The Ramsey Show - App - Bouncing Back After a Felony Conviction (Hour 2)

Episode Date: August 16, 2022

Dave Ramsey & Ken Coleman discuss: When it's worth getting a financial coach, Things to consider before changing careers, Using a unified managed account, Selling cars to get out of debt.   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

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage is taking the place of the BMW as the status symbol of choice. We help people build wealth, do work that they actually love, and create real, amazing relationships. Ken Coleman, Ramsey Personality, number one best-selling author and host of The Ken Coleman Show, is my co-host today as we answer your questions about your life, your money, your career. Jump in and we'll do just that.

The phone number is 888-825-5225. Alex is with us in Houston, Texas. Hey, Alex, welcome to the Ramsey Show. Hello, gentlemen. Thank you for taking my call. Sure, what's up? I'm in babysit two, and I would like your advice on whether or not I should spend money for a financial coach. The coaching fee for a coach I'm looking at will be $250 a month, and I bring home $2,000 a month.

I'm pretty strong on the head knowledge. I've been listening to you guys for a couple years now, but I'm really struggling with the 80% behavior part and keeping consistency. I would like your advice on what you think I should do. No, if you're making $2,000 a month, I would not spend $250 a month on a coach. That's too much as a percentage of your income. Have you noticed, Alex, that your income sucks? It does, yeah. I definitely want to find a way to increase my shovel, and you are right in line with the Facebook group. I put a poll out on there, and 92% gave me a no, don't do it. 92%. Maybe you need a new job doing statistics. Oh, my gosh.

Yeah. What do you do? What's your career? I work in a factory, a food production factory, and interesting part of my story, I'm less than a year fresh out of prison, and I'm just trying to rebuild my life together and make up for some bad decisions that I've made in the past. And part of that is trying to find a career where I will be given a chance, but I can also be paid for my worth, like what I'm capable for.

What would that be? Forget your record right now. What would you be pursuing if you didn't have this past that you knew you were going to have to navigate around? Yeah. What would you do? What would you do? What do you want to do? I love working in restaurants. That's one thing, but it's not long-term and stable. I really would love to be a real estate agent and to sell houses. I really like working with people. That would be something that I think I would be good at. Sales

in general, I think I would be good at because I was really good at it in the restaurant industry. I made good money doing what I did. And I would love to go into sales. So here's the thing. We are seeing coming out of the pandemic, and I want you to actually do some research on this. I think you'll be surprised at what you find. There are a lot of companies around this country that are really, truly reaching out to people with a criminal record. They're nonviolent and things of that nature. And they really have proven that they've

entered into society and they've paid their dues. And they're looking because we have such a huge gap right now with 11.3 million jobs. It's the last job report out of July. 11.3 million jobs available, 8.3 million people unemployed. And I'm just telling you, you'd be surprised at some companies that are willing to give men and women like you a chance. That's one thing. I want you to just do your research and see what's out there. Second thing, whether that was a true piece of data or not, relationships, relationships, relationships, people are going to see your story and you get to an interview process and you tell them that you've got a record because you're an honest guy and

they will still shoot you down right there but the reality is is through relationships people that you know who know you and know that you're a good dude and know that you have paid your debt to society and now you're trying to do what's right. They are going to be the key to you getting where you want to go. And I'm going to tell you something. If you want to get into real estate, you just got to find that one or two people who say, you know what, I'll be your broker. I'll put my arm around you. I'll develop you. I'll pour into you. I believe in you. Because the reality is, is people will buy a house from somebody uh that is kind that is knowledgeable and helps them accomplish their dream of getting that home they're not doing

a background check on you so i'm just i wanted to just put that in your heart so that you know you actually can get where you want to go does does texas real estate law prohibit a felon from getting a real estate license? That's something I need to research. I don't think it does. I don't think it does. It will keep you out of the securities business. You're not going to be a stockbroker or a financial advisor. So another realm of sales might be better for me. Yeah.

But real estate, most states do not, uh, have that as a prohibition on a real estate license. Um, and, uh, so how long have you been out? I've been out since October of last year. So I'm coming up on a year. Good for you. Okay. And how old are you? 28 years old. Okay, cool. okay cool cool well you're you're you're up for a fresh start i love that yeah and um you know if i'm you uh i'm gonna move towards sales because of some kind because you're a people person you're articulate and you can make more in 20 minutes in sales than you're making now i don't know what you're selling at this point, you know, in this discussion, but I think you've got some opportunity there.

