The Ramsey Show - App - Get off the Hamster Wheel! (Hour 3)

Episode Date: July 10, 2019

Take control of your money once and for all. The Dave Ramsey Show offers up straight talk on life and money. Millions listen in as callers from all walks of life learn how to get out of debt and start building for the future. Check out the fifth most downloaded podcast of 2018!   Tools to get you started: Debt Calculator: http://bit.ly/2QIoSPV Insurance Coverage Checkup: http://bit.ly/2BrqEuo Complete Guide to Budgeting: http://bit.ly/2QEyonc Interview Guide: http://bit.ly/2BuGnZE     Check out other podcasts in the Ramsey Network: http://bit.ly/2JgzaQR 

🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thanks for joining us. Open phones at 888-825-5225. And joining me at the bottom of the hour, number one best-selling author, Ramsey personality, Chris Hogan,

author of the books Retire Inspired and Everyday Millionaires. If you have a question for Chris, make sure you're in line on the phones by the bottom of the hour. The phone number here again, 888-825-5225. Ralph is with us in New York. Hi, Ralph. Welcome to the Dave Ramsey Show. Hi, Dave.

How are you? Better than I deserve. What's up? Not much. I just retired, and I guess I'm at step six. I just discovered your show, and I guess my question is, my house is paid off. uh i have a 401k savings um uh as far as the investing um should i roll over that 401k into an ira i guess that's my question yeah i probably would and you could control the mutual funds and access to it a whole lot better and have an advisor looking over your shoulder with you.

How much is in your 401K? $500. Way to go, man. Congrats. Thanks. Yeah. I keep mine invested in good growth stock mutual funds. I spread it across growth, growth and income, aggressive growth, and international.

And if you just click on DaveRamsey.com, you can click SmartVestor. It'll drop down a list of the SmartVestor pros in your area. If you don't have an advisor, you can pick out which one of those you'd like to work with and sit down from that list. Sit down with one of them and has the heart of a teacher. Understand very clearly what you're putting money into and then if you do a direct transfer rollover meaning the money doesn't come to you it goes directly from the 401k into the ira then there won't be any tax implications at all

and you'll have complete control of that money and what it's invested in and you can you know move it or change it at any time all within an ira and um then of course at 70 and a half though you'll have required minimum distributions rmd on that and that's normal anyway um and you can start to draw money off of it whenever you're ready uh to live on draw the of the income off. I certainly wouldn't want to draw more than the income off. I don't want to destroy the principle. And I assume you've got some other stuff coming in as well. But you've done very, very well. Congratulations, Ralph.

Well done. Daryl is with us in Boston, Mass. Hi, Daryl. Welcome to the Dave Ramsey Show. Hi, Dave. How are you? Better than I deserve. What's up?

Not much. the dave ramsey show hi dave how are you better than i deserve what's up not much um so i have uh we just finished baby step two and um we have a rental property however i owe more than my annual half income on it so it goes into baby step six however we were considering selling the property but there's come a tenant in there now um she hasn't missed a payment, and she knows we want to sell. She's been really dragging her feet, and I just feel like the place is out of her budget. Would it be ethically wrong to get her evicted from there? Not necessarily evicted, but she's a tenant at will right now and we just really want to sell the place to be able to finish baby step three put money towards the college fund towards

what do you mean by tenant at will um so she does not have a lease right now it's it's been expired okay then she's a month-to-month tenant. Yes, sir. Okay, there's nothing unethical about giving someone a 30-day notice that's a month-to-month tenant. Why would that be unethical? That's your agreement. Yes, she's just having a really hard time finding another place. She has two German shepherds, so no other place would take her. Oh, they'll take her, They just won't take the dogs. Yes, yes. Yeah.

So, you know, how long has this hunt for another property by her been going on? Since, I would say, last October. I've been wanting to tell it. Okay. So if you want to be gentle, you can give her 60 days notice. If you don't even care about being gentle, you can just give her 30 days notice. Yes. You need to check law in your state, but in most states you would do that before the first of the month for the ending of the month following.

