The Ramsey Show - App - Here's Why the Baby Steps Work! (Hour 2)

Episode Date: September 8, 2021

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🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, 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. George Campbell, Ramsey personality, host of the Fine Print and the Entree Leadership Podcast is my co-host today. Open phones here as we talk about your life and your money.

The phone number is 888-825-5225. So George, when I first started teaching this stuff, these principles of getting out of debt, living on less than you make, live on a plan, always be generous. You know, this whole process of the basic principles of personal finance, common sense, biblical financial principles, grandma's common sense. I had just gone through a bankruptcy, and so I was hardcore and still am to this day, anti-debt. Don't borrow money. Because I discovered that it not only can destroy your life, but on top of that, it can hold you back and keep you from becoming wealthy. So I was the get-out-of-debt guy from day one.

And so we started teaching this class. People were coming to the class. And I would start this radio show and people they would call in and say okay now what do i do first do i do investing for the kids college what about my retirement and what about this credit card do i pay it off and what about this car which one where does it fit in the plan and and where do i and what about saving for an emergency and oh i don't want to pay off my house someday, or I want to buy a house someday. And they would start asking all these questions.

And I figured out if you have like 17 things in front of you and you try to do all of them a little bit, nothing gets done. The power of focus and a clear path, a clear plan, a clear list of priorities started to emerge because i started to understand that personal finance is 80 behavior and only about 20 head knowledge and so i first said okay you need to get out of debt that's your first thing and then i went well probably not the house so the house is like a different thing but we need to get out of debt but the house and before we do retirement we really need an emergency fund because you'll cash out your 401K if you lose your job and you need money to pay the house payment and you don't have an emergency fund. So you need the emergency fund really before you have your 401K. So I started to kind of put these things in order.

And I'm looking around at what some of the people in the financial planning community are doing. And a lot of it I agreed with. And there's some basic guidelines in there. I didn't make up a properly funded emergency fund is three to six months of expenses i didn't make that up that was been out there for a bazillion years i didn't even make up the debt snowball i'm best known for it but i didn't make it up i saw it somewhere it made sense to me pay off the smallest debt rather than the highest interest rate because you get that zoom zoom that kick in the pants psychologically when you get things paid off.

And so this, if you want to eat an elephant, it's overwhelming. How do you eat an elephant? One bite at a time? A bite at a time. And so we started teaching what we called the baby steps, and the first baby step was get out of debt. Later on, I went back and I added a new baby step one. First have $1,000, and then use the debt snowball and get out of debt because people had no money, and like they'd blow a tire.

I mean, it'd be like a $100 thing, and then they would just quit because, oh, God, the whole thing fell apart. I was getting out of debt. I was doing fine until that tire went, and now I'm done. And they had no margin at all, so I put $1,000 in there, not for an emergency fund, but just for a little bit of wiggle room so when a little emergency comes up, it doesn't derail you emotionally. So thus was born the Baby Steps.

Wow. Who knew they would be so controversial? Right? Did you ever think you'd get so much? Well, I agree with Dave on this, but when it comes to baby step four, here's really, there's all kinds, but here's the thing. At the end of the day,

millions of people have done it, and they go, Dave, this worked. My whole life, I couldn't figure out how to manage my money, and I just followed a proven plan, someone else's process, and it changed everything. It turned into the book, The Total Money Makeover. The Proven Plan to Financial Fitness is the subtitle. You sold a few of those.

I sold approaching 10 million copies now. And some of them are on shelves collecting dust that have never been opened. Some of them are on coffee tables as a really nice coaster and have never been opened. But some of them have actually been read and we have documented proof that millions and millions and millions of families have not only gotten out of debt but have started to become millionaires baby steps millionaires using these baby steps it is a proven plan now you can work whatever plan you want to work, but don't call it my plan. Call it your plan. This is the Ramsey plan. This is the plan everyone at Ramsey has agreed on.

