The Ramsey Show - App - Dave Referees a Couple's Disagreement About Baby Step 3B (Hour 1)

Episode Date: September 20, 2021

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🎵 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 am Dave Ramsey, your host. We invite your calls nationwide, toll free. The number is free, and some say the advice is worth exactly what you pay for it.

The phone number, 888-825-5225. That's 888-825-5225 So I have had the pleasure of spending the morning with Ramsey Foundations in Personal Finance. Ramsey, I'm sorry, Certified Financial Coaches. And they have done all kinds of things. They've been in here learning all week. They'll be here most of the week learning. We've got an enrichment series going. We have several thousand coaches

across America and people with big old hearts and big old brains both to help you with your finances. And I'm coaching them through and giving them some ideas of stuff I used to do back in the day and lots of things Ramsey is doing today to do one-on-one coaching and to help someone change their lives. And it occurred to me that some of those lessons that we're talking to those guys about are probably good for some of our audience, some of our listening audience as well. Here's the thing that we discovered that is a segment of people in our culture that don't like to be told that they can win. If I tell someone that is hell-bent on being a victim that they can win, they don't like it. It makes them mad. Don't tell me I can win because then that takes away all my excuses.

It takes away the fact that I might have to deal with the person in my mirror. And if I convince you that your category, whatever category you have stuck yourself in, I'm skinny, I'm fat, I'm man, I'm woman, I'm black, I'm white, I'm purple, I'm pink, I'm Latino, I don't know what I am, I'm from the north, I'm from the south, I have this or that, I don't know what your thing is, but I can tell you after 30 years of doing this, I've met one just like you who made it. And if you want to live in the soup of your self-pity and in the soup of your victimhood,

you're going to not like Dave Ramsey. So personal finance is 80% behavior. It's only 20% head knowledge. And once you get that dialed in, then you're in a place to go, okay, yes, there's outside variables. Yes, sometimes there's mean people in the world. Yes, sometimes there's racists. Sometimes there's sexists. Sometimes there's a whatever-ist.

There's jerks and foolish and ignorant people everywhere. They're all around us. And yet, it's still your job to control what you can control, and they're not one of the things you can control, and they're not one of the things you can control. You can control the person in your mirror, and then you become successful. Ta-da! Is it easy? Well, crap no.

If it was easy, we would not recommend successful people. So last summer, I guess it was last summer, we had at our Entree Leadership event one of the sharks from the Shark Tank. And he and some of his folks and some other friends of mine all got together at my house for a big dinner afterwards. We ended up sitting on my deck and talking until the wee hours of the morning and became that night lifelong friends, I'll just tell you. I just love this guy. And I heard he was doing a new project an audible project and i got him on the phone because i want you guys to know about it so uh america shark you gotta love him damon john is with us hey my friend how are you what's up brother i uh i love what you were saying as i just tuned

in and um and yes it was a very it was an amazing experience being with you and your family and everybody so really good to hear from you man well it's good to hear from you i'm excited about this project so you're going to tell people how you built a six billion dollar brand called fubu uh i mean we get to see on the shark but that's small potatoes compared to fubu and you did this man started i mean 40 bucks you are a rags to riches story and you overcame some crap without a doubt to do that i mean you got misunderstood abused and betrayed and everything else and still pulled it off and uh which normally happens to all of us but sometimes people think that line of success doesn't include that much manure but it did in your case it did in my case for sure that's one

reason we became fast friends but talk about this new audible original uh about founding fubu what are you talking about in this yeah yeah so the water original and so there is no book to this that has now become an audible this is purely an audible original greatly produced it is talking about my found my days that i founded fubu what i went through all the things and all the all the things that happened to me good bad or ugly a or ugly. A lot of the behind-the-scenes stories, such as, you know, you start having money come around, there's bad people and good people that come around. I didn't think, though, that for your listeners,

that they can learn from the community that was built. You know, the same way, you know, we're seeing too many communities that are fighting because they're apart. We're not getting enough of the good stories of people like who listen to your show. They couldn't care less about other people's color, gender, and race, and all that other stuff. It's about communities you build. And really how we ended up growing and how I made a ton of financial mistakes, a ton, meaning closing FUBU three times from 89 to 92, running out of the first $100,000 that I had,

