The Ramsey Show - App - Don't Flee From Change - Embrace It! (Hour 1)

Episode Date: August 14, 2019

Dr. Les Parrott, John O'Leary, Debt, Home Buying, Insurance   Tools to get you started: Debt Calculator: http://bit.ly/2QIoSPV Insurance Coverage Checkup: http://bit.ly/2BrqEuo Complete Guide to Budgeting: http://bit.ly/2QEyonc Interview Guide: http://bit.ly/2BuGnZE   Check out other podcasts in the Ramsey Network: http://bit.ly/2JgzaQR 

Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, 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. Thank you for joining us. Open phones at 888-825-5225.

That's 888-825-5225. Louisiana is starting us off this hour with Nikita and Jeremy. Hey, guys, how are you? Pretty good. How are you, Dave? Better than I deserve. What's up in your world? So we have a question. We have two vehicles. One is paid off, and the other is financed. And we're trying to see should we sell those vehicles, get two cars that are, you know, of course we can pay cash for to pay off our debt. Gotcha.

Okay. And so the vehicle that's paid for is worth what? Worth about $12,000. Okay. The vehicle that has debt on it, what is it worth? It's worth $30,000. The financed amount is $22,000. Okay. Gotcha. And how much other debt do you have other than your home i have uh 2,800 in medical i have 4,000 in the credit card um and then 59,000 in student loans okay all right So like 90 grand total including the car? Correct. Okay. And what's your household income?

Me and my husband, we bring home about $62,000 a year. Okay. All right. Well, the rule of thumb we use is two things when it comes to vehicles, and they both come just from math, from nothing else. Cars are the largest thing that we buy that go down in value, and pretty well anything with wheels or a motor goes down in value. And so because they're depreciating assets, they're working against us becoming wealthy, right? So because of that, we just say you wouldn't want to have more than half your annual income tied up in vehicles.

And that would include boats and expensive lawnmowers and sea-dos and four-wheelers and anything like that's a vehicle, right? So all your cars and all your toys that have motors and wheels added together would not want to be more than half your annual income because basically they go down in value so fast. And so what that tells us then in your situation, you have a $62,000 income with one car being $30,000. So with one car, you almost broke through half. So that car is ludicrous in your situation, crazy. Okay.

So I would sell the, you know, well, I mean, you're at $34,000. No, you're at $42,000 in value, and you make $62,000. So, yeah, I would sell the $30,000. No, you're at $42,000 in value when you make $62,000. So yeah, I would sell the $30,000 car. Okay. And so don't worry about selling the one that's paid off? Don't have to. But at a minimum, I'm going to do that and take the $8,000 difference and pay cash for an $8,000 car. So that gets rid of $22,000 of my $90,000. So now I've got $70,000 in debt, right? Right.

And, uh, or 65,000 roughly in debt and you make 60. And so if you pay a 20 a year out of 60 on debt, it's going to take you three years. If you pay 30 a year, it's going to take you two years. Okay. Perfect. And that's what you're what that's what you're dialed in on so you know i like nice cars too i'm a car guy but the stupid things will kill you money wise they'll just destroy you and you just can't have big big dollars tied up in vehicles

because they go the wrong way you do whatever you want but that's the numbers that i use and i want you to get a nice car i just don't want the nice car to get you and this one's got you by the throat benson is with us in nebraska hi benson welcome to dave ramsey show hey dave glad to be on how are you good to have you better than i deserve how can i how can i help hey i just had a quick question um recently, recently discovered you, uh, loving material. So it's an honor to be on the show. Um, uh, me and my girlfriend, we actually just purchased a house. Um, and I was just kind of, we ran some numbers, try to check every box. And I'm just kind of worried that maybe we purchased a little bit more than we should have. Um, we're both really good with our money, but I just wanted to get some of your advice.

Obviously, I know we already purchased it, so I just wanted to pick your brain on that matter, what we should do moving forward. Well, legally speaking, there's not a we. True. You bought a house with a roommate in a partnership. Right. And so that puts you in danger right there, big time. Unless you have an intention of getting married very soon, this is a very dangerous scenario.