This is the shortest path, and to the extent you modify it, I think you lengthen the time it's going to take you to become wealthy. This is the shortest distance between where you are and financial peace. The shortest distance between where you are and a level of wealth that allows you to retire with dignity, begin to change your family tree, and have some peace in your life. Baby step one is save $1,000 for your starter emergency fund. You should do that in 30 days or less some of you have more than a thousand dollars in a savings account today set aside one thousand dollars that is baby step one you're done that easy some of you did it instantaneously some of you will do it

out of this paycheck it's a thousand dollars shut up do it now quickly quickly, immediately. Roll coins, sell crap out of the corner of your couch, put stuff on eBay, those old golf clubs. You've got 17 sets of old golf clubs. Get rid of all of them, you know, all this stuff, right? And so get the $1,000 quickly. Any money you have that is above that, that is not in a retirement account, goes on to Baby Step 2. Yeah, so once we have that foundation, that buffer, account goes on to baby step two. Yeah. So once we have that foundation, that buffer, we move on to baby step two, where we pay off all of our consumer debt except the house using the debt snowball method.

Which is? This is where we're going to lay out all of our payments, regardless of the interest rate. This is what gets people. We're ignoring the interest rate, and we're just doing it by the balance. So we're going to lay them all out from smallest to largest, and we're going to pay minimum payments on all of those debts except for that smallest one. And attack it with a vengeance. Laser focus.

Like your freaking life depended on it. You work so much that your kids don't know your name, and it doesn't matter because they're up for sale on eBay anyway. I mean, you've got to get with it. You sell so much stuff, the kids think they're next. The dogs on eBay and the cats on Craigslist. I mean, everything is gone. We're not going out to eat.

Don't talk to me about going out to eat. You're broke and in debt. You have to get out of debt. You can go out to eat later, whiner. Get a skillet and cook something. My grandmother used to say, can I fry you an egg? Get you something to cook. Come on now.

Seriously, people. It costs one-tenth to cook a meal at home what it does to go to a restaurant and buy it. And the reason is restaurant is entertainment. It is not food. I'm not against restaurants. I love restaurants. I will go to one tonight. But I can freaking afford it.

I'm not broken and dead anymore because I didn't go out to eat for a period of time. And you're not going on vacation either. Going on vacation, you're broke. You've got to be kidding me. So you're going to work your debts off smallest to largest in that order. Three to six months of expenses set aside. There's baby step three where you have that set aside for your emergency fund, and you're set up for that. And then it goes on to baby step four, 15% of your income into retirement. Five is kids' college savings. The six is we're going to pay off the house early.

The typical family working this system pays it off. It pays off the house in seven to 10 years. And they're millionaires in around 11 years. Incredible. Hey, it's Christi Wright. Y'all, let's be honest. When it comes to our quiet time with God, sometimes it's hard to know where to start. You've heard me talk about the Glorify app before, and there's a reason. For me, it has been a game changer, helping me grow in my faith every day. Every morning, Glorify guides me

through God's Word with a bite-sized Bible reading, a daily devotional, and a guided reflection that helps me connect with God. And it's free to download. So if you haven't already, give Glorify a try. Just search for Glorify in your app store. George Campbell Ramsey personality is my co-host today. Open phones at 888-825-5225. If you're like most people, you've got more than enough on your mind right now. Getting the kids where they need to be, keeping up with the bills, staying on top of work and family. It's exhausting, stressful. The money

thing, oh man, for a lot of people, I remember. It just makes your throat tight, your stomach come up in your throat. It's just bad. Listen, there's a plan that we were just talking about in the last segment that'll help you get on track, the baby steps. And the way we teach you how to do that the most efficiently and the way we develop those baby steps over all these years is through

Financial Peace University. It'll show you how to get out of debt, save money, build wealth for the future, be outrageously generous. You can stream all nine lessons on your own, and or you can join a class with other people so you're not figuring it out alone. People are good to be around, you know. And the only way to experience Financial Peace University is with a Ramsey Plus membership. Plan works every time. Ask the six million people who have done it.