and almost being homeless, and then blowing around $20 million when I first made money. And I think that's important for people to learn too, because, you know, fiscal education and responsibility is something that you learn every day. You keep growing. There's no way to just arrive at it. And I think that a lot of your listeners can absolutely take away from those big mistakes that I made. And thank God I'm still here after making those mistakes. What was the best financial decisions, the best three decisions, best three habits or disciplines around money that you developed that you attribute to being able to stay on top of it?

I think living within my means and understanding that. I think understanding credit. And I also think probably in general, understanding how money works from a taxes perspective, from interest and understanding how to allocate it accordingly. And I think all three of those really, uh, kind of, kind of stay in tune and align with each other. Um, but you're going to say three, I think there's going to be the fourth one is also the investment, you know, being able to not only have to go out and work for my money, but letting my money work for me and not, you know, not taking as many chances as, you know, I took in the past because I had money. I made my most ignorant or my most uneducated decisions was when I had the most money. That's when I made the biggest mistakes. Well, you kind of get fat and sloppy. We all do, right?

Yeah, it's kind of like, yeah, that little bit don't matter. That little bit doesn't matter. I got it. I got it. And all of a sudden, you're like, holy crap, I don't got it. How many of the shark deals are paying you money right now? Are you still making a profit on? Um, I would, I would think that around three out of 10, I make a profit on, um, uh, probably two out of, you know, cause I was two out of 10 are kind of the, the kind of trying to figure out who they want to be when they grow up,

and then the other five out of ten, they just didn't work out. You know, I don't want to talk bad about the entrepreneur. Maybe it wasn't their time, but, you know, they made bad decisions, or, you know, they didn't educate themselves enough. It's a three-hour audible project called Founding FUBU. You can listen to it at DamonJohn.com. Is that right, Damon? Absolutely. All right. Be sure and check it out,John.com. Is that right, Damon? Absolutely.

All right. Be sure and check it out, guys. This guy's awesome. Thank you, Damon. 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. So thieves have plenty of identities to use, and there's a one in five chance it will be yours. That's why Zander Insurance is the only program I use and recommend. Their plan covers all types of identity theft, and it takes over all the work if you become a victim. Visit Zander.com or call 800-356-4282. Ken Coleman, Ramsey personality, number one best-selling author and author of the new book that's in pre-sale, From Paycheck to Purpose, The Clear Path to Doing Work You Love, is my co-host.

He and I were both speaking this morning at the enrichment event for the Ramsey Financial Coaches, and it was a lot of fun. You did a great job, of course. Thank you, sir. A lot of fun. You warmed them up. It's always nice to follow you. You know the crowd's ready.

You know they're fired up. Or you know the bar's set low. Whatever. Yeah, no, not the case. It was a great crowd. These men and women are on the front lines who have decided because of the baby steps and the life change and transformation that they brought into their life as a result of that clear path, now they're out there coaching other men and women and giving hope.

And, you know, it's just always a blessing to be able to look eyeball to eyeball with those men and women who care deeply about coaching others. So it was a really, really sweet, sweet crowd and fun time. Well, and they know their why. They're clear on what they're doing. Yes, they do. They're very missional, and that's your whole message of the Ken Coleman Show is with your career to be missional, find something you love, and pour yourself into it. So if you want to talk careers, Ken is with us today. If you want to talk jobs, Ken's with us.

Of course, we'll talk about your life and your money. This is The Ramsey Show, so it's all about you. Wiley is with us in Reno, Nevada. Hi, Wiley. How are you? Doing well, Dave. Hi, Ken. How are you guys?

Great. Having a blast. How can we help? Hey, so my question, um, I'm currently debt free. I've been listening to you for the last two years, paid off all my debt. Um, my mom turned me on to you and I got out of college debt free. So I'm currently in baby step four and I'm saving 15% of, um, of my retirement. Uh, and I have, I I currently work for the school district here. So I have a retirement

through the district, the pension. I have a 403B and a Roth IRA that I'm contributing to. Look at you, well done. Thank you. It's all due to you and everything that you've got. I didn't give you any money.

