The Ramsey Show - App - Changing the Next Generation's Relationship With Money (Hour 1)

Episode Date: September 19, 2018

The show about you

Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. This is your show, America. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. James starts us off this hour, and James is in Missouri. Hey, James, welcome to the Dave Ramsey Show.

Thank you, sir. Thanks for taking my call, and thanks for helping everybody. Sure, thank you. How can I help? Well, sir, I have started a small business this year, heating and air conditioning, and I'm pretty much drowning in the business and personally. We have done about $110,000 worth of sales in roughly six months, five months. But our expenses have been like $70,000. And we are, we're not quite rice and beans, but we're cheesy rice and beans. Mm-hmm. Okay. And I just, I don't know where we're going wrong or I don't know what to do.

Okay. What did you do before you opened the business? You were obviously in the heating and air business, right? I've done this 20 years. Okay. What was your last position? Were you? I was lead installation technician technician okay all right and um and so obviously

the installation part of it you understand you're doing a great job selling because you sold quite a bit of it um you're not doing a great job managing your expenses or estimating your jobs well a lot of it has been I've bought all of the equipment. I've bought lots of equipment. More than you should have. Tools. Yeah, more than you should have. And I've bought it out of savings. I've bought it with what profit I've made off jobs and a little bit on credit cards.

But you bought stuff that you couldn't afford to buy. That's correct, yes. Yeah. And so you've couldn't afford to buy. That's correct, yes. Yeah. And so you've got to stop buying equipment. It's killing your margin. Right. The thing is, if I don't have the tools, I can't do the job. Yeah.

Well, there's some jobs you can't do then. Right. Because you won't have the tools. But you're not going to go broke that way. Let me just tell you, man, you're in a business where there's no end to the amount of tools you can buy. Right. You can tool yourself out of business business and you're well on your way i got them around here man i got these computer guys in this building and they'll fill this whole stinking building full up with dadgum rolls royce computers and my answer is no use the old one

well we can't get her done with that then go slow but we're not we're not gonna we're not gonna buy toys and broadcast equipment and computers and cameras gonna we're not gonna buy toys and broadcast equipment and computers and cameras and we're not gonna just buy and buy and buy and buy and buy microphones and everything else around here that we have the same thing we got a bunch of gadget gurus around this place and they will spin me into oblivion if i allow them to right right and i totally understand that you're doing it to yourself i've bought as much of it used as I could possibly buy. There were a few things that had to be brand new. I mean, I got one tool for $3,000.

Yeah, so here's the thing. You can't buy any more tools. Right. You're done. Now go make some profit with the ones you have. Right. Or go back to work for somebody else. I got you. That's the thing because you're we've analyzed this you're good at getting the business and uh are you

charging too cheap for the jobs uh i'm average with everyone else okay so so the only the only there's three sides of the equation there's the total which means you can sell you've brought in 110 000 gross well that's good news because a lot of technicians can't say can't close the There's three sides to the equation. There's the total, which means you can sell. You've brought in 110,000 gross. That's good news because a lot of technicians can't close the sale. So you're way ahead of the average cat doing that. You obviously are an expert at heat and air. I mean, that's not in question. You know how to do that.

You've been doing it 20 years. So the install part and managing that's not a problem. What's killing you is expenses, and it's labor and tools or something that's eating all your margin because other people are making a living and making a profit with the price structure that you have. Right. Now, one other issue, I mean, fuel is eating. The main thing that's eating me up, like 40% of my profit is going to fuel. And it's just our fuel bill is killing me on top of that i'm sorry gasoline for the

trucks yes one one truck one vehicle 40 of your profit yep where are you doing these jobs in north dakota no some of them are you know as much as much as 50, 60, 70 miles away. You're not bidding them properly then. You have to bid a trip charge in addition to the actual job because of how far you're driving to do the work. I got you. I'll give you an example. Okay, I got a lake house. I built a lake house a couple years ago.