Start your free trial at Ramsey Plus and get into Financial Peace University. It's a free trial at ramsey plus and get into financial peace university it's a free trial text the word trial to 33 789 that's trial to 33 789 our question of the day comes from blinds.com they're a wonderful american company i've been endorsing these guys for a long time got their window blinds in my own home personally find out for yourself why they're the number one online retailer of custom window coverings. You get free samples, free shipping, and with the new promos they run all the time, you'll save even more. Use the promo code RAMSEY to get the best possible

deal. Today's question comes from Robert in Tennessee. To say the home selling market in Tennessee is hot is an understatement, but I also have heard it's the worst time to buy a home for that very reason. The value of our home has gone up considerably, and my wife and I would like to sell in order to upgrade to a larger home. Is now the right time to cash in our equity and make this purchase? What do you think? That's a good question from Robert. Well, he's saying the value of his home has gone up, and everyone's has because it's a hot market. What do you think? where you've got to go, what's the right move financially? Regardless of where the market's at, can I afford that upgraded house? Is it a wise move for us to do, you know, regardless of what your house is going to sell for?

Yeah. The problem with selling at the top of the market is you have to buy at the top of the market. The problem with selling in a frenzied market where there's 17 offers in two days is you have to buy in a frenzied market where there's 17 offers in two days. And so unless you are somehow for some reason making some kind of a different move where you cash out now but use that money later or use it in a different way, then just to buy in a frenzied market and sell in a frenzied market is, you know, it's frenzied. Hello. I mean, high stress scenario to do it right now. And so I

think the breakdown, at least in the way you've worded your question, the breakdown in your wife's logic is she sees that you can get a lot for your house, but hasn't considered that it's going to take a lot to buy the next one and so i don't think homes are going to come down they've gone way up but not artificially it's just a drift it was an artificial demand and it was a covid supply demand in the in the basically the new housing market the supply chain got screwed up because the lumber market and a few other markets they couldn't get houses out of the ground and labor market couldn't get houses out of the ground, and labor market. Couldn't get houses out of the ground, and that slowed up and created a supply-demand problem, meaning there was a shortage of housing, and that drove this market and created a little

bit of artificial inflation. But I don't think next year houses are going to come down. I don't think the year after that they're going to come down. And why do I think that? Because I got my real estate license in 1978. And if you look back on the real estate market since 1950, so 75 years, you've not seen houses go down in value in 75 years, year over year, except in a few markets once.

And that was 2008, when there was a housing bubble and there was a real problem, a housing economic crisis. This is not a housing economic crisis. This is an overall supply chain screw-up due to COVID. And the economic suppression that came along with making everyone sit in their homes on their thumbs. And it screwed up the economy. Now, you can argue about the medical part of it or not,

but you can't really argue about the economic part of it. It screwed up the economy. Making people sit at home and not work screwed up the economy, straight up. Okay? So, would you buy and sell a house this year? Only if you want the stress of selling in a frenzied market and buying in a frenzied market i don't worry about the height of the prices as much as i do the process the process to sell a typical home today is you're basically having an auction and the process for buying a typical home today is you're basically

having an auction and that is a high-stress scenario for most people. And people end up doing things they regret later in high-stress scenarios. So unless you've got a situation where you can move. I'm moving this year, but I sold a ridiculously large house that really would have been very tough to sell in any kind of market other than this. And I thought, you know what, God, if you want to sell this house, I've had fun this and i thought you know what god if you want to sell this house i've had fun with it for 12 years this sounds like a really good time to get out and i got out and i cashed out but i'm doing something different there than just moving from house to house to house to house you know about a house but it's not nowhere near as big and all

this and so we didn't even say we need to downsize we didn't say that we said hey we're going to cash out at the top on this and we'll just buy something over here. That's a little different than I want to move up, and neither one of the homes we bought are typical either, by the way. Oh, yeah. Our team, the Ramsey Research Team, just released a Q2 state of personal finance study, and they found that the majority of people are waiving inspections and appraisals because of how crazy it is. They are way overpaying above asking price. I'm not talking about $2,000 more.

We're talking $50,000, $75,000 above asking to get a house. A guy on our team sold a $750,000 house the other day, $120,000 above market, and he took one of the 22 offers. Oh, my goodness. And that was about a month and a half ago. And that's what they're going to be dealing with. If they sell this house, well, now they've got a whole other situation over here. So I don't think it's this, hey, the housing market's hot.

Let's all sell right now. It's not going to work out like that. Well, I mean, if you've got someplace else to live until the thing cools off, that's okay. But to buy and the repurchasing of it is the problem in most people's situation right now. I will tell you this, too. In the last 90 days, the market has calmed down considerable. I'd say the activity is about half of what it was in Middle Tennessee. It's still very hot, but it was white-hot frenzied 90 days ago.

