The Ramsey Show - App - Don’t Let This Bite You in the Butt (Hour 2)

Episode Date: May 6, 2024

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. Jade Walsh, our Ramsey personality, best bestselling author, is my co-host today. Open phones at 888-825-5225. Thank you for joining us, America. Jade, did you know that it's producer James Childs' birthday? I was not informed.

Should we sing happy birthday? Probably not. Maybe not you. Oh! Says the singer who's heard me apparently sing in church. I've never heard it. Heard me singing a joyful noise in church. I'm just saying.

Only time I'll be caught dead singing. Happy birthday, James. Happy birthday, James. Thanks, guys. I appreciate it. Sammy is in Philadelphia. Hey, Sammy, how are you? Hey, Dave.

Thanks for taking my call. Sure. What's up so um i my question is in regards to funding inventory for my small business um so currently this is going to be my third year in business um we're expecting to hit two million dollars this year great um yeah so i Great. Yeah, so I don't have any employees, just me and my wife helping me on the side. So about 70% of all my business expenses is just in cost of goods. So you netted $2 million or you grossed $2 million? That was my revenue, so you should be netting about 400

gross profit on that would be about 600 yeah 400 and then you'd have some other miscellaneous expenses what other expenses do you have other than cost of goods um it's just basically uh rent among some other things that we do it's's consumer electronics, so each of them have to be inspected and tested and cleaned. So what does it cost you? What are your expenses, Ron? You said you had a 30% gross margin, right? It's about 25%. Okay, so 25% gross margin. So on $2 million, that'd be $5 million gross profit after cost of goods sold before operating expenses. What would your operating expenses be? It would be about $50,000. Okay, so you netted taxable income about $450,000.

Correct. That's what we're expecting this year. Phenomenal. Cool. Good for you. Well done. How can I help? So my question is, till now I've been funding my purchase orders. You're not going to like this, but with a credit card, I've been paying them off within a 30-day mark. The card I use doesn't actually allow me to carry a balance, but I've basically been spending about $80,000 on the card on, um, every month on average. Um, I make sure not to spend above, uh, why are you doing that? You have the cash. So I don't, I don't have the cash because every

single dollar is reinvested back into new SKU. I'm trying to, since we just started a couple years ago, I'm trying to expand my SKU every single month. I'm trying to get new lines. You spent $450,000 on personal living expenses this year? All that profit was put back. I don't pay myself a dime. All that profit was put back into the business pay myself a dime all that profit was put back into the business and it was all on why would you need to use a credit card because you have put four hundred

and fifty thousand dollars back into inventory because well that was that's that's the numbers we're expecting this year last year the number we made in profit was about three hundred thousand okay so you put three300,000 back in. Why would you need to use a credit card? You should make that cash machine run off of $300,000 organically. Correct. Currently, right now, at the moment, I have over $400,000 in inventory that's paid for. However, if I want to expand into new SKU, which I do.

So it's not actually to cash flow the operation of the business. It's to expand the growth. Correct. Or to fund the growth is with a credit card. Correct. Okay. If you want to stay open, you're going to quit doing that. Why do you say that? Because most people that do that crap go broke. I coach over 10,000 businesses in Entrez Leadership. People that run small businesses off a credit card inventory control system go broke. They don't make it. Instead of actually running your business on cash, which you have the ability to do,

you're smart enough to do it. You just didn't have the appetite to slow down enough to do it. You're going to slow your growth rate temporarily until you get weaned off this credit card and get 100% cash on your inventory reinvestment business. But it's going to cause you to buy different inventory too. What are you spending, what are you currently spending on the credit card to fund your new inventory, your new SKUs? So it's not exactly just on new SKU. It's just, it's just, I just spend as soon as I make an order every week. Um, and that ranges like currently, for example, on my cart, I have 15,000, but I just got another order today, which was 55,000. So, but, but, but I, but I have about 40,000 coming in a week, so that's easily going to get paid off.

