The Ramsey Show - App - Dealing With Home Repairs While Paying Off Debt (Hour 2)

Episode Date: August 22, 2022

Dave Ramsey & Ken Coleman discuss: What to do when you're stuck in your career, How to think through home repairs in baby step 2, Paying off student loans quickly, Whether or not to buy a new car. Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. We help people build wealth, do work that they really love, and create actual amazing relationships. Ken Coleman, Ramsey personality, host of the Ken Coleman Show, number one best-selling author, is my co-host today. And he, of course, specializes on your career and your jobs, and so taking your calls about that subject as well today. Open phones at 888-825-5225. Matt starts off this hour in Atlanta, Georgia. Hi, Matt.

Welcome to the Ramsey Show. Hey, guys. So cool to be on. I'll jump right into it. Me and my wife are working the baby steps with great success. I've got a good job. I make decent money. I've got some of the best reasons anyone could ask for to get up and go to work

every morning, but I still find myself struggling pretty frequently with finding meaning and fulfillment in my career. I don't think a shift in careers is the answer. I think I'm, you know, with the right circumstances, I could feel the same way with any kind of job. So I would love your perspective and your input on recommendations on things that I could do or book recommendations to help kind of pivot my perspective and start looking for meaning in my everyday. So if I heard you right, you're looking for meaning, but you don't think it's a move in professional occupation. Is that what I heard? Maybe one day, but at this moment, my current career makes the most sense as a vehicle to reach financial peace for me and my family. Okay. Well, so that's a little bit different

focus then. Instead of what you're doing, you need to be focused on what you're producing. So what do you do? I do heat and air. Heat and air. So you're out there working on HVAC systems? Yep. Okay, great. So based on what you just said, I want to challenge you in a moment on the big picture. But if I'm looking for meaning, I'm going to be focusing on the relief on men and women's faces when you show up to fix the AC.

I mean, I'm telling you, if you're showing up to fix AC in Atlanta in August and a lady answers the door, believe me, you're more important than her husband at that very moment. Am I right? Am I right? Well, in the rare scenario, yes. But these last couple of years, what I've been noticing is that smile and face is becoming much more scarce. the the frustrated pent-up just the anger seems to be much more common in in my personal i understand that and i and i don't dispute that but my point that i was making their little humorous take is is that you've got to focus on you are providing uh emotional relief yes they're they're they're they're upset at a lot of things in life and certainly because their machine isn't

working or whatever, but you are providing emotional relief. You are providing comfort for people to sleep at night. There's a lot going on there. And I think that's what you have to focus in on. And you have to say, you know what, right now my job is to come and fix a problem, but more importantly, do it in a way where people do appreciate the service that I've brought them. Even if they're not super kind and super nice about how they treat you, based on what you've told me, that's what you have to focus on is what's at the other end of your work. And at the other end of your work is peace of mind and comfort. And let's be honest, safety, if we're talking about heating in a very cold environment. So that's what you're focusing on.

And then you're grateful for the job and what it's doing for you and paying off debt, giving you stability to do that. So gratitude on one end for the job and then appreciation for what you are ultimately providing now um why i mean if you're on time and your company's not overcharging there shouldn't be really any anger corrected at you just frustration that they're heating airs out yeah it's not necessarily at me i think it's just the the last couple years have a little wild, and I think I'm noticing that wear on people's nerves more and more, and unfortunately, sometimes I'm the target of that, if that makes sense, just because I'm there and they worn out or whatever, and I'm struggling to feel grateful, what would be an exercise you would recommend I kind of put myself through to reset myself, I guess? Yeah, well, you've got to go right back to, hey, I've been able to pay off this amount of debt. We're going to be out of the baby step two at this such and such a time.

