The Ramsey Show - App - "Fair" Is Where the Tilt-a-Whirl & Cotton Candy Are (Hour 3)

Episode Date: August 2, 2023

Dave Ramsey & Jade Warshaw answer your questions and discuss:    EveryDollar, budget for the life you want today for free: Click Here "How should I use my tax return?" "How do I set up my inheritance well?" "Should I use all my savings to pay off my student loans?" Check out the Ramsey Student Loan Hub for tips, tools, and the fastest way to pay off your student loans, "Should we pay off our house before investing?" Support Our Sponsor: Neighborly Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Enter The Ramsey Cash Giveaway for a chance to win $3,000! https://bit.ly/TRSCashGiveaway Want a plan for your money? Find out where to start: Click Here Listen to all The Ramsey Network podcasts: Click Here Interested in advertising on The Ramsey Show? Click Here Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Live from the headquarters of Ramsey Solutions, broadcasting from the pods moving and storage studios, 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, is my co-host today thank you for joining us america we're so glad you're here open phones at triple eight eight two five five two two five liz is in boston hi liz welcome to the ramsey show hi thank you so much for taking my call sure Sure. What's up? Yeah, so I'm calling with sort of, it's two questions that kind of go into one. So I'm getting $4,000 back on our tax return and I'm going to pay off a credit card with that.

And I have another credit card that I do need to pay off, but I also have a small business and I was wondering what your thoughts are on putting that money as an investment into my small business. I have a food blog, so I was thinking of doing a website audit to see if I could increase my website traffic to make more money off of ads and things like that. And to go along with that question, I am a stay-at-home mom. And I guess I'm just wondering if I guess I'm just wondering if I'm doing the right thing being a stay-at-home mom. I left my job as a physical therapy assistant three years ago and I have two children under the age of two. I work 10 hours a week actually from my website host and then my food blog on the side and I just

wasn't sure if I'm doing the right thing. Okay what do you make on the 10 hours a week? 35 an hour. Okay so 350 bucks. Okay And then what are you making on the food block? Not a lot. It comes out to some months it'll be about $400 because I do food photography for that on the side. And then some months it's close to like $50. Okay. No, you do not put $4,000 into that. Okay. Take you forever to not put $4,000 into that. Okay.

Take you forever to get it back. Yeah. You're not making enough to justify a $4,000 investment. You're making enough to justify a $400 investment. Yeah. Yeah, it would end up being $1,800. It's too much. Okay. I'm also going to poke a larger bear here.

You said you're a stay-at-home mom i'm assuming you're married yes what's he make um this year it'll end up being about 240 okay so what's the problem yeah i i think i know what the problem is because you're saying these are your your tax return your credit cards you guys don't have your money combined no we don't um we do in a sense that um he pays all of the bills and i pay my student loans and my credit cards um yeah so you're not combined no we do have we do have a joint account um you're not combined dear I know what you're saying I know you want it to sound better than what it is but you're not combined but I hear from your voice that maybe you would like to be yeah um I think it would be a little less stressful. Yeah.

Here's the thing. This man has a wife and two babies. His job is not to make his wife pay her student loans so she can take care of the two children that he sired. That's bull craprap all right so the two of you should put all of your money in a pile and the two of you should take care of the two of you for sickness and sickness and in health for richer for poorer and the old wedding vows back in the day the old book of common prayer wedding vows say unto thee all my worldly goods i pledge you're good enough to have babies with but not good enough to have your student loans taken care of bullcrap

yeah you took him if he gets sick you're gonna make him chicken soup and you got student loans so we have two children we have student loans we made the decision for you to be a stay-at-home mom because that's what you wanted to do and you're fretting over eighteen hundred dollars and fifteen hundred dollars while your husband makes a quarter of a million dollars a year. Bull crap. Have you brought this up to him before that it would be a lot less stressful if you guys could just combine your money? Yeah, it has been a conversation. It was never like really stressed.

Like I never really tried to make it like a big point. I guess I feel guilty he has no debt and i have like no he married you yeah you you come with all of you you married him he doesn't he doesn't walk around feeling guilty about being selfish. No, he doesn't. You don't need to walk around feeling guilty about dadgum student loans. I'm not going to. Look, I'm catching a vibe here that I don't like. At all.

