The Ramsey Show - App - From $6.75/Hr to Baby Steps Millionaires & They’re Debt Free! (Hour 2)

Episode Date: January 11, 2022

Home Buying, Investing, Retirement, Debt, Budgeting As heard on this episode: Sign Up for a FREE trial of Ramsey+ TODAY: https://bit.ly/3rZTUAx Tools to get you started:  Debt Calculator: https://bit.ly/2Q64HME Insurance Coverage Checkup: https://bit.ly/3sXwUn5 Complete Guide to Budgeting: https://bit.ly/3utmVXi Check out more Ramsey Network podcasts: https://bit.ly/3fHhbVE

Live Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thank you for joining us, America. This is a show about your relationships, your work, your life, and your money. The phone number is 888-825-5225. Joining me in studio for the first time, one of our brand new Ramsey personalities. We've known she was here for a while, but it's time to tell you guys

out there that she's here. Christina Ellis has joined the team. She's an absolute rock star. We are so thrilled that she's with us. Welcome. Thank you. I'm so excited to be here. Oh, we're excited to have you. Now, you guys have watched Borrowed Future. You've seen Christina on there. She's an expert on scholarship. She had a best-selling book called Confessions of a Scholarship Winner. And so you were one of our experts that commented in the documentary on Borrowed Future, on getting scholarships, and on how absurd the whole student loan crisis is. You're one of the nation's leading experts in that whole space. And you get to join this team and fight this fight, and we're so glad you're here.

I'm so honored to be here, and I'm excited to fight alongside you guys. So you learned about scholarships and the whole student loan debacle firsthand for your own self. You know, I mean, like you grew up, your dad passed away when you were young. Tell us your story. Yeah, well, the first day of my freshman year of high school, my mom, she sat me down and she basically said, Christina, I love you and I believe in you, but there's just no way that I can support you financially once you graduate from high school. So you got to figure out your own way to pay for college. And at first I was shocked. I thought, like, why are you telling me this? I'm a

freshman in high school. But at the same time, I knew that she was just trying to help. You know, my dad, he did pass away when I was seven and my family really struggled financially after that. So even though that statement was really hard to choke down, I know she just wanted to set me up for success. So she actually, well, there's nothing like a single mom to give you clarity on everything. And she is a strong personality. So she is very driven and was like, you are going to college and and i'm not paying for it because i can't right so what are we gonna do exactly so she told me about scholarships and she basically cast this vision she was like if you work hard enough now i know that you can go to a great college and start fresh with zero debt and at the time i was

kind of like i don't know about this i wasn't a perfect student and I wasn't a star athlete. So I didn't know how that could happen. But she just had so much faith in me that I started to believe in myself. And I just absolutely dove into research on, you know, how can I win scholarships? I read every book I could find, every article. I interviewed alumni from my high school and I figured out I just wanted to know, you know, how can I stand out in this process and be successful? And she kind of held you accountable.

You had to write the essays. You had to fill out the applications. Oh, yeah. She held me accountable, and she was right there with me. You know, I've always said that, you know what, she couldn't give me in money for school. She gave me in the effort she put in walking alongside of me. Cheerleader and coach. Oh, yeah.

She was right there in the ring with me, and I'm just so thankful now that she cast that vision because... So how many applications did you fill out and ask for scholarships? I filled out over 50 applications. 50? Yes. That's all? Well, I actually was pretty OCD about the process, though.

But you hit home runs on almost all of them then because tell people how much you raised in scholarships. Yeah, I won over a half a million dollars in scholarships. Hello! Woo-hoo! $500,000. And you end up graduating from Vanderbilt debt-free. Yes, and I got a master's from Belmont, completely paid for with scholarships.

Yeah. Okay, I think that kind of wraps it up. Wow. I mean, you guys see what now we're enamored with Christina and just thrilled that she's on the team. She's got a great story, and she published a book called Confessions of a Scholarship Winner, the story that you just told there, but in much more length and in details on how to get the scholarship, right?

