The Ramsey Show - App - Can I Buy an Expensive ATV? (Hour 2)

Episode Date: September 21, 2021

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Starting point is 00:00:00 🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the 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. Ken Coleman, Ramsey Personality, is my co-host today. Thank you for joining us.
Starting point is 00:00:50 Open phones at 888-825-5225. That's 888-825-5225. Andrew's in Washington, D.C. Hey, Andrew. How are you? Good, Dave. How are you? Better than I deserve.
Starting point is 00:01:03 What's up? So, we've been working the plan for three years. We paid off just under $100,000 in debt, and then the next two years spent saving up and obviously doing the emergency fund, and we did the 3B. We saved almost $200,000. We put down money on the house, and we have our emergency fund in place. Great.
Starting point is 00:01:23 So we're looking to kind of do the four, five and six. Perfect. Now the 15% got that. That's great. We'll start investing in retirement. And now the question I have is the 529, should I do that or a separate brokerage account that's not a traditional 529 specifically with our income and then we don't know if our kids are or are not going to go to college well uh what is your household income so right now it's a little over 200 but kind of projected to go up okay well to start with no one knows that their kids are going to go to college but we're for sure know that if they don't have the money, it's going to be harder. So a 529 grows tax-free. I love keeping the government's hands off the growth.
Starting point is 00:02:12 It can be transferred to a sibling. It can be transferred to a parent, another family member. It can be transferred if they don't use it. If they got scholarships, you can pull from a 529 the equivalent amount of the scholarship with no taxes, tax free growth. And so, yeah, I'm doing a 529. I'm not going to overfund it. If you have concerns, I'm not going to put two hundred thousand dollars in there. But but I'm definitely going to put 40 or 50, 60 grand in there and depend on the age of the kid and maybe even more.
Starting point is 00:02:42 But and let it grow you know a brokerage account infers that you're buying and selling stocks and you don't need to be doing that especially for your kids college so i don't want that much risk i just use good growth stock mutual funds and a tax-free growth in a 529 and that and you choose the mutual funds and you choose to move them around. That's the type of 529 you want. We're very specific about that in Financial Peace University and in the Total Money Makeover. But, yeah, you don't have to overdo it, but don't underdo it either and overthink it about whether your kid's going to college or not. Interesting. So when we start the show 30 years ago,
Starting point is 00:03:28 the assumption was everybody wanted their kid to go to college. And now they don't. Yeah, and increasingly becoming the case. But also point out here that these 529 plans, that money can be used for non-traditional college education as well. So trade schools, that's anything from tech schools. I mean, you can use that. And so you're seeing more and more opportunities for people to get qualified to do the work they want to do. So it's not like you're being unwise by investing in that. You can use it for their private school when they're 1K through 12. You can. That's exactly right.
Starting point is 00:03:53 So it's still the best option. Yeah. Keeping the government's hands off the taxes and not screwing around with the money with single stock trades, acting like you and your buddy eating a biscuit at Cracker Barrel have a clue what's going on. Don't do it. Don't do it, man. Just get in there and have some mutual funds. Those guys running the mutual fund are coming to work in a car longer than your house. They know what's going on.
Starting point is 00:04:15 So it's not perfect, but that's where all of my kids' college money was, so I'm not being hypocritical. And so, yeah, I'm doing a 529. You can use private school while they're K-12. You can do any kind of post-secondary education. There's all kinds of stuff you can use it for legally, and it keeps the government's hands off of it. And so, you know, if you put $20,000 in there and it grows to $80,000 or $100,000, that's $80,000 with no taxes on it. I like that. I like that a lot better than screwing around with it in a brokerage account.
Starting point is 00:04:48 That's right. And a lot of options. Tons of options. Gustavo is with us in Tucson. I mispronounced that. How do you pronounce your name? Gustavo, sir. I did say it.
Starting point is 00:04:59 You nailed it. Well, I did. Hillbilly Spanish is just a hard thing, dude. I'm just saying. So what's up, man? Well, I kind of had like a weird question. I'm on Baby Step. I'm finishing up Baby Step 3 next month, just to give you a heads up of where I'm at.