If it's easily paid off, it's easily fundable with cash. It's the same thing, dude. One of these is not true. Okay? Either it's not easily paid off or it is easily paid off. And if it is easily paid off, it is easily run with cash. You just got to have a one or two week hiccup here and get weaned off these credit cards.

You can do what you want to do. You call me and ask me what I think you ought to do. Yeah, because ultimately it won't take him much time to adapt that cash system. He's just going to have to get, basically get ahead a couple of months so that he can have that reserve to do it. What I would tell you to do is to, Sammy, is to sit down with one of our CPAs or our tax people,

go to Ramsey Solutions, click ELP, and have one of them help you set up a bookkeeping system. You need to learn accrual accounting. Accrual accounting is when you buy an item, you book it as sold, okay? Instead of right now, you're booking it as cash. And every time you sell an item, you set aside a percentage of that item, like 70% or 75%, to buy the next one. That's accrual accounting with cash you're just throwing cash up in the air and hope it all lands and you're not managing cash well you're selling the crap out of stuff and you've grown a good strong business in terms of revenue growth but you're not managing it well you're not managing the accounting and the numbers well and it's going to bite you in

the butt so what you should what a proper business function would be with accrual accounting is every time you sell an item, you set aside 75% for a replacement item. If you want to grow, you set aside 85%, 10% for new SKUs and 75% for replacing the old SKU. And then you can stay ahead of the cash. You'll always have the cash. If you set that back, set that back for the next purchase, and then you don't purchase or make sales beyond your cash position. And, you know, you can run this business forever this way.

The way it is right now, if the music stops and you don't have a chair, you're screwed because you're playing musical chairs. That's what you're doing. You're playing hide the pee under the shell. This is The Ramsey Show. This show is sponsored by BetterHelp. All right, so I was born and raised in Texas, and I love the myth of the lone cowboy. You know, the guy who doesn't need anyone or anything. It's a fun story and it's a lie. In our self-obsessed society, we're obsessed about our own diets,

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The phone number is 888-825-5225. CJ is with us in Hickory, North Carolina. Hi, CJ. How are you? Good afternoon, Dave and Jade. How are you? Better than we deserve. What's up? So I'm going to jump right in. Me and my wife have about $57,000 in outstanding debt. About $27,000 of that is a student loan. Then we have two cars. One is $12,000 and the other is $16,000. And then there's a small amount of credit card debt in there as well. So I've been listening to you for about three weeks and we decided to sit down, make a budget and figure out and decide, you know, get debt-free.

Cool. We were living comfortably because we're making the payments, but... What's your household income? Household take-home is $7,300 a month. And how much of that is you versus her? I don't know off the top of my head. Okay. We did everything as a whole.

That's good. Okay. So your question is what? So my question is this. So we were starting to pay everything down. We have $16,000 in the bank. We were going to dump that into paying things, right? However, we were also trying for a baby, we're pregnant. Great news. But I'm

wondering what I should do with that $16,000. Should I save it for the baby? Should I use it to pay down debts? What should I do with it for now? If the situation were different and you weren't yet pregnant, I would say, yeah, like I'd skim that down to $1,000 and I'd take the other $15,000 and I would throw it. I'd knock out the one car and I'd start on the $16,000 car. But because you have the baby, I would say for us to pause all of this for right now and let's see how much cash we can stack up. That's kind of, I had a feeling you were going in that direction. That was also why I wanted to know how the income broke down because, you know, there might be a portion of time where she's not working and I'm not sure what the maternity leave is so for that reason it's good to have as much money saved up as possible until the baby comes the

baby's healthy and then you can crank this thing back up and you'll have a big pile of cash sitting there hopefully by then I mean she just got pregnant so hopefully by the time this is all said and done you might have enough to knock out both vehicles. Hey, CJ, if you weren't doing this and you really tightened the budget down, how much a month were you planning to throw at the debt? So our total after we tightened everything down was about between $1,200 and $1,500 a month. Okay. All right. So let's call that in nine months $ thousand dollars for fun okay so i want you to save the fifteen hundred a month i want you to get to twelve thousand dollars