Yes. And that book was a bestseller. And you actually, we had you actually on the show a long time ago to promote the book or you just called in and i got got some of the story out of you or what was it i remember there's some kind of a back thing there i forgot what it was i did the debt-free town hall whenever you all released a degree okay yeah i came out to support y'all and was on the panel that day and got to kind of share my story and okay it wasn't a random call then okay so we got you in there because i've had people call in they got

great scholarships and that kind of stuff over the years and i didn't know if that was one of them where we connected with you but uh so we had the debt free with a debt free degree book that we did that was a bestseller with anthony o'neill and so you were on that town hall i remember that and then we of course said we've got to call Christina. We're doing the documentary because she can make the case on scholarships that can be done. And her material and her background and her knowledge of that space will do that. And so if you haven't seen Borrowed Future, folks, it's the documentary that we put out about the destruction of the student loan industry to America, how it is destroying the American dream. And Christina's kind of got the antidote over here. Part of the antidote is scholarships. Part

of it is college selection. Part of it's a lot of other things. And so she's joining Ramsey to help us with the money space. And obviously, we'll be speaking over this whole college issue, this whole student loan issue, the scholarships issue, but not limited to that. We're going to talk about money of any kind, right? Yes, I'm very excited. It's awesome to join this team, especially with Borrowed Future coming out. It's like it's time that we really disrupt this industry, the student loan space. It's taking advantage of 18-year-olds. It's taking advantage of teenagers. And so to get to be on this team and just bang on the walls of this

toxic industry is so exciting yeah we're gonna kick the door down man that's what we're gonna do cause a holy ruckus yes let's do it yeah i like it i like it so and uh this lady's got the story to do it so yeah her dad passes away with cancer when she's seven years old her mom is a single mom raises her sits her down and says you have to get scholarships she goes and gets a half a million dollars worth goes to vanderbilt and belmont with a master's degree comes out zero debt and so listen any of the rest of you that have any problems we're just going to send her to you and say shut up i mean you can do this because it just is a matter of applying the system and believing you can. Absolutely and that's the thing about my story is I wasn't a perfect student and I wasn't a star athlete.

I had a lot of obstacles standing in my way so that's one of my biggest passions is just helping people believe in themselves and that no matter what your background no matter what challenges you're facing you can overcome them and you can get a debt-free degree. You do not have to sign up for student loans there is a way to do this. Now there's success principles woven all through your story and your life that can apply to not only the whole go to college thing, but just getting out of debt thing, becoming a millionaire thing. And so you joining the whole money team here of the Ramsey Personalities money team with Rachel and with George and me and and we get to talk about this stuff for the for the rest of your life this is awesome yes this is going to be fun i'm excited

about it it's really good uh we've also got another ramsey personality that has joined the team we'll be introducing you to in a few months and uh christina's been here for a few and uh we take a little time get a little on ramp going around here before we bring these folks out and make sure you get to know them. But you'll be hearing a whole lot more from Christina in the coming months and years. Be ready. She is an amazingly smart, talented young woman, and we are so excited to have you on the team. Welcome. I'm honored to be here.

Thank you, Dave. So check out Christina Ellis. And if you want to check out her book from before she was here, it's called Confessions of a Scholarship Winner. It'll tell you the story. And game on, baby! Woo-hoo! Game on! This is The Ramsey Show. you've got a lot on your plate a job your home your marriage and your growing family

while you're enjoying the present, you can't help but think about your future and your finances. As you explore your options, consider Christian Healthcare Ministries, or CHM, for your healthcare. Their generous maternity program and budget-friendly monthly programs have been a blessing to members welcoming children into their families. Visit chministries.org slash budget to see if it's right for you. Christian Healthcare Ministries is a Ramsey Trusted Provider. Dr. John Deloney, my co-host today here on The Ramsey Show. The phone number is 888-825-5225. I mentioned Borrowed Future, the documentary, when Christina was on a few minutes ago.

If you haven't seen it yet, over 150,000 folks have now viewed it. It's officially a big deal. You can watch it at BorrowedFut apple tv on amazon prime or google play it's pretty much everywhere uh so check it out it's called borrowed future all about the uh the debacle that is the student loan industry john deloney is on there uh we actually taped you as an expert prior to you coming here as well no No, I was here. You were here already? I had just come. Okay.

All right. I couldn't remember. All right. But with his Ph.D. in higher ed, he had some things to say that are very interesting. Be sure and check all of that out. Nathan's with us in Pensacola. Hi, Nathan. Welcome to the Ramsey Show.

