The Ramsey Show - App - How Can We Increase Our Income?

Episode Date: June 3, 2022

George Kamel & Dr. John Delony discuss: How to increase your income, How banks are indoctrinating kids with debt, How to motivate a lazy husband, Should you take out a mortgage for more than 25% of your take-home pay? Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6

I'm out. From Ramsey Network, this is The Ramsey Show, where we help you get control of your money, get ahead in your career, and get on the path to living well. I'm George Campbell, your host, joined today by Dr. John Deloney, some call it the dream team. No one calls it that, John. I'm sorry. I disagree.

You and I call it that. We high-five each other and chest bump in the hallway. It's like this is the dream team. We are pumped to take your call. 888-825-5225 is the number to call. And Chris is kicking off this hour in Columbus, Ohio.

Chris, welcome to the show. Thank you. I appreciate it, guys. I appreciate you taking my call. I would wish you a happy National Donut Day, but of course I'm dark and I don't get to do that. Well, I didn't know it was National Donut Day. Gosh, what a terrible time I chose to cut out carbs and sugar.

It wasn't on my calendar. Yeah. What's up, man? So I am true. We started the Ramsey plan a couple years ago and of course me being one of those guys uh i know they talked about i didn't follow it completely i can skip things yes and then uh you know i was paying off her credit card every month you know not cumulatively uh not getting insurance and then you know i wasn't so you know, not getting insurance, and then, you know, I wasn't. So, you know, I decided it was time to not walk the line.

Let's just get done with it. So you're ready to go all in. Is that what you're committing to on this call? Yes. Love it. Yeah, for sure. Okay. We're all in.

So what I'm dealing with, though, is I am is we're a one-income family, and we have a pretty large family, actually. We're going to be a family of seven. We have a new one that's going to be coming next month. So it's an exciting time, but, you know, it's a hard time to start in this process and, you know, try to get out of that. So I'm really, you know, just trying to figure out a way when, you know, try to get out of that. So I'm really, you know, just trying to figure out a way when,

you know, both me and my wife doesn't work a job, but she works at home plenty. So probably get extra income. And also, you know, I feel like it's probably not a wise decision to spend money to get out of debt. You know, like I heard a show not too long ago where, you know, we talked about, you know, it's a good time to, you know, fix cars. And I actually work on my cars to fix them and, you know, try to sell some more. But that has an investment in the beginning. Or even like we were looking at the Ramsey Plus, right,

which I think would help us. But, you know, is it just a good time to spend money to, like, actually get an income? Let's not go that route as our first option, for sure. Yeah. So what's your income now? About 63 to 65. Okay. What do you do?

I am a business analyst at a bank. Cool. Okay. And you're looking to increase your income. Clearly, your wife's got plenty on her plate, and so you are going to be our ticket here to get rid of this debt faster. How much debt do you have? We are sitting right about just above $11,000.

$11,000. Okay. What kind of debt? Yeah. About $2,000, $2,500 on a credit card, and then the rest is a car payment. A car payment. What's the car worth? It's right around that amount. Okay. What's the amount? It's about $8,500, so I'm going to guess around $8,000 to $10,000. Okay, cool. What kind of car is this? It's the van8,500, so I'm going to guess around $8,000 to $10,000. Okay, cool.

What kind of car is this? It's the van to carry everybody in. I figured. It was a kid hauler. Okay, well, to me, making $65,000, what's the current rate of debt payoff for $11,000, according to your estimations? So I'm really – I think it's going to take us a couple years if we just make one

payment which i don't want to do well so here we go george you 63 000 with seven kids you have no margin y'all barely make it every month is that right exactly yeah i mean you can't breathe fair so yeah we we've already cut out you know like we we don't do cable you know i did cancel like our two streaming services we got that out of the way i'm all about canceling screens but you got seven kids even you deserve a streaming service, okay? Here's the thing. Like, this is just two guys hanging out having chips and queso, okay? Yeah. Like, I can hear it, the freneticness in your voice.

