The Ramsey Show - App - How “Cash Stuffing” Works (Aka the Envelope System) (Hour 1)

Episode Date: December 7, 2022

Dave Ramsey & Kristina Ellis discuss: Firing clients to grow your business, The fad of "Cash Stuffing" aka budgeting with an envelope system, Deciding to move overseas, Investing strategy as a filmstrip instead of a snapshot, What happens when a parent refuses to pay back a parent-plus loan. Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET 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 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Live from the headquarters of Ramsey Solutions, broadcasting from the Pods Moving and Storage Studios, it's the Ramsey Show, where debt is done, cash is king, and the paid off home mortgage has taken the place of the BMW as the status symbol of choice. We help people build wealth, do work that they love, and create actual amazing relationships. Christina Ellis Ramsey, personality number one bestselling author, is my co-host today. She and I will be answering your questions about your life and your money. It's a free call at 888-825-5225.

That's 888-825-5225. Rebecca's with us in Flint, Michigan. Hi, Rebecca. Welcome to the Ramsey Show. Hi, Dave. Thanks for taking my call. Sure. What's up?

Sorry, I'm a little nervous. It's okay. You'll be all right. We've never lost a patient. I've been grooming for 12 years now and been doing mobile grooming. Started my own business six years ago. During the pandemic in 2020, I shut down and was going through a rough divorce and moved to be closer to my support system and my family. When I reopened, I kept some of my old clients, but it's time to let them go.

My business is booming and I have people waiting to get in with me. I just don't know how to let them go without disappointing them and without leaving myself open to caving in. So I can see myself telling them, hey, you guys have me till June. After June, you're going to have to find another groomer. And I'm going, we'll pay you more money. We'll do whatever we can to keep you when it just needs to be a severed tie so i'm calling dave to see if you can if you have any tools or advice on how i tackle that what's going on with the old clients why do they need to be severed too far away it's it's nothing it's nothing to do with

them they're good clients um They're an hour away. So now I'm within 20 minutes of home. I have a kid in school. So once a week I'm driving an hour. I'm grooming all of them. They're fantastic on keeping their appointments and that. It's just the drive back and forth when I could be making the same amount of money if not more close to home. Well, and you're also losing all that time, which is important.

Even if you got paid for it, it's still not the way to live your life. Exactly. That's why I don't want to leave myself open for money. Yeah, here's the thing. It's a very simple thing. You just say, it's too far a drive. After my divorce, I moved moved and i'm way away and i'm not able to do clients anymore that aren't within this uh range oh well i want you to come anyway i'm sorry i just wish i could but i can't well i'll pay you double i'm sorry i just wish i could but i can't and it's just okay

no is a complete sentence rebecca i mean yeah it's getting that no i've been grooming for them since i was in my early 20s so it's hard i don't care i mean there's things you outgrow things things change in life and if their life revolves around their dog groomer they need to grow a real life well dave should there be the option for them to drive to her if you you want to do that, that's fine. If you want to present. I thought about that. That kind of puts a wrench in things because if they're late or don't show up, now I'm sitting, I'm trying to find someplace to groom from.

The whole point of being mobile is convenience for the client. I show up and groom your dog. So you don't want to do it. You don't want to do it. It doesn't make sense you know and so you know uh we had a lady that cleaned our house and her husband moved to oklahoma and she wanted to go with her husband so she can't clean her house anymore because she's not going to come from oklahoma to clean her house and you know it was she's a sweet lady she's been with us for years we love her she's like a family member in a sense but she's

not a family member and um anybody with common sense knows that you're not going to come from oklahoma to nashville to clean a house it doesn't make sense so and that's the same discussion it's just you know you're gonna have you're gonna have one or two that are unreasonable emotional people but that's just because they're unreasonable emotional people and you're just gonna have said can't do it now i'm assuming you have enough you said your business is booming you got enough business lined up. You don't need them. Oh, no.