Hi, Dave. Long-time listener. I appreciate your show and definitely live by almost all the advice you have. Well, thank you. How can I help? So my wife and I are looking at possibly buying a property. It's a little bit more expensive than what I'm used to buying. So right now we own a home, and we're just trying to figure out if it makes sense to take our current investments and just basically liquidate our current investments

and then now go into debt with a mortgage that would be probably about a $300,000 mortgage after we're done with liquidating all of our expenses, all of our debt. I'm sorry, all of our assets. Okay. How old are you? We're 47, 47 and 46. All of your assets? You mean you're pulling retirement out? No, no, no. The retirement I can't touch until later,

but we've got, listening to you guys, a smart investor kind of stuff, and we went with a smart investor pro here in Pensacola. So you have how much money in investments that are non-retirement? Probably about $600,000 total. Okay. And your current residence has how much equity in it? About $400,000. Okay.

So you're buying a million-three house? It's going to be a little bit less than a million-three, but it'll be a little over a million. Okay. I missed how you get $300,000 in debt because I got a million dollars here, $600,000 and $400,000. So I guess the mortgage might not be quite $300,000. It'll be probably closer to $200,000 when you have all the closing costs and everything into it. Okay. So you're talking about you're not going to net $400,000 out of your house.

No, we should. We should net $400,000 out of the house. And you have $600,000 in investments. And savings and everything, yes. That's a million, and the house is a million. There's not $200,000 in closing costs. There's not a 20% closing cost. There's no such thing.

So I guess it's just kind of an uneasy feeling going with a higher home value. I guess the big question that I have is, does it make sense to liquidate the investments that we have right now? I wouldn't buy the house if I didn't because you're going to go into debt. It's the same question of if I had a paid $4 million house, would I go borrow $600,000 on it to put money into investments? No, I wouldn't. Not taking the money out of the investments and putting them on the house is the same thing as borrowing on your house to do that. So you should not buy the house unless you're willing to use the investments to do it.

What's your household income? Right now it's probably about $110,000. And how old are you guys? 48 and 46. Will you be able to afford the taxes on a million-dollar property with $100,000 a year just to maintain the property, keep the lights on this thing, keep the yard mode? Yes, we will. Yeah, Florida's got some generous disabled veterans tax benefits. Okay.

So why do you want to buy a million dollar property? It's something my wife and I have always dreamed about living on water and this is an opportunity to do so right now. Okay. I don't think you're going to need a mortgage or if you do it's a very, very small one and you're going to turn around and get that paid off as fast as you can. If you're sitting in this property debt free within a couple of years then i'm fine with this idea if you want to do it um it the thing that's out of balance that you're feeling is is that um the vast majority of your net worth is now tied up in your single family home that does not that does not generate an income it does grow in value but it does not generate an income and so um you know you're going to have to really pour on the coals and build some investments by the fact that you don't have

any house payment in the near future uh to make this work but no you don't need a $300,000 mortgage the numbers you keep giving me that you act like they add up and they don't add up i mean 600 and 400 is 1 million and you buy a million dollar house $1 million, and you buy a million-dollar house for a million dollars, and you use a million dollars, you shouldn't have a mortgage. Something about this makes me uncomfortable. It makes me uneasy. That's a lot of dumb business. The reason is that everything you own is going into this house except your retirement. It's out of balance.

It's too much, really. But if you're paying cash for it, I think you can tolerate it as long as you turn around and start dumping money into retirement really, really quick. Would I do this if I were in your shoes? No, I wouldn't. Yeah. No, I wouldn't. Maybe that's why I wouldn't either.

Because I don't want that much of my net worth making $110,000 tied up in a single-family house that does not create income. And I'm thinking of it, if the air conditioner goes out on this million-dollar house, it's going to be an expensive repair. Or if the driveway needs to be, or if I've got to do some plumbing work on a million dollars, it's all so expensive. Everything, I mean, just 100% of the houses break. Yeah, yeah.

100% of them need crap done to them. And brand new, no matter who built them, no matter where they are. I mean, I own a lot of real estate. And there's just, they eat money. Yeah. So to your point, that's good. Yeah, I think, you know, the more I sit here and talk this through, listening to John too. I'm risk averse though, so let me say that a lot.

But I mean, there's just no margin here. There's no wiggle room. I keep coming back margin here. There's no wiggle room. I keep coming back to margin. There's no wiggle room. What if you get sick? What if you get something? If life goes sideways. Right now, you've got a lot of wiggle room with $600,000 in the bank.

