The Ramsey Show - App - Have We Hit the Jackpot? (Hour 1)

Episode Date: December 17, 2019

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Music Music Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumped, 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. It's a free call at 888-825-5225. That's 888-825-5225.

Merry Christmas to you, America. Thanks for hanging out with us. Starting off this hour, Stephen in Tennessee. Hey, Stephen, welcome to The Dave Ramsey Show. Dave, thank you for the time, sir, and Merry Christmas to you, sir, and I love your show. Sure, thank you. Yes, sir. I like to picture immense mine on a few

things. I'm 58 years old. I have $10,000 in checking, $5,000 in emergency fund. I have $101 in my savings plan, and I'm kind of curious, but I do have a debt. The only debt I have, cars are all paid off everything else is paid off except for the house the house was about 123 123 000 and just trying

to get your opinions on that I was looking at Ken Coleman stuff online and I really didn't learn that much from Ken and so just trying to pick your mind so what would you think I should do one person says I should invest heavily. I do have a mutual fund, which is at 23% return, and I could mention an angst one or two on your program. One person told me I should invest for the future and not try to pay off the house initially, given my age group. What do you think, sir? Well, what we teach is what we call the baby steps,

and it's a process through walking out of debt and into investing and into saving. And you would become debt-free except your home, which you've done. That's baby steps one and two. Three is an emergency fund of three to six months of expenses. It sounds like you have $15,000 cash, so you're a little slim on that. Making $120,000, that's a little slim on your emergency fund. First thing I'd do is probably put a few thousand more in that. Let's get that up to $20,000 or $25,000 if you make that kind of money

and call that three to six months of expenses. You don't touch that for anything except for emergencies. It's an emergency fund. That's all it's for. Then beyond that, you should start investing 15% of your income into retirement. You've obviously already started some of that with $100K in retirement. Congratulations. Keep doing that.

I will tell you that I've been buying mutual funds for almost 40 years, and I've been licensed in the business of mutual funds. I recommend mutual funds and mutual fund brokers all over America, and a mutual fund that is producing a 23% rate of return is unheard of. So you found something that maybe made that kind of return in one year, or you found something that's unbelievably risky and scary, and you should be very, very careful. Because a typical mutual fund, 60% of them do not even outperform the S&P 500. The other 40% do, and that's the ones that I try to buy

are the ones that outperform the S&P 500. But I don't own any that have had a 20-year track record of 23%, and I'm really good at this. So I question what's going on with that fund, and I would warn you to be very careful with that. Now, once you're putting 15% of your income away for retirement, if you've got kids, you put into kids college as the next step, and then the next step would be to pay off your house as soon as you possibly can. And, you know, that's pretty standard stuff that we lay out on all of our websites and all of my videos just

about. We walk you through those baby steps all the time. And it sounds like they would apply perfectly to answering your question. So, hey, thanks for the call. Jordan is with us in North Carolina. Hi, Jordan. Merry Christmas. Merry Christmas, Dave. How are you? Better than I deserve.

What's up in your world? Thank you so much for taking my call. So I've got a little bit of an issue. I have been a Dave Ramsey fan my whole life, and I've had no debt, and then I married into debt, and I'm getting ready to inherit around $1 to $2 million. About how much? Within the next one to two.

One to $2 million? Yes, sir. I hate it when that happens. Well, I would love it if it happened. The problem is I see the weight of the responsibility for the money for our family. Good. But my husband sees it as a lottery. Okay.

Then you've got some danger signs in your marriage, and you've got some work to do there, right? Exactly. Because your view of it is more accurate. It is not the lottery. It is a responsibility. Exactly. And so I don't know what to do because he's just like, we don't have to, you know, pay for food anymore

because we'll have that money. But it's like, I don't want my dad's inheritance to be paying for me to eat. Yeah, like you guys ought to like work be the provider yeah maybe you ought to like work yeah does he have a job uh he does right now he's driving uber and he's a real estate agent but he's not really into it and so that's kind of the reason he sees it as the lottery and i'm seeing it as a huge weight yeah well let me tell you what money does it magnifies the good in people and the bad in people and if your husband is not um motivated and is not a hard worker

money will expand those negative characteristics and it sounds like there's a little bit of that going on sounds like there's a little bit of that going on. Sounds like there's a little bit of that going on. And I'm going to address that head on with him. No, we are not using this money so we can sit on our butt. We are using this money so that you can go be somebody and you're going to work your butt off. And no, you're not going to quit driving Uber and no, you're not going to quit doing real estate or, or yeah, unless if you do quit them, you're going to do something else. We are not going to touch this money to live. We're not going to touch it to live. Because you guys have got to have the dignity of the ability to earn for your own family.