Your life is chaos. Is that fair? It has its ups and downs. It's quieter at night. Spoken like a true business analyst at a bank, right? It's, you know, the market goes up, it goes down. Listen, what I want for you, what George and I want for you is that you be able to breathe. And with your set of skills, I want you to go find a job that's doubling your income.

And that might mean you have to leave a bank that you really love the people, but you've created a life for yourself that involves seven mouths to feed. And so there's nine of you, and I don't know that y'all make it on $63,000. I want you to go find a job or two jobs for a season and let your wife know, we're going to make some

sacrifices that are going to be gnarly for 24 months so that we can all breathe and the kids are going to get their dad back and you're going to get your husband back because right now even when you're home you're still rattled is that fair oh yeah for sure i i my goal was to sell everything. I heard that, sell everything but the kids. But I don't know if you can have kids work. We've got plenty of that. No, you can't.

The best solution is Chris goes and finds a better business analyst job. I just did a quick Google search. In Ohio, the average salary for a business analyst in Ohio is $79,000. And so to me, you're saying you make 63. I think it's time to go job searching and clean up the resume. Ken Coleman's got some great resources for nailing the interview, cleaning up the resume and getting that job. We'll send you a copy of Paycheck to Purpose so you can get you, kickstart you on that journey. Okay. For sure. But that's going to be your best way to increase income quickly without working 80 hours a week and never seeing your five kids seven kids yeah well you got a family of seven right uh i thought you had seven it changes everything okay john says no

five kids that's easy yeah right i have two kids i don't even know what day it is man um here here's the thing i i i something's gonna have to give and i don't want it to be you and your sanity and i don't want it to be your marriage and i don't want to be your kids so the only thing left in that equation is either geographic area which if you're plugged in you're plugged in or it's going to have to be a new job or two new jobs. And that might mean you have to get some new training, get retooled in some things, or it might mean like George said, I just got to spend some evenings over the next couple of months, sending out resumes like crazy, calling some more contacts, connecting with people that I know in other banks and other industries, maybe go work for the state, whatever that looks like.

And I want you to sit down and make a goal. I want to make $120,000. That's my goal. And you've got a job now that you've got. So when you are negotiating, when you're sitting down with, what do you need? I need about 120, right? You can start to put these numbers out there without having to worry about food because you already have a job. But I think you're worth that. And this will give you some space. There's no business taking two years to pay off 11,000 bucks. That should be four or five months. I want you to set yourself up financially so you can do that. Yeah, create that margin, which you're going to need for the rest of the baby steps,

getting the emergency fund in place, investing, paying off the house. So this is going to be a long-term solution, which I like for you. Thanks for the call, Chris. This is The Ramsey Show. life has thrown a lot at us these past few years hasn't it you've weathered so much and you're still standing. But it's taken a toll on many areas of our lives. Well, there's hope. Smart Conference is back, and this fall,

we're bringing this world-class event to Dallas. You'll walk away empowered to grow in every area of your life. We'll be covering topics including personal development, building wealth, leadership, relationships, marriage, and your career. Joining me will be Rachel Cruz, Dr. John Deloney, Ken Coleman, George Camel, Christina Ellis, and Craig and Amy Groeschel. Smart Conference is an incredible day-long event that will give you the principles and tools to live the life you've always imagined. Join us on October 22nd in Dallas for what will be the best smart conference ever.

You don't want to miss this life-changing day, and check it out now so you don't miss out on our early bird pricing. Go to ramseysolutions.com slash events to learn more. Again, that's ramseysolutions.com slash events. Welcome back to The Ramsey Show. I'm George Camel, joined today by Dr. John Deloney. So, John, we get a lot of emails that flood this place. You know, some good, some bad. Some people just want to warn others of what's going on in their world.