Yeah. That story I just told you was about 90 days ago that that happened. Rachel's with us. Rachel's in Wichita, Kansas. Hi, Rachel. Welcome to the Ramsey Show. Hi, Dave. Hi, George.

It's a blessing to get to talk to you today. You too. What's up? Well, I have a question regarding our retirement savings. I'm 51, my husband's 55, and we recently reached what I consider a milestone amount in our 401k, or his, of about $750,000. Way to go! And yay! Thank you. We've followed your investment recommendations as far as the four different types of mutual funds.

And it worked. So at this point, it did work. Yes, it worked beautifully. At this point, we're wondering, is there a point when we should move some or all of this into some more conservative investments? No. Okay. Let me explain to you where that comes from. That's called the asset allocation model, and it's a theory in financial planning that is widely accepted in the financial planning community. As you can guess, I'm contrarian to a lot of things that are widely accepted in any community,

much less the financial planning community. So the theory is that when you turn 60 or so, you should start moving your money away from any kind of equities into bonds and money markets to stabilize, remove the volatility in your golden years. Okay? That's the basis of the theory. And so by the time you're 70, you should have almost nothing in stock-type mutual funds. You should be largely in bonds and money markets and very stable type instruments at that point. That's the standard financial planning model. Again, it's called the asset allocation

model. The problem with that is, with someone that has built the level of wealth that you have built, is you're probably never going to actually touch the million dollars that you have. You're probably just going to live off the income that it creates. Okay. And if you move it to where it creates less income, I don't see the purpose in that. You can afford to ride out any waves that that model says you can't afford to ride out, so you need to stabilize volatility. And since you've got sufficient assets, I'm 61, I have zero in bonds, zero in money markets due to volatility. All of mine is invested in growth stock type mutual funds. I'm going to ride it out and I can afford

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Very fun to have you. And all the way over here to do a debt-free scream. How much did you pay off? We paid off $229,900, and we also cashrolled an additional $130,000. Wow. Wow. And how long did this take? 41 months. All right. Good for you.

And your range of income during that time? We started about $240,000 and finished at around $200,000. Cool. What do you all do for a living? I'm in construction product sales. And I was in escrow and title until COVID hit, and then I took the early retirement. All right. Good for you.

I like it. So what kind of debt was this $230,000? It was the mortgage, Dave. Oh, look at you weird people. Paid for house. I love it. Very cool. What's the house worth?

Probably about $700,000. It's all yours. Yeah. I love it. Congratulations. Thank you. Well, tell us about this 41-month journey. What puts you on to doing this stuff that we teach?

Well, our story goes back a lot farther than that. 41 months ago, we just got sick and tired of being sick and tired and broke. And we had a great credit score, but we didn't have squat. And so if you go back when we first got married some 31 years ago, we had more bills than we had money. And so before we even heard of Dave Ramsey, we created our own debt snowball. And we just figured a lot like yourself and probably a lot of other people, we just needed to pay off the lowest bill. I took a second job, did a side hustle, working at a dock and loading and unloading trucks while I was working my job. And just took one bill at a time, tore it up. And we were performing our plasectomies before we even knew what they were.

I love it. And got rid of them one by one. But, of course, we were doing it our way, and we never heard of Dave Ramsey at that point. So we did a whole lot of stupid after that. I just did a lot of crying when we were trying to do bills with no money. Yeah, she was sitting at the kitchen table crying, and I'm saying, no, this isn't going to happen. We need to change things. Yeah.

So, but then we just got rid of all that debt and created new debt. Bought new homes, leased cars, and just created just a bunch more debt. The good thing that we did all the way along, even though we didn't do it in your right order, was we were contributing to 401k from day one, 15%. Great. And then one day, Stephanie came home and said, I heard this guy Dave Ramsey on the radio. And I said, Dave Ramsey? And we picked up your book.

I read chapter one. I'm like, we're doing this. So KTAR Radio, huh? Yeah. They're in Phoenix. That's it. It's a great radio station. But we kind of kept thinking we could do it our way.