Right. And this is what we call trust fund baby syndrome, right? Yeah. People become useless and don't have the dignity of having produced and created anything because they sit and live off of the interest of daddy's money and that is not what we want that's not what you want that's not what i want and we're not going to allow a situation for that to occur for your husband how old is your husband um so my husband is 26, and I'm 30. Okay. All right.

Well, I think we get him with some guys around him and get some career coaching for him, and let's figure out what he wants to be, and let's get about the business of being that. And just explain to him this money is not for you to be lazy. This money is for our long-term use and we're not going to touch any of it to live we're not using any of it for monthly budgeting okay and if you can't do that then you need marriage counseling don't you exactly yeah and um so yeah it's um because i just the problem is I want the money to be a blessing to your husband. And a blessing is not where he loses his dignity and his ability and his desire to produce things in this world and serve his family.

That's where happiness comes from. It doesn't come from sitting on your butt watching Oprah reruns, living off your father-in-law's inheritance. It's just not there's no happiness in that at all. Your happiness comes from creating and producing and serving. And that's where dignity comes from. And that's the best life. And I want that life for your young husband. So that's that.

And I'm going to put, create a situation if I'm you that causes that to occur for both of you. Because that's how you end up with the best marriage Because that's how you end up with the best marriage. That's how you end up with the best kids. It's how things are going to turn out in your story the best. So let's cause those variables to happen. This. Oh, hang on. I'm going to send you a copy of The Legacy Journey, which is about wealth.

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Hi, Sarah. Welcome to The Dave Ramsey Show. Hi, Dave. Merry Christmas. Merry Christmas to you. What's up? So I am a wedding photographer, and I spend about $600 a year on equipment and liability insurance. And I'm wondering if that's an expense that's worth it, or if I could maybe self-insure through equipment stuff.

You do want liability insurance, and it's generally not very expensive. What are you making in the photography business? How much money? So my annual salary is about $80,000 a year. Mm-hmm. And I work underneath another company, so I get $10.99 every year. So I work underneath a company, and that company makes about half a million dollars a year. That you own? No, I work for someone.

Okay, so you just work by the job. They bill you out, and they tend 99, and so you're technically self-employed. And so you carry a liability policy that costs you $600 and your equipment. What's your equipment worth? I would say somewhere between like $7,000 and $9,000. Okay, and it covers breakage or just loss due to theft? It's mostly like loss of like flood, fire, theft. If I break it, there's a $250 deductible,

and like sometimes they'll cover it and other times they won't. So it's a little tricky. It doesn't seem like there's clear lines between what is covered and what isn't. So I'm wondering if I can just, you know. What is the liability coverage? The liability coverage, it's somewhere between, like, $500,000 and a million because venues require at least a million if you're going to work there most places. So that seems to be fine

i was more curious about the equipment yeah did they did they price them out separately excuse me no they did not okay sorry about that yeah i mean if you could do that you could just say okay how much if let's just say that it's a hundred dollars for the liability and 500 for the equipment then you would say, okay, $500 divided into $10,000 to cover $10,000 worth of equipment is probably worth it. So, bottom line is, it's probably worth it. Okay. Cool.

You got a lot of equipment. If somebody busted the back window out of your car while you're in there doing the thing and stole a whole bunch of this stuff out of there, it would be a big hit. I would cry. Yeah. I mean, it would be whole bunch of this stuff out of there, it would be a big hit. I would cry. Yeah, I mean, it would be like $10,000 out of pocket, right? Yeah, for sure. Yeah, I think I'm covering that for $600. And you do need the million for the venues and for, again,

liabilities generally the cheapest insurances out there. I don't think you're getting ripped off. You could go to an independent insurance broker uh one of our elps and shop it uh that wouldn't hurt it always helps to shop insurance and the brokers represent several different companies uh actually they represent you and they shop several different companies and get you the best deal and you might find a better buy but you're not going to find it like half of that i don't think i mean you might save 100 bucks or something but um what you're not going to find it like half of that, I don't think. I mean, you might save $100 or something. But what you're describing is not shocking in terms of price.