Starting point is 00:05:16 And I want to get a toy. I had one when I was in debt. But I want to make sure. It's kind of weird because my vehicles aren't worth too much, and the toy that I'm looking into, which is the RZR Razor, they run about 15,000 used, and that's more than my vehicles combined. But we're kind of happy with our vehicles, so that's where my question is kind of, is it weird that my toy would be more expensive than my vehicles,
Starting point is 00:05:42 even though we would be in a position to buy it cash? all right i mean it's weird you know it's weird that's why you're asking right you already knew it's weird but it's cool they're neat they're neat vehicles man you're talking about the the um is it the can-am make that who makes that the razor does uh polaris polaris makes it, that's right. Polaris. Yeah. I've got some friends down at Cabo that have them, and they all ride up the beach at Cabo. Those things are very cool.
Starting point is 00:06:13 They look neat, too, man. And they will haul butt. They're fun. Yes. So, yeah. And you're in Tucson, so you're doing, like, desert action with the thing, huh? Right, yeah. I mean, I could make it all the way to Phoenix, I'm sure.
Starting point is 00:06:26 Yeah, I bet you could. Yeah, they're very cool. It's a cool vehicle. I kind of want one myself. But anyway, yeah, your cars are your daily driver transportation. Your family depends on those. Your income is dependent upon those um and so yeah the you know a snowmobile a seadoo a boat uh a razor should not be worth more than your cars
Starting point is 00:06:56 uh it's just kind of a common sense thing it's not really a financial thing uh so right all it says is that you're probably not quite there yet that would be my opinion and of course you've made the mistake of asking so i'll give you my opinion but the um yeah that's i i mean you've got you got a toy in your house i do but it was a gift to you wasn't it it was and as you know i'm cash flowing the renovation of it yeah he has a classic car yeah got a 72 convertible karmann ghia uh found an old guy uh in the hood that loves working on him and so he's gonna help me put the carpet kit in and just a little bit at a time because we have kids in school and and other things and and so you just have to go at the speed of cash like you said when we built
Starting point is 00:07:40 this place and so i got the exterior done still a little bit more to do, and it still looks pretty sweet. Looks sweet. But, yeah, you have to kind of – what's the ratio on that? I mean, I understand what he's saying. He's like, well, I got baby step three. Now he needs to get to baby step four, actually put that in the budget. Then he needs to begin to save for something like that. Yeah, and I don't know that I have a rule, and I'm just kind of sitting here thinking on the fly. But really, if your boat is $80,000 and your cars are $10,000, that just seems dumb.
Starting point is 00:08:12 That doesn't seem right. You know? And so if your razor is $15,000 and your cars are $5,000, that seems backward. Yeah. You know? But those razors are very cool. They're very cool. Yeah, I think he may have talked you into buying one.
Starting point is 00:08:24 I may need one. Right. I don't know why, but I'm probably just because it has a motor and it goes It goes fast. It goes budden budden.
Starting point is 00:08:31 There you go, man. It's probably got a loud muffler. I could make a redneck muffler on it. Oh, sure. You can redneck anything up.
Starting point is 00:08:37 You know that. There you go. Hey, it's Christi Wright. Y'all, let's be honest. When it comes to our quiet time with God, sometimes it's hard to know where to start. You've heard me talk about the Glorify app before, and there's a reason. For me, it has been a game changer, helping me grow in my faith every day. Every morning, Glorify guides me through God's Word with a bite-sized Bible reading, a daily
Starting point is 00:09:16 devotional, and a guided reflection that helps me connect with God. And it's free to download. So if you haven't already, give Glorify a try. Just search for Glorify in your app store. Ken Coleman, Ramsey Personality, is my co-host today. Sarah is in Milwaukee. Hi, Sarah. Welcome to the Ramsey Show. Hi, thank you for having me.
Starting point is 00:09:44 Sure, what's up? So, my husband and I have a disagreement about our mortgage. So, we qualified for a 30-year mortgage, but our plan is to pay it off like a 15. My husband and the budget recommended to me in our last finance meeting together that whatever extra money we have in our budget, we should put towards the principal of our mortgage. And I'm like, well, honey, we only plan on being in this house for five, maybe 10 years because we want more kids and we need more space.