This is your 30-day notice. And you'd want to be careful to do it in writing. In most places, I would do it registered mail so that you've got proof of delivery. And go ahead and call her. I mean, you've had a relationship with her. Tell her that that's coming. Yeah. And all you've got to do is her and tell her that that's coming um yeah and all you've

got to do is have you know have proof of delivery and then then if she doesn't move then you have to go through the legal proceeding to evict her at that point but surely that will work um yeah she's not found a place because she's not been looking yes exactly so in your opinion that that's a good financial move too to sell the place, right? Well, you don't want it is what you're telling me. You've been working on getting rid of it for some time. Yes, sir. Okay.

I don't care if you keep a rental property as long as you pay it off, but it's not a problem to keep it as far as I'm concerned. I love rental property. I just want you to get them debt-free as quick as you can. But if you want to get rid of the property and you've been working towards that, this is what you would do. So if you want to, again, how long has she been in the property? Two years now. Okay.

All right. And six months of that has been dragging her feet to leave. Yes, sir. Yeah. You might give her 60 days if you want. Okay. you might give her 60 days if you want okay but i would do it very formally in writing after you called her and told her the letter was on the way yes sir and you you know check with your local uh laws and you know maybe check an attorney even

it does real estate evictions and make sure that you're you know what form and what process you need to use so that you're proper in your municipality and in your state. You know, what's the court going to do when you come in for an eviction? They're going to make you start this whole thing over because you did it wrong. You don't want to get into all that, right? Yes. Because what she'll do is tear the crap out of the house if you don't want to do that. So anyway, let's see.

The 1st of August is coming up. And so by the 1st of August, you get all this done. And you say, well, by the end of September, you must be gone. That's very gentle. That's almost a whole year. Yes, sir. Yeah, that would be very gentle. And if you want to be a little more hardcore, you could just say the end of August. Okay.

It's up to you. Either one's fine. Neither one. And, of course, all of that is subject to her continuing to pay the rent. If she stops paying rent, immediately we're going to move to have her removed from the property. So, yeah, it's just a month-to-month rent. That's nothing unethical about that at all, sir. Thanks for the call.

This is The news, guys. You need to stop and listen. The Fed decided not to raise interest rates. That means you've got a small window of time before rates rise again. Here's the deal. Most people are paying too much interest on their largest expense, their home. So you're freaking crazy if you don't take 10 minutes to call Churchill Mortgage right now and see if they can save you money before rates rise again.

A mortgage through Churchill could save you thousands, or better yet, reduce the time until you're debt-free. rates rise again. A mortgage through Churchill could save you thousands, or better yet, reduce the time until you're debt-free. Can you imagine how it would feel to no longer have that payment looming over your head every month? Just go to ChurchillMortgage.com or call 888-LOAN-200. Their team of experts will give you more clarity about your options and more peace knowing you're saving significant money in the long run. Call 888-LOAN-200. That's 888-562-6200 or churchillmortgage.com. reminder coming up at the bottom of the hour number one best-selling author ramsey personality chris hogan will be with us if you have a question for chris you can jump in now. We'll be happy to have you. And just the phone number here is 888-825-5225.

Jackie is with us in Chicago. Jackie, my screen says you're debt-free. Congratulations. Thank you. Thank you. It's true. Very cool. How much have you paid off?

I paid off $100,000. Yay. How long did this take? About three years and four months. Good for you. And your range of income during that time? I started out about 65 to 75, and then now I'm making 75 to 85. But I picked up another job.

Cool. What do you do for a living? A lot more work. Occupational therapy. I work at a level one trauma hospital with, like, strokes and brain injuries and spinal cord injuries. Wow. Good for you. Yeah.

So the $100,000 student loan debt or what? Most of it. So $77,000 is government student loans. $20,000 was private student loans. And then three of it was credit card debt. Okay. So that was the first one to go. Yeah.

Okay. So did you get out of school three years ago? What started this? No, I got out of school a million years ago. A million years ago. A million years ago. What happened three years ago? I had a big change.