And Dave is right. That's all I can say. I don't want to jump to any conclusions. I'm catching a vibe I don't like. I don't like that you have all this guilt surrounding a simple request I don't like that you are feeling so much apprehension about having this conversation with this man that you're married to and have three kids with so there's a lot going on here um if you're good enough to have babies with you're good enough to have babies with, you're good enough to combine finances with. Yeah.

Yeah. Okay. I mean, I think he would be open to it. Good. Good. That would speak highly of him. I would think better of him than I do at this moment. I would, too.

I would, too. I think you guys are just plowing along and hadn't stopped and looked at this, maybe. So let's stop and look at it, because here's the thing. You're fretting over stuff that you guys ought to just write a check and pay these loans off. I'm guessing you've got the money in the bank, and you ought to clear them up. It's not up to you to do it by yourself any more than it's up to you to feed the children by yourself, or it's up to you to do everything by yourself.

It's not up to him to do everything by his self. So we are a team. That's what we said when we went to the altar. We are a team. We are a team we we are a team that's what we said when we went to the altar we are a team we are a team we are a team we both have a vote and we both bring strengths and we both bring weaknesses to the team we are a team we are a team we are a team and let me just tell you the people that build the highest quality marriages with the highest probability of extreme prosperity meaning building wealth and becoming baby steps millionaires all the data points to they work together and they combine their finances. I want to be independent.

Well, you shouldn't have gotten married. Because when you get married, by definition, you are not independent anymore. You don't have to lose your personal identity. Right. And this is not some kind of 1950s thing I'm talking about here. I'm giving you fresh data from the marketplace that says, folks, you need to combine your finances if you're willing to combine your bed. It's not any more than that. I mean, in terms of being married, okay? So it's time. It's time. You can have babies together. You can pay off finances. You can pay off student

loans together. This is the Ramsey Show. Jade Walsh, our Ramsey personality, is my co-host. Our question of the day is brought to you by Neighborly, your hub for home services. When you need help getting your home ready for spring, go to Neighborly.com to find reliable local businesses like AirServe, Window Genie, The Ground Skies, and more. Visit neighborly.com today and find home experts available near you. All right, today's question comes from Leo in Washington. He says, I'm 83 years old, and I want to know how to set up my inheritance for my children and grandchildren.

I don't want to give them the money that is scribbled away i want to get i don't want to give them money that okay i see what he's saying he doesn't want them to get this money and just blow it blow it yeah um there's a couple of details i wish were here obviously uh you're going to either need a will or an estate plan or a combination of both depending. If you've got a net worth over millions of dollars and it's a lot of money, then you're probably going to want something like an estate plan to really put everything in there and decide over time what happens to it. If it's just a couple of possessions and a little bit of money, he might be okay with just a will. But there's probably more to money, he might be okay with just a will. But there's probably more to it that you're going to want to walk through. You're going to want to make sure that there's a power of attorney set up for your medical stuff, for your financial stuff.

You're really going to want to walk through that estate planning situation. Dave, if you're just a guy, you know, you got a couple hundred thousand dollars, you've got a couple possessions. Is it worth going through the process of doing an estate planner? Would you just say, yeah, put it in your will? I would go to Mama Bear Legal Forms and do a will. Yeah. Yeah. In terms of how to decide whether you're going, number one, when you start with the premise that just because someone is kin to you does not mean they're entitled to an inheritance. Okay?

So I'll give you an extreme example. One of your grandkids is doing heroin. If you leave them money, you will kill them. Because they will use it to overdose. Right? So we do not, you do not, they're not automatically entitled to money just because they're in your lineage. Uh, and so you have a responsibility to them and to God to manage this money well. And so we're going to leave it to people who are going to handle money well and

are handling their life well, because when you get more money, whoever you are, me included, you become more of what you already are. If you're a jerk and you get money, you become a colossal jerk. If you're a drug addict and you get money, you die of an overdose. If you have an anger problem and you get money, you're a rageaholic. You're a well-financed butt. And so, you know, and so on, right? And so if you're sloppy with money and you get money, it doesn't suddenly make you not sloppy with money.

It makes you sloppier. That's right. So you're not blessing someone who has behavior problems, we'll call them, by giving them money. As a matter of fact, you are blessing them by not financing that. Yeah. And have that conversation. Have those conversations open and in open. Don't make it like some big secret of.