We tore down the old one, built a new one. The local guy there decided that Dave Ramsey, since Dave Ram ramsey was building the house that he was going to get rich and so he bids my heating and air at like 56 000 bucks for this house and i had just built a house and i knew that was double what it should be so he's trying to gig me all right and so i called my guy 67 miles away that did my other hat my house here in town and said look bid this and i can pay you a major trip charge and you'll still get the job because this other guy's trying to take me to school and so he comes in 28 grand with the trip charge half with driving 67 miles and charging me for the drive right so charge them for the drive dude dude. Or don't take those jobs. Those jobs aren't profitable if they're too far away.

Right, right. The way I've kind of looked at it was $5 is better than no dollars. No, it's not either. Not either. Because what we're doing is we're going through your P&L, you and I right now, and we're doing a business analysis of why it's not working. And it's tools and fuel well do you uh do you have a recommendation of uh some business classes or a book sure i'll send you a copy of our book entree leadership

and it'll walk you through a whole bunch of things and you can probably jump into our all access community and learn a bunch there there's a bunch of heat and air guys all over the country in that all access community uh i'll start you i'll start you with the book and then you look at that but the thing is um you know just listening to you i think you've got the chops to do this but i think you're going to have to put some guardrails and learn to say no and that means no i can't drive halfway over there to do this thing unless I charge extra for that long drive. And, no, we can't buy tools with all our money because our kids want to eat. Right.

And that's the no's. That's been a little bit of my issue. I understand everything about the business. You do. Except the business side. Yeah. But, I mean, you actually know more about the business side than you think you do because you were able to describe it to me in one five-minute phone call,

and we were able to very quickly to drill down and find the problem. And it's not because I'm a genius. It's because you know your business. So your pricing is right. You didn't call me up and go, I can't seem to get anybody to buy heating and air. You're selling the crap out of it at reasonable average pricing, not too high, not too low. So we're not going to question about that. You know enough about the business to know that.

You know how to do the install. You know how to actually perform the service. You know a lot about that. You know you're spending too much on tools, but you've just rationalized it and said, I had to have one, and you've got to stop that. And you've taken these other jobs knowing there wasn't profit in them, and you've got to stop that or kick the price up for a trip charge so that they're profitable, and then you're glad you're driving 50 miles. Make yourself, make it a happy job.

I'm glad I'm going over there because I'm making some extra money going over there to do that. Or you get outbid on that one. Oh, well. It wasn't, it's, you know, all money's not good money. Hey, you got this, man. Hold on. I'll have Kelly give you a copy of the book. You're going to make it.

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Promo code Dave. so a good friend of mine in the publishing business sent me a uh an email the other day with a link to mike rowe talking to his mom on a facebook live feed thing and i was cracking up because it was quintessential mike rowe, of course. Fabulous stuff. And you know who Mike Rowe is. Discovery Channel, Dirty Jobs, and household name, Ford Motor Company spokesman. I mean, Mike's everywhere, right? He actually came on our podcast, our Entree Leadership Podcast, episode number 84 a while back, if you ever want to listen to it. And everybody around here is just a huge micro fan so my buddy hooked us up and we got mike on the phone oddly enough to not talk about anything except his mom's book because this is fabulous book story mike how

are you brother we meet at last my friend i'm sorry it's taken so long well it's uh we are we are uh brothers from a different mother for sure i mean uh you and i think a lot about hard work and uh getting things done and uh for years people have said you two ought to do something together so i'm honored that you that you took time to come on and talk to us let's talk about your mom's book man i mean you completely got upstaged by your mother i've been upstaged by that woman uh for the last 55 years and i and i enjoy it immensely uh after dirty jobs hit you know I was on the road so much, I never really got to see my parents anymore unless I hired them,

so I started putting them in these commercial campaigns and whatever show I was working on, and they absolutely steal the show every time. They're terrific, and I take the whole honor your mom and dad thing pretty seriously, so it was only a matter of time until she wrote a book. She'd been writing these stories her whole life. And what happened was about a year and a half ago,

she wrote one of the funniest things I'd ever read. True story of her losing her big blue purse in a Walmart. And I just laugh out loud funny, right? So I immediately read it and posted it. Went to work when I came home. and posted it, went to work. When I came home, 80 million people had watched the video of me reading this story. I swear, I'm not kidding. Google Mike Rose Mother's Blue Purse.