And so we got some emails that I want to share with you today that I think might grind your gears. One is from Kendrick. And here's what Kendrick had to say. The bank in my town encouraged parents to bring their children in to get a micro loan to start a lemonade stand. What are your thoughts on this event? Pictures attached. Let's see those pictures. Look at this.

Okay, it says, we have $30 micro loans for your lemonade stand business. Youth entrepreneurs offer. Offer good to the first 50 applicants of registered Lemonade Day businesses. Wow. Okay, and there's a said photo of a child who's very excited meeting a frightening, frightening man who has a lemon head mask thing.

What is going on here, John? And here's what they're saying. Some of these kiddos are having so much fun with Lemonade Day. Makes Lemmy so happy. They're not going to have fun when they're figuring out how preparation aches works from their hemorrhoids wow because gosh hey can we all just say this can we all just say this as a society can we leave the kids alone what about your life when you look at it and you owe banks everything they own your house they own your cars

they own your couches that you think, you know what? The best thing I could do is rope my kid into this. God almighty, stop. And banks, dude, that's my best friends on the planet work in banks. I have high respect, but don't go after children. They don't need $30 to have a lemonade stand. You know what you could do is you could have a, have a let them go pull weeds around your building day. Stop hiring some fancy crew.

Hire some kids to do it so they can earn $10 and they can go cash flow their lemonade stand. And then they can deposit their money in their bank so you can use it for whatever. You can loan it out to some other moron. But leave the kids alone. What's that? Your lemonade and drink it. Normally I have fun. This pisses me off.

That kid is excited. You know why? Because somebody handed him cash and he has no idea what he just signed up for. $30 loan. How about just, I don't know, go to your local Walmart and get some lemonade packets and make it for a dollar. Well, it might be $30 now, inflation, George.

What does the startup cost for a lemonade business? That orange face or the big yellow lemon face is going to give that kid nightmares. John, there's more where that came from. You want more of this? Keep them coming. Okay, Emily emailed in. This is on a related note. She said, I bet your team is already aware of this,

but I was shocked to see a credit card company trying to get my 14-year-old hooked on student loans. I don't even know how they got his name or address. This is from Discover Student Loans. And it talks about get a student loan that works for you. Yeah. All caps. We'll cover up to 100% of school certified costs with zero fees. We reward you for good grades.

That's right. If you have a 3.0 or higher, you can get a one-time cash reward. Thanks, Discover. Of 1% of the loan amount. Wow. A 14-year-old, John. 14. I just went from hemorrhoids to just plain old rocket diarrhea with that one.

Wow. That one's... Listen, listen. It got dark real quick. No, because... Oh, gosh. John can't even talk. He's so flustered.

I get so angry. Because here's what they're doing to children. They are weaponizing the brain chemistry that is connected to relationships. And you've got these companies going after children saying, I'm on your team. You can do life better with me. And so sign up young. And'm gonna reward you and to a small to a youngster's brain to a child's brain they go sweet and for many kids they're getting rewards nowhere else and the idea that somebody reached out and said hey i see you and i'm gonna reward

you that kid goes i'm in i in. And now they're hooked for life because they are golly, dude. John, you worked in higher ed for many years and you've seen how predatory these companies are towards college students, but now that they're going after teenagers and children even younger than that and

normalizing debt to go, oh, I took out a $30 lemonade loan when I was a kid. At least when i was 20 and 19 i was an adult right and not a not a very smart one not 14 not 10 not 11 not 6 let's all agree to leave the kids alone and by the way mom and dad i don't know where they got this stuff they get that crap off of social media they get that stuff off of your kids signing up for things with this address. It's not just magic, right? Or you're putting your kids' names down.

So be super protective of where your kids are putting their addresses and their names because these aggregate companies are selling this stuff to people like that who show up and knock on the door as the friend fairy and say, Hey, I love you, and I'll give you money, and I'll reward you. Gosh, it gets me so enraged. So parents, they're friend fairy and saying, hey, I love you and I'll give you money and I'll reward you. Gosh, it gets me so enraged. So parents, they're not innocent in this, John, because there's a lot of parents out there who go, well, it's good for Junior to learn how credit works. No. He needs to understand.