So probably what I would do is take your $600,000 and pay off your current residence, which you should have done anyway if you're listening to me. But that's that part where you said you just did part of what I teach. I remember that part. I didn't drive by it i heard it and um then then i would save like a crazy person and i might do this deal in five years where i've got 500 000 left over after i buy it now that started if you had 500 000 left over non-retirement after you move in there you do a million dollar house 110 000 incomes is low for a million dollar house but if you're paying cash for it for whatever reason it's okay but you do need some liquidity

and it doesn't need to be freaking 90 of your net worth that's just that's out of balance or can you save up some money and and go multiple weeks and stay at a lake house a year. I mean, if you need to get the fish. I don't even mind if you buy. You know, if your dream is to live on the water, I agree. I like living on the water. I've got properties on the water. I like it. But water is amazing.

Yeah. But it's not amazing if it steals your peace instead of gives you peace. There you go. So, and there's no margin here. No margin. It's dangerous. That's a dangerous deal. No, I wouldn't do it. I'm deal. No, I wouldn't do it.

I'm going to retract. I wouldn't do it because I don't like the fact there's no wiggle room. What I would do is I pay off my house today and I'd start saving like a crazy person and make this a three to a five year dream and just keep piling up cash and keep investing with a paid for house. But you're going to do what you're going to do because you already don't do some of the stuff we teach so that's up to you you get to decide but that that's that's what i would do if i woke up in your shoes um i find people don't have margin with their time they don't have it with their relationships they don't have it with work they don't have it with

money we just have a margin-free society now man well they're just it um there's friction it grates they get frayed ends yeah and you get frayed at the ends and it's just um because everything's pushed to the edge and it takes what would have normally been a blessing and and you you know you add two doses of stress to it and all of a sudden you don't the thing you were supposed to be in love with you hate and when you think of it uh psychologically our brains were designed to run at that level when a lion was chasing us not to live like that yeah it just rattles everything to our core it's a big old house with a lion chasing you around inside that you just parked a lion in the front yard yeah that's right so we've already deteriorated tiger king right here

this is the Ramsey Solutions on the debt-free stage, Kelvin and Emily are with us. Hey, guys, how are you? Hi. Good. Good to have you guys. Where do you all live? We're from Nashua, New Hampshire.

Ah, New Hampshire. Welcome to Nashville. And all the way to the south to do a debt-free screen. All the way through the snow. Love it. Tried to get away from it, but it's here, too. Thank you for bringing it with you. It was here when you got here, but it gone now it doesn't stay long in tennessee

so how much do you pay off 214 000 in this year and two months plus we catch for our wedding and we catch for my wife's school oh wow very cool very cool what's your in? I am a nurse in a pandemic. I'm also in school to be a nurse practitioner. Okay. And what's your degree in? I'm a truck driver. Oh, okay. Good. Very cool. Good for you guys. You guys got after it then, huh? Yeah, you're just knocking this out.

How long did this $214,000 take to pay off? Six years and two months. Six years and two months. Wow. And your range of income during that six years? We start at $95,000 and we end up at $200,000. Wow. Y'all are killing it. So what kind of debt

was the $214,000? We paid off our house. Oh! Looking at weird people. What's this house worth? $200,000. Say what now three hundred three hundred thousand dollars i love it yeah way to go it's awesome have you had your first month where you had no mortgage but you got that your everything deposited yeah it feels amazing

it's amazing huh that's how we're here that's. That is so fun. Congratulations, you guys. Thank you. It's awesome. So what started you on this Ramsey stuff six years ago to get out of debt? Tell us your journey. Tell us your story. Well, Dave, I came to this country in 2003. When I got my first job, I was working in the factory.

I was making $6.75 an hour. When I was working there, they made a presentation about a 401k. A close friend told me, do not invest your money in there because they're going to steal your money. I did believe it, so I did not invest in there. So a few years down the road, I was searching through the radio. I found an NPR that they were talking about when you retire, you need to have like a million dollars in order to be able to retire. I thought in my head, that is impossible. There's no way a middle-class working family

are able to accumulate that amount of money. So a few years down the road, one day, I found this guy named Dave Ramsey talking about finance, people calling, and he answered their question. He said, Henry, your finance, they were your grandma with it. The only reason we kept our TV back then. I started listening to it for about a month. About a month, I decided to bring it in my house.