I just couldn't get off the hamster wheel. I felt like I couldn't figure out why I was still in debt. I'm like, I got these jobs. I should be making a ton. I got a master's degree, but we know that that doesn't mean that I'm like, I got these jobs. I should be making a ton. I got a master's degree, but we know that that doesn't mean that I'm going to be wealthy, but I just couldn't get ahead. I'm like, I'm living in studios. I'm buying my clothes at Target. What am I doing wrong? And so I asked a friend who like owned a place. I'm like, Hey, do you think I can move in with you? And then right after that, my parents lent me the financial peace CDs. They're like, Hey,

take a listen to these and just see what you think about it. And that was the first time. I'm like, I can do this. Whoa. Yeah. It was like perfect timing. Like I was ready for it. You were disgusted enough to listen.

Yeah, pretty much. Yeah, that makes sense. Okay, cool. Good for you. So what do you tell people the key to getting out of debt is? That's pretty much. Yeah, that makes sense. Okay, cool. Good for you. So what do you tell people the key to getting out of debt is? That's pretty impressive. You paid off $100,000, almost all of it student loans, in three years and four months. So what's the key?

You've got to tell yourself no. You can't do it all. If you can't afford it, you cannot do it. That's the biggest thing when I tell people. I'm like, yeah, we can do these things, but not right now, not when you're gazelle intense. You can't afford to go on vacation, and you can't go on vacation. But if you save for things. But I think it's just telling yourself, no, you don't need it.

It can wait. You can save for it, and then you'll be able to do it. How old are you? I am 34 years old. Cool. Good for you. Well done. Congratulations.

So who were your biggest cheerleaders, mom and dad? Mom and dad, for sure. I've got big family friends, the Karoses, who are also Dave supporters. And they were helping me along. And just everybody at work has been cheering me on. And all of my friends, they know what I'm doing. And they're pretty supportive of it, even when I have to say no to going out and spending but everybody's on board cool good for you very very well done we're proud of you congratulations thank you we've got a copy of

chris hogan's book for you everyday millionaires that's going to be the next chapter in your story okay we want you to be a millionaire okay oh thank you i would love that too and outrageously generous as you go along so hey very very well done all right jackie from chicago one hundred thousand dollars paid off in three in four months, making 65 to 85. Count it down. Let's hear a debt-free scream. Three, two, one. I'm debt-free! There we go. Love it. Another millennial set free in the wild.

I love it. You guys are amazing. I'm so proud of you. Very well done that's good you know part of not being a victim is deciding you aren't yeah you're not entitled and you're not a victim. Once you decide that, you go, I'm getting off the hamster wheel. That's what she said, right? I'm getting off the hamster wheel. I don't want to run, run, run, run, run like a rat in a wheel,

get nowhere, have a heart attack, and die. That's some people's whole lives. Don't do that with your life. Don't do that with your life. Be like Jackie. Grab the bull by the horns. Grab the bull by the horns. Make this thing happen. Take it over.

I'm going to do what it takes to win. Now, that's when you turn things around. You have to make a decision. This crap is not happening to me anymore. I'm going to start happening to it. Life, I'm going to tell you what to do instead of you telling me what to do. I'm going to get about the business of designing my life in such a way that I have one. Get a life.

Go get you some. You can do this. It's very possible. That's why we have the Debt-Free Scream Zone, and that's why we talk to you guys every day to help you in any way we can to help you get there. We think you can do it. Sometimes we know you can do it, and we often think and know you can do it more than you do

because we've seen someone just like you do it. Just like you. I'm talking to you. Yeah, you. Yeah, you. Someone just like you has done it before. Gotten out of debt. Gotten under control with their spending.

Increased their income. Started to save and invest and became a millionaire. Millionaires come from all kinds of backgrounds, but the one thing we know is that very few of them come from wealthy backgrounds. Most of them started from nothing. Most of them did not inherit their money upward of 90 percent are not millionaires because of inherited money that's what chris hogan found in the study that we did as we were building the book everyday millionaires that he wrote yeah learn about this stuff get that book and read it it will change your whole perspective on what the deal is.

Are you a victim? No. We've got statistical data to prove it. We know that you can win. We know that it's possible. All right, checking in with an Instagram follower. I live in Vegas, Brandon says. House prices are in a raising fast.