True. So I'm just trying to look forward to my future i'm looking to buy a house good should i stop investing in these and just stack money or should i continue to invest in one or is there a certain one that's better than the other either one is fine people do all three things once you get to baby step three which means you have your emergency fund in place and you're debt free which you did a while back way to go, then is when you start saving for a house. Sometimes people wait a little bit, particularly if they're young like you. They wait a little bit to start their investing and use all that margin to pile up a big old down payment.

And there's nothing wrong with doing that. I don't want you to wait more than three years. But if you want to take a couple years and pile up a down payment and hold on baby step four, we always call that baby step 3B around here. Other people look at it and go, I can still save pretty aggressively while doing my investing. So I'm going to just dial some of my investing back. But I'm going to do this other one over here that's really sweet. I don't want to get completely out. And, Ken, we see people go up and down that spectrum and they all do well yeah because what happens is when you get to that baby step three and you move to three being looking out you have all this freedom you get to decide what really really matters you've got the

discipline you've done the hard work so now it really is i like that either or what's most important now and begin to move with the same discipline, the same purpose that you have been. And you'll get there. We do not say that about paying off your house early. No. We say do the 15%. That's right. And whatever you can find above that, pay your house off early.

But for saving for the down payment on the first house, a lot of people in their 20s or 30s will take a temporary pause on Baby Step 4, a gap year. Oh, I like that, Dave. Between 3 and 4. I like that. And they all build their down payment, right? Yes. And that's Baby Step 3B. I've never thought of it that way.

I haven't either, actually. It's good. It's pretty good. I like that. All right. Open phones at 888-825-5225. Tyler is in Abilene, Texas. Hey, Tyler, how are you?

I'm doing great, Dave. How are you? Better than I deserve. What's up? Well, me and my wife are new to you. We got married in June. Congratulations. And from the ground running, we knew debt was a bad idea.

She came into the marriage debt-free. I did not by a long stretch. So we, as soon as we got married, got back from the honeymoon, started attacking debt and working together to pay it off. We really haven't argued about money at all until last night. So I wanted to be our tiebreaker. So, uh-oh. Oh boy. Okay. So what is the argument about? This is great. I'll get my whistle out. My little striped umpire shirt. I need a flag, too. I could throw a flag on him. Yeah, that's it.

All right. Go, Tyler. What's the argument? All right. So I'm a youth pastor, and we were talking about, once we get out of Baby Step 2, about investing. And my CPA has talked to me a little bit about possibly filing an exemption for Social Security taxes. My wife is concerned about doing that in case, you know, the what-ifs could happen if I injured and couldn't work or whatever, or disability wouldn't be a factor and my mind behind it being a real uh numbers minded person today well we can make a lot more investing that or getting out of debt quicker if we opted out of the social security so i don't know what you would advise in that uh either direction or either at all darn darn darn i don't get to blow my whistle. You're both right. So let me walk you through how we handle this, okay?

Yes, I believe pastors should opt out of Social Security. In order to do that, you have to sign a document that says you're a conscientious objector that only has a religious basis. You do not believe in the Social Security system. And it's only for your pastoral income, by the way. If you have another income, that income is subject to Social Security. It's only for your pastoral income. Now, I could sign that with good conscience

because I believe the Bible teaches us to be good managers, good stewards of money, and giving money to the Social Security system is by definition not being a good steward. And so that's not a joke. That's just a morality fact as far as I'm concerned. And so you're not being a good manager if you give the government money and you didn't have to. So I could in good conscience be a conscientious objector. I don't have that option because I'm not a pastor. So, yes, I would opt out, and yes, you're right,

you would make more money by investing that money. Putting it in a fruit jar, you would end up with more than giving it to them. It has a negative rate of return, the Social Security system does, on average. Plus, when you die, they keep the money you put in and use it for the other people okay versus if you put it in a fruit jar when you die if your relatives can find it you'd be okay they would have it get the metal detector out in the backyard like it will be at my place right because i bury coffee cans everybody knows that not but anyway so um now your wife is also correct the The Social Security system does three things that you would be unwise to step away from the Social Security system without covering for those three things.