Going out there is literally I don't want to disappoint them. It's literally you don't know how to say no. Yeah. Yeah, exactly. I mean, I'm so sorry. I just can't. You know, the other thing you could do is do you have a former competitor in that area that you could recommend with good

conscience? I don't. That would make it easier to say, here's somebody to go to. There's not a whole lot of groomers. It's a very rural area out there. Yeah. Okay. Well, I can relate to your concerns as somebody who Enneagram 3 doesn't like to make people unhappy. Those conversations can be kind of nerve wracking, but if it helps, you may want to even like write out a script before you go into the call where it's like, you know, here are my boundaries. Here's what I'm going to say. So that once you get in it, you know, no matter what they say, even if they're like, oh, man, and start making you feel bad, you've really thought through kind of the boundaries and

what you want to say. The big thing you got to think about is this. When I get off the phone, there's only one result. It's over. Okay. Breaking up is hard to only one result it's over okay breaking up is hard to do but it's over it's over it's over we're not there's no negotiation there's no you're not attempting to get anything else out of this you're simply notifying them that after june little fluffy's gonna have to get his hair cut by somebody else. Pretty simple.

And they'll be okay. They're going to be all right. They'll be all right. I mean, Rufus the Shih Tzu at Ramsey Place gets a mobile groomer that comes in and cuts his Shih Tzu hair off, which definitely needs to happen. And, you know, I don't, we don't have like this in-depth familial relationship with the dog groomer. It's okay mean they cut the dogs here that's what they do it's okay dave don't make this bigger and bigger than it is it's just you know just no i can't cut their hair anymore just like that yeah even if you run into intense dog dads which apparently is a thing now well i mean just i i don't there aren't the

only dog dads are other dogs. I don't know. There's some people in this building who make little dogs. Other dogs make little dogs. So we need to keep this in mind. But, yeah, it's a little bit out of control. I'm kind of with Deloney on this one. All right.

Joseph is with us in Austin, Texas. Hi, Joseph. Welcome to the Ramsey Show. How are you doing, Mr. Ramsey? I really appreciate your call. Me and my cousin Calvin have been listening to you for a long time, so it's greatly appreciated. Thank you.

Thank you, sir. How can we help? Okay, so I'm 19 years old. I'm in the Army. I'm in college. I'm about to get out in two years and some change. My plan is to, my ultimate goal is to buy a house. When I get out of the Army, I'm going to go back home to New Jersey, New York City area, and I get basic housing

allowance, which is $3,500 for four years. I have about $25,000 saved up, and my plan is to, or, you know, goal... During that four years years you're getting the 3500 stipend because you're going to be getting your education correct yeah every month yeah good for you hey thanks for your service it sounds like a good plan no i would not buy a house while you're going through school just be a college student a 21 year old college student government's giving you housing allowance you got some money to cover rent and just go to school. Just go to school. Don't get in the house business. Go to get in the college graduation business. Focus on one thing because after you get out of college, it's highly unlikely you're going to be in that area. So let's make a decision to just rent right

now. Música Christina Ellis Ramsey personality number one best-selling author is my co-host today the countdown to Christmas is on and you have less than two days left to get free shipping and to get your gifts in time for Christmas. Go to RamseySolutions.com. Check out our new Ramsey apparel. We've got tees, hoodies, sweatshirts, all with your favorite Ramsey one-liners like Live Like No One Else or Cash is King or Better Than I Deserve. And also check out questions for humans conversation cards. We have sold out of the Christmas version. We've sold out of the New Year's version. But we have the brand new regular second edition there is available,

which will work just fine for your holiday get-together. And the Ramsey Gold Planner is out there, and the Rachel Cruz Red Wallet is out there. You have until December 8th, just a couple of days, to get free shipping and have your gifts in time for christmas ramsey solutions.com head on over there today so npr uh somebody sent me the link today i guess it was our producer james sent it uh npr stacy smith a writer for npr has a full article about a young lady uh paying off eighteen,000 worth of credit card debt,

not making a lot of money as a journalism living in Brooklyn. And she did this new craze that is sweeping the nation. Apparently, Gen Z has a brand new fad out called cash stuffing. It's a TikTok craze. Living on cash on the envelope system it's called cash stuffing such a new concept oh it's brand new just came out the tiktok guys just figured it out and so um it's fun though i'm glad that i'm glad she did it so she learned how to do the envelope system we i i heard about the envelope system uh 36 years ago the first time from a guy named larry burkett and and i have a collection of antique envelope systems from the 30s the 20s the 40s and the 50s it was quite the thing there was little envelope systems like rachel cruz's wallet had the red wallet that we have in the store right now, all the colors, but the brand new red