Yeah, we do. I mean, we talked about marriage. That was the goal going into the whole thing. So as far as that aspect aspect that is definitely the plan the next step yeah like soon right um i'm not talking about keep talking about it for three years you bought a house together this is dangerous territory all right so let's pretend for a second that you were getting married uh this weekend and so we'll treat the conversation that way because it's the only way i can logically answer it otherwise i gotta I've got to just tell you to sell the house. So how much is the house payment?

The house payment is $1,550 a month. If you were married, what would be your combined take-home pay? Take-home pay per month is right about $5,200. Between the two of you? Yes, sir. Okay. So we generally tell folks to be around a fourth of your take-home pay. You're above that, but not dangerously above that.

The reason for that guideline is it ends up what you said, the phrase is house poor. You end up paying house payments and doing nothing else because you can't breathe. And so that's what you've got to work towards. And, you know, so what do you think the potential is of your all's income going up $10,000, $12,000 in the next year or two? I'd say, are you talking 10 to 12 combined?

Yes. I'd say fairly good. I mean, we both have pretty good jobs. Because 1,500, one-fourth is one-fourth of 6,000 take-home pay. You're already at 5,200 take-home pay. Right. So, I mean, you're real, you're pretty close to your fourth. Okay.

And then, of course, we tell folks to do that on a 15-year fixed rate. If this is a 30, you're going to still want to try to pay some extra on it. So, you know, no, you're not house poor. Were you married? The problem you've got is if one of you decides that this isn't working and takes off, the other one has a partner who is in default on their obligation. That's the legal terminology here, okay? Not the relational terminology.

And the one left over there trying to pay the bill is going to get screwed. Right. And it's, you know, so this is a marriage. You did this backwards. You should not have done this until you got married. Really dangerous. So you need to remedy that quickly. This is the Daveave ramsey show This is big news, guys.

You need to stop and listen. The Fed decided not to raise interest rates. That means you've got a small window of time before rates rise again. Here's the deal. Most people are paying too much interest on their largest expense, their home. So you're freaking crazy if you don't take 10 minutes to call Churchill Mortgage right now and see if they can save you money before rates rise again. A mortgage through Churchill could save you thousands, or better yet, reduce the time until you're debt-free. Can you imagine how it would feel to no longer have that payment

looming over your head every month? Just go to churchillmortgage.com or call 888-LOAN-200. Their team of experts will give you more clarity about your options and more peace knowing you're saving significant money in the long run. Call 888-LOAN-200. That's 888-562-6200 or churchillmortgage.com. number one bet number one new york times best selling author psychologist regular appearance on major national shows like cbs this morning today cnn fox news the view even oprah back in the day. USA Today, New York Times. You see him everywhere.

But I get to call him friend. His name is Dr. Les Parrott. And he even hangs out with Rachel doing marriage seminars, right? We do. We're trying to save the world together, yeah. That's it. We've eaten barbecue together in Kansas City. More than once, yes. We've eaten just about every city in America as we've traveled around doing different things together.

And welcome to Nashville, to the New Digs. I've got to tell you, I feel like I'm walking on holy ground around here. We've been thinking and praying about this place for a long time. And to see it, this is literally my first time on this property. And it is just remarkable. I mean, it's exciting. And if anybody is near Nashville, they should go out of their way to come out here and visit this because it's worth it. It's so fun.

Thank you. It's everything we dreamed of, and we dreamed a long time about it. So it's a lot of fun. It opens to the public tomorrow. That's so cool. I love that you can walk, literally walk through the history of what this whole operation is, where it started. And I'm looking through the glass in the studio out to an automobile that's in your bookstore. Because you started by selling your books out of the trunk of a car.

And literally you can go buy books out of the trunk of that car right there. It's incredible. Some things never change. I love it. It used to work, so I figured it'd work again. Why not? Here we go. Fun stuff.