And when he brought it home, it wasn't like you were a curse word, but more like a new best friend who just moved in. Dave Ramsey said this. Dave Ramsey said that. And we had the envelopes and the magnets and the chart and our kids are doing chores based on commission with a triangle. All in. And it was super awesome because I grew up conservative, so I didn't have any consumer debt. I had paid for college originally, my first degree, but I just didn't know what the

direction. I never thought retirement, I didn't know how to do that. I didn't even think about having a will because I didn't think that maturely yet and so to be able to articulate and put it all on paper it was really awesome to like give a direction and be like good good stewards of our money so and now we're millionaires we're millionaires too yeah it's awesome baby steps millionaires i love it on the day we launched the book that That's awesome. Wow. Yeah. Well, we have an actual copy for you that we'll give you and sign it for you. This is so cool, you guys.

It is super cool. Very, very neat. Well done. Very well done. So, yeah, from $6.75 an hour coming to this country, you've got a Dominican shirt on. Is that where you're from? Yep. Okay, cool.

So you come here from the Dominican Republic, from the big DR, and end up in a factory. It's $6.75 an hour to now, what is that, 18 years later? Yes. From then, you're a millionaire. Yeah. You owe nobody nothing, dude. I do not. It's a real American dream.

It's hard to think, and I don't even believe it myself that we made it to here. I believe it. I definitely believe it. It's amazing. So what's the hardest thing on your marriage as y'all went through this for six years? Six years is a long time. You got three beautiful young kids. They wanted stuff.

They needed stuff. How'd y'all make that work? Well, for me, I came from another country. When you come here, for me, it was not hard at all because in the first day that I came to this country, I felt I was living as a king right away. I was his biggest trouble. I was his biggest hurdle.

I did not. I am middle-class American. I need a 12-foot Christmas tree. I need 3 to 4 to 17 pumpkins at halloween and so when you come from the br you know that's a want well when you when you are with somebody with everything is a want i'm like dag nabbit like i i don't need anything because i live in america and it was awesome it's awesome to be content because if you're not content with what you have then how are you going to be content with more because Because we didn't have that consumer debt.

So it's not like we were trying so hard. We didn't have to be beans and rice, but Calvin loves beans and rice. So we were. And I love tuna sandwiches, but it was really hard. It's really hard when you don't have consumer debt. You work full-time jobs. You're going to school. You have kids.

And to still scrimp and save and shop second hand and spray paint my patio furniture but we did it i love it and you're millionaires to be weird made for house yeah and as a nurse right now i love my job i really do love my job i love i have a great crew hviu um but i really didn't want to be stuck in a place where i couldn't be happy and it's so freeing it is so freeing to to be able to go anywhere yeah whatever you want to do yeah you can decide now yeah yeah it's uh it changes your career path it changes everything so kelvin uh your family cheering you on through this process or telling you that this is crazy they tell me this is crazy and how that how do they act now well still that we're crazy they still think we're

like we're crazy crazy millionaires over there but yeah my older sister i introduced dave renzi to her she just paid off her house wow she doesn't admit it was because they rented it, but I know that was the reason why. She didn't want you to get credit for it. Exactly, yeah. That's all it is. She's the oldest sister. That's the way they are. Yes, exactly. And I know y'all know this, but you got three

little ones over here that will never understand the burden you're talking about. Well, Julie and I, my middle there was the only sixth grader who knew the difference between a debit and a credit card. Yes. And we went to pay off the mortgage

when we waited for them to come out of school. So we did it as a family and they just know that having a credit card is just not in our religion and a car loan is not necessary. It is absolutely not necessary

nor is paying for school. Like, you know like getting a loan. All right. Get them up on the stage. Let's introduce them. What are their names and ages? This is Kevin. He's 16.

This is Julian. He is 13. And this is Issa. This is Issa. She just turned 12 on Sunday, so we're here on her birthday. Happy birthday. Yeah. Love it, love it, love it. Well, well done well done you guys we're very proud of you guys thanks all right what do you tell people the key to getting out of debt

is yeah you have to budget and you have to be content i think you need to have a goal to be worth to sacrifice for yeah my i want to give my kids the opportunity that i didn't have and i want to change my family tree. You did, brother. You did, my man. I mean, you completely did. Mic drop, man. You did it. If they got half the sense that you got, you set them up mathematically to where you've changed your family tree.