80 million. You can't do that on purpose. It has to happen on accident. And I've tried to do these things on purpose, and you're absolutely right. It just can't be done. So publishers start calling, right, to say, look, if your mom wants to write, you know, a few dozen short stories about Raising the Dirtiest Guy on TV, we'll put it out there. So I called mom and said, good news, that book you always wanted to write, guess what? And I pitch it to her and she says, she's 80, by the way, right? She says, well,

Michael, that sounds terrific, but you know, I have two other sons. This is what the publishers want. So just do me a favor, give it to them. And then we can think about book number two. She says, okay, she goes away and she writes 19 terrific short stories. I'm not in any of them. Zero, right? This is not what the publisher wants. So I don't even want to have the fight. I just say, mom, God bless you. You wrote the book you want. I think it's great. So I print 10,000 copies and put it on Facebook thinking I'll probably sell, you know, 500, but whatever. It'll be a nice thing to do for her anniversary. They fell out in two days. Now the publishers come out of the woodwork.

All of them. And long story short, Simon & Schuster is rolling the thing out in a couple of months. But I've been, you know, trying to get the pre-orders up because I guess that's the way the business works. You know better than me. And I've just been giving my mom these on-camera updates about how the sales are going and how suddenly on Barnes & Noble she went all the way to number one.

I called her on the way to church. I said, Mom, you're not going to believe it. You're number one on Barnes & Noble. She said, Oh, my gosh, that's exciting. Number one in what? In the world, Mom. In the world. I'm up to my neck in the most nontraditional book tour ever.

I've got an 80-year-old mom who's done something that I think should prove to anybody anywhere that anything is possible. She's going to be a best-selling author. We're having a ball and doing every single thing wrong. We're taking the reverse commute and trying to employ somewhat serendipitously virtually every tenant you've ever espoused with regard to the reverse commute. We're having a blast. I love it. That is so fun.

Well, she's already a bestselling author, number one on Barnes & Noble. Well, you know, the preorder game is like, you know, you're up and then you're down. And then there's this Bob Woodward book called Fear. My mom's book is basically about hope. It's called About My Mother. So people are now writing about this neck-and-neck race between hope and fear. And it's hysterical. I mean, anybody who's tried to figure out a nontraditional way to market a good

or a service or a business could probably learn something from my 80-year-old mom. But, you know, too, it just proves when you do something that is of high quality that people actually want uh you can't keep them from getting it i mean that they will take it away from you and that's what's happened the book is called by the way about my mother true stories of a horse crazy daughter and her baseball obsessed mother that right there tells you you got to read it right and um And Mike Rosemond, 80 years old, is the author. And what's her name? Her name is Peggy. Okay.

And, you know, Margaret or Peggy or Pegs, you'll go by virtually anything. And, you know, you're right about quality, Dave, but every time I listen to your show, I think of something else, too, that's very much for sale today, and that's authenticity. People can smell a rat. They can smell a phony. And, you know, quality is always going to win out.

But when you, at least when I find something that strikes me as completely authentic, whether it's a TV show or a radio program or a book, I pay attention in ways that I wouldn't otherwise. And my mom, I don't know where she got it, but she's got authenticity in spades. Well, too, when you reach 80, you just don't give a rip. You know, it's like you don't have to care what somebody, she's not trying to impress a publisher. She's not trying to impress you or me. She's just going to write what she likes, and you're either going to like it or not it's okay and that's that you know listening to her conversation with you she's so sweet but that comes through too uh and that's posted where's

that where can people watch that by the way that conversation that got this thing started oh the uh the the trip to church calling my mother on the way to church that's on my facebook page yeah you can just go there and scroll down. There are 5 million people there, and we keep each other abused every day with this and that. Gotcha. Okay, so Mike Rowe on Facebook. Yeah. Okay, that easy.