So those of you that don't know, Dr. Les Parrott is an absolute rock star in the marriage world, the relationship world, and he and Rachel have been doing money and marriage together. Les has been one of our faculty friends speaking with us on Smart Conference, and it has been a joy. People always absolutely love hearing him. He'll be one of our speakers this fall in Sacramento on November the 16th. We're going to be doing the all-day-long Smart Conference event

with an all-star lineup, Anthony O'Neill john o'leary dr les parrott dr meg meeker chris hogan ken coleman and me these smart conferences have grown this one's going to be almost 10 000 is that right is that the largest it's going to be the largest ever wow that's awesome so fun you know i gotta tell you and i love it that you have allowed me to be the first speaker of the day because i go out there and do love it that you have allowed me to be the first speaker of the day because i go out there and do my thing and then i can just attend the rest of i sit on the front row and i've heard some of these speakers several times and i get something new out of it every time it's so fun yeah we all kind of end up doing that we're all fans of each other and

friends and i sit and take notes on meg meeker i sit and take notes on you john o'leary well i was actually going to ask you uh i have an appearance in st louis if you could fill in for me since you've heard the talk before you could the only parts i remember the jokes that's all they want anyway yeah this is this is this marriage stuff is so easy that I'm going to come take it for less. So easy I'm going to let my chauffeur do it. That's right. Oh, my gosh. Fun stuff.

Hey, it's $59 for the day-long event. 888-22-PEACE. If you want to talk to Ramsey Concierge Team, they'll help you get a ticket. That is a deal. You'd pay $59 to hear any one of these national best-selling authors that are complete thought leaders in their area now you've been doing the smart conference with us the money and marriage many times like we talked about glad to have you back what's this conference like for you what are you excited about when we start talking about doing smart conference again

well i love first of all just the name smart um i want to be smart right i want to be smart not only with my money but i want to be smart in my? I want to be smart not only with my money, but I want to be smart in my career. I want to be smart with my family and as a parent. I want to be smart in my marriage. And that's why it's valuable. I want to increase my IQ in these areas. And so for me, obviously, I feel so humbled, so honored. You know, we always have a great time backstage before we go out together. And I think you almost always say, remember, this is a privilege, right? To us as speakers. And I always feel that way. It is. And so, but I love the chance to get out there myself and do that. It's energizing. I don't speak, you know, I mean, I speak all over the place. I don't speak any place where I feel more energy in the room than I do at SMART. It's just fun. I mean, it's easy.

I don't know if you know this, but you actually pay me to go do this, and I'd actually do it without that. Well, I shouldn't say that. We can fix that. We can remedy that. I forgot who I was talking to. Sorry, I didn't mean that. But it's so fun to do that.

But then, like I said earlier, just to sit back and take notes on everybody else's stuff is just uh man it's a gift so somebody's listening and they say hey you know marriage that session that less is going to do something that'd be important to us if we were to attend smart conference what are they going to take away from that lesson when you teach it well one of the things that i try to emphasize is we all have conflict it's inevitable doesn't matter how loving you are how great your relationship whatever age or is we all have conflict. It's inevitable. It doesn't matter how loving you are, how great your relationship, whatever age or stage, we all have conflict. There's only a very small percentage of people that don't have conflict and we can talk about that, but

the vast majority of us do. So why not use conflict to your advantage? I often say conflict is the price we pay for deeper intimacy and deeper connection. And so that's really my deliverable. That's what I hope someone will walk out of that arena with is the tools. And so that's really my deliverable. That's what I hope someone will walk out of that arena with is the tools and we give practical. And I love it that you always come to the speakers and say, hey, how do we make this more practical? Help us put the cookies on the bottom shelf. Make sure we have takeaways. And so I have three specific takeaways that people will walk out of that room with in order to use conflict to their advantage so it brings them closer together rather than tearing them apart. Because fighting, when done properly, is an excellent relationship builder.