one also. It has pockets in it that you label with categories in your budget and some things in your budget. From the very first day I started teaching this, Larry Burkett stole it from your grandmother. I stole it from Larry Burkettett and your grandmother we've been teaching people to do um the envelope system which now is called cash stuffing if you're a cool gen z tiktaker so um that's how that works and so here's how cash stuffing now that i know what you call it here's how the envelope system that we've taught for 40 years works. It's pretty simple. You have some categories in your budget, and they should be mostly, if not all, categories of things you spend when you are not paying bills. You're away from your desk. You're away from your home. So a grocery store could be car gas could be entertainment budget

it could be a restaurant budget and i do recommend when you first start your budget separate restaurants and groceries because uh it'll make you realize what you're spending on restaurants and so what we taught people to do and we still teach people to do this, I just didn't know it was cool again. I mean, if you keep your clothes long enough, they come back. Just ask James. I mean, it's come back from the 90s, right? So the idea is I'm going to spend X number of dollars for this pay period on groceries.

I'll make up a number, 500 bucks, 400 bucks, whatever the number is. You actually get that much cash out of your paycheck and put the actual real dollars into the envelope marked groceries or in the Rachel Cruz envelope system, and you label it groceries. And then you don't buy any groceries except out of that envelope. And you don't buy anything out of that envelope except groceries. It makes you keep your categories clean and true. And oh, by the way, when you are out of money in that category stop buying and so this young lady goes to the grocery store in this article with 46 dollars in the grocery store 46 cash for the week i apparently for the month i no no no it's for the week okay and i believe i have to go back and

reread the article but i mean but she's like i have to stay away from the fancy olive oil aisle because i really you're you're in for that stuff and i'm not gonna get it and um and she's buying day old bread and gets a whole thing a loaf of bread and she's like okay that's 20 slices that means i get 10 peanut butter and jellies out of that and so you know and she's going down $2.36, $0.80, $6.38. And as she's walking through, she knows she can't go over $46 because that's what's in her food envelope. Well, and it feels different when you're spending cold, hard cash. Like when you actually are handing over something in that transaction that you don't get back, there's an emotional

attachment to it. Well, you know, the studies have shown, and one of the best studies was done at MIT, is they were studying the brainwave activity. And when you spend with real cash, it activates the pain centers of the brain. When you spend with plastic nothing no brain but um yeah but anyway no i mean it's just dead there's no but you're so you know what you have an ouchy moment when you spend cash because you have a a realization and you're right rachel cruz pointed out years ago and i had never thought of it but she and i were doing an event together and she pointed out when you hand you know you think about when you were a kid if you wanted to trade one of your toys to another kid for their toy. So there's a trade.

There's a transaction. You give them yours. You don't get it back. They give you theirs. And so that's what happens with cash. We hand over president faces, and we leave with a loaf of bread. So there's a transaction. There's a hand that you give up something, and you leave with something.

Visually, that doesn't happen when you spend with plastic. You give them the plastic. They hand you the plastic back and the loaf of bread. There's no transaction visually, to your point earlier. And that sounds so primitive, but it activates those parts of the brain, and you have to understand personal finance is 80% behavior. It's only 20% head knowledge. So when you put systems in place that help you manage your behavior,

it's a life hack. You're cutting a corner and making it work. Well, and that's part of when people say, I can keep credit cards and I pay them off every month. I mean, I'm not going to argue with the people who say that they can do that, but do you spend more when you do that? Do you not have that pain center go off? If you were actually spending cash, would you be a little bit more hesitant to buy that extra shirt, to buy that extra purchase that you maybe don't need? Well, studies prove that you spend 12% to 18% more using plastic than using cash. I mean, we've got tons of research on this.