This is providing this for my family. You just, you retreat back to what this job is allowing you to be able to do. And so it's not really fancy. It's just retreat to clarity. I'm clear on what I'm grateful for. And I know that this is just the season that I'm in. It's not a sentence. It's a season, big difference. And I think that's all you can do in those moments. But I would really challenge you. I'm just curious. Let's fast forward because I know you've thought about it. What would you do long term if all this debt was gone and the emergency fund was fully stocked and you had options?

What would you do? Well, that's kind of a struggle. I would love to write a book. That's my dream eventually. I just don't have tons of time to work on that day-to-day right now. That's fine. But where I find myself kind of battling internally is I think I'm above average in pretty much anything that I apply myself to, but I have no idea what I would actually be great at.

Does that make sense? I don't know what my specific niche skills are. Sure. I hear it all the time. I hear it all the time, and I'm going to give you my Get Clear assessment, which will help you have some self-awareness and then get feedback from people. But when I encounter someone who says that, that's a person who for some reason has some self-doubt.

And I think the people who know you best, maybe you're one of your favorite coaches or teachers or coworkers, I'd be asking the question, and then your wife, family members who are going to be honest with you, you know what you're above average in, and just say, am I above average? Do you see me that way? And where you're above average, see, that can be turned into greatness. So that's real talent that can be honed think of talent as like a ball of clay and when the potter puts

uh the pressure of his hands in the water on it it's shaped into something tremendously useful so that above average that is what you're talented in and then applying education applying practice and experience to that talent that can become a super skill. So stop wondering so much. Get some verification confirmation from people who know you well. Use the Get Clear Assessment I'm going to give you. And it is in those talents where you're going to see clues to enjoyment, to work that you enjoy doing. So hang on. I want to give you not just the Get Clear Assessment, which will give you a great report on talent, what you do best, passion, what you love, and mission. What motivates you? See, those three things are vital for someone to get clear and then make really, really good money and tremendous impact. I'll give you the book From Paycheck to Purpose as well, which is the map that'll help

you climb up the mountain. I want you to determine what is that long-term, that dream, that peak that you want to scale. And on the the short term i don't know how much control you've got over the situation but um we're in a business where sometimes people are stressed out too they're freaked out they got money problems and sometimes they want to transfer their frustration to one of our team members and we just tell them they're not allowed to do that um we're not here to be abused we're here to help you and it's not customer service to be abused that's just lack of boundaries and so if you got somebody that's out of control uh you may need to deselect them as a customer like fire them as a customer this is the ramsey show We'll see you next time. ken coleman ramsey personality is my co-host open phones at 888-825-5225 5-2-2-5. Have you heard the news? We're in a recession.

Stock market's falling. Inflation's out of control. It's pretty easy to get out of control yourself, isn't it? If you watch the news all day long, it'll put you in a rubber room, man. I mean, seriously. Yes, there's some real stuff out there, but this is not time to panic. And if you're investing, it's definitely not time to panic. You've got to stay level-headed.

You don't jump off the investing roller coaster in the middle of the ride. That's the only people who get hurt. So you've got to watch out for the gloom and doom people that are out there. And history shows that the economy recovers time and time and time again. So you've got to have somebody to guide you through these times when you're investing, and that's why we have the SmartVestor program. The SmartVestors, SmartVestor pros don't work for us. They're people that we recommend that are in the financial advice business, and they help you with your investments with the heart of a teacher, meaning they're going to teach you what

you're getting into. You're going to know what you're getting into, and you're going to want to stay through downturns. As a matter of fact, once you really understand a downturn, you're almost going to be tempted to invest more in downturns. RamseySolutions.com slash SmartVestor. If you want someone on your team to show you how and what is going on, RamseySolutions.com slash SmartVestor. Garrett is in Las Vegas. Hi hi garrett welcome to the ramsey show hi ken hi dave thank you so much for taking my call sure what's up hey so my question is

where do unexpected home repairs fall into baby step two emergencies okay so let's say that the emergency fund... Is it an emergency? I'd probably say it's not an emergency. Then you don't do it in Baby Step 2. Got it. So we wouldn't treat it like a... An emergency if it's not.