I'm going to sit down with the grandkids. Yeah. And if you want to put them all in a pile, that's fine. If you want to do it one at a time, that's fine. And go listen, those of you that handle money well will be getting money. Those of you that don't handle money well will be getting a salute. I love you, but I am not. be getting a salute i love you but i am not matter of fact i love you so much i'm not going to finance your misbehavior and so grandpa's watching

it's that simple hey say you've got okay say your kids are fine and you want to split up this money and this is the other thing you can't be mad if everybody doesn't get the same amount no like go ahead and tell them let me just tell you fair is where the tilt-a-whirl and the cotton candy is there is no fair okay even jesus didn't split it evenly check the parable the talents true that parable the talents who got more money the one who managed it well parable the talents read it so this is biblical so i you know i'm looking at my grandkids and go don't be mad at me god said it okay so yeah here's and no i'm kidding but i'll take the blame because here's the thing i am not going to finance your misbehavior i love you too much to be an enabler enablers are weak people pleasers and i'm not one so this is i talk

to my kids now yeah i mean as weird as it sounds we do an estate planning meeting once a year where all the family is there and the leadership team at ramsey is there and we talk about what happens this year if dave dies as a matter of fact that meeting is today was it today it is going to be later today i am dreading it it's the monty python me are you feeling just fine i'm feeling much better it's just a flesh wound we're planning my death all the time right so yeah but this has been for years i mean the starting point of our thing is as for me and my house we're going to serve the lord and if you want to if you're going to do that then you're then you're going to get financed to do that through the blessings that God has given us. But I am going to make sure, if you're misbehaving, that God's money is not financing it and Dad's money is not financing it,

because both of us love you too much to finance your misbehavior and encourage your misbehavior. And the misbehavior can simply be laziness. I don't like to work much. Not financing that. Why? Because it's not good for you. It's not sustainable. Right?

It's not good. It doesn't bring joy in your life. Industry and diligence brings joy in your life. Creating things and accomplishing things brings joy to your life sitting around and being really good at an at a game on the television does not bring joy to your life i know you think it does but you're just numbing your mind it's a brain candy yeah so i mean you've got to do something with your life and so grandpa that's a fair thing to do and so it's a fair thing to leave you know if you want to leave a i'm gonna leave you five000 and all that is, as I say, I'll have you. Okay.

But, uh, but your sister gets a hundred thousand dollars cause your sister's actually got a brain and is using it. Yeah. You know, tactically tactical question. Okay. Grandpa's passing away. He's leaving the grandchildren 30, $40,000 each in the will. Does he need, uh, that money effectively would go would go to them immediately if it were in a will.

If they're minors, I would leave it in a trust. Yeah, so that was the tactical part. If the grandchildren are not minors, then I would just leave it to them. Yeah, I think that's the tactical part that people miss. If you've got minors involved, whether it's your own children or grandchildren, that trust lets you decide when they get the money as opposed to happening right if you want if you want to keep somebody from getting until they're 30 or something like that you need a trust too but i you know again it depends on the amounts and how complicated and

how complex you want to get into this yeah but let's start with the premise of two things number one no one is entitled to money no you know well my, I've met people who felt like their parents or their grandparents owed them their inheritance or that they were entitled to that inheritance. You're just not. That's not ethically, morally, legally, spiritually correct. It's just wrong. Okay. Number two. So you're not required to leave money to someone so get off

the shame train okay now the the second thing is is you need to really understand with all money transactions you are not helping people when you give people that are misbehaving money you are financing a larger portion of that misbehavior oh 100 percent of the time you're magnifying so your people don't get you know it's like marriages don't get better you know where our marriage is struggling so we had a kid well that was a dumb butt idea that doesn't help your marriage yeah okay it just means you're not sleeping that's all that means so i mean gosh and you might have to consider your kid's spouse do you consider the spouse as well yeah absolutely absolutely so if i have if

one of my kids has an overbearing spouse that is is going to inflict values that i don't believe upon the wealth that i leave that i'm not leaving it yeah oh and you got to tell you got to let him know that we talk about it all the time we'll be talking about tonight i mean we do we review this every year. We go through it, and we go through, this is what's going to happen with this. This is what's going to happen with that. This is where it's going. This is what we're doing. And everybody gets an opportunity to have their feelings hurt every year.