So we had one credit card for points, you know, made decent money. We didn't have nothing in the bank, but we figured it was OK. And finally, like I said, you know, we got to the point where three and a half years ago, just about where we were just tired and we needed a plan for retirement. And we thought we need to kick it into high gear now. So we downsized at that point, tore up the one and only credit card that we had, and we took and taught our first FPU class virtually last year. It's hard to not do the stuff when you're teaching. Right. We thought we better give up the credit card. We can't pretty much preach it if we don't do it. That's pretty much a hypocrite, yeah. Right.

Right. And then created our little graph and just took every lump sum we could and paid it all off. Wow. That's so cool. I told Ray when we downsized, I said, we can do this. We can do this in five and a half to six years. We started the plan. I'm like, we're doing this in three and a half years.

He's like, put it on a chart, and we did it. I love it. That is so cool. Dave, we were like the business fable of the chicken and the pig, you know, with the ham and the eggs, where the chicken's involved, but the pig is really committed. Yeah. Well, we were the chicken for the longest period of time, and then we decided, you know what? If we're going to do this, we need to be all in. Pig committed.

That's it. I like it. That's it. Very good. All in. I'm going to do what it takes. Yeah. So what do you think the key was to getting out of debt for you two?

Commitment and perseverance. I mean, there's just a lot of just giving it our all and not giving up. And as you always ask who our biggest cheerleaders were, I mean, we were each other's. I mean, we didn't share a whole lot with people because we were embarrassed or whatever or didn't know how to share certain things. So together we just said, hey, this is what we're doing. Yeah. And then I'd say for me, I mean, it was definitely our Lord and Savior, Jesus Christ. We wouldn't be here today without him.

So I knew that needed to be there and then you really have to have a tight loving relationship with the person you're doing this with no doubt about it and if we weren't on the same page there's no way and i know steph had a hard time with the budget uh i'm i'm friendly to the budget but yeah definitely being committed and disciplined disciplined and to know why you're doing what you're doing to change your future and your family tree. So 31 years of marriage, and this is the first time you've ever been debt-free. That's it. Completely.

Yeah. Way to go, guys. So how much is in the 401k? We're over a million. So you're approaching a $2 million net worth then. That's it. Your baby steps millionaires and you're debt-free2 million net worth then? That's it. Your baby steps millionaires and your debt. Yep.

Way to go, guys. Actually, our net worth. We're actually probably closer to $3 million. I have the $750,000 house and the $1 million 401k. That's all I had. It must be some other stuff. Good. $3 million is not bad,

dude. For a guy who used to work Okay. Good. Three million is not bad, dude. Wow. For a guy who used to work on the dock. Right. Well done, man. Well done. You guys are rocking it. Thanks, Dan. I love it. That is so cool.

So how does it feel? It feels amazing. It feels surreal, you know, because it's like anything else. Once you've been doing it and trying, and again, our journey was we were trying to do it our way for so long. And then when you finally get on it, it doesn't feel like you really didn't cross the finish line because it was such a process to get there. But now I think our biggest joy is trying to mentor and give wherever we can for other people. And I think that's the joy that we get. We use your name as a cuss word all the time. Hey, Dave Ramsey, you've got to do his thing.

I think we're bugging people so much. This is how we did it. We love this guy. Do it our way. Do it his way. Well, I mean, you're standing there worth $3 million, so it worked. There you go. There's that.

I mean, like you said, you kind of went at it side-angled a little bit on a couple of the steps, but you still got there. And very, very well done. Very proud of y'all. Thanks for teaching financial peace, too. It's got to be inspiring to the couples that are in there to have their coordinator be worth $3 million. Yeah, I'm listening to what they're doing. I'll take their advice. Well, we also wanted to thank you, Dave, because what you do and all your on-air personalities, you guys add so much.

And it's really what invigorated us. And your teaching, the way you do it in such a candid way, but also a brutally honest way when you need to, I love it. It's common sense at its best, and there's just not enough of that. So thank you. Thank you. We've got a copy of the Legacy Journey for you. That's what you're living in now is the new Legacy. And, of course, a copy of the Total Money Makeover for you to give away and pay it forward to somebody.