It's good for your relationship. It keeps things fresh. It keeps things honest. The good fight. Yep, the good fight. And we want to steer clear of the bad fight. And then there's the dumb fight, of course, that just is inevitable. You know, I was in my counseling room the other day,

and the couple was fighting about whether their cat was fat or not. That's a dumb fight, right? This is an objective, measurable event. This is not subjective. Fluffy's big or he's not. But if you can have a good fight, it really is the admission price for a better love life. One of the things you may not know out there as a Dave Ramsey listener, folks is uh Dr. Les Parrott is one of the things he's most known for is his ability to put together an assessment on a given topic and lead you with that assessment

um and and into you know better decision making into areas to improve and really into recognizing things that you're doing well yeah too uh project you're working on, I have watched you with it for a couple years as you've been kind of grinding through this thing. This is absolutely stellar, called Better Love. Talk about what this Better Love assessment is. Well, you were actually in my study in Seattle years ago when this was a wireframe up on the board and we were looking at it together. But I wanted, ever since my, Leslie and I were with eHarmony from the very beginning when Neil

Warren founded that company, but we were there when it was an idea at the kitchen table, walked through the first 10 years of that company. And in the context of that, I always said, I want to have a tool for couples that are already matched to leverage technology in a way that will help them have a better relationship. And that's really what we've done. That's why it's called Better Love. People can learn about it at betterlove.com.

You go online, you answer a series of questions. It takes only 10 minutes, and it's nothing threatening. You each do that separately, and within seven seconds, it will deliver a little 10-page report on your relationship. And I know some of our listeners are going, oh, that's like the last thing I want is a report on my relationship. It's not that kind of report. It's not evaluating. It's a customized roadmap to better communication, navigating conflict, you know, achieving the kind of attitudes that you want.

Really unpacking your two personalities. You know, there's never been a marriage like yours before, and there never will be again, because you have this set of really dynamic personality traits, and so does your wife, and you bring those two together. I've been telling Sharon that. Oh, Sharon has some things she wanted me to talk to you about, by the way. It's in the assessment deck.

Right. The shaming page. But that's what better love is all about, being aware so you can empathize better. Betterlove.com. The output on this is so revealing. It's just really good. Conflict, intimacy, adaptability, finances, obviously, harmony, time, how you view these things where your conflict points are it's called better love guys i gotta tell you it's one of the best things i've seen on marriage in years betterlove.com less thanks for dropping by always good to be with you brother thanks a

million dr less parrot We've been voted one of the best places to work in Nashville 11 times. You want to know how we do it? Well, our team has been using LinkedIn jobs for years to find the best people from all over the country to come and help us change lives. Think about it. LinkedIn has more than 600 million active members. I'm talking about people who come to LinkedIn to make connections, grow their careers, and discover new job opportunities. In fact, 90% of LinkedIn users are open to new opportunities

but not actively scanning job boards. This means LinkedIn Jobs gives you access to an entirely different demographic. Don't wait. One hire can change the direction of your company. Post a job today at linkedin.com slash Ramsey and get $50 off your first job post. That's linkedin.com. Terms and conditions apply. Dr. Les Parrott just was with us because he's speaking with us at the upcoming SMART conference.

Also in the building today, John O'Leary with us. Absolutely inspirational speaker. Did our devotional this morning. Had everybody laughing and crying. World-class communicator. John has spoken to over a million people in his speaking career. Absolutely the energizer bunny. He gets the Keep Going Hall of Fame.

And if you don't know his story, at nine years old, he suffered burns over 100% of his body. He was not expected to live. And now he shows other people how to live. And it's a great story. And as I told our team this morning, you've got a great sense of humor. I don't know who else, having been through that, titles their book on fire. It's brutal. Just brutal.

So excited to have you at Smart Conference this year. Dave Ramsey, honored to be on your show and thrilled to be part of Smart Conference. Well, we're so excited to have you. And when you get to get up in front of an audience like this Smart Conference group, this will be right around 10,000 folks. I know that, I mean, I speak for a living. You do. We both enjoy doing that, enjoy the stage, enjoy the result of seeing the needle move in someone's life. What is it that goes through you?

