The Ramsey Show - App - How Do I Deal With Business Restrictions During This Crisis? (Hour 3)

Episode Date: April 22, 2020

Ken Coleman, Daniel Tardy, EntreLeadership Theme Hour Tools to get you started:  Debt Calculator: http://bit.ly/2QIoSPV Insurance Coverage Checkup: http://bit.ly/2BrqEuo Complete Guide to Budgeting: http://bit.ly/2QEyonc Interview Guide: http://bit.ly/2BuGnZE Check out other podcasts in the Ramsey Network: http://bit.ly/2JgzaQR 

Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thank you for joining us. This is an Entree Leadership Theme Hour. Entree Leadership is our brand where we talk to business owners, particularly small business owners, about how to operate, how to win, and how to succeed, and today, how to survive.

And we're talking to small business owners all across America all day long with our Entree Leadership team. But during this time, we've decided to devote an hour at least once a week with Ken Coleman today, Ramsey Personality, number one bestseller, and the Executive Vice President and Operating Board member of Entree Leadership that runs that whole area of our company, Daniel Tardy sitting in as well, to answer your questions. Now here's why this is important.

Fifty-four percent of the U.S. economy, the gross domestic product, is produced by small business. Small business in this case is defined as 500 or less employees, just to give you an idea. That's over half of the economy is created by not people with 30,000 jobs and 100,000 jobs. So when you hear Macy's laid off 100,000 people, that's horrible and sad, but that is a uniquely small portion of our overall economy. Much more at risk for our economy is what happens with the small businesses, because as the small businesses go, so goes the economy. General Motors does not

wag the dog on this tail. It just doesn't work that way. They're not big enough as a percentage to do that. Now, I understand they're a big deal and all of that. But what is truly a big deal is small business. And the bad news is small business has been hammered during this coronavirus shutdown, the suppression of our economy in order to kill the virus. The good news is the first to recover will be small business because they're agile. They know how to float like a butterfly sting like a bee those of us that started something in our living room and we on a card table and we scratched and clawed we know how to scratch and claw we are not bound by bureaucracy and there is not a herd of sacred cows inside of our inside of our business to kill in order to just freaking

get something done ross perot said if if you see a snake, kill it. Don't appoint a committee on snakes. Small businesses do that. Small businesses do that. We don't screw around with stuff. We raise the bow and release the freaking arrow. And it's that simple. And so they'll be the ones that come back the fastest.

They're also the ones that have pivoted during this 30 days, a word that has been dramatically overused like unprecedented during this 30 days both accurate but i pivoted and unprecedented so much i'm dizzy and um uh that you know they're the ones that that are coming up with new products and way to survive and new sources of revenue to survive during the switch and then when it switches back they'll be ready to do that. So we're here to help you guys. If that's you, the phone number is 888-825-5225.

And Daniel Tardy, we have seen some wonderful success stories from some wonderful people that we coach and that we work with in the entree leadership space. These entrepreneurs truly are not only the backbone of America, I think they're the most creative business people on the planet. Dave, you're exactly right. The reason that I love small business people, the salt of the earth, the light and the darkness, I mean, these guys, they dream, they have passion,

they get out of bed every day in spite of the odds. I mean, normally the odds are stacked against them pre-coronavirus. And I've been talking to business owners since all this disruption. I wish I could pipe them in and just have them talk to America right now. Because these guys, for the most part, there's a few that are really struggling. But for the most part, they're going, I got to solve this problem. I'm going to figure this out. They're not being victims. They don't have their head in the sand. They're going i gotta solve this problem i'm gonna figure this out they're not being victims they don't have their head in the sand they're not sucking their thumb

and crying about it to your point earlier they're adapting they're pivoting they're coming up with new solutions they're checking the mailbox for a stimulus check they're coming up with solutions to the problem they've got and it's it's inspiring to listen to and many of them are figuring out whole new way of operating their business that they didn't even think about before. And so these problems have created creativity, and that creativity leads to new solutions and new business lines that didn't even exist. Well, you know, I'm really heartened by what we see out of business in normal times, and that is that business exists to solve a problem or meet a need. And I also just, you know, I love capitalism, because capitalism doesn't mean that you are immune from economic upturns, downturns, crisis.