And to be happy, to be content. It's about being happy with what you have. Yeah, well done. Well done. That's so powerful. Hey, you don't fully believe it yet. This one? No, no, no, no.

Kelvin, it hasn't sunk in yet. Oh, no, not at all. He's still wondering if there's something coming up behind him. Hey, you did it, my man. You did it. You did it. Congratulations. And we got here, which is also his second dream, because you're best friends.

I don't know if you know that. And we saw you in Lowell, so I'm sure you recognize us from the balcony. Well, I've been living in your spare bedroom so there you go we ought to be friends exactly this is awesome you guys are amazing so very very well done thank you all right we got a copy of baby steps millionaires for you because you are one yeah yeah and a copy of total money makeover to give it to some of the family that hadn't figured it out yet. Let's disrupt them. Very well done, you guys. Kelvin and Emily, what a great story. New Hampshire, $214,000 paid off, and they became millionaires.

Six years and two months, making $95,000 to $200,000. Count it down. Let's hear a debt-free scream. Three, two, one. We are debt-free! Yeah! Woo! Yeah, baby. Yeah. Thank you for joining us, America. Dr. John Deloney Ramsey, personality, is my co-host today.

Open phones at 888-825-5225. You jump in. So, John, before we move on to the calls, Kelvin, our last debt-free screamer there from the DR from the dominican republic it is worth noting in the belief chapter in baby steps millionaires that um the data that we have says that if you move to this country from another country legally you immigrate legally that you are four times more likely to become a millionaire than one of us homegrown and you you have to wonder why that is and uh in my mind i my my my theory my hypothesis is that uh in talking with the kelvins over the years is they came here because they really believe this is the land of opportunity and they went about getting their portion of the dream.

Because they believed it was there. They just had to go get it. And so he came here. He didn't come here to work 675 in a factory. He came here to dream, to get the dream. The 675 just first stopped. first stop and um when you talk to folks that have gone through that that that belief that it's there if i go do what i'm supposed to do not there's no victim there's no mental entitlement mentality there's no nothing that that comes with a someone coming to this country legally illegally you've

got all kinds of other barriers that you trouble you get into and uh legal issues and you know you can get deported all kinds of other things can happen but families that come here and are able to to um assimilate and uh utilize the power of this capitalistic economy for their own benefit believe that they can they go do it more often than we do yeah i over the years i've had so many countless international students that we've had private conversations with that just are perplexed at the amount of opportunity that they would see their classmates squandering they i mean they it was this sense of did they not understand there's just it's opportunity everywhere everywhere you look you can do whatever you want you can and it was this

it was almost it was it was inspiring to be around them i loved being with the national students because they were just so wide-eyed about oh you can do this or this or this or this go make it all happen and you can just do that just go do it and you can just you're free yeah and there's people that will buy that yes and uh and they walk into a supermarket where they wondered if they were going to have cheese yeah and there's 9 000 kinds yeah yeah yeah it's it's inspiring to be around folks like yeah the abundance that we live in and have take for granted and grow up in the level of abundance is uh it doesn't come home until of abundance is uh it doesn't come home until there's a shortage it doesn't come home until something else happens i mean you know these

supply chain things are giving people a feeling about what it is like to live other places oh i mean you can't just call upon it all and have it land magically in your front you mean i can't i can't push a button on my computer people bring into my front porch that's right what or it's gonna be three days instead of one? What? It's a travesty. Three days? I mean, I'm prime.

What's wrong? Yeah. Yeah, it's very interesting. And I also think it's important to note, be careful where you get your money advice from because somebody who loves that guy told him they're going to steal your money. Maybe in their home country they did, right? They might take your money. Yep.

But be careful where you get your money advice from. Take it from somebody who's been there who you can trust well here's a good idea i don't care where you come from or who you're talking to don't take financial advice from broke people i mean yeah hello yeah because i guarantee you the guy said they're gonna steal it was broke you know just another another guy they're making 675. And I guarantee you he was. And so there's lots of broke people with opinions about money. It's very interesting. Marcus is with us. Marcus is in Orlando, Florida. Hey, Marcus, welcome to the Ramsey Show.

Hi, David. How are you guys doing? Great, man. How can we help? So I just graduated from college in December, and I'm taking a new job in February. Congratulations. What's your degree in? Civil engineering. Oh, excellent. What's a new job in February. Congratulations. What's your degree in? Civil engineering.