Starting point is 00:10:24 And he's like, no, no, no, we really need to pay towards the principal. We need to own more of our house. And it's caused this huge rift in our relationship. Why is it causing a huge rift in your relationship? What, do we pay extra on the mortgage? What do you want to do with the money? I would like to put it towards trips or improving the house that we already have. Okay.
Starting point is 00:10:51 That's a fair argument then. Okay. So the answer is you need to do some of both. You're both right. Okay. I wasn't expecting that answer. Yeah. You're out of debt, right, except your house. Oh, right. Okay. I wasn't expecting that answer. You're out of debt, right, except your house. Oh, yeah.
Starting point is 00:11:08 Okay. And you have your emergency fund. Are you putting 15% of your income into retirement? We're about there, yes. Okay. Are you putting anything aside for the kids' college? Yes, we are. Good.
Starting point is 00:11:23 Okay. That's baby steps four five and six baby step six is pay off your house early now what you're supposed to do is to do baby according to what we teach in other words is uh is to do baby steps four five and six simultaneously so you're putting 15 of your income away for retirement you're're putting money on your kids' college, and you're supposed to be paying down the house, you know, reasonably aggressive. Now, baby steps one through three you do with gazelle intensity, like a gazelle running from a cheetah, wide open, scared to death, going crazy. Baby steps four, five, and six are not with intensity. They are with intentionality.
Starting point is 00:12:04 And baby steps four, five, and six are where you buy a couch where you fix up the house where you go on a trip and where you work on these other three goals of retirement kids college and and reducing the mortgage and so yeah i'd love for you i think it's wise for you to reduce your mortgage but i also think it's wise for you to enjoy some money during these steps as well, and that would include some reasonable renovations that you do with cash, no debt, some reasonable trips that you do with cash and no debt. If you consume all the money and do no mortgage reduction, that would be unwise. But if you put 100% on mortgage reduction, that's not what we teach. Okay.
Starting point is 00:12:45 So I would just figure out some, how much money are we talking about that's in play here? A month. How much a month is he wanting to put on the mortgage and you're wanting to spend? I think it's about $500 to $1,000 we have extra in our budget. Okay. Well, to start with, the fact that you don't know that is a problem. You need to know that. You need to know what's going on.
Starting point is 00:13:13 And $500 to $1,000, it's one or the other. Or it's $642. I don't know. I mean, you have a budget and you have an amount left over that we're arguing about, and we don't even know how much that is. So right now we're just having a vague argument. So the two of you need to sit down and say, okay, exactly, because he's the nerd, and you don't nerd out on details,
Starting point is 00:13:33 but you need to know enough of the details to know what you're arguing about. Right? Right. I agree. Okay. So you jump in there, you get figured out, and if it's $750, and you say, all right, we're going to put $350 on the mortgage and we're going to set $400 aside for fun, and that fun this month is we're going to start saving up to fix up this bathroom and I want to spend $4,000 on it, so it's going to take 10 months of doing that. You know, or whatever the thing is.
Starting point is 00:13:57 I don't care what you do. But if it's $1,000 and you want to split it 50-50, I don't care if you split it down the middle or what you do. But the point is that you have a valid, very valid complaint here, a very valid argument, that you should not only do the proper smart things with money and never enjoy money. That is not what we, you're not going to get there doing that. You need to enjoy some of it. But on the other hand, he's got a valid point that we need to put some on the mortgage, and we don't need to just consume all of our excess.
Starting point is 00:14:32 And so some of both is where wisdom lands, and that's where I would send you to. Good questions. A really good discussion. And I think people get a lot of confusion around that because we teach you to do live on rice and beans. Don't see the inside of a restaurant. Don't go on vacation when you're in Baby Steps 1 through 3. Yeah, I love the way you worded that. The intensity in Baby Steps 1 through 3 turns into intentionality, which is we've got a budget, but we can sit down and go, hey, we need to get a whole new living room set because the dogs have ruined it.
Starting point is 00:15:02 So we're going to save up for that. And so that intentionality is still the budget. It sounded like that might have really happened. It did. You nailed that. We had to do that recently because the doodles, big dogs come with big dog problems. But anyway, the point is that I really like that differentiation there that you have laid out. That's really the tone.