I'm going to find, and my mom is standing by, to a—I think there's a rumor of a second book, Dave. I don't want to be too much of a—I think the woman is going to get an agent, and pretty soon, you know, Mike Rose, I'm going to become Peggy Rose's son. There you go. That would be fine by me. Yeah, well, you always have been. So now the truth is told, that's all. Oh, you know, and the other thing, too, is the art of the storyteller, we've kind of lost that.

I mean, I grew up hillbilly, and hillbillies are great storytellers, you know. Sit on the front porch. We add drama to everything. We exaggerate everything. We raise our voice to things we shouldn't, you know, all that kind of stuff. But the art of the storyteller, it's kind of been burned out of writers in too many cases, don't you think? Well, it breaks my heart. Look, I work on a podcast now that I'm pretty passionate about,

and I do it because Charles Kuralt and Studs Terkel and George Plimpton and Garrison Keillor and, you know, those guys. They're just not in the space anymore. And it's tough to beat Once Upon a Time and a Campfire. Those guys, they're just not in the space anymore. And it's tough to beat Once Upon a Time and a campfire. It's tough to beat a really, really simple, well-told tale. And so, yeah, that's out there, too. And it's missing it.

We grew up with it, right? Like the frog in the boiling water, suddenly you look around and you go, well, where did that go? Or how did that happen? Why is that missing? It slipped away in the name of... Yeah, it slipped away in the name of just getting something on paper or something. I don't know. Or trying to please the publisher or trying to please the public that doesn't

know what they want half the time. By the way, folks, the podcast is The Way I Heard It with Mike Rowe. Look that up and give it a listen. You'll enjoy it. You'll continue to enjoy Mike on all of his appearances, and now we will enjoy Mike's mom, Peg. The book is about my mother, true stories

of a horse-crazy daughter and her baseball-obsessed mother. Love the subtitle. Mike, good to talk to you, brother. Holler next time you're in town. You got it, I promise. Appreciate it. Be good. This is the Dave Ramsey Show. One question I get asked all the time is, do I need life insurance? Listen, the whole point of life insurance is to replace your income for someone who counts on you. So if you have a spouse or you have kids, yes, you need term life insurance.

It's the only way to protect them until you're out of debt and have built up your wealth. You're only digging a deeper hole if you waste money on cash value plans since it robs you of the ability to make real progress. And that's why I send you to Zander Insurance, and I have for 20 years. That's where I get all my insurance, and they only offer the plans I recommend. It is not expensive. It's not complicated and Zander will be there as your guide every step of the way. Visit Zander.com or call 800-356-4282.

You need to get this taken care of. I can give you the advice and I can tell you where to go, but it's really up to you to take that important step to get your family protected that's zander.com or 800-356-4282 John and Wendy are in Athens, Georgia. Hey, guys, how are you? Good, Dave. How are you? Better than I deserve. I see on my screen you're debt-free. Congratulations. Thank you.

How much have you paid off? $91,032.19. Love it. And how long did this take you? 12 months. Whoa. And your range of income during that time? $130,000 to $140,000.

Okay. And what kind of debt was the $91,000? Everything except us being smart enough to have student loans. We had a lawnmower for about $600, furniture for $600, credit cards about $4,500, all our cell phones was another $1,400. The Harley-Davidson that I had to have was $10,000, a Cadillac for $34,000, and a truck for $41,000. Whoa, you were vehicle poor. I love vehicles.

I can tell. Me too, but they were killing you, weren't they? So how many of those things did you sell? The Cadillac and the Harley. Okay. All right. And we cash flowed out of the rest we did okay wow how long have you two been married next month will be 25 years wow so a quarter of a century and yet 14 or 12 months ago something big happened what happened well for me i was actually driving up to fayetteville north carolina for work listening to one of your shows and i'm listening to these people who have good income and have no

money at the end of the month and i thought man that's us you know we're we're really good at finding an extra three hundred dollars and then finding something we can pay three hundred dollars a month for that we had to have. Just living paycheck to payment, paycheck to payment. That was exactly it. Wow. Okay, so Wendy, John comes home and he spent too much time in the car, apparently, because he has these crazy ideas, right?