Brian is with us in Michigan. Hey, Brian, welcome to the Dave Ramsey Show. Hi, Dave. Thank you for taking my call. Sure. What's up? I still have a question for you. You know, my fiance and I, we have been on your plan for about five months now,

and we've been able to pay off $20,000 in debt. Way to go. And my question for you is, though, I try to get other friends and family on your plan, and I've already had one friend that says that sometimes when I talk about your plan and what I've been able to do myself that I come across as maybe as like as a show off and stuff like that. So my question for you is, how do I approach family and friends and talk about why your plan works and why they should, you know, get on your plan without coming across as you know just full of myself or something like that you know what i mean uh i don't think that person's a real friend yeah david i mean i try to get people on i try to get people on your plan and let them know hey you know this is what i've been able to do i've been that's not that's not the point i mean the

point is if you're winning at anything and your friend says you're a show-off, that's just somebody that's jealous. That's not a friend. Yeah. I mean, I got a friend that lost 200 pounds, okay? And I don't think he's a show-off. I'm proud of him. I'm happy for him.

Yeah. He's changed his whole life. His whole physical appearance has changed completely. It's absolutely amazing. He was a big old boy, you know, and he's in great shape now. And I'm so proud of him. I don't think he's a show off. And he talks about food and eating and exercise until I'm sick of hearing about it, honestly.

But I'm still proud of him. He's my friend. I'm happy for him. I'm celebrating his success with him. And so, you know, this is how sometimes how you gauge the people you are going to spend time with. Again, you know, you don't want to be obnoxious about how you're doing it, but just go, guys, I'm sorry if it sounds bad, but I'm just so excited. This is the first time I've ever had a handle on this thing. And money used to just beat the snot out of me and I was so bad at it. And now I'm winning and I've ever had a handle on this thing, and money used to just beat the snot out of me, and I was so bad at it, and now I'm winning, and I've gotten a bunch of this debt paid off,

and I'm fired up, and you don't have to be obnoxious Dave Ramsey fan. You don't have to do that. You don't have to be obnoxious about the fact you did it. All you're doing is just going, celebrate with me. I'm having some victory here. But if you can't celebrate your own family and your own friends scoring a touchdown and jump up and down and yell with them and say this is awesome then um and that's on them um there's not a really a certain way you do

that um you know manners dictate you don't talk about yourself all the time that'd be part of it i guess but other than that i mean really maybe just some of these people are, they just, you know, they're just revealing who they really are in your life. Chris is in Minnesota. Hi, Chris. Welcome to Dave Ramsey Show. Thank you. Thanks for having me. It's a pleasure. Sure. How can I help? Well, first off, I just want to thank you so much. I discovered you over a year ago. I'm currently on baby step number two. I've sold a Corvette. Wow. Pulled up quite a few credit cards, paid off a... You're breaking up a little bit. You paid off what? Okay. What did you pay off? A few credit cards. Okay, good.

Okay, cool. Okay, we're going to come back to you when we can get your phone straightened out, brother. Brandon is in Belgium. Hey, Brandon, welcome to the Dave Ramsey Show. Thanks for taking the call, Dave. Better than I deserve. What's up? So my wife and I are debt free

and we're getting ready to transition out of the military and we're going back to the U.S., Maryland specifically. Cool. We're due to have our first child in two weeks. Yay! Merry Christmas! Thank you.