He needs to learn. He needs to understand how to pay back his debt in a wise way. So here's how this isn't a theory. This isn't me just being upset. This is my house. I had a 12-year-old, and he is too young to go get a formal job at a bank, right, or at McDonald's or whatever. He is old enough to go next door or across the street and help our neighbors out in the

country with their horses and literally shoveling cha-cha with a huge shovel and learning how the polaris works and how to spread manure out on a field to help the grass like he's learning so many cool skills right and he's earning a little bit of money that then he can put aside and say hey i want to invest in this or i want to start he wants to start selling some of our chicken's eggs and so it's like cool you can't afford to even do that yet to buy the entry fee to the to the ag to the uh whatever you call them uh the the Saturday when they get together the farmer's market so let's go earn some money so that you right yes and so we're going to say teach them how to work not teach them how to borrow how to cut the system how to hack the system man we got to teach our

kids that money comes from work not from lendersenders, who are not your friends, by the way. Not your friends. In all the marketing, they want you to go, John, we care about you. We want to give you some money to help you. Gosh. Hey, pull that ad back up. I want to know this because this is going to tell me whether these are good people. The lemonade one?

Yes. It's up there. Are these good people who are trying to teach kids how banks work, which is not what I want to teach my 12-year-old, but I get the sentiment. Here's how I know. Do they charge interest on this loan? I don't see anything about interest. There's no telling. Because if they don't charge interest,

if they give a kid a $30 microloan for their lemonade business, the kid's got to return the $30 after two weeks. Then they're teaching the kid that money's free. And just like a drug dealer, when the first, yeah, man, just take these joints. These are free. Then we come back later. Then this kid's going to learn the hard way when he takes out a car loan

or a student loan. Oh, no, no, no, no. We take a big chunk of that back you owe us interest on that thing if they're charging these kids interest then at least they're teaching them the whole i mean they're showing them the full picture oh 35 you owe 35 dollars at least you're being honest um but if you just give that kid the money and then have them bring it back to you dude you are just giving him that first drug that first hit and that's john a lot of people go well it, it's okay, I do credit cards

because I pay them off every month. And the problem with all of this is you normalize the behavior and you go, it's okay to use someone else's money to live my life. And all of a sudden you go from 14 to 16 to 18 and you go, well, I grew up watching my parents with payments, so it's good. I have a memory of going to the bank

and they all cheered me when they gave me $30 to go start my business. And then you go to college and discover they're at a table with a free t-shirt and a pizza. If you sign up for their credit card. And they're going to send you notes and $5 for A's. It's ridiculous. I don't know, dude. Let's just say this. As a society, let's leave the kids alone.

You can get outside and make your grown-up decisions. let's leave the kids alone you can get outside and make your grown-up decisions let's leave the kids alone man that's just it just i got two little kids it just hits me in the guts i hate it man john i warned you this was going to grind your gears and i think my gears are are sufficiently ground there we go we got there i didn't know i had gears to grind but they're ground so parents remember more is caught than taught if you want to help your kids avoid the mistakes that maybe you've experienced or you watched your parents experience, you can change your family tree. But it starts with teaching them that debt is not a tool to be leveraged. And look at your life if you're swallowed up in debt.

Commit to at least not passing that on to your kids. Let your kid watch you become debt free. Watch how that changes your family tree. That is what I want to teach my kids. Not how to get $30 to start a lemonade stand. That's so ridiculous. I don't want your lemonade. Go do something more worthwhile. I do want your lemonade. I just want to pay cash for it.

There we go. I still don't want the lemonade, John. Too much sugar. I'm trying to watch my physique. Anyways, this is the Ramsey Show. Behind that leather jacket of yours. We'll be back soon. All right, so a lot of people would rather spend their weekend doing yard work than talk about insurance. Except for me, John. I like yard work, actually. And I like insurance more than yard work.