Exactly. So what did you say? I was kind of hesitant at first, but once we got into the whole thing, I got kind of excited. It was nice being able to, instead of stressing about money, being able to use it freely. Yeah, but he sold your car, right? He did sell my car. He sold my car. He called me at work and told me to come pick him up because he had just sold my car.

Oh, no. That's when I knew he was serious. Oh, my gosh. You didn't even talk about it, John? You just sold her car? We had a brief conversation. After or before? Before.

Wow. Amazing. So the radio show got you started did you do anything else or just listen to the radio show and go do the stuff no we uh i listened to the show and listened to the podcastings when i was traveling i got the total money makeover uh on audio version because just not a big reader. And then probably two or three months in, we went through FDU with the church. Oh, okay. So your local church was doing it. Good. Good.

Very cool. Well, fun, guys. Way to go. So 25 years. Have you ever been debt-free in 25 years of marriage until now? Absolutely not. Not at all. Never even considered it a possibility. Wow. and you did it in one year boom just like that but you you went all in i mean

you got real serious and you went wide open most definitely so what do you tell people the key to getting out of debt is this is a very impressive story for me i mean and we've talked about i think it was you know the budget i think is one we have never done a budget in our lives uh and i think it was looking at your money and you know giving each dollar a job to do i had no idea how much money we brought in and just went away and had no idea where it went or nothing to show for it. So, Wendy, on our YouTube channel, they're showing the chart with the dollar amounts and how you guys paid off everything. Who did the chart? We all did the chart.

Every time we paid something off, our son colored it in, and I wrote it was paid off. So we all kind of chipped in on making that chart work. So this was a family affair? Yes, sir. And that's got to be part of the way you get out of debt, is it's everybody's in. Oh, yeah, we were all in. Yeah, we're joking around about him selling your car,

but it was a game changer, and you all made the decision, and then he executed it at rapid speed. Rapidly, yeah. Instantaneously. Anytime we wanted anything, our son would tell us. He was like, what would Dave say about that? Oh, whoa. He got hardcore, didn't he?

Yeah, he did. So 25 years in, how does it feel now to have no payments? It feels great. It is amazing. And we are able to, after 25 years, have us a nice anniversary trip that we paid for in cash. Where are you going? Arrow Aruba. Oh, nice.

Ding, ding. Good anniversary. Yeah. Well, you've lived like no one else, and now it's time to live and give like no one else. That's exactly what you should do. You ought to celebrate this. So very, very well done, you guys. Very fun.

We're very proud of you. What do you tell Pete? What was the hardest part of well done you guys very fun we're very proud of you what do you tell pete what was the hardest part of this for you guys uh for me i think it was you know looking at the money we make and going why can't i have this or that or whatever i i mean obviously i love vehicles you know woodworking so i want tools all the time, guns, all the stuff that I need. And thought that I've got to have it. Why can't I have it right now? So your natural wants aren't necessarily your needs? Yeah.

Yeah, like hardly ever. And there's nothing wrong with buying some wants, but when you buy them to the point that you can't breathe, then it's no fun. You're making $140,000 and you're broke. But not anymore. Not anymore. You went through Financial Peace University, listened to the podcast. Way to go, you guys. We got a copy of Chris Hogan's book for you, Retire Inspired, number one bestselling book.

And, of course, that's the next chapter in your story. We want you to be millionaires now. You are on your way. And be outrageously generous as you go along. Very, very well done. Proud of you guys. Thank you. John and Wendy, Athens, Georgia.

$91,000 paid off in 12 months, making $130,000 to $140,000. Count them down. Let's hear a debt-free scream. Three, two, one. We a debt-free scream three two one we're debt-free that's how it's done baby that's how it's done changes everything now what about what about their young son? He colors in the blocks. He challenges them. What would Dave Ramsey do?