added to the sixteen thousand dollars is 28 is twenty eight thousand dollars in a big old pile of money doing nothing but sitting there making sure you have a peaceful pregnancy and delivery mommy and baby come home and everything's okay now we push play on the on the uh total money makeover baby steps and that means you're going to take of the 28 27 000 and um you're going to pay off both car you're going to pay off both cars. Okay. The day that she comes home and the baby's okay. Now you're debt-free, accept your student loan, and then you get in. Now you get into beans and rice, rice and beans mode,

and as fast as you possibly can. And you don't spend this $28,000 to build a $20,000 nursery for a newborn that weighs 8 pounds. Listen, if I were you if i were you i'd be calling up the the hospital where she's going to deliver and i'd ask outright you know how much is it going to cost to have this baby the natural way if she has to do another way what find out what it's going to cost find out if you're going to hit your deductible then you'll kind of already be able to kind of put some guardrails around this money you'll kind of be able to look at it and go okay this much is much is the deductible, then we'll have this coming out, and you'll be able to see

all the things that you can do and accomplish, to Dave's point. If you have reasonable insurance, you should be able to bring the baby home and have almost no effect to your cash flow and have the whole $28,000 clear to throw at the debt. Excellent. But if there's a hiccup, we got $28,000 worth apiece to help us with a hiccup. Okay, awesome. Sounds great. Yeah, and then you get – so you're not going to miss a step.

You're not going to miss any progress to amount to anything here as long as you don't sidetrack some of that money with something silly as you go along, and that can happen, so be careful. You have to guard against silly. Silly is how we got here, by the way way so we want to get out my not using silly jonathan's in murray kentucky hi jonathan welcome to the ramsey show hey thanks for having me sure what's up um our student loans are currently on pause right now um we're on the safe plan so we don't have a payment we're not getting any interest wait a minute can i call

i've thrown a flag on that play there's not a student loan pause now you could be on the one year ramp no i'm on the safe plan so it's on like our payments are on pause right now we have zero payment right now because you have no income or because you're in back in school our our income is low and we have two kids um so they're just so they're just letting the interest pile up no it had no interest on the safe plan uh the interest doesn't pile up okay keep going um so i'm on that right now we want to save for a house we had a house um and we got in some debt issue it was a really hard decision um but we had sold our house so we got in some debt issue. It was a really hard decision, but we had sold our house. So we're currently saving money, but we do have the student loan debt. So I'm just trying to,

and we have money going elsewhere. We're just trying to make sure we're in a good train of thought with our budget and everything to make sure that we're setting ourselves up. How much student loan debt do you have, honey? We have 62. Okay. Until you clear that that you're not going to prosper trying to monkey around and find some way to twist and turn and do a double backflip and act like that's not there and some kind of mathematical denial is not going to work the sooner you clear that the sooner you're going to prosper it's hanging over your head it's always in the

background it's always in the in the closet the monster ready to come out at midnight clean up your freaking debt quit screwing around with intellectual exercises while meanwhile you're hovering with this thing over your head it's not going anywhere until you take it out pay it off now what's your income whoops that's all right well here's what i want to say the screen said should we save for a house if we have student loans? But I'm like, you just told me. The answer is no. You just told me your income is low enough that they gave you a $0 payment. So there's your answer.

You shouldn't be saving. You shouldn't be. If you can't pay a payment on a student loan, you don't have any money to save to start with. And if you did, what are you going to buy? Exactly. I mean, a one-bedroom house? I mean, what are you going to buy? Exactly. I mean, a one-bedroom house? I mean, what are you going to do here? So, no, no.