This is not a new phenomenon. And in the digital world, we call it friction. The easier it is without realizing you spent money, without many steps then boom you know you hit the paypal cling boom oh amazon you hit you you click on your card is already on file and you just click buy and there's no i mean no recognition that money's actually spent the weird thing is is the studies also show that when you use a debit card versus a credit card, that there's more physical, physiological reaction, recognition. I better have the money in that account. Otherwise, I just bounce the check when I use my debit card.

Right. Yeah. Otherwise, I've just gone into overdraft. And there's a physiological recognition of that in your body and in your brain versus when you lay the plastic down, you're just like, eh, we'll figure it out later. I think now too, it's like the temptation keeps getting even higher because we've got Venmo where you can just transfer money so easy. A friend's going to be like, I'll pick up dinner and you can just send the money. We've got Amazon where it's one-click ordering. It's like everything, it's getting so easy to spend.

So it's like, even if you're using a debit card, I think it's getting more and more important to create boundaries around your spending so that you feel it. So that, you know, even if it's an easy transaction, there's a little bit of pain or a little bit of boundaries to keep you in line. Here's the other side of the equation.

Retired school teacher, retired Methodist pastor, 3.7 million net worth December of 2021. We're debt-free multimillionaires drowning in a cosmic ocean of grace. Giving is the most fun we can have, not involving fat, sugar, or chocolate. We're childless, but we have 16 kids that we support, so we have 16 children. Very cool. See, that's what happens when you stuff cash. Are you sick of planned obsolescence?

You know, when companies make products crappy, so you have to buy more of their crappy products? Well, me too. And it's why I love companies like Grip6. Grip6 is all about quality products meant to last forever. That's why their comfortable, bulk-free belts, slimline wallets, and lightweight wool socks all come with a lifetime warranty and simple returns and exchanges. So check them out at Grip6.com today and get up to 20% off with the promo code Ramsey. Christine Ellis, Ramsey Personality, number one bestselling author, is my co-host today in the lobby of Ramsey Solutions on the debt-free stage. Jim and Ashley are with us.

Hey, guys. How are you? Good. How are you guys? Better than we deserve. Where do you guys live? We live in Clarksville, Tennessee. Oh, just up the road.

Yeah. Well, welcome to Nashville. Good to have you. Thank you. And how much debt have you guys paid off We live in Clarksville, Tennessee. Oh, just up the road. Yeah. Well, welcome to Nashville. Good to have you. Thank you. And how much debt have you guys paid off? $625,000. Oh! Wow.

How long did that take? 30 months. Okay. There's a story here. What's your range of income during that two and a half years? We started around $45,000 and ended at $60,000 plus a $7,000 side hustle. Gotcha. What do you all do for a living?

I am an office manager at Crow Estate Planning and Probate. And I'm a stay-at-home dad. Cool. Good for you. Okay, how do you get rid of $600,000 on $45,000 income? That doesn't work. You must have sold the house. We sold our rental in California.

Ah, okay. All right. And what did it sell for? It sold for $810,000 and we used some of that money to pay off our house in Clarksville, Tennessee. That's fun. Yeah. What's the house in Clarksville worth? I think it's about $325,000. Okay. Very good. Very cool. Good for you guys. Okay. So you paid that off, and do you have any other debt? Nope. That was it. You're just now officially weird people. No mortgages, paid for house and everything.

We did have, we also paid off $55,000 in the combined total of student loans, credit cards, a car, and we had a turf payment. Oh, you did have other debt. Okay. We did, yes. Cool. All right. Cool.

So we knocked all of that out and the mortgage with the sale of the rental. Correct. That simple. And it took 30 months to sell it? We started for the first $55,000. That was about the first year and a half. And the last little bit was just kind of getting the house sold and just kind of letting the money go to pay off that house. So you kind of didn't want to sell the rental at first? No, we thought renting was going to be fun.

And it's passive income. And honestly, it kind of turned out to be a nightmare yeah i bet so um i mean you managed to do it right in the middle of covid too yeah yeah that kind of um you know we always thought maybe we'd go back to california that's where we're originally from uh we moved out here shortly after we got married and we're like you know maybe we'll go back maybe we won't And then we kind of looked at each other and said, are we really going to go back? So what got you started on the Ramsey way? Well, in about 2020, I started with the podcast. And about a month or so in, I had sent a text

message to a mentor that I had. And I said, hey, I'm listening to the Dave's Ramsey show. What do you think about this guy? You know, I'm interested to hear your piece. And he said, you know, Dave's a great guy. Keep listening. And so that kind of got me hooked. I bought the Total Money Makeover shortly after. And like I said, the rest is history.