Okay, because basically it's a bathroom and our kitchen kind of got shut down because of a leak. You got to fix the leak. Well, the leak is fixed, but the insurance didn't cover the cost of the total repair. So essentially, we're just down a bathroom now. So it's just like, essentially, they said it's going to be $7,000 to fix the rest of the toilet repair. So essentially, we're just down the bathroom now. So it's just like essentially they said it's going to be $7,000

to fix the rest of the bathroom. I'm sorry. Stop, stop, stop, stop, stop, stop. The toilet repair costs $7,000? No, the bathroom. It's the whole bathroom. Okay. What's wrong with the bathroom?

So we had a leak that went unnoticed for about six months. Murphy's Law, we bought our house last year, and we didn't notice it was coming from our master bathroom into the kitchen. And basically, we noticed it when the floors were potentially starting to cave in a little bit and um obviously with mold remediation um repair um pretty much the entrance only covered to a certain amount so it covered like the cost of the kitchen and the demolition of the bathroom but it pretty much like almost all the walls are like down in the bathroom and then no shower and pretty much the whole thing is you know gonna cost seven thousand dollars so i didn't know if we would save something no to essentially pay for that before you need to just you got to classify this need whether this is an emergency or whether

it isn't so i don't understand why the insurance didn't cover the entire repair. Because the limit on the hidden water leak was only $10,000. Yeah. I got you. Okay, that makes sense. All right, so how many bathrooms do you have? Well, it's a three-bed, two-bath. So you have one bath operating? Correct.

And you have how many people? Two. You and your wife? Yes. Okay. And what's your household income? We net $110,000. And what's your debt that you have remaining?

$69,000. Okay. It's going to take you two years okay to get out of debt right yes roughly i mean 18 months to two years if you're really hardcore on this it's not shouldn't take you longer than two years um Okay The way I try to answer questions on the show Is what would I do if I woke up in your shoes Okay What do you owe the $69,000 on? Well

$31,000 Roughly spread over Two cars $28,000 in credit card And about $10,000 in student loan. And what is the most expensive car? The most expensive car? Oh, okay. So the most expensive car is going to be like my off-roading slash overlanding vehicle.

And that's like $19,000. Okay. All right. Would you trade that for a bathroom? Absolutely would. Really? Absolutely would. Because I might not

okay anyway here's the way i answer questions what would i do if i woke up in your shoes you have a bathroom it's just the two of you this is an adventure let the stupid thing sit and get yourself out of debt that's what sharon and i would do if we woke up in your shoes now if i wanted to get out of debt a little bit faster because the bathroom is a big deal, the second bathroom, when we have one couple living in the house, I mean, I want you to get the stupid thing fixed, obviously, but if you want to speed it up, the way you speed it up is you start selling off the expensive cars, and that speeds up how fast you get out of debt, right?

Yes. Because one-third of your debt or one-fourth of your debt is one car. That's true. And boom. You know, we just cut down your two years to, you know, a year and maybe 14 months or something like that. And you can knock the rest of this out if you want to. Now, really what that buys you is um almost a year of fighting this stuff and waiting on to fix your seven thousand dollar bath but no i would not

budget in a non-emergency non-leaking you do have indoor plumbing you have a bath um sounds like a little creepy of a situation but i'm with you our roof was leaking when we were broke and we decided we were going to live this way i got some of that black tar stuff in a five gallon bucket and smeared it around on the roof and stopped the water from running down the light fixture onto the kitchen table it looked like crap but i could not afford a six thousand dollar roof at the time and that's what it took to put a roof on that house. And we lived like that for two years while we got out of debt. And after we got out of debt, I put a new roof on the house with cash because I don't borrow money anymore.