And, you know, real estate is a tougher one to get in because it takes longer to start making money. Other types of sales you can get and you can make money at the end of the week. And real estate, sometimes it often takes six months, you know, to get the on-ramp going. And you don't really have that kind of margin. But no, I would not spend $250 out of $2,000 for a financial coach. Financial coaching is worth every penny, but you're not in a position to afford that right now.

You're not making enough money. So I want to work on the shovel size and some other things in the process, and what we'll do is we'll put you through Financial Peace University as our guest. And that'll help you with the behavior side as well. But you're learning a whole lot of new things about self-control and about behavior and about you, the guy in your mirror, in this stage of your life. You're coming through a whole process there in every element of your life. So if I'm you, I'm plugging into a great church. I'm going to get some strong, emotionally mature men in my life,

if I'm you, that are older than you, that'll walk beside you and coach you and give you opportunities and connect you to their buddies and say, hey, you know, here's Alex. He needs a shot. And they'll walk with you. And you can meet those kinds of men in a good church, and you need those kinds of folk in your life right now, and then get in this class. But no, I'm not going to tell you. I mean, we've got several thousand Ramsey-trained financial coaches across America that are worth every penny that they charge.

They're wonderful. They're absolutely incredible. But no, I would not tell somebody making $2,000 a month a month to spend 250 a month on that that's not a good play not a good play at all there is um something that has to happen almost in dr john deloney's realm when you go through something like that to get that in your past. There's the reality that he faces of, you know, when he applies, he's a felon, right? That's right. There's a reality, a background check, whatever, all those kinds. That's the reality there.

But the other thing is, is it, you have to redefine yourself. Say, I am not defined by my past. I'm informed by it. That's right. And so I'm not a guy, I'm not a bankruptcy. I'm a guy that filed bankruptcy 30 years ago and it informed what I did in the following 30 years. Yeah. Told me what to do. And so, but I wasn't defined by it. I was informed by my idiocy. And so there's something that has to happen when you go through a big life-changing setback

like that, that you have to reset your head to go forward. This is The Ramsey Show. live from the headquarters of ramsey solutions it's's the Ramsey Show. Thank you for joining us, America. We're glad you're here. Ken Coleman, Ramsey personality, is my co-host. This is the deal. How many times do you find yourself saying, one day, about a goal that you've had? You know, one day I'm going to be in a career I like. One day I won't have to battle anxiety anymore.

One day I'll buy a house. One day I'll be out of debt. One day Sally Mae will be out of my life. Well, stop waiting around on your one day i'll buy a house one day i'll be out of debt one day sally may will be out of my life well stop waiting around on your one day you've got to do something about causing it to happen uh you have to turn uh dreams into goals and goals are basically vision with work clothes on and so you're gonna have to get with it here stop waiting around smart conference is oddly enough the one day event where we tackle all areas of your life and guys let's face it we could use that kind of boost out there right now you're going to hear from the nation's top thought leaders on money career mental health relationships marriage leadership and it includes craig and amy groeschel pastor from life church

on marriage dr john deloney number one best-selling author on mental health rachel cruz number one best-selling author many times over on money george camel from the ramsey networks ken coleman number one best-selling author on the issues of career and finding a job that you love from paycheck to purpose. Christina Ellis, new Ramsey personality on board. I'll be speaking. It's a day-long smart conference. It's only $39. The VIP and Platinum are already sold out.

The event will sell out early and get your tickets now. It's in Dallas. It'll be coming up really quick on October the 22nd, Saturday. It is a day-long event. You pay $39 to see any one of these people speak, and they have gotten a deal. But you get the whole day. You're going to leave exhausted and smiling and smarter.