But here's the deal. If you don't take the time to learn about this stuff, you'll always feel like you're getting ripped off or making all the wrong choices about your insurance. And around here, we think learning about money should be simple and, yes, even fun. And so our new free five-day guide to insurance called Confidence in Your Coverage makes learning about insurance quick and practical. And you might even laugh out loud a time or two. And here's why I know that. Because I filmed the videos, John. It was me. I got to call the shots.

Do you read better than you just did? Hopefully. There was a prompter, so that was very helpful. All right, good. So for five days, every single day, I will walk you through a new insurance topic in three minutes or less, unpacking everything you need to know to get the right coverage for you. To top it off, we're doing a giveaway for the folks who sign up for this series.

So at the end of the series, you'll still have yard work. It'll be there, but at least you'll know your stuff when it comes to insurance. So go to ramsaysolutions.com slash confidence to sign up and get started. Again, that's ramsaysolutions.com slash confidence. If nothing else, sign up so that I can feel good. Because I worked hard on these videos. Listen, right now there's some people saying, hey, I think I want to go see the new Top Gun this weekend. And somebody just went, hold on.

Insurance video series. We've got five insurance videos we can watch. But if you're going to have to learn about it, let it be from me in three minutes or less for five days and call it a day. I agree with that. I agree with that. That's what I want.

It's better than scrolling Instagram and finding a TikTok video that's 32 seconds of that. That's what I want. It's better than scrolling Instagram and finding a TikTok video that's 32 seconds of some... That's true. Unless it's me teaching you about insurance in a TikTok video. Please don't do that. Okay. Fair point. Be better than that. Well, sign up. RamseySolutions.com slash confidence. I know John's going to do it. He needs all the confidence

he can get. I'm about to walk off the set and go watch those videos. Thank you. It's going to be hard for me to grind out the last 20 minutes here. Let's go to the phones because that's what I do when I want John to stop talking. Brittany joins us up next. She's in Baltimore. Brittany, welcome to the show. Thank you. How's it going? Are you okay? Yes, you sound great. Thanks for taking my call. I want to thank the Dave Ramsey team for helping us get debt free a number of years ago. But my question is more pointing to

help with helping someone, my spouse, who has been retired due to a disability for about 10 years. We are in a situation right now where we're cash flowing the kids' college. We are building a new home. And with the current market, those prices have come in about 20% higher than we've expected. And I'm encouraging him to go back to work, but he's full of false starts, and this has been going on for 10 years. And I really, you know, I've tried the soft approach. I've tried the ambivalent approach. I can't get him to church. I don't know what else to do, and I'm running out of options, and I'm running out of time. When you say you're running out of time, what does that mean?

Well, I'm at the age where I have about 10 years left in my career, and we're taking on a much larger mortgage than we had originally predicted. And so that either means that we take that on and we sell the house once we will no longer lose money or I'm going to have to work much longer than I had planned. But we both have our limitations. He has a number of illnesses as a result of being a first responder. He has a couple of layers of PTSD. And I've got some neurological damage from some long-term illness.

Okay. So what I hear in a house, here's what I hear in your house, that you've done this for a decade you're tired and you decide i'm gonna go on living my life and that life is going to include a house that you finally have been wanting for so long the house is it's going to include this it's going to include that you're about to set yourself up for a disaster okay on a couple of fronts, front number one, you've got to look at the last decade as a strong data set that suggests what the next decade is going to look like financially for you. And so taking on a giant mortgage with somebody who's struggling with a number of challenges is not wise. I get that you need it, that you want it, that you can't wait for it. I'm just telling you as someone who cares about you, it's not wise. I get that you need it, that you want it, that you can't wait for it. I'm just telling you as someone who cares about you, it's not wise. The second thing is, is you've reached the point where I'm just gonna start lobbing grenades. It's not going to be the, you're not going to get the