So very, very well done, you guys. So proud of you, heroes. I love meeting Baby Steps Millionaires. It's awesome. Very cool. Good for you guys. Very, very well done. Raymond and Stephanie, Phoenix, Arizona.

$230,000 paid off in 41 months. That's the house and everything. Making $240,000 to $200,000. Count it down. Let's hear a debt-free scream. Ready, babe? Three, two, one. We're debt-free!

Look at them! With a kiss. Step up. I love it. This is how it's done. Incredible. Man, that's fun. Hand in hand.

That's what happens when you get on the same page with your spouse. So you can do it if you're 31 or if you've been married for 31. That's right. Either one. You can do it either way. But you've got to get on the same page. Yep. And they said that was essential.

To making a $3 million net worth. Look at that. Ding, ding. Yeah, of course, we don't know anything at Ramsey about building wealth. We're just about getting people out of debt. That's right. We're not really good for you if you want to build wealth. So you shouldn't really follow our stuff if you really want to become wealthy.

So say the trolls. This is the Ramsey personality is my co-host today. Open phones at 888-825-5225. Michelle is with us in Milwaukee. Hi, Michelle. Welcome to The Ramsey Show. Hi, Dave. Thank you so much for all that you've been doing.

I've been listening to your advice since I was a teenager. Went through high school and college. Wow. Graduated in 2001 and came out wanting to start my own business and have peace with it, and I did. Wow. And I've been able to run my own music studio since 2001. 2003, I got in a massive car accident. By 2004, I had $125K worth of debt and was able to pay off student loan debt and medical debt

and then purchase a home by 2009. So I wanted to thank you for that advice. Thank you. And I was wondering now that I'm married and my husband and I have gone through another long stretch of that. In 2014, we were on our way, only had 50K worth of debt. I got cancer and then we had to start over scratch deal with the medical debt. So now fast forward, I'm sold the house now past COVID.

Pre-COVID 2020, we had $421,000 worth of debt. Now we're at $323,000 worth of debt. Counting a house or not? Counting a house, yes, sir. I'm sorry. How much of that's a house? How much of that's a house? $280,000.

$280,000 is a house. So how much non-mortgage debt do you have? Oh, I'm sorry, sir. $33,000 is a vehicle. $7,000 is revolving credit card debt because of a business. My husband is a private contractor. Is it $10,000? Is that the only debt you have other than your house? The $33,000 for a car and $7,000.

Oh, $33,000 for a car. Yes. Yeah. So I make, at my music studio, I make about $4,200 a month. When my husband is under contract, he can make in between 18 and $20,000 a month. He works between, um, seven to 10 months out of the year. He wants to retire soon, but obviously we don't have a lot of money in the bank because of that. We currently have 54K in the bank. His military pension will start at $1,065.

What's your question? My question is, where do I contribute? Do I do the HSA and max out my 401Ks, or do I do my emergency fund first because we never know if he's working and not working? So my emergency fund right now is at three months of our expenses. It sounds like you're doing the baby steps out of order because you're saying you have a bunch of consumer debt, but you've got your emergency fund in place. You're trying to do a lot of things at once, it sounds like.

Yeah, because we never know whether or not he's going to be having a job. Stop, stop, stop. I don't care if he's having a job or not. He's making plenty of money. Okay. And you may need to set some money aside that's not an emergency fund to fill in, but you're making $4,200 a month. Can't you all live on that?

Yeah, we can. Then do it y'all live on that yeah we can then do it on that that's the goal that's the goal no that's not the goal stop having a goal do it okay our monthly bills so if you are living on forty two hundred dollars a month then you don't need to set back money for when he doesn't have a job right exactly so let's take all that money like george said and get out of debt. A $33,000 car debt? And you've been listening to me since 2001? Yes, sir. My husband didn't quite get on board until after I started playing your radio program every day during COVID.

So he finally is on board. That's the next step. Write a check today and pay off your car. Yeah, pay off your car first. Yeah, pay off your car first. Yeah, pay off your car. Okay. And pay off your other debt. You're debt-free today, but a house, and you've still got $10,000 left over, if I calculated that right.