Right now, you need to clean up your student loans as fast as you possibly can and quit trying to use some governmental stupidity as an excuse to not do it. Knock it out as fast as you can. Get it out of your life. Then build an emergency fund. You're 100% debt-free. Then save for a down payment on a house it's the slower version of getting back into a house but it is the proper way to do it and by

the way hopefully your income won't be so stinking low as you go along this process and you can get you can actually make some better progress than um then trying to trying to sidestep this stuff. Open phones at 888-825-5225. Guys, the things that we teach you here on the air are never pleasant in the present. They're always the best thing long-term though. And most things that are good with money long-term are a bit painful in the present. The ability to delay pleasure, the emotional maturity that allows you to delay pleasure is a real indicator of building wealth no discipline seems pleasant

at the time but it yields a harvest of righteousness and so we're always going to tell you hard stuff and stuff that makes you frustrated and give you some reason to you know do a whole instagram post about how stupid dave ramsey is and that. And let me help you with this. Dave Ramsey doesn't care. I'm not taking a poll. You know, I'm not asking you what truth is. You were asking me. And there's a reason. It's because for 30 years, I've been showing people the real way to build wealth. And it's called common sense.

Get yourself out of debt. Get on a written plan. Build an emergency fund. then start your saving for a house and buying and start your investing. This is common freaking sense. It's what old rich people did. It's how they got to be old rich people that you make fun of. This is the Ramsey Show. Hey, you guys, health insurance costs are only moving one way, and that way isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer, and it's harder than ever to get anything approved through the bureaucracy. So if you feel like the

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Jade Walsh, our Ramsey personality, is my co-host. She's the best-selling author of the book, Money's Not a Math Problem. It is a Ramsey quick read, and what that means is it's about 74 pages long, give or take a page, and that means you can read it in one setting. Money's Not a Math Problem, the real reason you're broke and what to do about it. Check it out at ramseysolutions.com. Today's question is from Donna in New Mexico.

Yeah, Donna says, I sold my home two years ago because my son was co-borrower and wanted to purchase his own home with his new wife. Good. After the sale, I purchased a new home with my daughter. Oh, you didn't learn. I used over $140,000 from the house sale for the down payment and other expenses for the home. Now my daughter and I are having relationship issues and she has told the rest of our family that I need to be in assisted living. All the money I had went on the new home and I have no savings. I want to move out, but I'm retired and on a fixed income.

What are my options? Oh my gosh. Well, the first thing is you need to learn to just buy a home on your own. If you want to buy a home, you buy it on your own. I'm not sure how old she is, but I would say if you're on this together, the only way to get somebody off is to refinance to get out of it. If she needs to buy you out or we need to sell the house, and I would tell her she has 30 days to decide. Your daughter, tell your daughter, because you're trying to get me put away in a nursing home,

we are selling this house. I don't want to live here anymore. And I'm not going to leave my $140,000 in here. And so if you want to buy me out with my $140,000 by going and getting a mortgage, you can do that. Otherwise, we're putting the home on the market and we're going to sell it so that I can get my $140,000 by going and getting a mortgage, you can do that. Otherwise, we're putting the home on the market, and we're going to sell it so that I can get my $140,000 out, and I'm going to go get me a place of my own. Now, which one do you want to do? You got 10 days to decide because at the end of the month, I'm putting a sign in the yard.

And see if you can stop me. If she tries to stop you, then you're down to a court action, and the circuit court will have to issue an order to sell the assets of the partnership to settle the partnership. Now this is going to get nasty, and it's going to cost you about $10,000 to get out of this ridiculous stupidity you signed up for. So, folks folks don't do this stuff if you if your daughter wants to live with you that's up to you if you want to do something else that's fine but when you do these deals together then you're you know the only you

had a pleasant one where you got out of it my son was co-borrower wanted to purchase his own home with his new wife which is perfectly natural and healthy thank you and the way we fix that is we sold the house good so now my daughter's being a butt and the way we fix that is we sell the house ta-da just like that so um you don't want me to live here that's a problem you're gonna have to buy me out or we're gonna sell it up to you your choice and then i'll decide where i want to live assisted or otherwise because that's what i do i'm like a grown person and stuff so there we go you're not getting rid of me that easy it's not good wow open phones at 888-825-5225. Zach is in Cleveland, Ohio.