You know what I mean? I can't imagine there's any drama in that room. No, there really isn't. That's what I'm saying. I can't imagine there is. There really isn't. It's really kind of boring. But at least we review it, and that's an act of diligence. It's an I'm saying. I can't imagine. It really isn't. It's really kind of boring. But at least we review it.

That's an act of diligence. It's an act of love on my part. So Sharon says, this is what's happening. That's what's happening. Sharon knows she's taken care of. Kids know how they're getting Ramsey. They know how they're going to run Ramsey this year if something happens to me. The milk truck hits me. The proverbial milk truck. That poor milk truck.

If that milk truck comes for you, I'm coming for it dave nothing's taking you out there we go now now i feel better feeling now i'm feeling i got you you're on my side jade jade's got me that's it beware ye milk truck drivers 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 system is working against you,

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to take care of healthcare costs. CHM programs start as low as $98 a month. So learn more today and join at chministries.org slash budget at chministries.org slash budget. Jade Warshaw, Ramsey Personality is my co-host today. Jack is in Charleston, South Carolina. Hey, Jack, what's up? Hey there, I've got a question for you. I recently graduated college about a year ago. Congrats, what's your degree in? Mechanical

Engineering. Good, good, good for you. And I have been working, I've got a decent job, and I've got about $100,000 in student loans. I haven't made any payments because I've been waiting to see if our president was going to do anything with our loans, which I don't think is going to happen.

You figured that out, did you? Yeah, which is fine. The interest rates have been deferred. But my $100,000 is actually made up of two separate loans. One is $25,000 about, and the other one is $75,000. My cash in the bank right now is about $, 26 grand. And I've been wondering if I should just outright kill this smaller loan and just get it off my plate. Because I've also been looking at saving up for a house, a down payment on a home, and I just don't know the best way to attack this,

these two separate loans. What do you make? Right now, 86. Good for you. Thank you. So how long have you been a listener? Are you pretty familiar with the way we teach? Yes, yes. If I had to guess what you're going to say, it's going to be I really need to attack these lows. But I just don't know if y'all would say an aggressive, aggressive payment plan each month and try to take them out over the course of the next five years. We'll just do it right now. We may help you. That's what we always say. Okay. over the course of the next five years. We'll just do it right now, the smaller one at least.

Let me help you. That's what we always say. Okay. A hundred percent of the time. And there's several reasons for that. The probability that you actually get out of debt is so much higher the more aggressive you are. And because it shortens the time and because it's an all-in commitment it's an emotional thing

as much as it is a mathematical thing does that make sense yes sir it does and so there it's weird because the thing kind of works on a curve i mean you're familiar you you do this uh it's like on one end of the curve uh you're going to be in debt forever because the energy is very low in the middle of the curve you don't get much of any movement you don't get movement equal to the equal to the effort and on the our end of the curve you get movement that is unequal in a good way to the effort because the effort is so there's so much focus of energy and so because personal finance is more behavior than it is, it's more emotions and behavior than it is actual math, especially in a situation like yours, because you're going to only

owe $75,000 when you get off this call. And you make $86,000 and last year you didn't make anything because you're a college student. Right. So you don't have any reason to be spending $86,000. You could probably almost knock this out in a year. That's what I think. Yes, sir. I know I'm extremely low rent at the moment as well. So I think what you're saying in summary is to completely kill this smaller loan, change gears, and a highly aggressive payment plan to knock out the 75. That's right. Keep yourself a thousand bucks aside like you plan to do. And yeah, highly aggressive payment plan. I agree with Dave. i think you could knock this out in a year if you wanted to pick up some work on the

side or on the weekends maybe you could do that i'm not sure you know how taxing this new job is or if you're feeling you know like let me just chill for a second i just got this job but so what are you 24 yes sir yeah so we're talking about 25 years old you're making a hundred thousand dollars a year you don't have payment in the world. Do you know how fast you're going to be a millionaire doing that? About eight years. Yes, sir. That'd be awesome.

That's the plan. Do you see how that works? While your contemporaries are all sitting around going, Biden is going to save me. Oh, no, he's not. Yeah. And I knew that was going to happen me. Oh, no, he's not. Yeah, and I, you know, I knew that was going to happen, which is fine. I was just waiting to see, you know,

what the interest rates were going to do. You know, actually, I feel like I need to mention this one little thing, too. The smaller one has got a much lower interest rate than the larger one. It doesn't matter.