One is disability. And you would not be getting SSI or Social Security disability if you became disabled. So you need to buy long-term disability insurance before you opt out. Oh, you need to do that whether you opt out or not because a Social Security disability is not enough to live on. So everyone needs long-term disability insurance anyway. Okay? The second thing is you will not be receiving Social Security at retirement.

So you will need to save for retirement oh wait a minute you need to do that anyway because we've already covered they suck the rate of return the money you're going to get at retirement is awful you'll be eating alpo so you need to have a retirement account but not doing a retirement account not doing this social security and not having a retirement account not doing this social security and not having a disability account and then you retire broke or you get disabled and no policy your wife is right that would be really dumb okay and the third one is and it's not applicable yet but if you have children and you die your children get paid social security until they reach 18

on your behalf. And you would need to buy life insurance to make sure your family is taken care of in the event of you dying before you're rich. Oh, wait. You need to do that anyway. Because the Social Security coming to your kids is not going to be enough. And so I could conscientiously object and step out, but you've got to cover disability, death, and retirement. But you've got to do that anyway. I'm thinking about being a pastor, Dave, all of a sudden, so I can opt out.

Part-time, of course, Dave. I'm not leaving. This is The Ramsey Show. 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 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 our co-host today here on the Ramsey show I'm your host Dave Ramsey the phone number is 888-825-5225 if you feel like you're constantly running but nothing you do ever moves the needle,

you can't get off the wheel, your money, your life, you know, that's normal. Most people feel that way. But right now, in our world, normal is frustrating. It's exhausting all the time. But you can live the life you want, where you're debt-free, where you actually have breathing room and your time and your money, but it takes having a game plan. And that's why we want you to join us for our Game Plan Live.

We're doing a free live stream on September 28th. Me, Dave Ramsey, Christy Wright, and George Campbell, and we're going to help you set a foundation for your goals and your money. We're going to give you a game plan. Now, I don't know what normal is anymore. Who knows what normal is? I want to get back to normal. I'm not sure I want to get back to normal.

I want things like the old days. I don't want things like the old days. The old days had outhouses and cars that didn't have disc brakes and didn't have penicillin. I don't want the old days. You know, I like it the way it is, and so life is pretty good. But normal as of two years ago i'd settle for that but i don't think you're going to see that again i think we have a different world now so let's learn to live let's learn to live and not sit on the sidelines and throw

grenades so we're going to give you a game plan september 28th to register for the Game Plan live stream, text GAMEPLAN to 33789. Text GAMEPLAN, all one word, to 33789. Open phones at 888-825-5225. Marissa is in Bend, Oregon. Hi, Marissa. How can Ken and I help? Hi. Thank you for taking my call.

My husband and I, we are really frustrated living in Oregon right now. And so we are wanting to move somewhere to a state that is more in line with our values and what we want for the future for our children. And we are in the middle of Baby Steps 3 and 4. So just trying to, you know, your advertisement about a game plan, so just trying to figure out what would be the best game plan to plan a move like this, something we had not planned on doing at all. We both were born and raised in Oregon, but it's just too much.

It's so heartbreaking. The place you were born, the place you love, the place you were raised doesn't feel like home anymore. No, not at all. So what are the key things that are driving you out of there? So a lot of it is just, you know, the unrelenting mandates. I work for state government. My husband works for an Indian tribe here. So it just is, you know, one thing after another. Our kids are just being bombarded by, you know, liberal anti-Christian

views when they're in school. We actually live in more of a rural area, so we don't have any other schooling options for them. So those are the two big things. A lot of the politics, just, you know, the constant socialist ideas that are being passed down in Oregon. So, I mean, all of it. Well, the reason I ask is not to stir up trouble, but I think it is good for elected officials to hear why their citizens are leaving. Right. And it's happening in California, New York, and Mass. It's happening in Oregon and Washington State.