Hi, Zach. How are you? Hey there. I'm great. How are you? Thanks for taking my call. Sure. What's up? So I just had a question around house buying strategy and how much kind of house we can afford. I've always kind of hated debt, hated interest, just as a personal belief. But that said, 29, no kids, getting married soon.

I take home 160K a year between two full-time jobs and then another 20K with a side hustle. The fiance has 50K salary and we have some investments as well. So basically, we're just looking into this starting out. We were shocked by interest, right? So we were looking at around $350,000 home and then looking at interest over 30 years. How much do you have saved? So currently, we kind of rolled a lot of stuff over into an investment account now. So we have like half of it in a money market account that gets about 500,

5% back. And then the rest of it is in like S&P 500. How much is it? How much is the cash on hand? 125,000. Okay. When are you getting married? This September. Okay. Well, don't do anything before September. Yeah. We're not in any rush. We're just trying to? This September. Okay. Well, don't do anything before September. Yeah. We're not in any rush. We're just trying to lay the framework. Yeah. You don't buy a house before then, before you're married.

For sure. Don't buy a house for somebody you're not married to ever, people, ever. And then we've got, you know, what I would do is take the whole $120,000 minus an emergency fund. Do you have any other money saved other than that? We do have, or I do have a 401k through work that I'm looking to roll over into a Roth soon for tax benefits, but then that's about $70,000. Okay. Do you have any other money in miscellaneous savings other than this $120,000?

That's about it. Okay. All right. You need to set aside somewhere around $20,000, $25,000 of that as your emergency fund. Don't touch it. So you're going to have somewhere around $100,000, $25,000 of that as your emergency fund. Don't touch it. So you're going to have somewhere around $100,000 down payment, plus whatever you can save with your fabulous income. You ought to be able to save like crazy. Y'all are making a quarter of a million between the two of you.

Way to go. I heard you say that you were concerned about the interest rates, but I also heard you say on a 30-year. Have you looked into the 15-year fixed rate? So I understand just by reading kind of your guys' Reddit page, actually, and your general information that seems to be what you're recommending. I don't have a Reddit page. Fair enough, fair enough.

There are some morons on Reddit that have an opinion about me, but I don't have a Reddit page. I can't stand the format, just to be clear. So let me tell you what we really believe, regardless of what Reddit told you, all right? What we really believe is the number one and two reason that people become millionaires, and we have data to prove it with 10,000 millionaires studied, is they're investing into their retirement and they're paid off home. These are the two elements of the first one to five million of net worth. So to that end,

we're going to move you towards a paid for home as quickly as we possibly can. Great news is you make a quarter of a million dollars and you're smart people. So you're going to be able to do this fairly quickly. We would tell you to put the hundred down, hold 25 back, put as much as you can down, at least a hundred in your case, and then put the balance on a 15-year fixed rate where the payment's no more than a fourth of your take-home pay. And the data tells us that the typical millionaire pays off their home in 11.2 years because they hate interest. I think I heard a guy say that once. Yep. You.

Yeah. Yeah. And so we're going to take out a 15 year fixed it's a lower interest rate than the 30 year is and it's going to be a more conservative home than they will qualify you for but you can get in and get it paid off and then with the kind of money you're going to be making you can move into anything you want to move into later but you get in there and get started and get get your fun little house starter house and get going with the plan that in five years we're probably going to move and we may have it paid off in five years because i got a feeling in five years your income will be a lot more than 250 don't you ideally sure yeah it would be normal if it was

most people's most people's household income goes up. It goes up. Yeah. You're only 29. Great. You're doing really good. Yeah, I'd like to think we're doing okay. You're doing excellent. You're asking all the right questions. You're sourcing the answers in the wrong place with Reddit.

But other than that, but yeah, I'm kidding. Not much. But the success pool. But anyway, thanks for hanging out with us today. You're a sharp young man. You're going to do really good. I think you're amazing. And, you know, with the kind of money you're making, you're going to be in a great situation.