And I wasn't going to stop getting out of debt for that one place that it was leaking and couldn't figure out a cheap way to do it, so I just made a mess. Yeah, I completely agree. One couple couple no kids one fully functioning bathroom take care of your priorities it's not that big of a deal it's a great story to tell anyway you know all your friends and family already know about it anyway because of the ordeal you've been through yeah and you kind of you know someday when you have kids you can go you know back in art 22 we lived with one bathroom yeah you know you tell the

grandkids that right what'd you call that stuff you put on the roof what was that black what was it tar tar yeah because whatever you call it well no the reason i've said it because i recently had a i recently had a leak in my roof which you know about and i just didn't have time to get anybody out there and so i waited until it stopped raining i got that flex seal from that awful infomercial that guy screams at you about putting his boat back together why didn't you just throw your shamwow up there so i went up with the flex seal sprayed it it stopped the leak until the roofers couldn't get out did it really well now we've got an endorsement for flex seal i didn't mean an unpaid endorsement i didn't mean

to do that an unpaid endorsement i mean you know where there's a will i mean this was you're in a different century than i was when i did this i love that though, where there's a will, there's a way. Well, I mean, you're in a different century than I was when I did this. I love that, though. I love that. 1988 is a different world. Tar. 22. Can you even get tar for your house these days? I don't know.

I don't know. I doubt it. I don't even know how that stuff works. It's just that it's nasty. Yeah. It's just nasty. I love it. It's a great mental picture.

Pretty much white trash. That's what I was doing there. This. It's just nasty. I love it. It's a great mental picture. Pretty much white trash. That's what I was doing there. This is The Ramsey Show. សូវាប់ពីបានប់ពីបានប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពី Ken Coleman Ramsey personality is my co-host today. Open phones at 888-825-5225. Dhruv is with us in Greenville, South Carolina. Hey, Dhruv, what's up? Hey, thanks for having me on. Sure.

How can we help? Yeah. So I currently have student loans. So I just graduated undergrad in spring of 2021. And I went to a full-time job right after, about a week after. And then I started grad school last August, which is a two-year program. So I've accumulated pretty much a good bit in student loans, about $90,000 total by the end of my grad school career. So I'm trying to figure out, you know, what's the best way to attack that amount as quickly as possible, because my goal is to

be financially free and debt free as quick as possible. So, and then one more thing is my current employer, found out they have a tuition assistance program, so they're going to knock off about $30,000 right there. So really I'm looking at about $60,000. So trying to figure out the best way to pay that off as quickly as possible. What do you make? About $70,000. Okay.

What are you studying in grad school? It's a Master's of Engineering Management. Okay. What's that costing? It's costing $60,000. And you're how far into it? I finished one year, so I have one more year left. Okay.

What does that increase your income by for having that? I'm hoping, you know, the company I'm at, I'm not really sure what the pay structure is for our management role because currently I'm in a technical role. I would have to guess, I mean, about minimum 90 to 100 starting as a manager. Oh, and you make what now? 70. Oh, yeah.

Okay. But you're guessing, number one, so go find out. Number two, you know, if you're an engineer and you busted on a technical level, am I incorrectly presuming that you'd have an opportunity to move into management or do you have to have a master's degree to get into management level of engineers? I don't think it's necessary to have one. I think it accelerates the timeline. It kind of pushes you a little bit quicker up the chain from what I've heard from people at the company. Okay. All right. Well, you're halfway there. You're going to finish it. So the way you get out of student loan debt is you live on nothing. And beans and rice, rice and beans, you don't go inside a

restaurant unless you're working there as an extra job and you don't go on vacation you live on beans and rice rice and beans and you attack the student loan debt as fast as possible you got 60 000 to pay off while making 70 towards 100 um so you know you need to do that in a maximum of two years 2 500 a month 2 500 And you need to start that now because you're currently making $70,000 and not take on the debt. Yeah. And then the other thing is...