Wow. Very cool. Just like that. So, Ashley, he's got the podcast podcast going is he giving you a hard time um he's we've talked about reading me reading the book and um he pretty much just every day i'd come home and he'd talk about the plan and the baby steps and then you know we would talk about knocking each one of them out and then he he listens to the podcast every day and so um when we're in the car we listen to it or we watch it on YouTube.

There's no fun anymore. It's really cool though to see everybody come from different walks of life and really stick with the plan and be able to pay everything off. It's awesome. So you sold the house. What else did y'all do in this journey? Because you mentioned the side hustle, a 7K side hustle. What was that? So we cleaned my offices that I work for in Clarksville and in Hopkinsville. Okay. That's awesome. So what would you say is the key? Because there's a lot of people who are looking at that number thinking, whew, that's impressive. What's the key to getting out of debt?

You know, Stephen Covey has a really good quote that says, begin with the end in mind. And our definitely end goal was to be stress-free, to really, like you said, live like no one else so that we could live like no one else. And I think that was our biggest goal. We wanted to change our family tree. We didn't want to be like everybody else because normal sucks. Amen. Good for you guys well done hey we're proud of you who are your biggest cheerleaders each other and uh our families we have jim's mom here from california to celebrate with us today as well very fun awesome good stuff we got the live and give bundle for you that's the uh total money makeover book the baby steps millionaires book that's the next chapter in your story and a one-year membership to Financial Peace University, the brand-new version that has George and Rachel and Deloney and me and everybody's in it.

So be sure and watch that through if you haven't or give it all away or whatever you want to do. It's for you. It's the Live and Give Bundle. So very, very proud of you. All right. What's your child's name and age? Let's get him in the shot here. His name is James, and he will be two in january all right so james came uh just about

well right in the middle of all this yes yeah yeah yeah that's part of the deal huh good job all right fun stuff i love it all right jim and ashley and james clarksville, Tennessee, $625,000 paid off in 30 months, making $45,267. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! Yeah! That is how it's done.

I love it. Wendy is with us in Omaha, Nebraska. Hi, Wendy. Welcome to the Ramsey Show. Thank you for taking my call. I appreciate that. Sure. So the reason why I'm calling is I wanted to know if my ideas of moving to Japan to be close to my grandma is a good financially good idea. I'm a school teacher

for the past 20 years and I raised all my three kids as a single mom. So I don't really have much of a retirement other than the four, three B that I received from the school. Um, so, school um so and i do own a house i mean i think i still owe about 98 000 but it's worth about 275 000 good how old are you um 49 cool so you want to go to japan and do what um be maybe administrator i do have a two master's degree so i'm hoping to get into an international school or something and get into administration you'd be near your grandmother you'd be making a lot of money a lot more than you make now right hi i'm hoping to no i wouldn't go if you don't because it's very high cost of living all right and so i mean i i talked to a guy yesterday as a matter of fact that is in the it world and he moved his family and they lived in japan for three years and the the company he

worked for furnished all housing and they doubled his income and so they looked at it as a short term adventure and he piled up a huge pile of cash in a short period of time but if you're going to go over there and make the same amount of money and the cost of living be twice as much as it is where you are no thank you i don't want to do that okay okay what do you make now um i make a 70 you should make a hundred and a half with a with a master's in administrative yeah i haven't tried for the administrative positions yet. I mean, but no, I wouldn't go over there and make the same. You're going to go backward if you do. What about your kids?

You're going to leave them behind, right? Right. Well, they're older. You know, the oldest one is married. They don't count anymore. Yeah. Well, youngest one is still with me. But then, like, I'm also concerned about my house. I do have a four-bedroom home.

I would just sell it. How long are you going to be in Japan? Well, my grandma is 92, so I just didn't want her to be alone there. How long are you going to be in Japan? Maybe five years. Sell your house. Okay. Buy another one when you come home.