It doesn't matter. You're going to go so fast, it's not going to matter. It's going to be calm by the end of the day it doesn't matter okay and and just there's the psychological part when you just immediately get rid of one and it's gone for good that's that's some momentum right there that's the moment you get some positive momentum going we're getting some physics going on here

so well done sir well done hey the student loan thing is starting uh there is and everybody talks about how bad it is and everybody talks about how sad it is and everybody talks about how upset people are and all this and yet there's a whole nother side of this that yeah there's a lot of positive things going on especially in our world on our youtube page that's right we're getting comments of people who paid off their student loan debts i wanted to read a few of them yeah so this is on our YouTube where we've already talked about student loans. There's enough naysayers. These are the people who actually did something about it.

This person says, hey, I paid off $72,000 worth of student loan debt in seven years. It's one of the best feelings. I'm now working to pay off my mortgage. I took Dave's advice back in 2020 when the payment pause started. I paid off my loans by the end of that year. It took a few sacrifices, in 2020 when the payment pause started. I paid off my loans by the end of that year. It took a few sacrifices, but it was definitely worth it. Wow. This person says, I don't regret going to college and earning my degrees. I do regret not understanding what I was getting myself into when I signed for the loans. I lived off some of the

money, took a graduated payment plan when I finished school. I did that too, making it impossible for me to pay down the loans, pay the loans down the first five I finished school. I did that too, making it impossible for me to pay down the loans, pay the loans down the first five years of college. I did the same thing. I didn't fully understand how the debt was controlling our finances. Eventually we refinanced the loans privately before the pandemic,

sold off a ton of assets along with working overtime to pay the loans down. We paid them in full summer 2021. It's insane. The sense of relief that you feel not being strapped down by debt. Yes, I feel that. Boom. This guy says had over $80,000 in student loans, which was part of $100,000 in consumer debt. Paid in full in 2019 after three years of grinding. Built a dream house in 2020 put down 20 now on track to pay the house off by 2025 getting out of debt is a mindset more than anything we're continuing to document the journey on youtube i love that last one she says as of two days ago i'm 100 debt free

the last things to go with my student loans and it's no more the sense of relief is amazing a sense of relief sense of relief i came up to it three times yeah yes that feeling that you get what and it's not i don't want to correct them because it's their words and their experience but it's really not a sense of relief it's just relief it's relief there's a reason you have a sense of relief it's because you have relief it's actual relief yeah because it's actually there there's a sense of sense of not being weighed down why because you're not weighed down there's you know that there's why that sense is there so yeah that's interesting phrasing it is but yeah check out the ramsey student loan hub for tips and tools and the

fastest way to pay off your student loans ramsey solutionsaysolutions.com slash studentloans. Jade's got a lot of help over there. I do, I do. You don't want to miss out on it. She can help you. And listen, we want you guys to get these student loans cleared up as fast as you can. If you haven't gotten them cleared by October when they start back, we certainly want you to be prepared for when they start back because it's coming, people. And it isn't like we hadn't told you for two years this is what's going to happen.

So we've told you and told you and told you and told you and told you and it turns out we're right and that's the bad news the good news is we're going to help you yeah and show you what to do give you the motivation the inspiration and the information to get this done ramseysolutions.com slash student loans what all's on that site jade so on that site i go through three steps with you of what you can do literally today the first one is getting organized about your student loans. What all's on that site, Jade? So on that site, I go through three steps with you of what you can do literally today. The first one is getting organized about your student loans because maybe it got sold somewhere. Maybe you're not sure what your payment is or what you owe. I'll help you through that. The second step is for you to understand your payment because there's a lot of payment plans out there. Should I do the save plan? Should I do one of these income driven plans? I'm going to walk you through all of that so you know what to do. And then finally, you got to get on a budget, guys. You need a budget so

that you can actually see where your money's going. Do you have the margin to pay it? If you don't, how are we going to get it? I'm going to walk you through all of those three steps. It's full of resources. Trust me on this. I'm talking about this, Dave, because I did it. It's free. This isn't like you made this up in a vacuum how much student loan debt did you all pay off 280 000 dave yeah and as a part of 400 and something thousand that's right that's right seven years to do the whole thing that's right but uh and so you know you're sitting here with 80 000 in student loan debt well jade's got you beat i promise you and she's proof it can happen.