That didn't sound real convincing. Well, I also just bought a house, too. I was renting about early this year, but early this year but that was a huge mistake really you're broken ninety thousand dollars in debt yeah okay um well i i don't know my thought process was i mean i'm starting to build equity early um listen here's the thing, okay? You're going to have to decide which thing you're going to do. And the thing you're going to do, if you believe the shortest distance to becoming wealthy, which we do, and we have data to actually prove it, it's not a theory, and we've been doing this for 30 years, the shortest distance is to not add new debt, number one, and then number two,

live on nothing and clear your debts as fast as you can because then you will have control of your most powerful wealth building tool. And quit using your own analysis on these things because your own analysis sucks. It's what got you where you are so don't don't look in the mirror again and say to yourself you know I kind of reasoned this through no because your reasoning has caused you problems it's got you into a mess and so you don't need to use your reasoning you need new sets of information to make this decision if you're an engineer you built a bridge the bridge fell we don't want to use your calculations again okay that's not a good it's not doesn't build a

good bridge and so that that's where you're setting and um so uh you know uh now thanks for calling we appreciate you calling in now let's sidestep a second, Ken, because a $60,000 degree that might maybe increase your chances of – that's overpaying for a master's. It is. And you're right. He's halfway through, so we're going to finish. Might as well finish it. But the reason I ask that question is I want people to think about this. Unless it is the only way, meaning there is no ticket to the dance if you don't have this higher ed degree, then you've got to think through it.

You take a young man like this who's fresh out of college. He's got to earn it. He's got to pay his dues, Dave. He's got to crush it in the now. And then as he does a great job, goes above and beyond what his leaders ask of him to do. He shows himself to be humble in the workplace. He shows himself to be hungry to look for more opportunities to do whatever it is to win. He's going to have an opportunity for leadership regardless of the master's degree.

Take the same person with a master's degree, and they have the supposed edge, and they're up against a guy who doesn't have the master's degree, and one is humble, and one is hungry, and goes above and beyond what's required of them leadership will look at that person unless there's some sort of weird goofy politics involved and they're going to promote that person every time well you can pay eighty thousand dollars for an mba or you can pay seventeen thousand dollars for an mba well there's that too that's exactly right so you need to think about what you're paying. And once again, we just want to underscore for everyone out there, not just that young guy, but for everyone, that not all education is worth what you pay for it.

That's correct. It does not give you an ROI, a return on investment necessarily. And so if you pay $17,000 more for an MBA and you pay for it in cash and you finish and get a master's in business, and that might open up some doors, maybe a little bit. more for an MBA and you pay for it in cash and you finish and get a master's in business and that might open up some doors maybe a little bit but and you might end up your knowledge base actually might cause you to make more not really the degree but beware of anyone who tells you including telling yourself that going back to school is automatically worth it at any cost

for any degree because unless it's permission to play that's correct it's usually not worth it it usually doesn't have an roi that's true and if you overpay you ensure that it doesn't have an roi and one other piece of advice for drew drew uh d Dave gave you a really good target, and I heard the doubt in your voice because you've got a mortgage now. $2,500 a month can be done with your skill set as an engineer. I would be, besides rice and beans and schooling, you're looking for extra work nights, weekends, engineer-type work where you can make really good money per hour that would allow you to reach that. $40, $50, right? Absolutely, he could do that. And now all of a sudden, what needs to be true for him to pay $2,500 a month to knock this out in that time period?

It's going to be extra work. He has a skill set that is in great demand. He can find a way to make extra money. And the faster you don't have any debt, the faster you start to build wealth. That's correct. Because your most powerful wealth-building tool is not some kind of scheme or scam where you try to figure out a way to trick your way into it. Your most powerful wealth-building tool is your income.

And it's simple. When you don't have it going out in payments and you put it in the 401k it and in your roth ira it causes you to become wealthy it really is that stinking simple it is there's only one way to stack money dave you got to make it and keep it and and we we overthink this stuff it's pretty straightforward yep that answers that. This is The Ramsey Show. so so Ken Coleman Ramsey personality is my co-host today. Open phones at 888-825-5225. Chuck is with us in Indianapolis. Hi, Chuck. Welcome to the Ramsey Show. Hey, how you doing?