Do you think he has changed? See, there's several elements to changing your family tree. Some people think that if you just get enough money that it changes your family tree. It won't because idiots can lose it in one generation. And it'll ruin their life if they're idiots. Because they're just well-financed idiots then. So you have to, in order to change your generation, to change your family tree, in order to change the next generation, you have to not only leave them money,

but also leave them the wisdom on where money comes from and how you control it and where it goes from here and making good decisions with money and placing a value on a dollar. And you can do that if you're wealthy. You don't have to spoil your children when you're wealthy. I can promise you the Ramsey kids were not spoiled. They were not lacking, but they were not spoiled. You can ask them about the work ethic that was drilled into them. Their old man is a taskmaster because we're not going to raise kids that don't know how to work. Because you know what?

All else fails. As long as you know how to work, you can work your way through a whole lot of stuff. That's the one skill you've got to have. You've got to have. And you can do it. I know you can do it. Way to go, you guys. Proud of you, John and Wendy. Well done, well done.

This is The Dave Ramsey Show. Thank you. Thanks for being with us, America. Lourdes is with us in Dayton, Ohio. Hi, Lourdes. How are you? I am good. How are you? Better than I deserve. What's up? Hey, I have three questions, and I would love for you to help me out with it. I have recently got married.

Congratulations. And I used to work full-time job and didn't have time too much for my son. And so now that I got married, so my husband told me that I can stay at home and take care of my son. But at the same time, I work now part-time job instead of full-time. And I was just thinking, because I don't think I'm making too much. I'm not making as much money as I did before. And so I was just thinking to work from home. Like, and I found these websites saying they rent me.

I don't know if that's true or not. It says computer train. And you have to pay $37, and they will give you all the training and something like that. And I just wanted to know if that's legit. $37? Yeah, you have to pay $37. And the only thing that you have to do is just post links, and that's how you make your money. So I don't know if that's true or not.

And so I'm just looking at my options to work from home to make more income. So I don't know if you have any recommendations for any websites that I can work from home or not. Yeah. What I would tell you to do is hook up with Christy Wright's Business Boutique. I'll send you a copy of her book. It's a number one bestseller, Business Boutique, Equipping Women to Make Money Doing What They Love. I think the site that you described to me is probably a scam.

I don't know what it is, but most things that sound too good to be true are too good to be true. That's why they sound that way. And so, you know, what you're doing to do instead is say, okay, these are my skills, and these are the things I like to do and I'm passionate about. How can I form that into a business that serves and loves on its customers? How can I be a blessing to my customers? Because when you're a blessing to your customers, they give you applause, and their applause

is called profit. And businesses that are not a blessing to their customers don't make a profit after a while because customers don't give them their money anymore. And so that's the way it's supposed to be. And so find something that is within your skill set and within something that you have a great joy and passion about. Meld those things together. Ken Coleman talks about this on his show on XM Radio all the time. And then take off and go from there.

And, you know, push it all the way through. Push it as hard as you can. But hold on, and I'll have Kelly pick up and give you a copy of the Business Boutique book. And then check out the businessboutique.com website. There's a lot of good community there, and there'll be some people there that can guide you and give you some encouragement as well. Open phones at 888-825-5225. Wendy is with us in Asheville, North Carolina. Hi, Wendy. Welcome to the Dave Ramsey Show.

Hi, Mr. Ramsey. Thank you for taking my call. Sure. What's up? Well, my husband and I have an equity line, and right now our minimum payment is interest only, and it is more than half of our annual income. Our annual income is $42,000, slowly increasing, but slowly. How much is your first mortgage balance?

The first mortgage is $88,245. And how much is the second? $33,400. Okay. And what is the the second? $33,400. Okay. And what is the interest rate on your first? $4.875. Okay. Refinance the first and the second together.

Okay. Get rid of the second by rolling it into a new first. What is your home worth? Probably $165 to $ to $175,000. You've got plenty of equity to do a refinance. You can get about a 4.5% interest rate right now fixed on a 15-year, and that's what I would do. You get in touch with Churchill Mortgage, and they can help you get that refinance done.