Starting point is 00:15:22 You go from intensity to, okay, now we can be intentional and still enjoy life. Oh, and I'll just add one more thing to it. It doesn't have to be all or nothing in a month. I mean, it doesn't have to be split down the middle of the month. You could say, this month, we're going to spend it all. All right. Next month, we're going to put it all on the mortgage. That's exactly right.
Starting point is 00:15:42 You know, you can go back and forth a little bit. For two months, we're going to set it all to buy this furniture, and then for the next two months, we're going to do the mortgage. I don't care how you do it, but some of each needs to occur. Yeah. I really like that. That's a really great breakdown of how you do that, and it allows people to breathe. But, you know, there's something about the human spirit, Dave.
Starting point is 00:16:01 When they get all intense, it's hard to turn that down a little bit. Especially those nerds. Yeah, right. Like they get all intense, it's hard to turn that down a little bit. Especially those nerds. Yeah, right. Like me. Right. Yeah, I mean, we're so task-oriented, and, man, that's what her husband's doing. Jennifer's in Sacramento. Hi, Jennifer.
Starting point is 00:16:12 How are you? Hi, I'm doing good. How are you? Better than I deserve. What's up? Well, I am trying to figure out what I should do with my extra funds that I have. I currently have a PSP account. It's about $156,000.
Starting point is 00:16:38 And I have some of the half of the funds in G fund, $84,000. How much? Yeah, I know. But the other half is in C fund. It's about $72,000, and I currently contribute about 20% of my check into my TSP, but I'm thinking I need to make some sort of change because I'm also putting out $500 a month savings just to a regular checking account, and I want to maximize my retirement.
Starting point is 00:17:02 You're a rock star, man. You're getting after it, kiddo. What do you make? I make about $79,000 a year. Good for you. Do you own a home? Well, my husband, he just paid off his house like two years ago. I'm sorry. Do you live with your husband? Yes, I do. I say his house because he bought it before we were married. Oh, but now it's your house. Okay. Yeah, okay.
Starting point is 00:17:33 So we just paid off our house. So your debt-free house and everything, your family is, correct? Yes, correct. Neither one of you, you or your husband, have any debt then? Well, I just wrote a check. I planning to uh pay off my lexus i owe about fourteen thousand dollars but i'm gonna go ahead and check off today good and i do have a ten thousand dollar extra um that i'm saving for my daughter but i think i also need to move that to somewhere else as well okay well. Well, how old is your daughter? What are you saving for, college?
Starting point is 00:18:08 I guess for her future, whatever she needs, like a vehicle or college. I'm just worried about college putting into a 529 plan or a college saving plan. What if she doesn't go to school? Why wouldn't she go to school? I don't know. I yeah put it in 529 keep the government's hands off of it get with a smart vestor pro at davramsey.com they'll help you do that as far as your tsp goes i recommend 80 into the c 20 into the s and 20 into the i the s is a small company the i is the international, the C is the common stock.
Starting point is 00:18:45 That little portfolio mix right there will outperform any other mix in the TSP. And you could put it all in the C, but I want a little of the sauce in there, the small and the international as well. It continues to amaze me how identity thieves keep finding ways to use our own identities against us. Not only do they commit crimes related to financial fraud, medical ID theft, and insurance benefit fraud, but now we have to deal with home title fraud. Thieves are using your own personal info to take ownership of your home so they can take out loans, and you end up with a pile of debt and foreclosure notices. Over 4,000 data breaches happened in 2018, exposing 3.6 billion records.
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Starting point is 00:20:39 Welcome, welcome. Where do you guys live? Pennsylvania. All right. Cool. What part of Pennsylvania? Wellsville, Pennsylvania. All right. What live? Pennsylvania. All right, cool. What part of Pennsylvania? Wellsville, Pennsylvania. All right. What's that near?