This is a complete stop. This is such a whole different animal here, this coronavirus thing. But what I have faith in is capitalism because that means that men and women who are running businesses will figure out how to solve their problems while solving customers' problems. And I think when we get back to it and we get to a point where most of the American consumers are safe, they feel safe, let's put it that way, to get back out there, I think we're going to see a tremendous boom. I don't know how soon and I don't know to what extent, but I do believe in capitalism because it is driven by the small business owners that we're talking about. They will figure it out.

If you're a small business person, this is your hour. The phone number is 888-825-5225. 888-825-5225. You jump in, you can talk to this panel. And Daniel Tardy, we've put together in Entree Leadership a two-hour online workshop shop for business owners called How to Lead in a Crisis, Your 90-Day Action Plan. And since I know I wasn't there, who did this? This is with John Felkins and Alex Judd, two of our top coaches with our team, doing basically a webinar with small business owners talking through real issues that are happening right now.

But then taking the Entrez leadership principles that have taken us through many crisis, many disruption. This isn't the first crisis we've all faced. We've looked back on what has always been true and what are the things that people need to be focused on right now. And we put that into a workshop that's practical. It's hands-on information. And it went so well. We had several thousand people show up and we got rave reviews about how helpful it was and so many business owners going, this is the hope that I needed today. We figured out a way to

package that and rebroadcast it out. And so anybody that wants to jump on that, they can text the keyword free workshop to 33444, free workshop to 33444, and they'll get access to the recording of that. It's really great. So one thing I think we're going to see with small businesses out there is not only are they going to come up with ideas and solve problems like we've been talking about to be one of the first group that creates economic recovery when the suppression is over. But I also think that there is going to be a shortage on some of these services, and so they're going to be jammed up because some of their competitors went broke in the haircutting business and won't be back,

and you've got this surge of people who desperately need a haircut. Some of the competitors in the restaurant business, people are dying to get back in restaurants no pun intended um i mean they're really desperately wanting to go out to eat and yet a bunch of restaurants are simply not going to reopen they're gone and so you've got a shortage and an oversupply and we're going to see some price adjustments on some of these goods and services we're going to see some of the businesses that do reopen and retool and reset be overrun with customers. It may be the best month you've had in years.

As things warm back up and some of the surge, this pent-up demand from the suppression comes at you, I think some of you need to get ready for that. We're going to take your calls on The Dave Ramsey Show. Everyone knows we're going through challenging times, and from what I hear, a lot of you have been calling Zander Insurance with questions about your existing life insurance or to see if plans are still available. For those who already have a policy, you've got nothing to worry about. There are no limitations related to the virus, so just keep paying your premiums. Most companies are even offering extended grace periods for those running into financial trouble.

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that means even if you mismeasure or you pick the wrong color they will remake your window blinds for free free samples free shipping new promos all the time always use the magic word the promo code ramsey to get the best deal. Today's question is from Dominic in New York. Dave, my wedding has been postponed to next year. I'm on baby step two. I'm working on my student loans. However, I just got engaged, and I decided to put my debt snowball on hold until after the wedding.

Thanks to COVID, our wedding has been postponed until next July. I'm not sure if I should go back to continuing my debt snowball or keep saving for the wedding. What would you suggest? If you've got the wedding covered, then restart your baby steps, which would be restart your debt snowball. But until you've got the wedding covered, that's your first priority. So whatever your out-of-pocket expense is going to be, you need a budget for the wedding, an amount. Then you hit that number. Then, boom, you push play on the debt snowball.

And you should be able to cover that as much time as you've got. This is a small business theme hour, an entree leadership theme hour. The panel answering your questions, Ken Coleman, Ramsey personality, number one best-selling author, and the executive vice president of Entree Leadership for Ramsey Solutions, Daniel Tardy, joins us. Let's go to Tommy in California. Hey, Tommy, welcome to the Dave Ramsey Show. How can we help?