We're going to be purchasing a second vehicle and we have the cash to buy a brand new vehicle, but my wife and I are thinking about, excuse me, getting a used or certified pre-owned vehicle somewhere between 10 and 15 because we want to keep the rest of the savings to keep building towards the down payment on our house that we're going to buy in about two to three years. So I just wanted to hear your thoughts on that. Good question. Well, I don't believe in buying brand new vehicles unless you have a net worth in excess

of a million dollars. Do you? No, we do not. Okay. And the reason is very simple. A brand new car loses the vast majority of its value in the first year you own it. They're going to lose 60 to 70% of their value in the first year you own it. They're going to lose 60% to 70% of their value in the first four years. And so when you drive that new car across the curb and it goes blump, blump,

that was a $10,000 noise. That's how much it dropped, you know, when you drive it off the parking lot of the dealer. And so you're much better off to let someone else take the butt kicking and get a nice, slightly used car. As a matter of fact, that's typically what the millionaires that we've studied do. They drive two-year-old cars, one-year-old cars until they become millionaires or multimillionaires. Because we're not investing large sums of money in things that go down in value and then scratch our head and wonder why we're not rich.

So that's what it comes down to. So you're on the right track there, and thank you for your service to the country, and congratulations on the baby. Yes, I would buy slightly used. I'd get a great deal, get a good car, and then start saving for that house like you were talking about. And I think then when you someday you hit millionaire level with your net worth, you may want to buy some brand new cars. That'd be fine.

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sponsor of Dave Ramsey Live Events. chministries.org. We're talking with Chris in Minnesota. Hi, Chris. We were trying to talk a minute ago. Your phone was messing up. Maybe we got you now. How are you doing, man? Good.

Sorry about that, Dave. How are you? Better than I deserve. Sorry about that myself. So, all right. What's your question, sir? Yes, sir. Keep it brief and to the point.

I'm on baby step number two. And my question to you is, I work at a BMW car dealership. My car's paid off. And a lot of the guys say, hey, you work in the business. You get a $450 a month lease credit. Why don't you lease a BMW and represent the brand that you work for? My response is, I'm getting out of debt and I'm done with debt. Yeah, that's fine. And you could drive a used Beamer for that matter. They're a great car. You don't have to lease a car to represent the brand. Correct. But being in the business, I obviously know how the values can change. And I feel like if I got a lease for $400 a month and my lease credit was $450, I would be breaking even essentially.

Exactly. Just wanted to get your thoughts on that. You might be okay. You don't get any credit otherwise. It just depends on, you know, again, if you're driving the car for free essentially and it's going down in value and you turn it back in, then you've saved whatever the loss in value is on that car. But if you're driving a car now that's not going down in value, you're doing the same thing.

So I don't like their argument that you have to go do this because you represent the brand. If you have to be stupid to represent your brand, that's not a good thing, okay? But if the deal makes sense but if the deal makes sense then the deal makes sense and uh so they give you a 450 credit when you work in a dealership right correct and that's on their traditional lease the lease that they have for the consumer for the employee okay no but i mean you you it's an employee lease and then the but the lease is

based on the same way you calculated for the consumer, only they give you a $450 credit. Exactly. Yeah. So if you took out a $450 a month lease payment, you would drive for free, correct? Yes, that would be put into my check. Essentially, that money is going to come out of my check, and I just don't want to end up in that. And if you do a three-year lease, and after a year they fire you, what happens?

Exactly. The lease would still be in my name. The payment's not going to stop. That's what I thought. Or if you quit because you got a better job, now you have a lease. So I wouldn't do it. Okay. And, yeah, that's what I thought, Dave So I wouldn't do it. Okay. And, yeah, that's what I thought, Dave, and I really appreciate it.

Now, I would consider at some point buying a used BMW for cash and driving it and say I'd drive the product. Okay? Because they are a great car. They make a wonderful vehicle and i'd be i would consider that uh and some of the car manufacturers for the manufacturing folks not the dealership folks have all kinds of wonderful deals that are basically a rental program that it's a month to month lease and if you could do this on a month-to-month basis to where if you got fired or quit, you're not stuck with the balance of the lease,

then I would probably look at doing it because some of these deals are really like Nissan, for instance, here in our neighborhood in the Nashville area has a wonderful program for the plant workers where they get to drive a car. It costs them almost nothing, and they get to drive a car it costs them almost nothing and they get to drive a car but if they leave they can just turn it in and they're not stuck with three more years of payments or something i mean if you can do something like that i'm fine with that i'm okay that would be all right or if you want to do a one-year lease and take a little bit of risk i'd be okay with considering that but But the idea that you get stuck with something long-term and they're not paying the bill,

I'm not after that. So hope that helps you, man. Thanks for the call. All right, up next is going to be Gina in Ohio. Hi, Gina. Welcome to the Dave Ramsey Show. Hi, thank you for taking my call. I appreciate it.