Starting point is 00:20:48 South of Harrisburg. Harrisburg area. Okay, cool. Well, welcome to Nashville. Good to have you. And all the way down here to do a debt-free scream. How much have you paid off? We've paid off $178,000 in 22 months. Good for you guys. Well done. And your range of income during that time? We started at $220,000 and ended at $229,000. Wow. What do y'all do for a living? I'm an
Starting point is 00:21:12 executive director at a long-term care facility. And I'm a nurse practitioner. Awesome. Two great careers. Well done. What kind of debt was this? $178,000. Paid off the house. Oh, look at the weird people. Awesomeness. How old are you guys? I'm 55. I'll soon be 54. There you go. Good.
Starting point is 00:21:34 Very good. And a paid for house. Right. What's the house worth? $380,000 to $400,000. Wow. How fun is that? It's great.
Starting point is 00:21:42 When did you pay it off? What day? April 9th. So actually today would be the first day we didn't have to write a mortgage check. How does it feel? Great. Awesome. I think it's still sort of settling in. It's a little surreal, isn't it?
Starting point is 00:21:53 Yes. Very cool. Well, congratulations. So you decided to get after that mortgage two years ago. We did. What got you guys on fire? Well, I think it started when we were at church and they were advertising for a financial piece they were going to teach. And I'd never heard of the program before. I'd never heard of your name.
Starting point is 00:22:12 And I asked Pam, I said, well, you know, what's Dave Ramsey? What's this program about? And she says, I think it's something to do with budgeting. We thought, well, we don't have a problem with budgeting. We pay our bills on time. So we didn't think much of it. We didn't sign up for the course. And six days later, I was at work having lunch with some colleagues. And someone at the table, she said that, you know,
Starting point is 00:22:30 she's a nurse anesthetist. Her husband's a surgeon. She said, you know, we make really good money, but we're broke. So I've been reading this book, Total Money Mocha by Dave Ramsey. I thought, well, that's my sign of I heard your name twice in a seven-day period. So I went home and looked up the baby steps, read through those. And to me, it made sense. And I was telling Pam at the time, and we watched some debt-free screens. We watched some of the podcasts. And I tell you, it just really was like, we need to do this. I'm not sure why we weren't doing this decades ago.
Starting point is 00:23:01 Well, you make great money. And so, yeah, but you weren't broke. I mean, not like your friend. But you did say, I can knock off the house. This is doable. Yes. Kind of that light bulb moment a little bit.
Starting point is 00:23:15 Did you end up going through financial peace after all? We did it later just online with ourselves. We were actually on baby step three when we first found out about you. And so immediately got on that. We got set up with a budget and started actually, I guess you had mentioned, you know, you get a raise when you actually start, you know, getting rid of things you don't really need in your budget. And we got rid of DirecTV. We took that money and put it towards the house.
Starting point is 00:23:40 I had a whole life insurance policy. We got rid of that. We got rid of the credit cards. And I met up with a smart investor pro, Scott Robb, out of York, PA, who had a 403B. He called everything in. Yeah. And, you know, initially we thought, you know, we looked at the numbers. It's like, you know, I think we could pay this off in three years.
Starting point is 00:24:00 And you mentioned it in your show before where you'll say something like, you know, I think you'll pay, you know, 24 months. But I think if you really get on fire, you can do it less than that. And we just started putting everything into it. And the pandemic helped it somewhat because we didn't eat out for like a year. Yeah. And we took all that extra money. Yes. We pretty much just lived on it.
Starting point is 00:24:24 So we just put everything towards the house wow did you work extra hours did you guys double down there just just really tighten everything she worked a lot extra hours but she's salaried so yeah with the pandemic and health care at all right of course both of you had i mean nursing home wow what a stressful year and you know and nurse nurse practitioner as well i mean a stressful year you just say practitioner a bad year. And nurse practitioner as well. I mean, stressful year. You just said practitioner? Yes.
Starting point is 00:24:48 Yeah, okay. Yeah, so both of you were in the, I mean, you're on the firing lines for sure. Wow. And still just said, okay, we're knocking this out. I like it. So good, you guys. Well done. You're rock stars, man.
Starting point is 00:25:00 Such heroes. I'm so proud of you. Well done. Well done. Well done. So what advice do you have to that 52-year-old dink professional couple out there, double income, no kids, or no kids at home anyway, and they just need to lean in and do it? I mean, what is the steps? What are the main things to get out of debt? I think work as a team. You have to be a team. You have to set a goal and just write a plan and go for it.