That's why we call it the Smart Conference. That's how it works. Blinds.com gives us our question of the day. Find out for yourself why Blinds.com is the number one online retailer of custom window coverings with free samples, free shipping, new promos they run all the time. Use the promo code Ramsey to get the best possible deal. Today's question comes from Thomas in Nebraska. I have $15, 000 in student loans 6 000 in a car loan and a mortgage my current job will be paying me 100 000 by 2024 is it too late to get into the finance field with having to go back to school for a master's in finance i will most likely have a

drop in pay and my finances are based off of making six thousand dollars a year but do not know 60 60 i'm sorry what did i say you said six thank you dave that would have been really strange are based off of making $6,000 a year, but do not know. $60,000. I'm sorry, what did I say? You said $6,000. Thank you, Dave. That would have been really strange. Do not know if being in the financial field will pay me that much in the Midwest. What should I be aware of before making this change?

Well, the first thing, Thomas, is we need to get this debt out of your life. You're not making any kind of change as it relates to going to get a master's degree with this debt in your life. You're not making any kind of change as it relates to going to get a master's degree with this debt in your life. So we want to get you debt free. It's not too late at all for you to get in the finance field, but I would really question why the master's degree. Again, I'm not anti-education, but we know that you can do this research on your own. Most master's degrees do not have a great ROI. And in this case, for you to get into the financial field, you do not have to have a master's to be successful in it.

So I would have you identify where you want to be in finance. And then having done the research and then speaking to men and women who are winning in that particular area, what is the best path for you to get there? Because I don't buy the notion that you're going to have to have a drop in pay either. I don't buy that at all. No, it should be an increase in pay. It should absolutely be, or it's the wrong place in finance. Yeah, you should have it be an increase in pay.

And virtually no finance jobs require a master's. There's virtually none i mean there's a few you know corporate gigs or something where you're trying to move up into upper management or something like that immediately step straight in they're going to want to see a master's but um the truth is is that uh finance is simply that not that complicated when i mean if you're a math person and you get into it and you learn the process and you learn the formulas, you learn the critical thinking skills, you can be a financial analyst or do finance or whatever form that takes. But when you say, I want to go into finance, dude, that's like saying, I want to go into sales. Yeah.

What part? I mean, there's like nine bazillion possible jobs. Right. So you need to figure out what type of thing you want to go into then you can start figuring out if it really involves a pay cut and if it really needs further education i doubt it does i doubt seriously it does um but again there's a few corporate jobs that like to have an mba with a specialization in finance that wouldn't be unusual uh but a master's in finance is just simply not required to be in the financial field. I mean,

we work with financial people that are brokers that are, you know, sitting down with you, helping you with your investments. We work with financial people in the mortgage world. We work with financial people in the insurance world. We work with financial people in the financial planning fields. Very, very, very few of them have masters. And it's just simply not a barrier of interest. That's right. And very, very few of them make less than what you're talking about. So you've also got a bad information there.

So I think you need to get in to figure out what part of the world of finance you want to go into and then figure out what that pays and figure out a way to get in to figure out what part of the world of finance you want to go into and then figure out what that pays and figure out a way to get in that and maybe if you want to work on your master's maybe the new job in the world of finance will pay for it and that would be the way i would do it but i just i'm gonna you know this is like like you've got uh i don't know, cold feet where you are, and you just want an excuse to get out. Yeah, here's the deal. When people think about changing, they automatically think,

what education do I need? I think that's the right question. But you've got to classify education a little bit differently than we used to 20 years ago. Now, in this particular area, as Dave has laid out, you're talking about certifications and some training. That's it. It does not require a master's.

And so, hey, what do I need to learn? Where can I learn it? What's the most affordable way to learn it? Those are the specific questions. Yeah. Where do I get the knowledge base to operate efficiently? That's what you're looking for. Francis is with us.

Francis is in Richmond, Virginia. Hi, Francis. How are you? Hey, I'm doing great. Thanks so much. And Francis is in Richmond, Virginia. Hi, Francis. How are you? Hey, I'm doing great. Thanks so much. And great responses to Ken and Alex. I really appreciate it. I'm an ordained clergy person, and as ordained clergy, I have to pay my own Social Security and Medicare taxes. The church doesn't pay for that. And to offset that, we're allowed a housing allowance that is tax-free. My wife and I have a home that's, well, our household income is $150,000. We have a home that's valued at $520,000, and we have $110,000 left on the mortgage.

