station near you, go to ramseysolutions.com slash show. If you enjoy this podcast, you should check out other great podcasts from the Ramsey Network, like Ramsey Everyday Millionaires. Ordinary people built extraordinary wealth, and you can too. On Everyday Millionaires, you'll learn how millionaires live on less than they make, avoid debt, invest, and are disciplined and responsible.

Listen to Everyday Millionaires wherever you listen to podcasts. Hey, it's James, producer of The Ramsey Show. This episode is over, but check the episode notes for links to products and services you heard about during this episode. Thanks for listening.