It's proof it can be done. This can be done. You are not a victim. It is time to be a victor. You need to happen to things instead of things happening to you. Dr. Stephen Covey said in the book, The Seven Habits of Highly Effective People, the number one habit, proactive. People happen to things, not things happening to them you are not a victim

you're a victim of your own thinking and jade can help you with this that's what we're here for this is the ramsey show our scripture of the day habakkuk 2 3 patience is not the same as indifference. Patience conveys the idea of someone who is tremendously strong and able to withstand all assaults. Thomas Jefferson said, never spend your money before you have it. It's kind of like, don't go in debt. I like it. Loving it.

Jeremy's in Cincinnati. Hi, Jeremy. Welcome to the Ramsey Show. Hey, Dave, Jade. glad to be on the show honored to have you how can we help yeah so I guess the basic uh point of my question and I know I know you guys usually would shoot this down pretty quickly but it's basically can my wife and I are on baby step four five and six and I wanted to know if we could kind of skip baby steps four and five and just hit six with everything we got. And so a little bit of background.

We didn't really have much of a baby step two. We are only 25. We both just turned 25 in the last couple months. Last fall, we bought our first house and found out we were pregnant shortly after. And we just had our first baby boy in April of this year. Congratulations. A lot going on. Thank you very much.

Yeah, no, it definitely was worse than we anticipated, but it's been a good time. So, yeah, so we have a combined income of about $120,000, and our mortgage is about $195,000. And we were considering, I'm an accountant by trade. And so I run the numbers like crazy, uh, much to my wife's, you know, a pleasure, I guess. Uh, no. And, uh, and I was like figuring out that we could, if we just focused on the house, we could be not even 29 and have a paid for home.

And then, um, being as young as we are that we could catch up on investing pretty quickly and still retire with millions even if we just did 15 at that point okay so your question is what should you do that or what yeah but it would be okay to kind of focus on that house first get it out of the way have have more income to well you're a grown up anything you do is okay you get to make your choices that's right um sure would i do that no i wouldn't do that what i tell you to do that no i wouldn't tell you to do that because i think that um you're not going to end up with as much going your way as you will going our way

and that's my reasoning see that the thing you did not run your number in your numbers is increased in income the chances of you having zero increase in income between 930 zero and you did not run any increase in income in your numbers you ran very naive basic primitive numbers that am i right sure yeah yeah so you're if you put 15 away um you're probably going to pay off the house in about the same period of time okay fair enough and then you're going to have a paid for house and have gotten your other stuff going so the kind and what you're leaving out is the opportunity cost on the money that's what financial people call it and that is that the money that you put in between now and 30 what that money will become

over the next 30 years is astronomical and you're missing out on every bit of that so uh this uh semi-balanced approach of 15 of your income going into retirement at baby step four. Now we've got a baby. Put 50 bucks a month or whatever aside. Let's get something started on college. And we're touching the bases. And then just throw everything, including all new raises, within reason. Let your wife have a new whatever.

Don't be an accountant. But throw everything at the house and you're still going to have this house paid off and probably about the time you thought you're going to anyway and because now i'm factoring in increases in income and um i i think you're going to be there i mean you can do either one jeremy neither one of these your plan versus our plan is not a recipe for bankruptcy. Right. It's not like the dumbest thing I ever heard on the planet or something like that.

You got a house paid for by the time you're 30. I'm loving it. Okay. I think it's a great plan. I just think ours is probably slightly going to come out ahead. Dave, I hear, I hear, I got to be devil's advocate for a minute because I hear a question from the peanut gallery. Okay.

And the question is. What from the peanut gallery okay and the question is what is the peanut gallery saying the peanut gallery is saying well dave so it's it's okay for me to miss out on opportunity costs when i pause my investing to pay off my debt for five years but it's not okay for me to pause my investing when I want to pay off my house for five years. Okay. Well, let's also be very clear. Almost never does it take five years to pay off the debt. True that.