That's three out of 15 years on that mortgage. We have about $50,000 in our brokerage account and we're set on retirement. We're really good there. Our question is, do we want to take that 50,000 out of that brokerage account and pay down that mortgage? When we pay the house off though, my taxable income will go up. And so that's kind of the rub that we've been wrestling with a bit. Your taxable income will go up. And so that's kind of the rub that we've been wrestling with a bit. Your taxable income will go up. Correct. Because my mortgage is part of the housing allowance. No, it's not. Not taxable. No, it's not. And so... No, no, no, no, no, no, no, no. I've had to teach pastors this all over America, okay? That's great. Teach me. I'm here to learn. You need to go sit down with a tax professional that knows what they're doing on the pastor's housing allowance.

The belief that is an absolute lie all across America is that if a pastor pays off their house, they lose their housing allowance. No. The tax law clearly says that you can still write off the market value of rent of that $500,000 house. Right. As if it was a house payment, you do not have to be in debt to get your housing allowance. No, I do understand that, but my actual taxable income will go up when the mortgage drops off because it's actually the fair market value rental furnished or your actual expenses each month whichever is lower and so for our home it would be the actual expenses which would be lower and so my housing allowance is

going to drop significantly which means your fair market value furnished rental on a five hundred thousand dollar house that's high that's high and that's the only thing you've got left if you've got no mortgage. Yeah, right, exactly. So you can still take that as your housing allowance? You're not going down, you're going up. You've only got a $110,000 mortgage left. So, no, I think you pay off the house as fast as you possibly can. You take the fair market value furnished of a $500,000 house and that's your housing allowance. You're still going to come out ahead. ken coleman ramsey personality my co-host today in the lobby of Ramsey Solutions on the debt-free stage.

Jeremy and Kaylee are with us. Hey guys, how are you? Hey Dave, we're better than we deserve. I love it. Where do you guys live? We live in a small town of less than 3,000 people, Chaffee, Missouri. It's two hours south of St. Louis. Okay, cool. Welcome to Nashville. So good to have you guys. So how much debt did you pay off? We paid off $125,000 in 56 months. Good for you. And your range of income during that

time? Oh, we started in the 80s and we finally broke $100,000. We were $104,000 this year, finally. Yay! What do y'all do for a living? I'm a school nurse and I work for a towboat company construction on the river. Oh, wow. Good for you. Very cool. Very cool. So what kind of debt was $125,000?

It was everything from cell phones, a credit card, van. Transmission. Transmission for the van. And then student loans and our house. You paid off your house? We paid off our house. Whoa! Look at the weird people.

How old are you guys? I'm 35. And I'm 40. And you have a paid-for house? Yep paid off our house. Whoa! Look at it, weird people. How old are you guys? I'm 35. And I'm 40. And you have a paid-for house? Yep. What's the house worth? About $125. I love it.

And it's completely yours? Yep. No payments in the freaking world? None. How's that feel? Nice. I bet. 56 months you did this.

Wow. All right, so tell us the story. What got all this started, and what got you so fired up you plowed all the way through and finished the house? Well, I'm the one that drank the Kool-Aid first. My best friend asked me to go to Financial Peace with her. And Jeremy works 28 days away. Yeah. And I said, well, I don't have anybody to watch the kids.

No, they have daycare. And she talked me into it and I was like fine I'll go and uh the very first class when you had the kitchen table um we were doing fine at the time but when you had the kitchen table in the video and you talked about how um you know your family where you have as a family becomes piled with bills and stress we had lived that before and I felt it. Like I just felt it and I felt the chains and I was just like, nope, we're not living this way. Um, and whenever you're the first person I ever heard say, you don't have to have a credit score because that's

all you're told is you have to have good credit. You have to have good credit to have everything. And, um, I was like, we can, we can do this. Like this is something that we can do and so I told I came home from that first class and told him about it over the phone and he and I was kind of skeptic at first but he was very skeptic I would have been I come home and I leave home and see what you get yourself into exactly gone for four weeks I come home and I go to my two weeks. After that very first class I went to, I come walking in afterwards and gathered the kids up and cut up that one credit card we did have and showed them we don't need this. We're not going to have another one of these in the house.

Oh, wow. Never going to happen again. So when you came back off the road, off the river, and went to the class, immediately you were in. Yes, sir. We were on board. Okay. Just like that. Well, and I had the benefit immediately you were in. Yes, sir. We were on board. Okay. Just like that.