resolution that you want. It's not, someone hasn't yelled at him in the right way to get him up. And I know that's hard to hear. The hardest thing to hear is you can't make him be motivated. And you're feeling though, as though he is not doing this to spite you because he doesn't care about your dreams. And he's not doing this because he's feels like he's broken and he's hurt and he's made some choices to not get well. I'm not, he needs to get up and go get well and he's choosing not to right but i out of your anger and frustration and i i know it's real so hear my voice i'm not discounting you've been doing this for a decade and you love this man a lot right but god almighty go get a job right i get that but don't let that fire you off into a mortgage that you simply can't handle and to having to work to be 80 years old

to pay for a house that you really probably should never bought in the first place the ultimate question here and this is a scary question is the or what and so i'll ask you publicly and you can say i'm not ready to answer that that's fine are you going to leave them are you there i don't think i've i don't think i've gotten to that point yet. Okay. But I've got to do something because this is taking an emotional toll on me and it's starting to drag on my resilience, on my health. Yes. I know you've had every conversation in the book. Have you sat down with him and said, I'm scared about what's next for us?

Yes. Okay. What does he say to that? I get a false start. He bought your book and he said, well, I've already done the career I wanted to do. I don't know. Again, another false start. Yeah.

Have you gone to talk to somebody? I have. Okay. Was he willing to join you? No. So this is going to be hard for me to say out loud, but this is where we're at. You get to choose. This is the guy I'm with. This is the person that I married. This is who they have become. I don't love it for them. I don't love it for us, but this is it. I'm not

going to leave them. I'm here. And so I'm going to look at the financial realities, the marital realities, the relational realities of that world. Or you can say I'm going to start making plans to do something different and all of the downstream challenges that that's going to involve. But choosing to let this situation slowly steal your joy and your heart and what resilience you've got left and your exhaustion and just walking around inflamed all the time. I'll just tell you to love yourself enough to not do that. Make peace with where you are and choose to say, okay, I've got to live a world of joy inside this mess

or I've got to make some pretty radical changes. But right now, you're just in limbo. You hear what I'm saying? I do. I do. What I'm saying is tear-inducing. It's terrifying. It's scary. You've got a house that you've been working on. I mean, the whole thing.

Right? I get that. But you're drowning slowly. Yes. I need you to hear me say you're worth more than that. He is too, man. I would do anything for him to get up and get well. I would love that.

But a cornerstone, the second step of getting well is looking in the mirror and owning reality. Okay? This is the way this is. Has he told you he's just never going to do anything? He just won't? I mean, what's the – is there just no momentum? Is he just really suffering from depression and just kind of locked in place there? Yeah.

Does he have some guys that could come over and talk to him, some old guys from his old units to come over? Nope. Have you thought to reach out to some of them? He will not. He might not, but you're welcome to invite people to your house. I've tried that. Nothing?

Nothing. Okay. Brittany, is it too late to back out of this house situation, even if you lose a deposit? No, no, it's too far in, but it's, you know, it's a situation that it'll be marketable. And so, you know, I don't have to endure it terribly well. Well, you're so excited about this house and this, the day one, you're already going to be stressed about it, wanting to get rid of it. I know. So I would look into all your options on that side and maybe cashflow in college. You go, Hey kids, we're going through a lot right now. Financially college is on you because we don't want to be a burden to you guys when you're

out of college because we can't retire. That's right. Or in a semester, we're going to, we're going to have to take a break. Um, if you're a guy and you're in the situation, you're listening to this, please, for your sake, for your family's sake, go get well. Go call somebody and say, today's going to be the day. And I hate this is your situation. I wish we could have a rosy ending to this call, but there's a hard reality to your situation. And you're going to have to decide to make peace or to make some transitions.