Sure, what's up? I'm trying to figure out if I should file bankruptcy or try to negotiate a settlement with a bank. I'm recently divorced. We finalized in the summer. My ex-husband agreed to, and this is all in the divorce decree, that he would take on the debts and the assets. So he got the house and the loans and the money that we'd taken out for his business opportunities, but he also got to keep those assets. However, he has since had some trouble in his career and he defaulted on his loan. It's a personal loan, but we had taken

it out for business purposes and he never refinanced my name off of it, even though he was supposed to per the divorce decree. So now the bank is coming after me because I'm a co-signer on the loan and they want me to pay. It's going to end up somewhere between $250,000 to $300,000. And I don't have any of those assets to sell off. Does he? He does have some of the assets, and he could sell them off, but he's kind of put himself in his own little witness protection program. He changed his last name, and he moved, and he has not left a forwarding address. I am getting his mail even though we're divorced, and I've moved as well. We've both left the state.

And so they don't want to track him down because that's harder. No, I don't want them to. I want you to, and I want the judge to put him in jail for violating. He's in contempt of court on the divorce decree. I want you to hire a private investigator. I want you to find him, and I want you to have your lawyer file a motion with the court that he's in contempt on the divorce decree. He's holding assets that will pay this deep bill, and he's a shyster.

Indeed. Okay. Yeah, that's the best answer for your question. You may end up, if you can't get this done, and, you know, but I'm not going to just roll over and be yet another one of his victims. So hire a private investigator and go for the jugular and call your old divorce attorney. Is your old divorce attorney a little bit mean? She's a sharp, yeah.

Good, good. That's what I want. I don't want a nice attorney. I want a mean one. If I need an attorney, if I need somebody to be nice, I'll get a pastor. But so, yeah, if I need an attorney, I need an attorney. So, yeah, that's what you need to do. Let's just grab this guy by the throat, which is the only thing he understands,

and turn him upside down and shake him until his nickels fall out of his pockets. Sounds like a good plan. Yeah, I mean, that's where I would spend my energy before I went to bankruptcy court. Now, again, you just tell the bank, look, send the bank a copy of the divorce decree. It does not relieve you from the liability. That's the problem with divorce decrees. People do the deal like you've done all the time. They think they're free, only they find out later that they're still on all these notes,

and the divorce decree does not have the power to remove your liability on these notes, which is what you've done all the time, they think they're free, only they find out later that they're still on all these notes, and the divorce decree does not have the power to remove your liability on these notes, which is what you've discovered. But I would send them a copy of that divorce decree anyway and say, notice he got the assets, I don't have any assets, and so what's going to happen if you pressure me is you're going to get a goose egg from me because I'm going to file a Chapter 7. Oh, by the way, you're getting a goose egg from me either way i'm not paying this bill so either you go find him or we go find him i'm going to work

on finding him uh and we get some money out of him but i don't have 250 000 and you yelling at me doesn't make me doesn't make it create $250,000 in my bedroom. It doesn't happen. I go in there and there's a stack of Benjamins. It didn't happen. Okay. So, you know, just talk to the bank like this and go. In other words, you guys have got to be kidding me. I'm a newly divorced lady. I have zero assets. He got all the assets. You did the deal with him anyway, which makes you stupid. And you guys need to go find him he's your problem i got zero i couldn't pay you if i wanted to i don't want to and i'm not going to and if you pursue it too much i'm just going to give you a big bankruptcy a big bk right there on your forehead and uh so back off and let's go find this guy and get the assets

out of him so you can get paid that That's how I would talk to the bank. Okay. And should I continue to represent myself speaking to the bank or should I hire an attorney? It's okay if you do because you're not really, you know, just tell them what I just told you. The thing you want to do is be a little, you're just a real nice person. And I don't want you to be that in this conversation. I want you to be really tough, okay? I don't want you to be arrogant or nasty,

but I just want you to kind of be sarcastic and edgy like I was when I was speaking it over you a minute ago, okay? I want you to be that lady and go, you've got to be kidding me. I'm not paying you. I don't have any money, number one. Number two, you bozos did the deal with him. Go find him. I'm looking for him, too.