Starting point is 00:25:28 Yeah. And I think one of the things that just through the years, you know, it's like how much do you invest? You know, am I going to be ready for retirement? actually finally linked up with a smart investor pro to look at where we're at what we need to do to you know to for our plans for retirement um you know how to switch things from traditional ira over to roth doing all those things to kind of now to plan for the future every little thing dial every knob yeah yeah and with no payments at all i mean in a decade out at least until retirement, your choice, of course.
Starting point is 00:26:06 But, I mean, you're going to be multimillionaires. That's so cool because, I mean, this great income and not a payment in the world. I love it. Well done. Well done. Well done. So who are your biggest cheerleaders? One another, for sure.
Starting point is 00:26:23 And our daughters, we have two grown daughters and our son-in-laws and we have seven wonderful grandchildren. And that was part of our why. Not just paying everything off, but that we could increase our giving, increase our investing and those sorts of things. But also, what can we do? We talked about all the time, you know, we want to help out with the grandkids' schooling and things like that. So now we're in a position where we can do those things. Yeah, you can just write a check.
Starting point is 00:26:53 It's not a thing. I feel so good. I'm so proud of you guys. Well done, well done. Excellent, excellent stuff. Yeah, you know, I'm hearing a little bit of legacy. I'm hearing that, obviously, for the grandkids. Everybody gets that.
Starting point is 00:27:06 But I'm just curious, giving outside of the family, do you guys have been able to have those dream conversations and some things, some fingerprints you guys can leave behind? Not yet. It's our first month. We actually have the extra income, so to speak, because there's not a mortgage, other than tithing, which is what we do now. Missions. We do give to missions.
Starting point is 00:27:27 But other than that, we haven't really come up with what we want to do. What's the first big thing you're going to buy to celebrate? Probably a car for her. She has 300,000 miles and had to go to AutoZone this morning to get some parts to get us back to PA. That's awesome. You need to buy her a car.
Starting point is 00:27:45 You need to buy the woman a car as soon as you get back just write a check and get her get her a nice car i love it well done you guys if you live like no one else later you get to live and give like no one else i'm so proud of you guys all right it's david and pam from harburg, Pennsylvania area, $178,000 paid off, 22 months, making $220,000 to $229,000. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! Yeah!
Starting point is 00:28:19 Woo-hoo-hoo-hoo! I love it! Man, that is awesomeness right there. How powerful. Powerful. And David's showing off a little voice there. He went up a couple octaves. He showed some real baritone there.
Starting point is 00:28:33 I don't know if he sings at church or not, but that was better than a scream, man. Way to go. It's just so fun to see that, isn't it? They're just so light and so exciting to see what they're going to be able to do as a couple. They've got so much legacy to build. fun yeah and here's the thing maybe you don't pay off your house in 22 months maybe you do it in eight years because maybe you don't make 220 000 but your house will still be paid off when you do that. And so you can still take from this debt-free scream that sense of freedom and peace that you felt on them. You're right.
Starting point is 00:29:10 It's a sense of their light. They seem light, don't they? Yes, very much so. Versus heavy. Yeah. There's no dark cloud. Today is the first day without the payment. No house.
Starting point is 00:29:19 That's crazy fun. Payment. No house payment. What if you did that? Why don't you do that? I think you should do that. No house payment. This is the Ramsey Show. We'll be right back. Ken Coleman, Ramsey Personality, is my co-host today.
Starting point is 00:30:32 Open phones at 888-825-5225. Our question of the day comes from Blinds.com. They have a 100% satisfaction guarantee. That means even if you mismeasure, you pick the wrong color, they will remake your window blinds for free they have free samples free shipping new promos all the time always use the magic word the promo code ramsey to get you a deal today's question dave comes from javier in california he writes in i currently have a job in construction management which pays
Starting point is 00:31:02 a hundred thousand dollars a year plus bonuses. My dream since I was a kid was to become a police officer, but the money I've been making has pushed me away from this goal. I don't get the satisfaction with my current job that I think I would have as a police officer, but I'm scared to make a change, which might be a mistake. What should I do? Javier, you should follow your heart on this. But before we follow the heart, let's do a little bit more research, what I call clarify and verify. You've probably done this, but I'd love for you to talk to a couple police officers who really love their work. And this is over coffee.