I can afford a house payment in the size we're looking at right now but i'm still working our debt snowball should i purchase now to avoid the crazy prices in a year or rent longer rent longer you should not buy a house until you're out of debt brandon the house will become a curse rather than a blessing. Brandon, I don't know if you know much about Las Vegas, but a few years back it was voted the fastest growing city in America. It was the biggest real estate bubble that burst when the real estate bubble burst. A lot of properties there dropped in half in value, more than any other city in America.

It was a mess. And if you think you want to ride one of those bubbles up again and then watch it pop while you're broken in debt, I'm going to tell you don't do that. I'm not saying Las Vegas is a bubble. I'm saying it was before. And that's a proven fact. That's an observable fact.

It's not a supposition of how I feel about things. So no matter where you live, sir, buying a home while you're broke is a bad idea. It will make you broker and broker and broker because everything that can go wrong will. When you move in and Sally Mae moves in the spare bedroom because you've still got a student loan, you've still got a car fleece sitting in your driveway, and you still owe MasterCard, as soon as you do, the roof will leak, the heat and air will go out,

and the hot water heater will blow up. And you're going to find out about a home ownership. It costs a lot to own a home. And you don't want to do that when you're broke please get yourself out of debt have your emergency fund in place do things in the proper order don't get house fever when you make decisions like this based on fear of the market outpacing you you're getting ready to do something stupid. This is the Dave Ramsey Show. I'm going to go ahead and get started. Joining me this half hour, number one bestselling author, Ramsey personality, Chris Hogan. Author of the book, every number one bestselling book, Everyday Millionaires,

How Ordinary People Built Extraordinary Wealth and How You Can Too. You hear him here filling in for me periodically like Rachel does and Anthony does and Christy does and so forth. Coleman, Ken Coleman's been in here a couple times when I've been gone on vacation lately. And Chris certainly has been jumping in and filling in. So how does it feel to do the show when I'm not sitting here? Dave, there's a little pressure. There's a little pressure that comes with this situation. There's a lot going on uh just steering the ship there's so many moving components

um of what's happening with the clock and then the brakes and so it is one of those it's been a great learning curve uh but i've really enjoyed it well or it is you're good at it well i appreciate that that's what everybody's saying james and kelly have done a great job they have yes absolutely so uh chris here to answer your question with me this half hour the phone number is 888-825-5225 audrey is with us in san antonio texas hey audrey how are you hi dave god bless you thank you for helping absolutely how can chris and i help i have um retirement coming it's a rollover. I have one retirement that's $82,000 in one account, and I am contemplating rolling the in one basket is what I was thinking. But I was wondering, would it be better to put it all together or put it into two separate accounts?

Well, technically, you can't combine them anyway. You would have two separate account numbers with your IRAs. So you roll them both into IRAs. But if you put them both in the same four mutual funds, and certainly the four categories of mutual funds, there'd be no harm in that. Okay. Because it is going to be a rollover because I got a divorce and they said that I could put it in a separate account. Yes. Yeah, you do need to roll out.

It's his old 401k half then. Yeah. Yeah, you just roll that to an IRA. Two separate accounts would be better than one account? It's mandatory. Okay. They make you have two different account numbers, but you could put both of the funds or both sets of rollovers into the exact same mutual funds, and it would have the same effect of

having one account, and there'd be nothing wrong with that. Does that make sense, Chris? Am I missing something? What am I? No, no, not at all. And, Audrey, you can set those up, as Dave is saying, into investing the same four ways in those gross stock mutual funds, and you'll be well on your way. That's a great question, and it's really one of those reaching out to a SmartVestor Pro

in your area will help guide you through that entire process seamlessly. Yeah, click SmartVestor at DaveRamsey.com, and one of the pros will help you walk through the process. There's not that much to it. You can do it, and you'll understand it in one meeting. Jesse's with us in Jackson, Miss. Hey, Jesse, what's up? Yes, sir, Mr. Ramsey, Mr. Hogan. Honor to speak to you, too.