If you find him, let me know. If I find him, I'll let you know. I'm not giving you nothing. This is the Dave Ramsey Show. We'll be right back. Our question of the day comes from Blinds.com. Find out for yourself why they are the number one online retailer of custom window coverings. You get free samples, free shipping. And with the new promos they run every month, you'll save even more. The promo code is RAMSY.

Alexis in Texas says, I want to start paying our debt in January. Both me and my husband work. We make $149,000 together. Our consumer debt's total $22,000. By January, we'll have $37,000 in our savings. Do you think we should pay off all of our debt with our savings? Yes. I'm just so nervous about using our savings to pay off debt.

Should I have thought of that when you were spending the money? Pay it off. Oh, by the way, have thought of that when you were spending the money. Pay it off. Oh, by the way, you're not broke when you do that. It's 22 out of 37. You've still got $15,000 sitting there. You're not exactly broke, so go back now, finish up your emergency fund of three to six months of expenses. You'll be in great shape.

But you've already spent the money. When you pay off the debt, the debts just when you admit it it's already gone your savings is already gone you just hadn't admitted it yet and so yeah definitely get rid of it and chop up those stupid credit cards so they don't grow back have a plastic surgery party all right up next is going to be Alexa in Alabama. Hi, Alexa. Welcome to the Dave Ramsey Show. Merry Christmas, Dave. Merry Christmas. Thank you for what you did. Thank you. What's up? So my question is, I'm 22 years old. I'm a senior in college, and I know how you feel about credit cards, and I totally agree. I have one right now in order to build my credit because

of course everyone says you need the credit card to build your credit so you don't totally agree well that's what that's what the normal people say i'm sorry do you have a credit card now i do okay then you don't totally agree with me, so your other statement was incorrect. Okay. All right. So one question is, do you need credit? What would you need credit for? Or, I mean, do you need... A credit score.

Your credit score, yes. What would you need it for? Like if you wanted to, I guess, get a mortgage or something like that. Okay. So the only time you can use a credit score is to go into debt. Agreed? Agreed. It's its only value.

And if going into debt is your staying out of debt is the shortest path to wealth, that diminishes your need for a credit score dramatically, doesn't it? Yes. Okay. And the only way to build a credit score, by the way, is to go into debt. Right. And so it's, I get a credit card so that I can build my credit score, so that I can get a car loan, so that I can build my credit score, so that I can get a mortgage, so that

I can build my credit score, so that I can get a car loan, so I can build my credit score, so that I can get a mortgage so that I can build my credit score, so that I can get a car loan so that I can build my credit score, so that I can get a credit card so that I can build my credit score. And this is how most people live, and they worship at the altar of the great FICO. Oh, great FICO, you are the provider of all that is good. We bring you offerings of interest, and we pay big payments to the bank to make you happy, oh FICO. Grant us what we would like to have, great FICO. And this is what America does.

They worship at the altar of a false god because it's stupid. Okay. 100% of the algorithm that creates your FICO score is your interaction with debt. If you don't have any debt, you don't have any FICO score. That's why you called me and asked me this, okay? Now, having said that and established that it is not actually a score that indicates financial health, it's a score that indicates how much you've been playing kissy-face with the bank. That's all it is. Now, when you break down that logically, then the only possible equation is,

no, I would stay away from using a credit card to build my FICO score. But what about a mortgage? You can actually get a mortgage without a FICO score. It's called manual underwriting. It's how we used to grant mortgages back in the day when mortgage people actually had brains. Now they just look at a number like a monkey and go, ooh, ooh, big number, make loan, ooh, ooh. That's all they do. If they can't look at the number, then they don't know how to make the loan. However, there are some mortgage brokers who have a brain, and they do manual underwriting as well as FICO lending. And what manual underwriting is is they manually check to see if you paid your landlord on time.