Well, and I had the benefit of he's gone for 28 days. So whenever he was like, I don't know about this, I kind of threw a tantrum and I was like, no, we have to do it together. You have to do it as a team. I just paid stuff off while he was gone. So when he came home, I was like, but look what we've done already. And he was like, oh my goodness. We are smart.

Yep, absolutely. And so that also helped get him on board. That's a new one, Dave. You've probably heard it all, but I've never heard of stealth debt payments before. That's a great one, yeah. We are really smart. Look what we did while you were gone. Yeah, look what we did.

While you were gone. Yeah. Well, that'll get you some buy-in because it's not like he's like, oh, I hate this. Let's go back in debt. He didn't say that. No, sir. No, here we go. Game on after that, though.

Absolutely. Yeah. I do want to say something about the credit score, though. When I was 18, I tried to get a car. And I remember I went to a car lot and the car salesman was like, well, you probably have no credit and it's really hard to get a car with no credit and they ran my credit and i had a bad credit because a family member put a phone bill in my name when i was like 15 that's awful and i hated credit i hated the credit score because it wasn't my fault it was like it was like It was like a bad grade on a test you didn't take or something.

Yeah, for real. That's the worst kind of violation. It really is. And a family member. So you had to get the identity theft cleaned up is what it amounts to. And the worst part is the thief is in the family. So I was like like game on i was like if i can we can live without a credit score let's do this yeah i like it when they tell me i have to have

a credit score and i say you don't take money exactly because i got money is that does that work here so that journey when i hear is that 56 months yeah that's a lot of months what kept you guys going each other each other and the debt-free screams um we had a couple date nights where we sent the kids to grandma's and we'd push the couch up to the tv so it was a bigger screen because it's only a 40 inch only yeah and um we would uh just play every screams back to back to back and hear everybody's stories and here you can relate to people and that's why we wanted to be here because we're like there's a family out there there's somebody that's been through going through what we've gone through been through and you know the pandemic everything but the house was paid off so it was an inconvenience

for us you know and um i was actually an office nurse at the time and i was sent home from work and and i even had to draw unemployment for a few weeks and as a nurse i never thought i would face something like that so um they send you off the river during the pandemic i was actually on the boat uh during my trip when it really started getting a little crazy. But I came home for my two weeks, of course, because I'm just tired of seeing everybody's faces after four weeks. But I come home, and when we come back, we just took a COVID test, took a swab and all, and back at it. Yes, sir. All right.

Cool. I figured. I figured. Good. Good for you guys. Well done. Hey, that's cool. Essential. Back at it. Essential. Yeah. All right. Cool. I figured. I figured. Good. Good for you guys. Well done. Hey, that's cool. Cool.

And you get the other side of it, and now you've got no payments in the world. None. It's a whole different place to be. And so did you have more cheerleaders or more people thinking you were crazy? We had a few close, close cheerleaders that understood, maybe two, that actually knew what we were doing and why. A lot of people thought we were crazy, laughed at us. But that's encouragement. That's encouragement.

Because we're going to do it, and you're going to see. Wish you did. Yeah. It's the Toby Keith thing, how you like me now. Exactly. There you go. Well done, you guys. I'm proud of you.

You're amazing. Thank you. Very, very cool. Very well done. guys i'm proud of you you're amazing thank you very very cool very well done all right what do you tell people now that you did it the secret the key to getting out of debt is um life's gonna happen life happened uh just keep at it yeah we had lots of medical happen in four four and a little over four and a half years i mean it's inevitable the excuses you just got to push through it like anything else. If you want to do it, decide it, make a plan, and do it. Yep. Yeah.

Don't let anything stop you. You got to push through all the stuff because there's always going to be stuff. Yeah. Yeah. That's good. That's good. That's inspiring. Well done, you guys.

Well done. All right. Bring the kiddos up. We got a copy of Baby Steps Millionaires for you. That's the next chapter in your story, how people build extraordinary wealth how you can too we've also got a one-year membership to financial peace university and you can go through the class if you've never been through it or give it away if you'd like same thing for the books and that includes the total money make over book which has now helped over eight million people and so i'm going to send all of that with

you to say thanks for coming into nashville to do your debt-free scream we're honored to have you guys what are the kiddos names and ages um this is connor he's 11 and priscilla she's nine uh eight she's eight okay well she'll be nine soon it's okay and uh you know you guys have completely changed your family tree you realize that absolutely because for four and a half years these guys have been watching every move you made and they'll remember that time you came to, did this weird thing in Nashville called a debt-free scream. And that's when mom and daddy changed everything. And that's when we started becoming rich around our place. You're on your way.