You, too. Yes, sir, Mr. Ramsey, Mr. Hogan. Honor to speak to you, too. You, too. Yes, sir. I actually call in me and my wife. Actually, beginning of this week, we finally decided to, I guess you would say, take the bull by the horns and start managing our money and really, really get this train back on the track. And really, my question is um i do travel for work um instead of staying in in hotels or whatever actually um i pull a camper with me to location uh most of the

time i'm there for four to five months at a time we actually travel throughout the united states and um i'm really just kind of looking seeing what things I could eliminate as far as debt and hearsay. And really, all of our debt combined, really, the setup that I have to travel with is a pretty good bit of my debt. And just really want to see if maybe y'all had an idea of another route I could take or what have you to maybe minimize some of this debt. Okay, and Jesse, when you talk about what you travel with as a large part of your debt, how much debt do you have on the truck and the camper? Right now, the truck is at about $32,000, and the camper, I'm probably about $24,000.

Okay, and so with that, those are recreational, I'm probably about $24,000. Okay. And so with that, those are recreational things that you're using for business, correct? Yes, sir. Yeah, because most of the time, I normally would just stay in a hotel. And with the hotel, I've seen averages of you're going to be spending around $500 to $600 a week. And actually, doing this route, I'm actually spending about that same amount, but in a monthly aspect rather than the weekly aspect. Well, I like that you've made a decision about debt, like you said, getting the train back on the track. But as far as working your debt snowball, it's just going to be a matter of getting serious.

I mean, what's your household income? Right now, combined, we're probably about $100,000, $112,000 a year. Okay. And what other debt do you have outside of this truck and the camper? About $2,000 in medical bills, about $15,000 on my wife's car and a mortgage, and that's it. How much on the mortgage? We're about, I think we're about in the mid-60s, if I'm not mistaken.

I'd be lying if I gave you an exact number. Okay. All right. Well, I think if I'm in your shoes, what I'm going to do is get serious about attacking that debt, or I'm going to sell those things and get a hotel. You know, I mean, those are realistically the two options as you start to walk through it. So you guys need to make a decision,

but you've got a whole lot of debt hanging around with you, about $56,000 between the truck and the camper. So as you can see, your game can change if you were to sell those. But if you buckle down and get serious, I think you can attack it and pay it off. What's your thought, Dave? I think you can go one of two ways. One way would be you just add these up and run your debt snowball and say hey are we willing to cut deep enough to get all this stuff except the house paid off in two years it'd be tight it'd be tight but you probably could do it but i mean it'd be zero it'd be beans and rice rice and beans and do you really want that camper truck combination that badly

the other option would be sell those two things. You'd be debt-free very quickly, not counting the house, and then begin to save while you're using the hotels to buy another camper and another truck. And my guess is you might buy a different camper and truck when you're paying cash. Yes, sir. Absolutely, really and truly. Yes, sir. So either way is fine. how much of your life do you want to give up because basically it's going to cost you about a year of your life to keep these two things yes sir um really i'm i'm at the point now of um lord i've heard you say before i mean

tell so many things uh the kids think they're next And I'm kind of at that point now of really just whatever would make the best sense, I guess you could say. Well, the bottom line is your idea of having the camper to stay in is a good idea. It's cheaper than the hotel. That's where your idea came from, right? I mean, you're saving a ton of money doing that if it was all paid for. So the question is, for this camper and this truck, are you willing to go beans and rice for about an extra year?

Because that's what the math looks like. Yes, sir. True enough. You know, versus sell them and then buy some other ones a couple years from now. Either one of those plans is okay with me. It's just a matter how much price you want to pay for that particular rig now i've had some rigs in my life i'd pay a price or two to keep them i'd bear down and do it and i've had some other stuff i didn't give a crap about on

i'd rather be free and so either one of those is fine you can be out fast enough if i looked at this is gonna take you five years i'd be selling it yeah but i think you can be done in two years with all of this if you're on 112 000 income if you really lean in but it's gonna be tight because if i got that you know looks like we got 60 75 80 000 out of 112 so that's 40 a year for two years that's doable but it's tight. It's tight. And mama back home while you're living in the camper is also going to be tight. And so she's got to be completely on board with paying. The family is going to pay a price for you to keep this rig as well. So good stuff, man. Thank you for calling in.