Because you're a seasoned pro. This is not your first rodeo to walk up on that stage by any stretch. What is it that goes through your mind about that audience? So I used to be really afraid that they would judge me. And I used to think that it was all about me when I spoke, which puts a lot of pressure on you to do a great job if it's about you. And what has happened over the last decade and a half is as I speak and share the stories and messages, more and more I'm realizing it has nothing at all, at all to do

with me. In the back of the room after speaking, a line will form. People will come up, give me a hug, shake my hand and say, hey, John, it's not exactly a fire, but, and then they talk about the divorce and then they talk about the bankruptcy. Then they talk about the debt. Then they talk about the marriage that has fallen apart. Then they talk about bipolar. They talk about the thing, Dave. So to recognize before I say the very first word two things number one it's not about me and secondly everybody in that room is going through something and hoping to move towards something better the book on fire uh covers seven things what's it going into the choices the seven choices so the seven choices to ignite a radically inspired

life the very first choice is to own your life and it's something you talk about all day long on radio own your life when i was nine came into the hospital i'm burned on 100 of my body i am dying my mother walks in she takes my hand i look up her. First time we've seen each other. And she says, I love you. And I said, Mom, knock it off with the love. Am I going to die? And I assumed she would say, you're fine. We're going to get you out of here today. We'll swing through a drive-thru and get you a milkshake.

And instead, if she said, John, do you want to die? It's your choice, not mine. And I said, Mama, I do not want to die. I want to live. And her response was, good.. Then baby, look at me. You take the hand of God, you walk the journey with him and you fight like you never fought before. And on January 17th, 1987, my mother, God bless Susan O'Leary up in St. Louis today. My mother taught me how to own my life. That's not easy. It's not fun. It's not commonplace. But it's what we're called to.

We have, I think the message in the last two decades, the pendulum has really swung away from that, that everyone else owns my life. I don't have any choices. I'm a victim of circumstances. I'm a victim of circumstances. I'm a victim of systemic whatever. And I spend my life, and you do too, trying to get people convinced that you are a victim of some things.

There's some things that come at you. But, you know, 90% of what happens as a result of that, though, is not up to the perpetrator, so to speak. The boogeyman, it's up to you making that choice. The boogeyman comes in once and can do incredible damage. And then you take your next breath, and then the sun rises again, and then it sets again, then it rises again, then it sets again. And at some point, you've got to decide, who's driving forward my life? Boogeyman?

Whatever title you want to put on the boogeyman or me. And free will. Thank God for it. Free will to know better and then to do better. It's a choice. It's a decision. That's exactly right. Good stuff.

We will be at Smart Conference. Anthony O'Neill, John O'Leary, Dr. Les Parrott, Dr. Meg Meeker on marriage and parenting, John on inspiring leadership, and Anthony O'Neill, teen and millennial expert, Ramsey personality, Chris Hogan, national best-selling author, lately number one best-seller of the Everyday Millionaire's book. He'll be talking about millionaires. Ken Coleman, number one best-selling author, career development expert, and, of course, I'll be speaking. John will be there. It's in Sacramento, November the 16th. Tickets are only $59, which is what's known as the deal of the century, because you would

pay that to hear any one of these people. Believe me, this is known as a bargain. Just go to DaveRamsey.com or go to 888-22-PIECE. This is a day-long event, the SMART Conference. It's not your first one. It's not my first one. First one was back in 2015. Right.

Down in Dallas. And I still remember it, and I still remember being full of anxiety ahead of time and then being on fire with life afterwards. Because, Dave, the entire time I was there, I sat in the audience. And like everyone else who goes, I'm there, I'm engaged, I'm laughing, I'm crying, I'm taking notes, and I'm improving my life. And then one of your guys, one of your ladies grabbed me and they're like, hey, O'Leary, you're on in like 11 minutes, you got to leave. So I left the crowd, left the audience, walked behind stage, got a mic,

stood in front of them and shared my heart. But when people come to Sacramento, they are going to hear the very best share, the very best that they have. And so I will be in the audience taking notes along with all of you who choose to join us. Get tickets again at DaveRamsey.com or 888-22-PIECE

with the Ramsey Concierge Team, 888-227-3223. You and I are both in the business of helping people change, and change is just hard. It's not natural to embrace change. It has to be an act of the will. You have to go, okay, enough, I've had it. I'm going to change.

Why do you think people don't change? It's easier not to, and it's easier to blame the boogeyman than to recognize the only person eventually you can blame is the reflection in the mirror. At some point, Dave, you can't blame mom and dad. You can't blame your upbringing. You can't blame the guy behind you on the highway who rear-ended you and ruined your entire day. And then you're weak. Then you lost your job. And now your life is ruined because of that guy.