You don't want to manage a rental property or an empty house internationally. You'll take all the fun out of this experience. So what do I do with the money that I get from the house? Put it in an investment to buy a house with when you get back. All of them? All of them? All the money? Like all of them all of them all the money like all of the well i'm thinking like 150 000 dollars i probably yeah let's put it in some good mutual funds and so it'll be there when you get home and it will have grown and you'll be able to buy another house and you're gonna make a whole bunch

of money so you're gonna add to that investment while you're going to japan or you don't go that's what I would do. Well, and with this couple that just paid off their debt, they didn't want to stay in the rental business. And managing that while in Japan would be, whew, not good. No, no, no, no, no, no, no. So much wrong with this. This is The Ramsey Show. We'll see you next time. Hey, guys, thank you for joining us. Christina Ellis, Ramsey Personality No. 1 bestselling author, is my co-host today. If you like this show and you want to help us out, we would appreciate the help. We do need the help. We need you to do three things regarding

the show number one if you watch the show on youtube subscribe if you listen on a podcast subscribe versus just dialing in and checking it out the subscriptions change the algorithms on the internet and on the different platforms and it serves it up to more and more people to be recommended if you're subscribing so thank you that. Leaving a review does the same thing. Five-star reviews only, please. Thank you very much. And share the show. If you're listening on talk radio, tell your friends about your local radio station to

tune in. And of course, you've got share functions on Spotify or Apple or YouTube that you can actually send the link and click a share button, whatever, however that particular platform works. But help us spread the word. It turns out all of our internal data indicates by far our best promotional thing to help us get the word out of this information is you telling someone about it. You are a big deal thank you we appreciate you jared is in altuna pennsylvania hi jared welcome to the ramsey show hey dave and christina i hope you guys are having a good day today we are how can we help

um yeah so my question kind of in a whole package deal today is, um, my grandparents had their retirement funds in a, um, annuity that matured after 10 years. Right. And, um, about around last year, I looked into what the retirement plan was and it looked like that their retirement was basically getting zero interest per year on that annuity, but they were still taking out their fees and their expenses, the service that they had. And so I decided that I was going to manage their funds for them, and I decided to pull that retirement out and roll it over into a traditional IRA. But doing that, it was a 5% penalty because it was only five years into the annuity.

Oh, you made that up in one year. That was brilliant. Yes. Yeah, if they were making zero and you moved them into mutual funds making 10 or 12, they made 10 or 12 the first year. They lost five, so they only netted seven. After that, they make 10 or 12. So absolutely, I would have done that the only thing is it was around last year and now the market crashed oh

it's market didn't crash market went down and it hadn't come back up but i mean overall over the scope of their lives unless they die this year this is a brilliant move but no i mean you know the market can come up and down but the average of the market is has been 11.8 since it started and so let you know let's say you cost them five and you made them 11 then you made them a net of six now this year you may or may not do that um probably not in 2022 but 2023 you'll be fine 24 there you know you're gonna be just fine i mean some years you could make 17 right i mean it's it's an average yeah i guess i was just nervous because you know i transferred it all over they they dropped i mean there's probably 100k in it and

then you know five five grand off the top just came off of that well and then they lost another 12 20 percent yeah then they lost another 12 or 13. Yeah. Yeah. But it's not, you know, you didn't lose it until you cash it in. Right. No one gets hurt on a roller coaster except those that jump off during the ride. Yeah.

You did the right thing, Jared. Okay. That's exactly what I would have done. All right. Perfect. That's all I want to hear. Okay. Thank you.

Yeah, that's hard. Thank you you so the important thing to remember it folks is this you cannot take a single snapshot when the market's down and use that to make your judgments about your long-term investments that's a moment in time you can't take a single snapshot when the market's way up and go well I made 23 on my money last year which i've had years i made more than that you know well but that's not the norm i mean you can't count on 23 no but you can count on the averages well and jared i didn't ask his age but he sounds young and if he's gen z millennial this may be his first time seeing the market go down significantly so it is kind of scary if you've you know gone through the season with covid where it's been lots of highs and a lot of people have been winning in the market.