I would just roll them together, and then you've got a 15-year, whatever that comes out, $110,000, $115,000 mortgage, and you put that in your baby step six, and you don't have to worry about it anymore. The problem with the second mortgages is the terms on them are bad. Either they have a call, a balloon, or they variable rate, or their high interest rate. And so very seldom do you run into a HELOC that makes you excited that you have one. And so to stabilize that big a debt in your situation, I'd refinance your first and second together.

You'll come out ahead by the time you're done with this whole thing if you do that. So check with Churchill Mortgage, and they'll help you out with that. Open phones at 888-825-5225. Wendy is in Houston, Texas. Hey, Wendy, how are you? I'm doing great. Thank you so much for everything that you do and teach and for taking my call. I'm so excited.

No troubles. How can I help? So I have a question. My husband and I are on baby step two, but I'm considering kind of breaking the rules and going out of order, but I think it actually makes sense in our case. We've been married about 13 years. We have three kids.

We live in a house that we owe about $91,000 on still, and it's worth a fair amount more than that. And the only debt that we have left is a student loan that we acquired when, after 15 years of being an elementary school teacher, I decided I wanted to be a doctor. So I did the very normal thing and took out student loans, and we did that for nine years, made it through, and finished. I graduated med school in 2014 and then finished residency last July in 2017. By the time we came out, or By the time we came out of residency, we had about $230,000 in the student loans at 6%.

So we've been paying those off with somewhat gazelle-like intensity, not quite all the way there. Paying those off at this point today, they're at $168,000. And so I'm paying that off. But I met with my CPA, and he is recommending that we max out our SEP contributions, and he is saying that if we put $61,000 into the SEP this year, that will actually decrease our taxable income enough that we get a $21,000 tax statement. What's your household income my growth so far this year is 316 000 i'm a 1099 employee and this is my actual first year from january to december where i'm working as an er doctor

and so i don't you know it's a little odd because i get they just let me just tell you for you to do anything other than take 168 000 in the coming 12 months and pay that debt off is asinine. Okay. Your CPA ought to have his butt kicked up around his neck. That's asinine. You make $300,000 a year. You used to make nothing. And you have $168,000 that you've been messing around with and playing around with,

it is time to get out of debt, Wendy. You're going to keep this around like it's a pet if you keep listening to this guy because he's normalized debt in his mind and he's got it in his head that you need to play all these tax games. You need to get out of debt and then take all that money that you're making and go become wealthy. Then you can start putting stuff in SEPs. And no, you don't do get out of debt and then take all that money that you're making and go become wealthy then you can start putting stuff in seps and no you don't do this out of order you need to smack this debt in the mouth and you need to keep your lifestyle down and keep your investments at zero and get this debt cleaned up it's huge okay you have a huge debt

yeah we've gotten it done some and don't have anything else. And the cars are paid for. And all my friends are buying fancy cars. Wah, wah, wah, wah, wah. Call the wambulance. We're living in our 1,200 square feet. Wah, wah. No, I don't mind it.

You make 300 grand. Clean up your mess and then go act like you make 300 grand. But right now, you're a broke doctor. You do what you want to do, kiddo, but you call me. If I woke up in your shoes, I'd do that in a heartbeat. There is no way. You have not applied the intensity. You self-said that, and I'm saying 168 out of 300,

you ought to be able to pull this off. I mean, really. And, you know, then worry about moving up in-house and then worry about your investing. No, do your baby steps in order. Because there's a reason. It lays a foundation in your life for you to be able to win for the next 10 years. What you're describing might be smart for the next eight months, but not for the next eight years, it's not. And you're setting yourself on a path to justify and rationalize to keeping this around because you've been doing that. It's time to stop.

This is The Dave Ramsey Show. Hey, it's Kelly Daniel, associate producer and phone screener for The Dave Ramsey Show. Did you know that in 2017, Dave Ramsey Show listeners paid off $50 million of debt? That's pretty impressive. And it could be you this year. Keep listening for more inspiration.