At some point, you get to own it and change demands, ownership. You either change and you grow and you live. Or you choose not to. And it is a choice. And you slowly fade away and you begin moving away from real, full, abundant life. And so I just beg people when I have an opportunity, whether it's a group of one or a couple hundred thousand, to embrace change. Don't flee from it, but harness it and embrace it, love it, and step into it fully. How do you create it?

How do you create change? I think it begins with purpose. So Viktor Frankl wrote, when you know your why, you can endure anyhow. When you know your why. Change, getting away from debt is almost impossible. Baby steps make it seem easy, but it's not. It's almost impossible unless there's a driving force, a driving power in your life that is calling you through this change. And so, for me, my why, like I have a mission statement for life, Dave, and it's why I get up early.

It's why I stay up late. It's why I dance all day long, even when physically I'm not always up for it. My mission statement, I choose to thrive because God demands it, my family deserves it, and the world is start for it. Let's go. And for me, that lights me up financially, but it also lights me up relationally, professionally, and spiritually. Amen.

John O'leary inspires.com if you want to book john as a speaker in your event coming up you will be uh amazed it's an incredible story he's an incredible man an incredible friend thank you for hanging out with us thank you for being on the smart conference lineup for the fall. Always good to spend time with you, my friend. Love you, buddy. John O'Leary, ladies and gentlemen. JohnO'LearyInspires.com. Thank you. Melody is in New Jersey. Welcome to the Dave Ramsey Show, Melanie. Hi, Dave. Thank you for taking my call.

Sure. What's up? So I just wanted to know how much to calculate for life insurance. Our term policy is ending next year. And my husband's policy is going to be a little bit more expensive because he's got a medical condition that meds are a little expensive. So I just needed a general idea of how much to get. Ten to 12 times what you will need in income in addition to whatever income you have.

Okay. to whatever income you have. Okay? So if you're broke and you have nothing, you're in debt, you have no net worth, you have no investments, then it would be 10 to 12 times his income on him, 10 to 12 times your income on you. So how much is in your nest egg? So fortunately, we have a little over $.5 million okay good and uh household income is over 350 good how old are you uh 48 and he is 50 kids still at home two minors The youngest is 10. Mm-hmm. Okay. All right. And how much of the $350 does he produce, and how much do you produce? So right now it's all him.

I have my work schedule for the last few years. Okay. All right. And what does he do for a living? So he's in media. Okay. Good. Good. Very good. Okay. And is your he do for a living? So he's in media. Okay, good, good, very good. Okay, and is your home paid for? So that's our only debt. We have about $325 left.

Okay. So what I would do is say the $1.5 million, if that were creating an income, I'll just use some round numbers for the fun of discussion, okay? Let's say it created 10%. That would be $150,000 a year, right? Right. Okay. And you're used to having $200,000 more than that coming in, but that doesn't necessarily mean you would have to have that to be okay and raise these children

so i would start asking myself not a bare bones budget not a beans and rice rice and beans but probably not 350 if something happened to him and you wanted to continue your life just like it is um you know you can take an income off of the 1.5, you would have, you know, we'd pay off the house, and, you know, how much more than the income off of that 1.5 would you need to have a good life? And, you know, so if you said $200,000 as an example, you know, you might pick up another half a million dollars. Okay. You know, or something like that. Because you're trying to get another 50,000 on top of the 150 that the million five might create or something like that.

But what I'm trying to do is fill in the difference, not between his income and what your assets would produce, but fill in the difference between what you would really realistically want. If you want to live on $200,000 a year, you would say, okay, how much will my investments create? The difference times 10 or 12 would get you there on your term insurance. So he does not need $3.5 million in life insurance because you don't need a $400,000 income if something happened to him. Right. And the $1.5 million is all in retirement, so we can't touch that for at least 15 years.