It's happening around some of the major cities where the city has lost control. They've lost control of their cities. And people are, they are not are not you know people who are the producers in our culture who are the people the artists who make the art the business people who run the businesses the administrators who administrate the good moms and dads who do show up at the pta meetings uh they've lost their tolerance for this stuff and um we're seeing one of the biggest migrations in the history of the United States right now is since the time that this country was actually settled.

It's pretty bizarre. So that's why I bring it up. It's kind of a philosophical thing, but worth talking about. Yeah. Marissa, I'm curious if you could tell Dave and I what's driving the destination the most. Is it the where or is it the what, what you guys will need to do from a professional standpoint? I'm just curious. Well, I actually work in a prison here in Oregon. So, you know, my career field, I'm not necessarily anticipating being able to stay in. But my husband is a farmer.

He actually farms for, like I said, a Native American tribe for their tribal government. So he's very much, I mean, he has an ag degree from Texas. So that's kind of why we're looking at Texas. He's, you know, familiar with Texas, really liked going to school there. So his degree is in ag economics. So he can run any part of a farm from the business end to the manual end. So we're just, right now we're focusing on getting him a job and where, where would that be? What would that look like? Um, especially in the Midwest. I mean, even just, uh, job opportunities for him in Oregon, the farming community where they're out of water, like, you know, so his, his opportunities, regardless of the politics are becoming few and far between.

So that's another thing that's driving our desire to move is career opportunities as well. What do you do tactically just to function in the prison system? What kind of a job? Is it administrative in nature? What do you do? Right now I run a life skills program, so transitioning work. So I can do that kind of stuff in a variety of settings. Yeah.

And I also have experience in administration. Okay, great. So I feel like I'm a little bit more marketable. Yes, you are. As far as, you know, working for a different type of environment. I think your career field might be, Ken, correct me if I'm wrong, more defined by what you do rather than where you have been doing it. I think that's absolutely right. So I really wouldn't – I mean, I think it's – I've been running a life skills program.

I've been in administration. Oh, by the way, happen to be in a prison system. Yes. I agree. So once you guys get where the right gig is for the hubs, this is a wonderful, wonderful job market right now, and you're going to be very, very attractive to a lot of different people. So I just wanted to ask about that. So I think, Dave, at this point, it's, you know, okay, we've got to figure out the place.

We've got a wonderful relocation guide that I do want to make sure Kelly gives them at the end of this call. We had a Ramsey relocation guide. It's free. It really helps you walk through a checklist of everything from real estate professional, schools, packing, everything you can imagine. Because part of the thing that freaks people out about a move is not having a plan. It's just like, what do I think of? There's a million things. And certainly when you're uprooting from one state and moving cross-country, that's terrifying.

But we do have a great tool we want to give her that'll help. I didn't even know that. You didn't know that? Yeah, I talk about it on the Ken Coleman Show. We have a lot of people changing jobs. I guess I ought to know these things. I changing jobs. And so it's a checklist. So it helps you come up with a plan. Hey, Marissa, we have this great.

No. Okay. Anyway, the thing that comes to mind for me is I always have to put stuff like this. How do you eat an elephant a bite at a time? You said how you lay out a game plan. I always have to put stuff that's this big a task in order, almost like a flow chart. Until this happens, I can't go to the next thing. And the first thing for you guys is to land careers. Right. You can't go on a wing and a prayer and hope somebody hires you. So if you

both had jobs making more or equal to what you're making now in a new market now moving starts to be mathematically fairly easy and that's another thing that's been overwhelming is um you know just the cost of living and our salaries here are quite a bit more than when i look at like texas oklahoma kind of midwest um but i also know that we're going to be able to buy a house that's probably half the price of our house here you know so just trying to keep things those things in perspective too but when you look at those salaries

if you can land the career with a track you know land the position both of you in whatever city and you say okay that's where we're going. Then you can start unraveling the stuff on your end and making the leap. But making the leap until you have the income waiting on you at the new place,

that's really dangerous. And so that would be my biggest and first thing I would do if I were in your shoes, is to jump on King Coleman's site, use all of his tools to land that job you love. And this may be a time to transition into a different segment of your career field that gives you more meaning as well. But land that first, and then you can talk about selling your house, buying a house. You can talk about moving. You can talk about actually loading up the truck and heading to Beverly Hills, that is.