So I'd take out a conservative 15-year fixed and pay it off as fast as you possibly can. That's what I would do. Good question. Thanks for joining us. Open phones at 888-825-5225. But, Jade, I can't buy the house with the racquetball court, the jacuzzi, and the skylight if I do that. Well, you better get your expectations settled.

Get them straight. Oh, expectations. Sorry. You know. The secret to happiness. The secret to happiness. Lower expectations. Sorry. You know. The secret to happiness. The secret to happiness. Lower expectations. That's right.

You're not going to move into your parents' house at 29 and 28. Because it took them 35 years to get there, boys and girls. And they had two baskets of strawberries. That's what they paid to buy that house for. Two baskets. This is The Ramsey Show. Jade Walsh, our Ramsey personality, is my co-host today. Vera is with us in New York City. Hi, Vera, how are you?

I'm good. How are you? I'm actually okay. Good. How can we help? So I am working. I've been, I started listening to you about two weeks ago, I would say, as I was trying to work out how to pay off my debt. And I have been working at that, and today my car broke. And I have a really old car, 2002 Dodge Stratos, and it's been heavy repairs every couple of months, like $600 to $1,200 every couple of months, which has been putting a string on trying to pay off my debt. And I need to buy a car now, and I don't know what to do with what I'm working with, so I kind of need advice.

What do you make? I make $52,000. And where do you live in New York City? I live more in Bergen County, New Jersey. Okay. All right. And so this car, if you were to get rid of it, it'd bring nothing, right? Yes.

I looked on trying to junk it, and the most I'll get is probably $400. It looks like it's the head gasket today. Okay. Yikes. Okay. Do you have any money at all? Yes, I have $7,500 saved in my savings account, and then I have about $900 in crypto-slash-stocks that I've invested a long time ago,

but it's not going anywhere. Okay, that's the good news. Cash shows two out today. Okay. And now we've got $8,400 and I want you to buy a $5,000 car. Okay. For cash.

What car do you recommend? Not a Dodge. Yeah. Let me ask you this. Have you got family in the area? My mom, yes. Okay. Are you in a good church by chance? Yes. Okay. Call your pastor and ask him if there is one of the elders, one of the men in the church that will walk with you while you buy this car. Okay. That's for two reasons, not because you're inept, but because

some people selling cars are sexist and they think they can take advantage of a young sweet lady and they won't think that about an old ugly man. Okay? And so they shouldn't be that way, but they are. So that's thing one. Thing two, you may actually get some good advice. Now let me teach you what you're looking for when you're buying a $5,000 car because we don't want to drive this car forever.

It's until we get out of debt and we have some money and then we get a better car, okay? Okay. So it's just a stopgap just to get you out of debt and not go into debt. Now, what you're looking for is something that's possibly very ugly. I don't mind that. I don't.

Good, because that's what you need, okay? It could be really ugly. I don't mind that. I don't. Good, because that's what you need. Okay. It could be really ugly. It could be. It certainly has zero sex appeal. It's probably a land yacht. You don't hear it coming. Okay.

It might not. It definitely won't have all the bells and whistles and cool stuff on it. We're just trying to get to work so we can get a better car later. That's all we're doing. Okay. So what you need is something that's very reliable and has low miles, but it could be old. Mm-hmm. It could be a Camry from the year 2000, a 25-year-old Camry.

But it's been sitting in a grandma's garage, and she only drove it to church on Sunday and all that stuff. So it's got very low miles on it. She died. Now her kids are cleaning out the house, and they're selling the car at a garage sale. This is a goldmine car right here for for you because it'll have 20,000 miles on it although it's 20 years old and ugly and is not up on the technology certainly doesn't have apple carplay i can promise you okay but that car will that car will go another 10 years you only

need it to go about another two while you get out of debt and the fun thing is if you buy that car for five thousand three years from now you can still sell it for five thousand yeah my only concern is that um the past i would say 15 years of my life i'm 34 but uh 15 years of my life would have been having those type of cars and they always but are you are you are you cleaning up your debt now uh now i'm cleaning okay are you going to stay in debt and keep being like it was the last 15 years no you told me you weren't yeah because those cars i'm not concerned about i'm not concerned about the last 15 years i'm concerned about the next 15 years okay you're not going to do it again are you no sir okay then get out of debt and get you a better car. It's very doable.