And I'm not going to make that for you. You've got to make that call. Our scripture of the day comes from Psalm 119, 89 and 90. Your word, Lord, is eternal. It stands firm in the heavens. Your faithfulness continues through all generations. You establish the earth and it endures. Charles Spurgeon said, by perseverance, the snail reached the ark. Good stuff. Open phones this hour, 888-825-5225. I'm George

Campbell, joined by Dr. John Deloney. John's on the line in New York City. John, welcome to the show. Hi, Ken and John. Thank you so much for taking my call. I really appreciate all the work that you guys do. Happy to do it. What's going on? Yeah. So, um, I've lived in New York city my whole life, born and raised here, and I'm looking to purchase a one bedroom apartment here, which, um, you know, the, the price point that I'm looking at and seeing for something that's not a total closet is around $600,000 to $750,000. And over the past years, I've worked really hard and followed your guidance and teachings to get to the point where I have the ability to put down 20%. And when I look at my

budget the past few years, I think from an income perspective, it actually makes sense to, uh, to do that. But I figure if I do it on a 15 year fix and do 20% down, I'm looking at approximately 37% of my take-home pay. And then if I do, um, if I do a 30 year, it'd be 29%. Now the take-home pay after taxes is approximately $12,500 per month. So if I went with the highest higher end of that, $750K, 15-year fix, looking at about $4,700. Now, my intuition is as a 25-year-old single person, the $8,000 per month after the housing payment. I mean, when I look at my budget the past few years, I'm spending, you know, at most $1,500, $1,750 on the really, really high end per month

on expenses outside of housing. So I figured that, you know, I should be okay. I mean, that still would leave about $6,000 to $6,500 left over in income for me to left over in, um, in income for me to use for investing, retiring, and, uh, you know, ultimately powering me through baby steps for, and hopefully six, even paying that number down early, but you know, your teachings and guidance have always been really valuable. So I was just wondering if, you know, if maybe my case might be an exception to the 25%, um, 25% of take-home pay rule that you guys have had over the past few years.

Well, John, we get these calls fairly often where people go, am I the exception to the rule? And in this case, you're not special. I mean, you're a special guy. You're a one-of-a-kind guy, but you don't get a pass on math because you live in New York City. Now, what's your income? You said you have $12,500 you take home? Last year, I was at about $210,000, and then this year I'm pasting for about $260,000. You're amazing.

At 25 years old, what's your line of work? I sell technology for a living, and I've, just follow the principles that, you know, Dave and you guys have taught, just keeping my head down, working the whole day and putting in those 50, 55 plus hour weeks. And I mean, yeah, I mean, I'm very blessed and fortunate to be in a position where I can have a good income at this point. That's awesome. And your after-tax income before, you know, take out 401ks and health insurance, what is that number per month? Oh, I did take out 401k and health insurance to get to that 12.5k number. Without it, probably I'd say about 14k after taxes, no health insurance and no 401k. Perfect.

New York City has the extra 4.5% tax that they kind of unfortunately get you with. The bonus, yeah. Hey, I'm going to hop in here. George is walking you through this. Are you commission-based? I'm 50-50. A good amount of it is commission.

Okay. All right. So based on my math here, I'm using the mortgage calculator on our website, you would need a down payment of about 200 grand, a little more maybe, to get into this place and not have it cause you to be house poor. So how much money do you have right now saved up for the down payment? Yeah. So for the down payment, I've got 150K delineated for that. And then I've got an emergency fund of 30. And then I've got an emergency fund of $30,000.

And then I have another $40,000 that's currently in mutual funds in a brokerage outside of retirement. Sweet. So I could go to $190,000 and still keep the emergency fund. So this feels great then, because now I'm going, all right, how fast can we save up another $10,000? Probably a month or two? Two months. Yeah. And so this is where I start to feel good about it because now we're not trying to skirt it. We're not trying to find shortcuts. We're just looking at the math of it to go, Oh, you can still live your life with an amazing income. And you said it's only going up, which means we can pay this thing off faster. And so I would not do a 30 year. I would not put less down. I'm just going to keep saving. And with your income, this is not a huge problem.