Hey, guys, thanks for taking my call. Hey, Tommy. What's up? I'm 28, and I own 50% of my wedding venue business. I run the business day-to-day, and my parents, they're only involved in a large decision, split the other 50. In 2018, we got hit by the wildfires, which caused us to close temporarily. And in the downtime, while we're waiting for permits, I'm going through all of our processes and costs. And in that, I'm realizing my parents, since they're not part of the day-to-day,

don't understand what our customers want, but they still try to impart their decisions as a final one, like hiring subcontractors and vendors, without my knowledge. They've talked about how they want to be a part of the business in a way where they're just asking how the business is doing and not part of the decisions. So my question is, I want to have the discussion about the process of buying my parents out over time in a mutually beneficial way. So I don't know how to have that conversation,

and I don't know how to put a dollar amount to the percentage. Tommy, I'd be curious to hear from you. I'd love Ken's thoughts on this too, but you're 28 years old. You're in a business that it sounds like you're partners with your parents. I want to zoom back for a second and start with, is this what you love and really want to be doing when you're 35? Or did you kind of drift into this thing because mom and dad are a part of it? Oh, this is absolutely what God has for me. I love waking up every day and doing what I do. Okay. Good. Well, that's good. So what do you, what do you want to be true in a year from now, as it relates to the way that mom and dad are involved, not involved? It sounds like you want

to buy them out and have a clean break. I have a great relationship with my family i think the problem is um it's mostly my dad gets a little too involved and so i don't know my idea was buying a percentage or something so that there is a little bit more i have more decision on that but i i just that's kind of what I came up with. I wasn't positive on what to do on that. After you are paid a base salary for managing the business, nothing but that, how much profit is left a year? About $600,000. Wow. You're profitable $600,000.

So they're taking about $300,000. You're taking about $300,000 in profit. Correct. After you were paid a salary. Correct. Okay. All right. you're taking about 300 in profit correct after you were paid a salary correct okay all right so the business is worth roughly four to five x of that number that's the value okay and and so their their half their 300 is worth somewhere around a million 1..5 million, two to a million, five, somewhere in there. Okay. All right. Now the way I would do it is I would just propose that you give them X percentage of the profits until you reach that number. And it would be in excess of 50%. Okay. Okay. Our agreed buyout number is whatever. Let's agree to a number and i'm going to give you

80 of the profit until we hit that number if you can live on 20 plus your salary which you ought to be able to these are incredible numbers that all makes sense okay and so if we said um% of 600, that's like a half million dollars. And if it's a million five three years later, you're clear. I like that. So you need to agree on a price. But the price generally a small business will sell for somewhere around a 20 to a 25% rate of return to the investor, which means the cap rate is about 4X or 5X, okay, of the net

profit. And their portion of the net profit is 50%, if I understood you right. Is that correct? That's correct. Yeah. The problem is you got two heads, and anything with two heads is a monster. Yeah. That's what you're discovering. And with this buyout, they lose the right to interfere operationally. I'm curious. What do you think the chances are they're going to go for this?

Do you feel good that they'll go for this idea, what Dave just laid out? I think it would be a good conversation. It would. I mean, when we started it, it was definitely something where I was really wanting to do this, and they were willing to help. And they wanted me to run everything, to do everything, but they still want to put their fingers in it even though it's really kind of hurting. Well, I can ask a good question. Dave gave you some great mechanics on the valuation of a business and how you would put a proposal together for the buyout.

But you may want to have a few conversations just from a relationship standpoint before you come in and start talking, you know, the buyout and the timeline for that to happen just so that everybody, I mean, you don't want to look up and in a year from now, the relationship that you have with your parents that is great has gotten really rocky because how you approach this was too transactional. And it doesn't sound like you're going to do that. It sounds like you guys are on a good track. There's a couple of things to do that being a founder of a business. Your dad's not actually the founder. You and him founded it together with his money. He got you started or whatever. And then you took it and ran it and grew it but you know always honor their position as parents always honor their position in the business and thank be thankful and grateful for what you've gotten for this point and that's how you always start a conversation

like that and and then you say and you know our original purpose was for us to get this thing running and so now the natural evolution of this dad mom the way for me to continue to honor you is to buy you out and so i i want to give you a large percentage of the profits against a buyout number and cause that to happen but that's me tipping my hat to you and saying thank you and i appreciate you and i love you and um you're you've been incredible and it's the natural evolution of this just like when you were raising me mom and dad you didn't want me to live in the basement till i was 40 and this is i'm starting to be in your basement now that's true yeah you're giving them a metaphor of some kind that says it's time for me to grow

up and grow on and you and you have to let me go i have to move out i'm getting married you know it's that kind of a thing and so that they are that but they're getting some psychological value out of interfering and you need to take that away from them gently well and just be patient. I mean, when I was 28, I would want all of this to happen in six weeks. It's okay if it takes six months. That right there is a very big point. I think what Dave just mentioned on the psychology is huge, Tommy.