Swimming pools and movie stars. Texas tea. This is The Ramsey personality, number one bestselling author, is my co-host today. His new book is called From Paycheck to Purpose, The Clear Path to Doing Work You Love. You can get it at RamseySolutions.com. And if you pre-order it, because it will come out in early November, and you should pre-order it, you will get over $100 worth of items with it,

including the e-book, including the audio book, including, oh, what's the other stuff in there? Well, you're going to get the Get Hired course, which is our digital course. It really gives you the edge to beat the competition. It's a wonderful little course. We've got the live stream event coming up in November. We've got so many

more goodies that are practical tools that are kind of in a suite there. So that's where it gets you that incredible value. So that is fantastic. It's kind of like you get all the tools that allow you to beat the competition. That's what we're trying to put together here to give people the edge. It's competitive right now. That's the way it happens.

This is the Ramsey Show. 888-825-5225 jim's in sacramento hi jim how are you good how are you better than i deserve what's up good i got a little bit of a pickle here we uh we sold one of our rental properties out here in california and we have approximately $310,000 in a 1031 exchange. By the time we were able to evict our tenants and get out, the market has kind of climbed a little bit higher. We have an emergency fund. We're on baby step seven, no bills. And the problem is we're kind of just short on cash without liquidating our emergency fund out to buy another rental property. Obviously, don't want to take a loan, but I also don't want to pay $60,000 plus in taxes. What would you do?

You have $310,000. Yes, sir. I'd buy a $310,000 rental property. You can't find them out here. That's not true. You can't find one you like. Correct. But they're there.

I have my emergency fund as well as some additional cash, but it would take my emergency fund down to just a low amount. So explain to me what that means. How much money are you talking about? We typically keep about $ about 30 000 in our emergency fund so you're telling me you cannot find a property for 310 but you can for 340 uh they're running well i have additional money as well i have additional uh 50 or so 40 50 000 in cash but i don't want to want to liquidate every dime i have down you know i would have

to go down but i mean you're telling me you can find a house for $360, but not $310? Yeah, it's pretty close, yeah. Dude. And the market is crazy hot. Well, I know that. But, well, you can do what you want to do. I think you... It's just illogical that you can find 360 but can't find 310. I mean, if you told me you can't find anything for under 600 so my 310 won't work, we'll argue about that.

That's at least a logical argument. But 360 versus 310, that could be a matter of negotiation. That could be a matter of finding one that needs the gutters replaced. Correct. Yeah, no, I understand. We're looking at right about 380, 390, and I have the cash for that. You have a particular property you've fallen in love with. No, absolutely not.

I don't fall in love with real estate. You have a particular property you have your eye on. We do. We're down to about 14 days to identify a property in that 1031 so we want to you know we've had we've got two two or three we're looking at right now and they're right about 380 390 um it just puts my emergency fund you know down to about what's your income we make about 220 230 depending on bonuses so your emergency fund's down for one month or two months. Yeah, that's kind of my thought, yeah.

Yeah, yeah. I think you rebuild the emergency fund like it's an emergency, and you close on something if you've got 13 days. But moral of the story is don't wait until you paint yourself into a 13-day corner so you get desperate and have to make a move that's pinchy, because this is pinchy. It feels pinchy. But this is all because not wanting to pay capital gains. Yeah.

You could buy less. That's, yeah. And you could buy, you know, hypothetically, you know, go to another market even. Go 100 miles away. That's what I'm wondering. And buy a $200,000 property, you're going to pay capital gains on 110, not on 310 then. So you only pay on what you don't use up out of this. I despise taxes.