We ask them, yeah, what are credit cards? And what's the first thing they go? Bad. That's it. That's the answer. What's a credit score? Something someone else needs. Exactly. Not me. That's the answer. What's a credit score? Something someone else needs. Exactly.

Not me. I've got money. They take that here. Congratulations, you guys. All right. Jeremy and Kaylee, Connor and Priscilla from the Missouri area. $125,000 paid off in 56 months, making $80,000 to $100,000. Count it down.

Let's hear a debt-free scream. Three, two, one. hear a debt-free scream. 3, 2, 1. We're debt-free! Yeah! Man, they pushed through 56 months. That's rowdy. This is The Ramsey Show, number one bestselling author of Paycheck to Purpose

is my co-host today. Open phones at 888-825-5225. Chris is in Duluth, Minnesota. Hi, Chris. Welcome to the Ramsey Show. Hi, Dave. Thank you for taking my call and great show as usual. Thank you, sir. How can we help? So my broker recently advised me to consider investing in what he called a unified managed account, a UMA. That will research, but I wanted to get your expertise and opinion on this.

Okay. What is your net worth? Probably just under $2 million. And how much have you got under management with a broker? I've got about half. Well, it's all under his. About $500 is in our 529. And then the remainder, about half, is in our Roth and my TSP.

And the other half is in an open account. So there's about $700 he's talking about putting in that account. Okay. All right. account so there's about 700 he's talking about putting in that account okay all right well i mean there's a lot of people using managed funds in the world today a lot of our smart investor pros use those and basically you know you're usually talking about one one and a half percent a year of the balance and then they're managing the funds and you can do away with all of the commissions and fees by doing that um and it it is not cheaper but it just gives you some flexibility uh and some you know some you move stuff around without any tax issues and that kind of stuff um typically that's called a managed fund the only time you use a uma a unified managed account

is if you're wanting to screw with single stocks and bonds and some other stuff in there. I only do mutual funds, as you probably know, Chris. And so managed funds will do that with an investment professional. Most of them are using, almost all of them are using those now. I still buy old A shares because I just buy and keep forever, and I don't really do any moving around much. But the managed funds is a very popular way to handle it now, and there's nothing wrong with it.

It's slightly more expensive over a 10-year period if you held the same exact amount of money for 10 years or same exact funds for 10 years. But it's not prohibitive. It's not a ridiculous fee, and I would say you're getting ripped off or anything like that. It's not. The thing that scares me, the only thing that scares me about it is the fact that we put unified in the name here, which usually is high net worth individuals, which you are,

and it usually is where you want to screw around with single stocks in the portfolio, and I'm not a player on that. If you're going to play with a small amount of single stocks in there, you know, maximum of 10% of your net worth is what we say. That's fine if you want to do that. I personally don't. And I'm a little bit worried that this guy's wanting to pull you into some of that stuff. Are you hearing any of that or are you just doing mutual funds?

Well, we're – of that 700, I would say only like a hundred in like two or three stocks. So we're definitely in the, like there's four or five mutual funds that we dollar cost average. His point is that taxes are what we have to start considering when I retire in 15 years. And so our plan is, is that we spend this down first and then the TSP and the Roth, the Roth TSP and our Roth, we spend down when we're our eighties. I would agree. I think that's,

I think he's got your priorities right on that. Yeah. Okay. And so he was like, he's like, this is a, I don't want to use this, but he says the tax efficiency,

the watch rule, the tax loss policy, he says all this. And he says it's actually very similar to a mutual fund. It's just how it's managed is what he's saying. Well, I disagree with that, but from a tax standpoint, it is. And I think his suggestion is fine. What I just don't want to see is I don't want to see you with $700,000 screwing around with single stocks and you're jumping in and out, trying to play the market and basically day trade inside this account.