And then what Daniel said is true, too. If they resist this a little bit, you need to relax. Because you told us all unequivocally. I mean, you couldn't get it out fast enough that this is what you were created to do so guess what you're getting to do it you're 28 let this thing cycle out your time's coming yeah but don't but it it could be gradual but it does need to see incremental progress with the end in mind that everyone has become starts to be in agreement with um because what happens sometimes with family business is to avoid conflict, we kick the can of conflict down the road, and it gets bigger every time you kick it.

So it's easier to go ahead and deal with it. Again, not to rip the Band-Aid off and not to be impetuous and not to be immature, impulsive in how you're doing it, but gentle and wise and honoring, always honoring those that came before you. One of my favorite things about Nashville is that I know a lot of music people around the world. I'm not a music person.

I'm just a fan boy. But country music people do a great job of honoring the ones that came before them. You have to honor Dolly Parton. You need to honor John and June Cash. You know, you need to honor the ones, you know, Porter Wagners. You need to honor these. And they do in that world. And it's a good way to make transitions happen.

It's classy. This is the Dave Ramsey Show. Folks, since you're spending more time at home these days, why not make the most of it? Now, I know not everyone has the means to do a full renovation, but thanks to our friends at Blinds.com, there are some small changes you can make to help improve your home. Blinds.com makes it incredibly simple to shop top quality blinds, shades, and interior shutters from home with easy online ordering and free shipping right to your door. Listen, window treatments are a simple project that you can do that really benefits the look and feel of your home. And if you're nervous about doing it yourself, well, don't be. Blinds.com has helped millions of homeowners through the process

with free design help by phone or online, plus they guarantee the perfect fit for your windows. Go ahead and get started today. Go to Blinds.com to take advantage of this week's special offer. Rules and restrictions apply. Small business theme hour this hour with Ken Coleman, Ramsey personality, number one best-selling author of the book The Proximity ken coleman shows all about jobs in your career also on the panel daniel tardy the executive vice president of entree leadership we're answering your questions

about small business right now we're offering a free workshop on how to lead in a crisis your 90-Day Action Plan. And the workshop breaks down the four steps our company, our operating board, me and my leadership team used at Ramsey Solutions to navigate through the last 45 days, and we will navigate through the next 45 days using these same four steps. To register for the free online workshop, text FREEWORKSHOP to 33444. This is for you leaders and particularly small business leaders. FREEWORKSHOP to 33444.

One phrase, no spaces. FREEWORKSHOP. And send it out, and you're going to get 90 days of good, solid material from Alex Judd and John Falcons. John is head coach, and Alex Judd is one of our top coaches, but also is the host of the Entree Leadership Podcast. And so you hear him here all the time. And he's not lacking in energy, and John's not lacking in wisdom. So you'll enjoy this.

It's absolutely amazing. Another thing that we are doing for business in America today, we have an HR benefit that we've sold for years in the financial wellness space, teaching your employees how to handle money, how to get on a budget, how to get out of debt, how to build wealth, and how to be outrageously generous. And it's called Smart Dollar. And lots of companies have taught it. It's been available to over 10 million employees at this point.

Companies like Costco, for example, have taught it and used it. So here's what we're doing. We're doing a couple of things. Number one, if you have had to lay people off, if you'll get in touch with our team at smartdollar.com slash hope, they will set you up to put any of your former laid-off employees or furloughed employees through SmartDollar free to the end of the year. They can stay in the program up until the end of the year. They get all the lessons and the curriculum on how to handle money, and it's me and Hogan and Rachel and many others teaching on this. And it's pretty incredible stuff, completely free for them. Also, if you want your company for your current employees to have a free trial to Smart Dollar,