Great. What's up? Well, I was calling in, you know, I've been listening to your show for a while, and, you know, even your baby step or whatnot, they was teaching that us in high school. Some people didn't pay attention you know what i mean but those are the stuff that you know i've been using and i didn't i wouldn't say i'm the best at using it you know some people do what they after they learn what they learn but i'm i own my own business and you know it's going well but some you know it has its ups and down and sometimes man i'm like should i just go give me a regular job and just keep going you know i'm in i'm i'm to the

point where i don't know you know i don't know what to do but you know without because you know running your own business you have to work all the hours, you know. Toughest boss you'll ever have. I'm sorry, repeat that again? I said that's the toughest boss you'll ever have working for yourself. That guy's a slave driver, man. He'll work you in the ground. Yep. So, you know, I'm like, man, sometimes I want to be like normal people,

go out on a regular day or, you know, and I'm like, well, you can't be normal. But then I'm like, man, sometimes I want to be like normal people, go out on a regular day. I'm like, well, you can't be normal. What kind of business is it, Chuck? A tow service. Is it just you and one truck? You have a fleet? What's going on? Well, I got multiple outfits, but it's just me.

I try to hire some people, people want to want so much they want so much pay but they can't you know they can't even back the truck up you know i hear you what is the uh what's the market rate what you think is the fair rate for a tow truck driver i'm just curious well that's what what the other people are paying i can you know i know i know i don't care about other people based on your business and your revenue what's what's a rate that if you could get somebody to take it today you'd pay it happily anywhere between 15 if that's if they're good you know what i mean i hear you mean? I hear you. You got to train them up. You got to train them up. But, you know, how many people I train?

Some people, and then it's not even training. You know, this is not, it's the continuous learning. Because once I teach you, each job is not the same. You know what I mean? Sure. So what's the rate? What's the rate? 15 to 20 an hour? Is that what you were going to say?

Yes. Yes. Okay. What'd you make last What's the rate? 15 to 20 an hour? Is that what you were going to say? Yes. Yes. Okay. What'd you make last year in that profit? What? For the business or me? Well, you. I mean, what'd you pay taxes on last year?

120. Okay. Can you make that drive working for somebody else? Well, yeah. I'm going to have to work like a hebrew slave for them so would you rather work for you or for them yeah that's the thing working for me i have to be the manager and this and you know the the thing with me is i can control what i do you know i can decide hey like i was talking he was talking to the other guy about the heat and air. Uh-huh.

Most of my customers, they happen to see me when they call, you know. Right. So that's not the, it's just more of the, you know. So at this point, I'm like, man, sometimes I'm more like, I'm tired of exchanging time for money, you know. Uh-huh. So if you could make $120 driving a truck or some other kind of vehicle for somebody else, you didn't have to work the crazy hours,

would you jump on it? Would you even be calling us? Yeah, I know I can do that more myself, but it's, you know... Well, you got to look for it. My point is, you got to decide, right? I either want to work for myself and then I'm going to have to try to hire somebody.

And I know it's hard. We hear this a lot in Entree Leadership. When we have our leadership conferences, it's really hard. I understand that to get good help, but I also believe there are people out there who don't want to be in an office, who want to drive a truck or a tow truck, and they want to be somewhat autonomous and they'll learn, they'll get trained. I know you can find good people. So you have to double down and go, all right, I'm either going to do the work to find good people, to train them up and pay them and take some of my chief everything officer off of me and begin to delegate it. Or I'm going to say, forget it. I don't want to deal with it. I'm going to find a good company where they value somebody like me and I'm operate heavy equipment or drive a truck, make really good money and leave it at the office or at the

work site and go home. Those are your two choices. Yeah. Everything you said about running your own business was negative. You don't, you're tired of it. You're done. You didn't have any fight left to fight us to say, oh, I should keep it because of this. You never, not one thing did you say there's a

reason how to keep it all the reasons were reason to get out of it and there is some reasons to keep it but you you don't have those anymore and so if i were you i would close it up sell your truck and go get you a good job and um not have to worry about all this junk and because you are you are officially done just listening to you you don't want to fool with it anymore. Unless you want to fight me on that, and you didn't have any fight left when we were talking, then I think that's the best route. I think you're done.