You're going to lose your butt if you get off into that hole. Okay? So don't do that. Let's move more and more towards just managed mutual funds inside this account. But the advice he's giving you is correct. I don't disagree with a single thing he's saying based on the way you're the context you're giving me around it um but sometimes people use that same tool for high risk speculation rather than calm steady investing you follow me i do i do i've been with him 20 years we're a buy and hold and that's why we're

so i mean i don't make much i only make a hold, and that's why we're so... I mean, I don't make much. I only make a little over $100. That's how we got to this point, by dollar cost averaging. Exactly. Well, he is right about the tax efficiency. That's one of the benefits of it, and the fees are not outregistered, and it sounds like you're doing this in context. Yeah, I'd probably go ahead and do it. Okay. Okay, I just wanted to wanted when then we lost the

cell phone dropped the cell phone into the bathtub okay but yeah it's uh net worth just went down but yeah right hey what a great what a great story though two million dollars of net worth and has killed it for a long period of time and And backs up what our study showed, the largest study of millionaires. He didn't inherit it. He doesn't have a huge salary. He makes good money, but it's not great. 33% of the millionaires, one-third of them never made over $100,000. And he's one of them.

Beautifully done. Very beautifully done. Tara is with us. Tara is in Texas. Hi, Tara. How are you? Hi. Good. Thank you, Dave. Tara is in Texas. Hi, Tara. How are you? Hi. Good.

Thank you, Dave, for taking my call. Sure. So I am recently divorced. I have two girls at home that are in high school, a senior and a freshman. My bring home pay right now is around $85,000. I have about $6,000 in debt between credit cards and orthodontist payments and little things like that. I've got $45,000 in vehicles between my daughter's car, my car, and a three-year-old home that I built in 2019 that I still owe $275,000 on. So obviously recently my income changed. We went from about a $225,000 a year income to just mine, which is like I said, 85. I started your program

recently. I just, I sold everything that I could. I completely purged my house and got my $1,000 saved up. I just started tackling some of the debt. But, you know, I built this whole spreadsheet, and when I look at the big picture, I'm kind of like, okay, I know those vehicles are going to really— Break that down for me on the cars. What is your car? What do you owe on your car? So I owe $32,421 on my vehicle. Okay, and what is your car? What do you owe on your car? So I owe $32,421 on my vehicle.

What is your car worth? It's a brand-new Challenger. Whenever I got my divorce, I was stupid, and I went and bought a brand-new car. It's the divorce stress car, okay. It is. So your daughter's car is like a $12,000 car. Yes, $12,908 uh, balance on her Honda. And what's it worth? It's a 2017 with 55,000 miles on it. I'm not really sure. Okay. You can

look these up on Kelly blue book, KBB.com. Okay. So, uh, if you're asking me what to do, um, if the dumbest thing you ever did in the stress of a divorce is buy a car that you couldn't afford, well, you're a pretty smart gal. Because I've done a lot dumber stuff. But I think we can look at that car in the driveway and go, this is the one thing that doesn't fit in the rest of this picture. The rest of this picture looks pretty solid calm under control wise and then there's the challenger right it needs to go yeah for two reasons one is it's financially irresponsible and the second reason is every time you look at it you're going to feel dumb right it's it's a shaming car it shames you when you go out there to get in it.

Am I wrong? Yeah. No, you're absolutely right. I have bought stuff or done stuff financially that was dumber than a rock, and every time I see the thing, it reminds me I'm stupid. I don't like those things. Right, right. I'm getting rid of this thing. It's a reminder of the divorce, a reminder of the pain,

a reminder of you making a bad decision in the middle of the pain, and I don't need any of that, and I don't need $32,000 worth of debt on a car when I make $85,000. Right, exactly. Let's get you a conservative $15,000 car, and let's get you and your daughter's car paid off, the other car paid off, and if you had no payments but this house payment, your life would be pretty good right now.

Okay, so that was going to be my next question about the house because house is not out of control it's fine if you like the house if you want to sell it fine but if you like it it's not out of control doesn't sound like anyway if you've got it financed reasonably hang on we're going to put you through financial peace university and participate in your healing after the divorce you've gone through it's very very painful thing i'm sorry you've been through that, kiddo. Hang on. We're going to sign you up for the class. If you'll take it, I'll give it to you for free. This is The Ramsey Show. Dave here. You can find all of our shows with the Ramsey Network app on your smartphone. It's the only place to listen to the entire back catalog of episodes.

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