I'm glad you're doing it. You can do it. We're right here to help you if you need some more help. Chris Hogan joins me this hour, this half hour, answering your questions. Ramsey Personality, number one bestselling author of the book, Everyday Millionaires, How Ordinary People Built Extraordinary Wealth and How You Can Too. This is the Dave Ramsey Show. Thank you. Our scripture today is Psalm 133.1, how good and pleasant it is when God's people live together in unity. Helen Keller said, alone we can do so little, together we can do so much.

So Chris Hogan and I are together. Ramsey personality, number one best-selling author, answering your questions. Leticia is with us in San Francisco. Hi, Leticia. How are you? I'm fine, thank you. How are you guys doing? Better than I deserve.

How can we help? Okay, so I have a question. I'll start with a question first and then try to give you some background information. You can let me know if you need more. Okay. So the question is, my husband has an opportunity to transfer his job to Georgia, north of Georgia or north Georgia and Atlanta, Alpharetta, Woodstock, Marietta area. We're in the San Francisco Bay Area. We are currently debt-free except for our home. We bought our

home 10 years ago when it was low, so we bought low. Our current payment is $2,200 a month. We owe $270 on it, and we're looking to the move. We're considering the move for a couple reasons. One is financial. Obviously, the cost of living is cheaper out there. We actually went out there a couple weeks ago to kind of look around. It seems like we would save money, obviously, on real estate, home, property tax, and and fuel all other costs kind of seem relative or kind of a wash income tax is a lot lower what's that georgia has a small income tax compared to california oh okay well so we figured i'm sorry i was just talking about referencing like groceries and the gym you're right you're exactly right so okay let me ask you this before we're going further where do y'all want to live

well that's the thing so we we have always had a desire like we have a three-year-old daughter now but even before we had her we always kind of thought in the back of our head we wouldn't retire here california's fine we're not in love with it we don't like the school systems now that that's on our plate to think about we don don't like the cost of living, the taxes, the political environment. There's several things that we don't like about it, but it's all we know. We grew up here in Northern California, so it's kind of a scary thought. We've never bounced around or moved around. The particular area in Atlanta that you're talking about going is a wonderful area.

It looks like it. It is. That's the impression we got yeah it's an upscale uh high you know good good community strong schools um i just happen to know a little bit about it i've spoken in several churches in that area know a bunch of people that live there and it's just a it's a great area so it's there's nothing wrong with this move so far what's your question okay so the question is he's going to have a loss of income. He won't have a loss of his base salary.

When you work in this area, you get a 15% geographical pay. When he moves, because that area in Atlanta is up and coming, they do have a 5%. So he is going to lose 10% of his pay. So we're wondering, we know moving isn't cheap, but we're wondering, is this a wise decision financially? Our two goals financially would be obviously to take the equity we'd have in this house, put a larger down payment on a home over there to give us more money, a 15-year fixed, more money at the end of the day to up our retirement and our

college savings account because I'm 42, he's 44, so we're saving for both retirement and college. I'm sorry? What does he make? He makes right now $100,000. Okay. So it's a $10,000 swing. Yeah, $10,000 swing.

I'd do that in a heartbeat. Okay. And what would you think, Chris? I mean, I'm listening to this dave and i'm with you it's a matter of where do you want to live leticia okay and and the financial side but then it's the quality of life so if you've grown up in northern california are all of your family there yes okay yes they are we don't see them i mean my family's about four hour drive away his family's um in the same town we are we're we don't have any family issues but we don't see them i mean my family's about four hour drive away his family's um in the same town we are

we're we don't have any family issues but we don't see them that regularly or or you know it's not they're not a part of our life as far as child care or i stay home with my daughter right i can tell you this you're going to save more than 10 by relocating to georgia you know in the tax side of things and where you are. So, I mean, for me, from a financial standpoint and quality of life, I think you're going to enjoy it. What's your income tax rate in California? 21%.

I think it's four in Georgia. Yeah. Oh, my goodness. I think we just found your $10,000. Yep. No kidding. I'm not positive, but double check. But I think it is.