Yeah. Yeah. So my question is then how do we contribute, max out the HSAs and the 401Ks for the tax shelter first, and then go towards retirement what is what's the next step i'm still trying to get you through baby step three you keep jumping ahead yeah i have a problem with being patient yeah and it's cost you because you have to keep starting over it's kind of like the old, you're not old enough, but there was an old game we played in the yard when we were kids called Mother May I.

And if you took a step forward without being told you could, you had to take penalty steps back. And that's what keeps happening to you. Yeah. I want you to follow the baby steps. And if you do that, you've got a lot of money in the bank, which is great, because that means you can be debt-free today. And you said you already have three months saved outside of that?

Or does that include that? I have three months saved outside of that or is that yeah i have three months i have three months saved out of that but the money that we have in the bank is in the 401ks though it's not oh this is retirement accounts we're talking so you don't have 54 000 in a savings account in cash correct in cash we have between 18 and 21 you don't have a 401k in a bank. There's no such thing. I understand that. We're in the process of moving the 401k from one institution to the next. So it's in the cash mode right now, and then they're moving it. So maybe my description of that.

Okay, I'm dizzy. There's a lot going on here. Here's what you need today. I'm going to put you on hold, and we're going to put you into Financial Peace University. The two of you go to Financial Peace University. Both of you watch the lessons together and do exactly what we tell you to do in that and stop all this other crap. You're driving me nuts.

I mean, you've chased your tail six times in this one conversation. So I thought you had $54,000 in the bank. Why? Because you told me that, and you don't have $54,000 in the bank. You have $54,000 in an IRA rollover, and you're rolling it over into mutual funds, not over into another 401K, and you need to work and get yourself out of debt. Probably need to sell the $33,000 car. It sounds like you don't have the money to pay it off.

If you don't have the money to pay it off, it needs to go bye-bye. And then we need an emergency fund of three to six months of expenses in addition to that i need you to save some money to cover the down months when he's not working in it then and only then do you start your retirement savings and then on contract labor you use a roth ira because he does not have a 401k on contract labor you have a 401k if you work for someone else or you are self-employed and you have a simple IRA, which is a 401k for self-employed people. But that's the only thing you can do is something along those lines and sit down and talk with a smart investor pro. They'll help you

put all that together, but they will not help you put all that together until you get out of debt and have an emergency fund in place. And you've got to do that before you do anything else. Do it in order and you'll not have to start over so dadgum many times. That's what you're facing. And the question was, can we retire soon? No. We've got to clean this mess up. You don't have any money.

You have $54,000 to your name. You can't retire. You're working. Sorry. You're working for a while. I mean, you've got a $33,000 car debt. You're not even close to retirement. You're going to get rid of the car. You're working for a little while. The good news is

he makes a pile of money. And if you'll stop just throwing this money in 63 different directions, get yourself cleaned up, get that foundation laid in place, and then really you can pile up a good pile of money and retire fairly soon.

But you're not going to retire this year. You're broke. You're broke. You're not going to retire this year. People try to do it out of order, and they go, Well, Dave, you've got to understand my situation. We've got a lot going on here. Yeah, there is a lot going on, and that's why you need to follow this plan to a T

because it works with no exception. So hang on. Kelly will pick up. We'll put you into Ramsey Plus membership, and that will get you guys into Financial Peace University. And that's the shortest possible path I know to get you all to retirement. Follow that exactly. So, George, the other thing that comes up that flashed through my head,

I look at social media about once a month and every time i do it's a mistake um it's like reading comments after an article you ever read an article on the internet and then read comments cesspool the comments are where the dumbest meanest humans on the planet live is in comments you understand why some species eat their young and when you read comments and so social media especially twitter is about the same point these days and uh but this dave ramsey's one size fits all um let me help you with this there are some principles in life there are some principles that you operate your life by that one size does fit all. That's why they call them principles. Tell the truth.

One size fits all. You all ought to do it. You ought to be truthful. You ought to have integrity. The law of gravity. One size fits all. Everyone gets to play with equal rules. You know, those who follow a proven process in the financial world,

they get a proven result 100% of the time. So, yeah, getting out of debt is one size fits all. Just like the law of gravity. Everyone should do it. Just like telling the truth. It works every freaking time for everyone listening. If you can fog up a mirror, it'll work for you. This is The Ramsey Show.

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