Hey, I drove a piece of crap while we were getting out of debt after we filed bankruptcy. It was a horrible car. I don't mind the bad car. It's more I'm afraid of the spending because in the past I would pay six bucks. I'm telling you to buy something that has a lot of life left in it. You won't have a lot of spending on it but it's not very not very pretty and that's why i wanted someone to walk with you and help you investigate the car and give it a good hard look you can get a lot of car for 5k right now but it's it's a garage

sale car that's what you're looking for it's an estate sale car that's what you're looking for you're not looking for anything fancy. You're looking for something that has low miles and a lot of life left in it. And you're right. It's probably not a Dodge. It's not a Dodge Stratus. Or Dodge. Period.

But yeah, I mean, you're looking for, yeah, there's a lot of great vehicles out there- Altima, Civic. That are ugly and have a lot of life left in them, and they're not stylish. The paint job is faded. That old red is kind of looking a little pink, so Big Red might be a little pinky. I don't know, but give it a name. But this is your last time you're going to drive crap

because you're going to go get your life straightened out and pile up some money. You're going to live like no one else so that later you can live and give like no one else. That simple. Yeah. I think the problem with her is she's been driving those cars for the last 15 years. That's what she said. But there's a reason. It's not supposed to be like that.

She never addressed the reason she was in the car. That's right. If you address the reason you're in the car, the reason you're broke is all the other crap. The not handling money well, the building up all're broke is all the other crap the not handling money well the building up all the payments and all the debt you get all that cleaned up and you're living on an every dollar budget you can save some money and get a better car our car had what i call special features like what well the the motor and the windows was out and so you know when the motor goes out the electric window yeah they just fall down so we used uh shoelaces they were actually old like dog leashes

on the inside of the the wall to keep them up oh you had to you had to strap them up because otherwise they'd fall down yeah you open up the door and you can go in there and kind of jerry rig it so we had that you know smoke came out of the top of the car i don't know why just came out that kind of it ate the cds when you put cds in there it just hung on to hung on to them that tells you right there what you're dealing with. Mine ate cassettes. What's a cassette, Dave? What's a CD, Jade?

Special features. That's what you're looking for. Special features. Special features. So we had a guy here that bought a car that was a $10,000 car on Kelly Blue Book. Really nice. 20,000 car on Kelly Blue Book. Okay. Really nice. 20,000 miles, perfect condition. Wow.

Except the people left it outside in a hailstorm. Oh. So it looked like it had been shot in a gang war. I mean, it had pot marks all over. It was the most horrible. And they basically kept the money from the insurance claim and then sold the car to him. And he bought the car for nothing.

I mean, he bought it for like $1,500 and it was a $10,000 car. But you talk about ugly. It looked like it had been, it looked like it came out of Beirut or something. You know what I mean? That's crazy. Like it had been shot at or shelled or something. And he drove that with great pride for a little while while he got out of debt. We had another guy had a 1994 Ford Granada.

That's a definite land yacht right there. But it had, he paid 500 bucks for it. The red was pink. It had all turned pink. And I think it had like 8,000 actual miles. Oh my gosh. It had no miles on it. The 8,000 actual miles. Oh, my gosh. It had no miles on it. The woman had never driven it.

They had to put a battery in it because it wouldn't start. That's crazy. And he drove Big Red. He picked me up one day and took me to my shop to pick up my car, and we drove up in Big Red. It was great. So, hey, that's pride right there, man. It is.

And you know what? That guy today, he still works for us. He can drive anything he wants to drive now look at that live like no one else so that later you can live and give like no one else drive like no one else later you can drive like anything you want shut up that's how that works love it problem with this stuff we teach you is it works it'll bother you It'll keep you up nights. This is The Ramsey Show. Thank you.