It's not to say one's better than the other. I'm just saying where you are. Sam's with us in New York City. Hi, Sam. How are you? I am well, Dave and Ken. How about yourself? Better than we deserve.

What's up? That's what I like to hear. Yeah, so I'll just give you a little bit of background about myself. So I'm 22. I currently have no debt. I'm moving to a new city because I'm a recent college graduate, starting a new job. And I need a car to commute. In a car market, I would have always bought used. But because used car prices are so high, but oftentimes higher than MSRP, I want to know if it makes sense to consider a new car market instead of the used car market. Well, that was true six months ago. It's not true today.

Used cars are back down again. And so they're not all the way back down to where they were. There's still some premiums on some of them. But, I mean, if you start pulling up Kelly Blue Book, you know, trade-in values, all the way back down to where they were there's still some premiums on some of them but um i mean if you start pulling up kelly blue book uh you know trade-in values uh even private sale values you'll find used cars are still are again substantially cheaper than new cars so a good a good rule of thumb sam is unless you have a million dollar net worth you don't want to buy a new car they go down in value too much how much money you got saved for this car i mean i've got saved up about 30 but

my salary is 100 good for you good for you yeah i'd buy me a you know a twenty thousand dollar you need an emergency fund left after you buy it so i mean i'd buy a nice twenty thousand dollar good solid used car some kind that sounds fun if you're 22 and living in new york and i'd pay cash for it and i'd be done with it and that's the only thing I would consider doing here. You don't want to buy things that are going to go down in value when you're 22 in your first job. You don't want to buy things that go down in value ever unless you make so much money and have so much net worth

that the amount you lose in value doesn't matter. That's why we say when you have a million-dollar net worth, if you want to buy a new car, that's fine, because a new car will lose 60% to 70 percent of its value in the first four years that's the average since we've been making new cars it's like the world's worst investment now they're fun and i love cars and i'm a multi-millionaire i buy brand new cars often i sometimes buy a used car. But I can afford the loss in value. It's not a relative amount of money in my situation. In your situation, it's a relative amount of money.

It's a lot of money. Losing $10,000 on something right now in your life is a lot. So I wouldn't buy new. Not at all. And at 22, Dave, I thought you were very generous. I'd push him a little bit. I'd probably do $15,000. I mean, $22,000, but hey, you got the money.

Do exactly what Dave said there. But you don't need a fancy car. Just something nice and dependable. That's all. You can get a lot of car for $20,000. A lot of car. Fabulous vehicle. My goodness.

I mean, it's amazing what you can get. And certainly if you get a brand that is very dependable, doesn't have a lot of mechanical issues, I would just stack that money if I were your age. I really would. Stay out of the car business for a while. It's a losing business, and it is right now, too. You're right. Six months ago, we had the supply chain issues that messed up the car market

like it messed up the lumber market like it messed up a lot of other markets. But nowadays, some brands, anyway, are cranking the factories back up, and they're dumping the new cars back on the lots, and that's bringing the used cars back down because new cars are starting to have inventory again. Now, some brands, they don't have any inventory still. They're still short, but it depends on what it is you're looking at. But still, if I'm 22, that's what I'm doing for sure.

That's the answer to your question. Thank you for joining us. This is The Ramsey Show. Dave here. You can find all of our shows with the Ramsey Network app on your smartphone. It's the only place to listen to the entire back catalog of episodes. Download the Ramsey Network app in your favorite app store today.