Well, that's right. But you also, should something happen to him, some of that could move into an inherited IRA with required minimum distributions with no penalties. Okay. So you'd have access to some of that could move into an inherited IRA with required minimum distributions with no penalties. So you'd have access to some of it. So you've got a little bit of calculation, a little bit of nerd work to do. But the concept is what is your need above what you can get to with these investments? And, you know, you might want to put that on a 10 year policy, not a 15 or a 20 because 10 years from now, your 10 year old will be 20, 10 years from now, your 1.5 will probably

be 5 million, um, 4 million, something like that. And so 10 years from now, your need for term insurance is going to be gone. Gotcha. Your kids will be grown and gone and your nest egg will have grown to enough to take care of you and for sure your house will be paid for so by the time he's 58 you're done with insurance okay because you'd be self and you'd be self-insured by being debt-free kids are gone in a big enough nest egg does that make sense yeah i get nervous with the self-insured because his medical condition can be expensive no i mean self-insured in the sense of life insurance. Okay.

If he dies and you have $4 million, no kids at home and a paid-for house, you can make it. Right. That's where you should be at 58. Sounds good, Dave. There you go. So that's why you would take a 10-year, not worry about it lapsing after 10 years. That'll also keep your premiums down since he does have a medical condition and puts you in really, really good shape.

Hey, thanks for the call. We appreciate you joining us. Jacob is with us in California. Hi, Jacob. Welcome to the Dave Ramsey Show. Hi, Dave. Thanks for having me. Sure.

What's up? Hello? I up? Hello? I am. Hello? Hello. Yes, sir. How can I help? Yeah.

Hi. Thanks for having me. I am a superintendent for a construct. Smaller company in terms of people employed, um, here, but, uh, the, I started working here about 12 years ago and I've worked my way all the way to the top. And the owner has kind of, uh, he's about 65 now. He kind of wants to retire and he's kind of propositioned me to buy the company. Now I have always lived my life for the most part, debt free. And by that, I mean, I just have a house. Um, I don't have any credit card debt. I don't have anything like that. Um,

just cause of the nature of my work. I mean, kind of a blessing. Like sometimes we had to work. Sometimes we didn't, but I didn't always, i didn't want to have credit cards and i grew up kind of poor too so that kind of helped um but uh i don't really know how to proceed like um he's said well you can get a loan and buy it and he hasn't told me how much it would be. Is that something that is approved? I mean, I haven't been listening to you for that long. Yeah. Well, I love being in business. I love owning a business.

I'm an entrepreneur. I want you to own this construction company if it's what you want to do. I do not want it to own you. So would I go to the bank and borrow $100,000 to buy a construction company? Never. Never. Never. Now, is there a way to work a deal still if I'm not willing to borrow money? Well, the answer is yes.

Do you have any idea what the profit is in this business? I couldn't say the profit. The profit would be more of a ballpark. I know we grossed $24 million last year. Okay. What would you guess the profit would be more of a ballpark. I know we grossed $24 million last year. Okay. What would you guess the profit to be? Probably about half. I'd say probably about $12.

You really think that you're making 50 cents on the dollar? Yeah. No. We do really, really, really high in work. Yeah, but even then, you're not doing that. Okay. I doubt it. Maybe I'm wrong. I doubt it it i don't know dig in there

okay so okay let's just use some round figures and let's call it 10 million dollars okay okay and let's say he wants to sell the company for one time gross or 25 million dollars okay okay the kind of a deal i would work would be to say i'd be willing to continue to take my salary and give you 100 of the profits until it reaches 25 million which means at our current rate two and a half years you'd get 10 million yeah 10 million 5 million and after it reaches 25 million then the company is mine. And if there's zero profit because there's a dramatic downturn, that would mean it would take longer for him to get his money.

If there's never any profit, then there wouldn't. So your downside is not that you're bankrupt if this doesn't work. Your downside is that a $25 million company went up in smoke, and it would be really embarrassing. But you're not broke. So you could live on your salary, give him 100% of the bottom line until he recoups what, and he goes home and retires, and you run it, giving him all the profit until you have paid him out. I would do that, or something like that, but I would not go to the bank and borrow the money.

This is The Dave Ramsey Show. Hey, it's Kelly, associate producer and phone screener for The Dave Ramsey Show. If you would like to do your debt-free scream live on the show, make sure you visit DaveRamsey.com slash show and register. We would love for you to come to Nashville and tell Dave your story.