we'll make that available to you at smartdollar.com. And, of course, a message of hope. America moves forward, focusing on helping leaders like HR folks and C-suiters who are trying to make these money and HR decisions at times like this. If you want to join us for that, it'll be Monday, April the 27th at 11 a.m. Check it out on our Facebook page, our YouTube channels, and you'll be able to see what's going on there for that space. So we're trying to help people in business because we know business is where jobs come from and we need to know a whole bunch of people in america

need a job right now they need some income sue is with us sue is in california hi sue welcome to your welcome to the ramsay show how can we help well we own my business partner and I own a small business. We own actually two dance studio locations, and it's super frustrating here in California since there seems to be more focus on gathering data than getting businesses back on their feet. And we've listened and have educated ourselves immensely in the last several weeks with strategies and ways to stay afloat.

But small businesses here, I don't know about the rest of the country, but weren't even given an opportunity to keep doing what they were doing and incorporate the directives. And I know that they're offering loans, but we know that that's just a temporary fix. And I'm just to the point where I want to know, like, my civil liberties are being taken from us. Our freedoms are being taken from us. They're not giving us really any definitive dates. I want to go back to work and I I want to open up my business, and I will implement those mandates that essential businesses apparently had that opportunity to do, but we were not

given that opportunity. So I just want some advice on that, because we've pivoted. So what is your main form of revenue is it classes where there's larger groups or is it also individual dance lessons it's large it's we particularly we are a recreational studio we do have a performance team company but we're predominantly a recreational and so classroom, in-person instruction. So we've done everything. We've pivoted.

We're online. We are prerecorded. We have live Zoom classes. But it is not the preferred method of service. And we survived our first April month because we are on an automatic tuition and invoicing system. Let me ask you, I understand preferred method in terms of format and what's best for the students. How has this impacted revenue?

Has the pivot that you guys made been able to keep you guys afloat from a cash flow standpoint? Well, they had auto draft for April, so it'll be May for you know, right? Yeah. Well, April we survived, but May is not looking favorable because we keep having these daily, allegedly these daily updates with no specific information. Which city are you in? We're in San Diego. Okay.

And so our county isn't anywhere near what Los Angeles County and San Francisco area with regards to, you know. And I could go on and on because I just personally feel I spoke with my own doctor to find out specific information about this virus because we need to make good business decisions that are going to keep our staff and our customers healthy. And his information does not align with the direction of the leadership here. I was trying to explain that to a person in government I was having a discussion with earlier in the week that the problem is that those of us that are entrepreneurial running our own businesses, you have to present credible data to us. And if our data was off as far as their data has been we would have been out of business a long time ago oh my gosh and if i had someone working for me whose data model was as far

off i would give them one pass and then i would fire them for incompetence and i was trying to explain that the government you cannot cast a vision for people. People are not going to stay in their homes because they no longer believe the data because it's been so inconsistent. And the models and the application of the restrictions have been so willy-nilly and so inconsistent. And so I think a lot of us share your frustrations. Well, and this is what frustrates me. We sit in these webinars, and all of these entrepreneurs are like, well, what can we do?

What can we do? And I said, okay, well, we're doing what we need to be doing, but we also need to be smart, and we can use our voices and say, this information is not lining up. No, it doesn't. How do we collectively come together and say, if the data and if the information that came from my physician lined up, I'm all in. Exactly. Sue, I'm just going to throw something at you real quick here because I'm with you. I'm so frustrated on your behalf right now, but I think you do have to make your voice heard.

Here's what I would do if I were you. This is worth a stab. Number one, I'd talk to your clients. Talk to these people, their kids, or maybe these are adults that are paying for your services or have up to this point. If they got tested, have they been tested? Are they willing to get tested?

And if they had a negative test or they got positive and then they quarantined for 14 days, whatever the CDC says, would they be willing to come in if you had all of the safety things in place and everybody was tested? We're already seeing multiple states around the country agreeing to open up if you took their temperature before they came

in. If you went to all these nth degrees, I think if you have clients who said they'll come in, I think you've got to make that case. I'd sign a petition and I'd take it to the mayor. I'd take it to the city. I'd take it to the city. You have to do it. And I would publish it, too. I'd put the word out.

I think at this point, you have to spread the word. This is where the protests are coming from. I think you have to do it. But you hear the anger in their voice. They're not crazy people that are protesting. But it's shutting down dreams. They're logically looking at the data that doesn't line up. It's not consistent.