They manually look at your tax returns to see that you paid your landlord on time. They manually look at your tax returns to see that you actually have a freaking job and can pay the bill. They manually look at the deposit verification of deposit of VOD on how much money you have in the bank, which indicates you can make a down payment and make the payment if you had an emergency. And so that's underwriting a loan in the old fashioned method where you actually looked at the financial documents of the individual you're making the loan to instead of one stupid number. It was actually a good way of making loans. And by the way, back then, mortgage loans did not default at nearly the rate that they

default now because the loans were more thoroughly underwritten. It was better banking practices as a side note. But anyway, as far as you go, you're 22 years old. If you pay your landlord earlier on time, you save up a good down payment, you're steady on your job for two years, you can go to Churchill Mortgage with a zero credit score, and they will make you a loan with manual underwriting that is just as good a loan as you would have gotten with an 800 FICO score.

Okay, so you don't need a credit score, even if I'm going to have student loan debt. Okay. You need to pay off your student loan debt before we even need to worry about buying a mortgage. Right. Okay. So we're going to teach you to be debt-free, everything but the

house. Remember that part where you said you listened to me? Yeah, all the time. Okay. All right. So what we do, we say don't buy a house until you're debt-free and have the emergency fund. Does that sound familiar? Yes. Okay. So if you're debt-free, student loans and everything, and you have zero credit, zero accounts open, The credit card's closed and has zero balance. Student loans are closed and have zero balance. You've saved up an emergency fund of three to six months of expenses. In addition to that, you've saved up the down payment for your house, which means it's been at least six months since all of your accounts were closed.

You have nothing reporting to the credit bureau, then your FICO score will disappear in 6 to 12 months it will become zero like mine has been proudly for 30 years and you will become one of the weird people that has no need to worship at the altar of the great fico and when you don't have any payments you have this inordinate ability mathematically to build wealth you do what you want to do kiddo but that's what we teach. And that's how I've turned people into everyday millionaires for 30 years. And that's how we've become multimillionaires at our house.

And so it does work that way. You have to decide what's going to provide you the path that you want in your life. Is it going to be some kind of a false measure like a FICO score, or is it going to be actual real net worth and cash flow and real money, which is how you should measure your financial progress, not your FICO? Hey, thanks for the call. Appreciate you joining us. It is very interesting if you guys think about how stupid this world is.

I'm a multi-multi-millionaire. it is very interesting if you guys think about how stupid this world is. I'm a multi-multi-millionaire. I'm not bragging, but the building I'm sitting in is worth $70 million. I pay cash for it, okay, just as a starting point. I go down to the cell phone store, and if I don't have a corporate account, which we do, we've probably got 100 cell phones in the stupid store, right, for our executives and stuff around the company, maybe 200, right? So if I go down there, I just put on the company. But if I went down there as an individual with zero FICO score,

the stupid butt people at Verizon are going to have trouble issuing me a cell phone. I can write a check and buy their little freaking store, but they can't issue me a $300 cell phone. This is how bass-ackwards this whole stupid FICO thing has become. It's absolutely asinine. Same thing's true if I go up to some corporate little apartment complex, and, you know, the little 26-year-old manager reports to somebody in another city, and, oh, well, I'm sorry, Mr. Ames, we're not going to be able to rent you a little apartment because you don't have a FICO score. I can write a check and buy the whole complex, but I can't rent an apartment there. That's how backwards this thing is. So, you know, there's disadvantages, but the advantage is I don't have any payments. You know what the interest rate is on my mortgage? I don't

have one. You know what the interest rate is on my credit card? I don't have one. You know what the interest rate is on my car payment? I don't have one! Wow, how neat is that? It's kind of different, I know, but you know what? When you don't have any payments, you know what you can do? Anything you want. The borrower is slave

to the lender. How you gonna play this thing, boys and girls? You gonna be an obedient little slave? Get in with the herd? Get in with the herd, be like everybody else? Not me, baby. This is the Dave Ramsey Show.

This is James Childs, producer of the Dave Ramsey Show. Once again, you made the Dave Ramsey Show one of the top five most downloaded podcasts last year. To get your daily dose of motivation and inspiration, subscribe today.