And then all of a sudden it goes down. It's easy to go, oh, my gosh, I've never seen this before. But somebody like Dave, you've talked about how you've seen the roller coaster throughout the years. Somebody, are you saying I'm old? Are you saying I'm old? Somebody old like Dave. Yeah. But I mean, seriously seriously that's it pan back from the moment

and get not only a little bit of the future in your peripheral vision but a whole bunch of the past in your peripheral vision and you see the trend across something more than one month or one year because if you take a one month or one year trend in any investment and use that to make your decisions you're going to make a bad decision now i wonder too if some of that anxiety he was feeling was the fact that it's his grandparents you know money and they're they're probably needing that money right now what would you say to that concern of you know if it was jared's money specifically it'd be a lot easier to go okay i'm not worried about i'm not going to retire for 40 years here's the thing if you left it where it was it was sucking for sure it was going to retire for four years. Here's the thing. If you left it where it was, it was sucking. For sure.

It was going to go. It's costing money every year sitting where it is. He did the right thing. His anxiety is that he just wanted to make sure he did the right thing. For sure. But for retirees right now who are feeling really nervous about the market, what would you say to them? You don't need the money.

When you retire with a million dollars you don't cash a million dollars out and set it at the kitchen table you leave the million dollars in the investment you live off the income and so if this year you didn't the investment didn't go up and so by taking some money okay let's take let's take this let's take the hundred thousand okay uh market's down 15 all right and you were you wanted to live on 10 of your investments so if you had a hundred thousand dollars you wanted to live on ten thousand dollars okay so you pull out ten thousand dollars you got 90 and it loses 15 so you're down 25 okay now the next year it comes up 10 15 comes back up, and you still pull off $10,000.

If you keep doing that math every year, up and down, up and down, up and down, and it averages 10% or 11%, and you're pulling off 10%, you will get to even. You'll get back to the 100, and the 100 will just sit there over time. Some years it'll be 110. Some years it'll be 90. Some years it'll be 90. And it'll be back and forth, right? But you're pulling off 10 the whole time, and it's going to vacillate back and forth.

So you're going to be just fine. And so that's the thing. It goes down, but it's not down permanently. So it'll keep coming up, and they can live off the income. So the point is you never in any of this case took out the hundred all you took out was the amount you need to live on and and then it went down a little and then it comes back it has it needs to come back the amount you took out plus how much it lost before you're back to your hundred and it will over time it will over time i mean and if

it didn't it'll be the first time in history brand Brandon is with us. Brandon is in Raleigh, North Carolina. Hi, Brandon. Welcome to the Ramsey Show. Go fast. I'm short on time. I got you, Dave. Well, thank you so much for taking my call. Basically, my question is, is when I was in college, racked up a bunch of student debt. We're halfway through it. And during college, my mom promised to help me take care of the parent plus loans that she took out um and you know as the holidays come up it's you know really started to weigh down on me and wanted to know what your thoughts are on that and or if it's a conversation to rebring up uh what would that look like because uh we're halfway and it's just been a been a really long journey i'm confused your mom has a parent plus loan yes for my school so parent plus loans are in her name and she took that loan out and she said she was going to pay it

she was going to help me pay it pretty much match what i pay or 50 50 split and now she doesn't want to or she just it's just something that's gotten swept under the rug, and she hasn't taken responsibility to help me or pay it. Well, I think we talked about it. You took this loan out. It's in your name. I can't just leave it at your doorstep. Your mom.

It's not in your name, Brandon. I mean, anything you do to help her pay her loan is because you made an agreement, and you should honor that agreement, but you're not legally liable in any way for this loan. It's a Parent PLUS loan. It's in her name. And so I think we give her a little wake-up call, my point. Mom, you have a loan.

Yeah, she needs to be feeling some of that heaviness too. Yeah, you have a loan. We promised each other that we would work that loan off together. I'm not going to knock that loan off by myself because you have a loan. And I think some version of that with more kindness than I have in my voice right now is how your holiday discussion sounds. This is The Ramsey Show. Have you been inspired to make a change with your money? Want to know where to start? Take our three-minute money quiz to get a plan you can follow.

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