Starting point is 00:31:37 It could be over Zoom, whatever. And sit down with them and learn what do they love most about the work? What do they like the least, and let's just do a little simple almost term paper-like research with real men and women who are winning and love being a police officer. Once we get that information, that's the clarify, your heart is going to verify and say, hey, this is something I need to do. Now it's all about getting qualified, and so you know what that journey looks like, or you need to find out from them. So what is actually involved? What do I need to do to get qualified? What's that process going to look like? And now we have a clear path to getting qualified. And so you make really good
Starting point is 00:32:13 money, you save up for any kind of cost here in the qualification stage, and you go for it. You're going to make the transition. And here's the deal, Dave. I know this, that anytime somebody makes a change, even when their heart, like Javier is saying, he's always wanted to be a police officer to protect and to serve. But it's scary when we don't know what the journey might look like. And so when we go figure out what the journey is going to look like in getting qualified, and then what does the day look like? It's not so scary.
Starting point is 00:32:41 There's two pieces to that to me, listening to you explain it through. It feels like that if I get real clear of exactly what it looks like when I get there, and then I get really clear on exactly what it's going to take to get there. That's exactly right. The fear goes away. Yeah, because now we know, oh, okay, I'm going to have to get physically fit because I've got to pass a test for this. So I've got some goals I've got to hit. I'm going to have to get physically fit because I've got to pass a test for this. So I've got some goals I've got to hit. I'm going to have to go through the academy.
Starting point is 00:33:08 Through the academy, maybe three, four months. And then maybe there's a six-month probation period where they bring me in. Whatever that particular department looks like, that's what we're talking about. What does it take to actually get in? And then when you're doing the job, here's what the glorious parts are. But here's the inglorious parts. I know one lady that kept saying she wanted to be a nurse and then she went and shadowed a nurse for two days and she went ew i don't want to do that that's right that's the clarify verify once we actually see what it's like what are the best parts yeah do some ride-alongs with some patrol guys
Starting point is 00:33:37 you know we had a policeman call me today on the ken coleman show earlier today and he was wanting to transition because of the environment that unfortunately exists today in America around policemen. And it's not the case for everybody, but there's certainly a really rough environment. And so I really pressed him on it, and I said, what do you love most about being a police officer? And his answer was, I really like being a part of saving someone's life, whether I'm doing it or assisting an EMT or a fireman or whatever, because it's really about protecting people for me.
Starting point is 00:34:08 And I think that what he was trying to do is say, hey, Ken, should I leave because of the environment? And I said, if you can find something else that allows you to do the work of protecting or caregiving, then yes. But if not, stay. And in this situation, before you make that that move you really want to clarify and verify does this set my heart on fire am i doing work that i love am i producing results that matter deeply to me very simple questions and if you look into it the answers take away the fear of
Starting point is 00:34:37 the unknown because we know oh this is what it's going to be like and this is what it's going to take to get there now i can wrap my brain around it just like dave for years has given you folks seven baby steps oh a thousand dollars baby step one i gotta put a thousand dollars for rainy day you know the the debt snowball oh there's a plan absent of a plan fear will paralyze us yep yeah but i it does your knowledge gives you power absolutely when you when you know what it's going to be like when you get there and you know exactly what the steps are, the fear largely dissipates. It really does.
Starting point is 00:35:09 But most of your fear comes from the unknown. Yes, sir. Open phones at 888-825-5225. Rachel's in Orange County, California. Hi, Rachel. Welcome to the Ramsey Show. Hi. Thank you so much.
Starting point is 00:35:21 This is like my fourth or fifth time calling, and I'm excited every time. Well, we're honored to have you again. How can we help? Thank you. Okay, so in January this year, I paid off two car collections that I had from about six to seven years ago. And so one of them is not on my credit report anymore. The other one for Toyota, I had to dispute twice and it finally shows that i paid a lesser amount than what was actually due however it's still showing up on my credit report and it's saying it'll be on there until february of next year that's because that's what happened okay so they keep that on record for a year i it came out. I mean, you settled it for less than was owed, right?