And how old are you, man? I'm 25. 25, okay. So you've been, since you've been working, I mean, as you entered into this field and you've been crushing it, you've been at the back end of the longest bull run

in the history of humanity. The largest wealth accumulation that has happened in a single run, that's been the only years you've worked. What you haven't been, and unfortunately all of us who are old have, is the seasons of crushing it followed by nobody's buying any tech for three years because their businesses are trying to hang on, right? And so, here's the math isn't to punish you,

it's to prepare you, not if but when a season comes that suddenly your income drops to $150 or drops to $95, which is a great salary, but it cannot float the scheme that you cooked up. You hear what I'm saying? And I know in head, you're like, dude, that's never going to happen.

I've made $210,000, and this year I'm making $260,000. Next year I'm projected to make – just trust me, having been on the roller coaster enough, that sucker eventually has to come down, right? And it's just preparing yourself. If it comes down, I've got to be able to cover 25% of my take-home pay. That's a lot of loss you can stomach in your salary, in your commissions, and still not lose your home. You see what I'm saying?

Yeah, absolutely. That makes a lot of sense. That's kind of why I want to continue to save and invest, you know, even if, so with the 25%, you know, hopefully I can still save, you know, maybe I only spend another 25% on top of that, still save half my income so I can have that nice, you know, hefty amount in mutual funds. So, you know, should I need to go beyond my emergency fund or should anything happen, I can still back that up and still sustain the mortgage and not have to go into any sort of distress. Yeah, it gives you options and a lot of freedom there. And that's what I love about a 15-year fixed rate mortgage where the payments no more than a quarter of your take-home pay is that you still have 75% of your take-home pay to accomplish all of your other goals to invest and save up for your kid's college or buy the engagement ring or pay the house off. And on top of that, guess what?

15-year fixed rate mortgage pays off in 15 years every single time. And that's a worst case scenario, which means at 40 years old, if you just made minimum payments, just those same mortgage payments, you would have a paid for property in new york city at 40 years old that probably is appreciated up to a million dollars or if you're a single 25 year old and you work like bananas like he's been doing because he's this guy's brilliant and he's a hustler you can have this thing paid off in three years yes and then you've got the next however many years suddenly you get a seven or eight thousand dollar a month raise right because i don't have any house payment. You're talking about investment.

Man, there's not a lot of investments that make you that kind of money every month, right? Yeah. And the problem with the 30-year is they go, well, John, it'll give me wiggle room. You know, I've got to have that wiggle room, John. And you know what wiggle room really means? George loves his wiggle room. Oh, it just grinds my gears, John. People say that. Because the wiggle room quickly floats away into, oh, I bought a new toy or there was this random expense that came up.

When you do a 15-year, you go, well, I guess we have to actually be disciplined and be on a budget and figure it out and get creative and not make excuses. And so that's why we do it. Again, it's not to punish you. And if it's 26% of take-home pay, we're not going to send you a letter in the mail chastising. Listen, it's just a parameter because we want you to win. We want you to not have a mortgage long term. That's the difference with our show and the other Get Rich Quick shows where they go get as much real estate debt as you can because that's the path to wealth.

So nonsensical. So our show is very countercultural that way, John. You know that. You love that. Well, it's been fun, John. Thanks for hanging out with me for three hours. And also with you. You were forced to, but I think you also enjoyed it.

I got paid to do it, but since we're best friends, I was pumped to do it. Well, it's an honor and a privilege. Thank you to my co-host, Dr. John Deloney, all the folks in the booth, Austin and Ben and James and Zach and Andrew and Josh. They're all back there keeping the show afloat. In You America,

we appreciate you so much. We'll be back with you before you know it. In the meantime, spend wisely, save intentionally, and give generously. Do you love a good day, friend? Want to see the latest Ramsey Show videos going viral? Check out your favorite moments from the Ramsey Show on YouTube. Go watch and subscribe to the Ramsey Show channel on YouTube.