You and Sam are highly unusual. That's true. Unusual amount of debt. The vast majority in the 90 percentile of our listeners that follow our stuff with focused intensity, with gazelle intensity, are debt-free, not counting their house, in 18 to 24 months. And so that is a different period of time for opportunity costs than he's 20-some, 24.

Yeah, he's young. And he's going to be 30, and so that's six years, not two years. That's true. So there's a difference there. And I'm not talking about... I'm also clearing up uh cash flow here that's right that that is going to offset it well we can't learn of cash flow on the mortgage too so

peanut gallery would have that part right you you could clear up more depending on the type of debt you have on the front end what your debt is and how much it is he said they didn't have much of a baby step too no they didn't so in their a baby step, too. No, they didn't. So in their case, they're what, he's experiencing the weight of the mortgage payment emotionally. Yeah. Because he's an accountant. So it's very good.

So that's cool. That's excellent. Because, by the way, the number two category of people who become millionaires are accountants. Number one's engineer. Number three's teacher. Yeah, because they're aware of what's going on. Compound interest and spreadsheets are uh they're their second language you know and so

he just his brain works my brain works like that so that's how i've had to fight against my own nerd self at times that's how i know you've thought it all through every corridor that this can be thought through well i mean i started, I started, you know, I mean, like the debt snowball, obviously, is not mathematically correct. Sure. It's a behavior-based tool, not a math-based tool. The problem is it actually works and the other one doesn't work. That's right.

The avalanche or whatever the crap people call that. That's just bull. It doesn't work. It doesn't work because people don't play all the way through. With the debt snowball, they play all the way through. So all that matters is when you're done, who ended up paying off the most debt the fastest. That's what matters. And it's not a theory.

It's who's going to actually do it. Yeah. And so then that starts to mess with my math nerd self. Because my math nerd self would say the avalanche works better. Yes, because you're looking at the interest. Never stop compound interest. Never do anything to stop compound interest because it's it's the eighth wonder of the world albert einstein said so you know i mean

you don't ever do anything like that but uh so you have to have this there's more to it than math yeah there's a well are the apparent math sometimes the math that's on the surface is not all the math um you know uh well yeah you know like for instance i'm going to borrow money on my home at six percent and i'm going to invest it in this in a good growth stock mutual fund at 10 to 12 percent and i'm going to make the spread well that's that's that math is not accurate because you left out risk and you left out taxes and so when you adjust 10 to 12% for risk and taxes, it looks a lot like sex.

That's a good point. And so you didn't really make anything on your little plan here. And you see these TikTok characters. It's like, I'm going to teach my 14-year-old to arbitrage. Maybe you ought to spell it first. And maybe you ought to actually understand that arbitrage involves risk and leverage equals risk and uh it 100 of the time it equals risk more leverage equals more risk so that's a math thing

where we left out parts of math in his case he didn't leave out any math he's really thinking this through well yeah the only piece of math he left out was increasing yes that's right yeah but but um and so he's truthfully if he goes hangs up and goes they're crazy i'm gonna go do my thing he'll be fine he's gonna be he's still gonna be, if he goes, hangs up and goes, they're crazy, I'm going to go do my thing. He'll be fine. He's going to be, he's still going to be wealthy. Yeah, he'll be fine. It's just a matter of, you know, when he's 40, if we ran this all the way out, which

one of us would end up with the most money? You know, and I'm promising you. It's your way. We would. We would. Because I've done the case studies for 30 years. I know. So it's not, it's not a thing.

So that's just fun. It's fun to talk about though it is and here's the good news about somebody like jeremy he's paying it he's 24 and he's paying attention i know that's right it's not a zombie that's right he's not walking through the streets going i vote wrong i hope someone takes care of me you know he's not he's not a zombie he's actually doing he's actually paying attention. That's right. And he knows, and he's thinking and wise beyond his years. If you pay attention, you're going to be okay. That's right.

You're ahead of everybody else. Good stuff. Jade, good show today. It's fun. Oh, Austin, Ben, James, Zach, and Andrew in the booth. Great job. The booth dudes, they did it again. I'm Dave Ramsey, your host.

We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. Hey, what's up, guys? It's Jade. Look, if you like what you heard in this episode and want to know more about getting started on the Ramsey baby steps, go to ramsesolutions.com and click the get started button. We'll help you figure out the best next step for you based on your specific situation. That's ramsesolutions.com and click get started.