Oh, excellent. What's the new job paying? $80,000 a year. Okay. Marcus, get to work. We got a lot of stuff that needs to be civilly engineered, my man. You're going to be working for a long time, brother. Get to work.

Get to fixing it. Yep, I hear you. What's your question, what's up the uh job i'm taking is a few hours away from my parents house um in orlando so um i'm gonna have to buy a car here and getting a lot of different advice i guess from family members and friends on whether to go new or used and like looking at new prices versus used prices i'm not seeing like a huge difference i guess and where i've been looking so i was wondering if you could offer any advice And looking at new prices versus used prices, I'm not seeing a huge difference, I guess, in where I've been looking.

So I was wondering if you could offer any advice on where to go for that. You buy used. And because even a used car that's, say, like $15,000 to $20,000, that I'd have to take a loan out on? No, you're not taking a loan on anything. You got any money? on no you're not taking out a loan on anything you gain money um yeah it's i have about let's say like 9 000 in savings and then um like a decent size investment account how much is in your investment account about 70 000 is that in a retirement account um no it's in a taxable okay

pay cash for your car son buy a car dude you don't go into debt you got 70 000 so it's in a taxable. Okay. Pay cash for your car, son. Buy a car, dude. You don't go into debt. You got $70,000. So it's cool if I'd sell investments to buy a car? You dadgum right before you take out a car payment. Because let me tell you what the difference is, all right? Let's say you owned a $15,000 car that was paid for. Would you go borrow money on it to put money in investments?

Only if you're stupid. Yeah, I guess you're right. And it's the same thing. It's still a balance sheet issue, okay? It's the same exact thing. I just did it backwards. I reverse engineered your question. So you're definitely paying cash for a car, and you buy a used one.

Here's the thing. Cars are awesome. I love cars. I'm a car guy. I'm a gear guy. I just love loud mufflers. I'm a redneck. It's awesome man and and but but here's the thing they go down in value it's the largest thing we all buy that goes

down in value the biggest mistake brand new college graduates make is they go buy a brand new car to say thank you to themselves for graduating and they put a big butt payment on it all your friends are doing it and they're, and they're all screwing up. And your parents saw how much money your new salary is, and their mouth dropped wide open, and then they told you to go buy yourself a brand-new car. Yep. Yeah, that's pretty accurate.

And besides that, with all the supply chain stuff and the shortages, the used cars are ridiculous, so you might as well buy a new one anyway. Everybody rationalizes their butt off. No! Hey, for what it's worth, to let you know this isn't a theory i make more than eighty thousand dollars and i've got more of my retirement accounts than you do and i just bought a used car for my wife what'd you pay for it what do we pay for it a lot okay a lot but you bought used but we bought used wrote a check for it paid cash good called it good

good okay so that's what you do. If I were in – wait, wait, wait. Let me go back. Let me go back because we're just chopping him up. What's your income going to be? $80,000. Yes, correct. You did say that.

He's going to make $80,000, yeah. Okay. I missed that. All right. So, yeah, buy a $15,000 or a $20,000 car and write a check and pay cash for it. And then build your emergency fund of three to six months of expenses, which you pretty much have. You just need to reallocate it to that, and then start your investing, and you're going to be a millionaire very, very quickly. If you continue to buy very large things that go down in value, and you continue to buy

very large things that go down in value on payments, you will be middle class. You will not build wealth most middle class people do three or four stupid things continuously throughout their lives and they never break through into wealth car payments and buying brand new cars is one of them whole life life insurance which is the payday lender of the middle class, is another one. Okay? And you just get hammered by these industries that are completely taking you to the thing. And I know some of these people giving you advice mean well, but they really aren't doing that well with their finances, so you don't need to take their advice.

If the last engineer, the guy you work with, the last thing he did was a bridge that fell down. I don't really need his consulting on my next project. You know, same thing. Okay, broke people shouldn't be giving you financial advice, but they do. We were just talking about that. And something about you knows that. That's why you called.

Yeah. You get a lot of people jawing at you. You're making a great salary, but something about you knows i don't want to get out of college and be free and then immediately sign myself back up for debt so i'll tell you what i'm gonna send you a copy of baby steps millionaires as your graduation present show you how to be a millionaire and i have shown more people how to be millionaires than just about anybody on the planet right now so you hold on and i've actually done it by the

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