You know this. I hate them but but but i mean it doesn't need to be the top the tail that wakes the dog that's what i'm wondering if it's putting some false pressure here i don't it's not false pressure well it's making you prioritize the wrong thing thank you for saying that better yes but it's like make good business decisions first great tax decisions second first, great tax decisions second. Yes. Not great tax decisions and bad business decisions. That's exactly right. That's what's bothering you. Yeah. And you're right.

I feel like it's just the wrong thing is driving the train. So I think you're going to close on a $380,000 property because I think you can't get your head off of it. That's what I think is going to happen. You nailed that. I mean, he's got something. He goes, this is a good deal if I can get it. Yeah. And he's going to get it.

So you make two and a quarter. No, don't borrow money. You're going to do it. And you're going to run three months or four months without a properly funded emergency fund while you rebuild it with a $200,000 income and no payments in the world. But God help you if something breaks in that new rental the first month. You got no money. That never happens, though, Dave. Wow.

You're the real estate guy. You know. I think it's worth talking about. I hate taxes. I do, too. I will do almost anything except a bad deal. And that's what I'm getting at here. To avoid bad, to avoid paying taxes.

Here's a guy that said Baby Step 7. He's crushed it. He's done a phenomenal job with his money. And to try to avoid capital gains. Here's a guy that said, baby's up seven. He's crushed it. He's done a phenomenal job with his money. And to try to avoid capital gains tax when you're... Well, capital gains on $300,000 is 60.

Yeah. Okay, but capital gains on $100,000 is, you know, 15. So, you know, you can buy something cheaper, too, is a possibility. But here... Guys, you... In the the in the decision making

frameworks that we use all of us use when you paint yourself into a corner and you start making statements like they don't have any of those that's when i start challenging you because they always have one of those i don't even know what those is yet but there's always another option when you start telling me there's you know it's like bless your heart when you're in youth ministry and they go oh she broke up with me and she's the only woman on the planet yeah no she's not yeah by tuesday you'll see another one that's the truth that's the truth it's fatalism thing you know god only that's the one that God picked out for me. There's only one.

Yep, yep. There's another one. Had a guy say that to me once. He said, well, what I really mean is she's the only one that would love me. I go, now that is possible. No, I kid. Ooh, you're a real minister, aren't you? Yeah, I really have a heart for people.

You're a real pastor's heart. It was a buddy. Chris is in New York. Hey, Chris, what's up? Hey, what's going on, fellas? Hey, man. I'm in a really tough situation right now. I just literally found out probably about a year ago I had a judgment against me since 2012.

I never knew about it. I was never the type to check my credit or anything like that. Recently, I've been trying to build my credit. And when I got the letter in the mail, I said, wait a minute, hold on, wait, they're taking me to court for garnishment. So I did not understand at all why they would take me to court. Come to find out, they sent papers that I was never served in 2012, and they got the judgment against me because I never appeared to court. Before I run out of time, Chris, what's your question? Oh, I'm sorry.

My question is, my original debt was $4,000. They want, right now, $20,000. I call and I try to settle with them. Basically, they said, no, we want the full $20,000. What was this debt resulting from? This was a credit card debt. Okay. Absolute horse crap.

They will settle for $1,500. And if you can't beat them down to that i know if you can't beat them down to that on the phone you need to hire an attorney don't pay them twenty thousand dollars it's probably not even collectible in your state so if it's eight years nine years ten years old yeah that's what i'm so confused by i'm like why like i just didn't understand it well basically here's what I'm so confused by. I'm like, why? Like, I just didn't understand it. Well, basically... Here's what you've not done. Here's what you've not done.

You've not been proactive. To start with, you knew you had credit card debt, did nothing about it since 2012. And then a year ago, you got a judgment notice. And now you're calling me a year later, still working on it. So you need to get on this, man, and get this solved. Time to put both working on it. So you need to get on this, man, and get this solved. Time to put both feet on it. Now, if you can't fix it, you need to spend $2,000 on an attorney to fix it and get it solved. But I don't think they can even collect it, but I think you probably settle

it for a thousand, couple thousand bucks. Probably going to cost you a thousand in an attorney's fees. This is James Child, 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.