Starting point is 00:36:06 Correct. I got it all in writing. Yeah, and they're reporting it accurately, although it is a negative report. Okay. Is that correct? Yes. Okay. Yeah, you can't do anything about something that's reported accurately.
Starting point is 00:36:21 Okay. But they're saying it's going to drop off in a year? Yeah, it says on file until February of 2022. Great. Because another way they can choose to do it is seven years from the date of last activity on the account, and the last activity on the account was when you settled it. It could have been seven years from the other day. But the good news is it's about to run out anyway so it's going to go away uh but you're there's not really anything you can do about it because you can only dispute
Starting point is 00:36:49 things on a credit bureau report that are inaccurate correct and this is accurate so you're stuck with it and the great news is it's going to go away automatically in a year anyway because apparently that's seven years ago that you had this repo or had the problem or established the account or something because it's a seven-year rule. The only thing that stays on your credit bureau report longer than seven years is a Chapter 7 bankruptcy, which will stay on for ten years. But everything else drops off in seven years from the date of last activity. And so it literally can be you pay an old bad bill this week, seven years from this week it goes off.
Starting point is 00:37:27 It can be. But apparently sometimes it's up to the creditor as to how they report it, but apparently the creditor here is reporting it from the date the loan was initially made or the date that it went into default or something. Yeah, Rachel, I just want to encourage you. Hey, you're walking out the baby steps, so this isn't going to be a factor for you anyway. Number one, it doesn't stay in you. Number two, you don't need it because you're going to pay cash for things so let this thing i love the intensity and i love the enthusiasm and the deep passion here but this is not a big stain that's going to hold you back it's going to fall
Starting point is 00:37:57 off and you're doing all the right things really really proud of you keep after it yeah here's to ken's point um and it's not what you were saying, so I'm not correcting you, but I just want our listening audience to hear this clearly. We don't worship at the altar of the great FICO. Right. Your FICO score is an indication of how much money you have borrowed and paid back. It is not an indication of wealth. Let me try that again.
Starting point is 00:38:24 Your FICO score is how much – the larger your FICO score, the more you've been playing kissy face with the bank. It's not an indication of wealth. Let me try that again. Your FICO score is how much, the larger your FICO score, the more you've been playing kissy face with the bank or kissy something. And so you've got to decide. You're going to play kissy with the bank all the time? You can have a big old FICO score and keep them rich. If you were going to quit borrowing money, your FICO score literally does not matter. You know what my FICO score is?
Starting point is 00:38:47 I don't have one. It's zero because I haven't borrowed money in decades. Shame. Shame. Shame on you, Dave. You have not maximized the American way. Yes, I have. I'm getting several hundred million dollars. It's working out for me.
Starting point is 00:38:59 That's right. So, you know, this is, you know, this is, but you're right that, you know. It doesn't matter. Who cares that it's on there? She's moving on. Yeah. And I think that's a good point. But also a good point to say she's doing really good stuff by watching what's going on with it and getting the proper things on there, the proper things off of there.
Starting point is 00:39:15 I did all of that, too. I wanted to make sure mine was cleaned off because after I went through a bankruptcy, it stayed on there 10 years. Wow. You know? Yeah. And so, yeah. But you know what? I never borrowed money again, it stayed on there 10 years. Wow. You know? Yeah. And so, yeah. But you know what? I never borrowed money again, so it really didn't come up.
Starting point is 00:39:29 That's exactly right. It never came up. She got it in writing, the settlement. She's doing everything the right way. Yeah. She's just really cleaning things up. Good for you. Good job, Rachel.
Starting point is 00:39:37 Well played. Well played. Ken Coleman, Ramsey Personality, is my co-host this hour. Good hour, Ken. Thank you, sir. Good job, Kelly and Ben in the booth. I am Dave Ramsey, your host. We will be back before you know it.
Starting point is 00:40:09 This is James Childs, producer of The Ramsey Show. Did you know The Ramsey Show is one of the most popular podcasts in the world? Subscribe or follow today wherever you listen to podcasts. The Ramsey Show.

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