Okay. And they do have an income tax, but my recollection is it's a very, very small number like that. And so check that. That may answer your question instantaneously. But the big thing is where do you want to live? If you're four hours away, you're also four hours away by air. That's right. From California, I mean, from San Francisco to Atlanta, you can be there in four hours and um plus or minus getting through the atlanta airport but just somewhat like going

through hell but i was gonna and dave i was gonna talk about the traffic in atlanta but they live in california they live in san francisco it's gonna be a traffic upgrade that's it without a doubt it's hard to imagine but it's possible that's true it's a matter of where you guys want to live it sounds like a great adventure here's the to imagine, but it's possible. That's true. It's a matter of where you guys want to live. It sounds like a great adventure. Here's the other thing. If you go over there and it doesn't work, you probably could move back. Nothing is as permanent as it feels sometimes when you're doing these things.

I'm in. I like it. All right. Zachary's in Austin, Texas. Zachary, your question for Chris Hogan and me. Hey, guys. How's it going? My question is, we're on me and my wife are on baby step 4, 5

and 6, if you will, mainly focusing on paying the house off early. At the same time, we have a small business that we run. So I'm trying to find the right way to balance both being gazelle and tent on the 4, 5 and 6 steps,

as well as trying to build up, I guess you guys call it like a retained earnings fund for the business itself. Okay. Well, the way I set the retained earnings fund up is I just say a percentage, and you decide the percentage of your net profit each month should be dumped into retained earnings. Okay. So it wouldn't be, it's not as, I guess not laid out the exact same as like what you recommend for the personal side where it's just the straight expenses, bare minimum expenses. No, you're trying to get to about six months of business expenses because you need to be

your own line of credit and not be borrowing money in the business to expand, not be borrowing money to survive, that kind of a thing. You're trying to get there. Full disclosure, I've never gotten there. Our business has grown faster than my retained earnings has grown. And today, to hold six months of cash that it would take for this place to operate would be so much money, it would be ludicrous. So it starts to change.

But, you know, a small business with, you know, 40, 50 team members or less, man, if you had that kind of cash position, you'd feel so rich, you know, six months' worth, you wouldn't know what to do. So you can adjust that back and forth and say, we're putting too much into retained earnings, so I can't do my stuff at home, or I'm doing so much stuff at home, I can't do any retained earnings. And just dial back and forth between those two knobs and i think you can find the balance you're looking for chris when you're meeting with an entrepreneur like that an entree

leader when you and i are teaching entree leadership and they're asking that question you know one of the things i run into is is that i'd say 90 of the time they have zero retained earnings that's right and not only the zero retained earnings, Dave, but they also have debt. You know, they've leveraged something because they heard a professor or some guru say that you need to. And so, you know, Dave's principles are definitely applicable in business. That mindset of getting yourself out of debt, having a cash position, it just puts you in a position to have opportunities for your business.

And so this is all taught in Dave's playbook. He laid it out, people. If you've not picked it up and read it, it's called Entree Leadership. It's the playbook on how he went from a card table in his living room to now almost 1,000 team members. But it talks about the operating principles of Ramsey Solutions. So if you've not read that, if you are a leader or a business owner or you want to be, go pick it up. And then, Dave, we also have All Access, which is available for people. They can plug in and hear more information.

Now, that's the behind-the-scenes thing, you know, where we walk with you that way. But the thing about business is we don't use the same baby steps. We do use the same principles. Correct. The principles are saving for emergencies and saving to purchase things so you pay cash instead of going into debt, staying out of debt. Those are principles, but we simultaneously teach small businesses to get out of debt while building some retained earnings. That's different than we teach on the personal finance level. That is correct.

So, Chris Hogan, thanks for joining me. Thank you for having me, Dave. Chris Hogan, Ramsey Personality, here with you this half hour. I am Dave Ramsey, your host. Thanks to James Childs, our producer, Kelly Daniel, our associate producer. 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, it's Kelly, associate producer and phone screener for The Dave Ramsey Show. If you would like to do your debt-free scream live on the show, make sure you visit DaveRamsey.com slash show and register. We would love for you to come to Nashville and tell Dave your story.