And they're just not going to stay home anymore. Business leaders make your life easier with FreshBooks. Whether you're starting a business or you've been at it a long time, FreshBooks is one of the smartest decisions you'll make this year. FreshBooks is an accounting software designed for people like you that lets you do the things like automate your invoicing and your online payments so you get more time to work on your business. Try FreshBooks for 30 days free at FreshBooks.com slash Dave Ramsey.

Our scripture today is Psalm 32, 8. I will instruct you and teach you in the way you should go. I will counsel you with my eye upon you. Also, our quote of the day is, Amateurs have hard work and speed. Professionals have hard work, speed, and direction. Ooh, that's good.ie is with us in arizona hi jamie welcome to the dave ramsey show hello thanks for having me on sure what's up well i have broken every dave ramsey rule in the book that i can that i So, uh, I've finally gotten on board. I've had enough. Um, and so I've, I'm just beginning to learn how to run a budget. And I see that in my business,

I have two businesses that my personal stuff is so intermingled that like uh you've described as embezzlement from the company yeah and um so i'm in a in a crazy pickle with this uh coronavirus one business has literally gone to zero an off-road tour company that we had to refund over $10,000 worth of reservations because of cancellations and tourism. And then so that business has generated $300 in 20 days. And my other business is a trucking company, and I'm dump trucking every day, and I'm busy every day, and it's better than i can imagine yeah yeah and so i'm i'm literally robbing from my truck to pay for off-road toys well they're not off-road toys they're paying for your other business

right yeah okay they're not toys that you use You were using them for the off-road business, were you not? Correct. Okay. All right. Which is not a lot different. I mean, we have different lines of business, and some are up and some are down, and the ones that are up are covering the ones that are down. I mean, so you haven't done anything ethically wrong here by saying,

hey, for right now, you know, the horse that's walking, I'm going to ride that one while the other one's kind of lame and limping along behind. Yeah, and it's not ethics anyway. It's not even structurally wrong. Right. It's not wrong accounting-wise. It's just you have one area that has a temporary shutdown, a suppression, and one area that's booming, and they offset. And we're, like Daniel said, we're all through Ramsey Solutions.

We're looking at anything we can do because even within, you know, one particular product line, sometimes the study at home is going big, but the study somewhere else is not. It disappeared temporarily, and it's made up for by the study at home, and we're seeing that all through this place as an example. So that's all fine. The personal stuff interwoven, you've discovered you need to unweave it right yeah definitely yeah quit buying groceries and paying your rent and uh going on personal trips out of your business take money home from the business and then go do those things uh but they need to be the accounting needs to be very specific to your business. And you could have two divisions of one business or have two businesses. You can call it whatever you want between the trucking and the off-roading.

But either one of them, then, they have revenues associated with them and expenses associated directly with them, and then profits associated or lack of profit associated directly with them. And then the net profits of all of that glom together, and you get to take that home for your personal income. And if you keep that set of books and run your checking accounts that way, where you're not paying bills for you don't pay your house payment out of your business, and you're not doing that kind of thing, that commingling thing,

and I laughingly call it an embezzlement from yourself, but it helps keep it clean, and you get better numbers on your business to be able to make decisions on your business, because right now the numbers aren't pure. You know what I'm saying? Yeah, for sure. So I've done a very good job of I'm debt-free personally with the exception of my mortgage.

Good. And I have broken free personally with the exception of my mortgage. Good. And I have broken every rule in the business. I have financed everything to the hill and back. Okay. Well, it's just like the interweaving into the budget. You just begin to, you begin to, uh, say, all right, that's not where I want to be, which is what you're telling me. Uh, and how, how quickly, how dramatically do I need to get out?

Do I pay my way out over time and keep the off-road toys in the truck, or do I say I'm going to get out of one of these businesses and, you know, let that amount of debt go away because I'm going to sell those items? I don't care. If they both can cash flow over the coming 12 months and make money and you like both of them and you want to use that cash flow to clear these debts in a reasonable period of time, that's not an unusual suggestion that we have for an entree leadership person, right? Yeah. I mean, I think you've got to go. If I want to keep that business, like Dave said, especially the off-roading thing, it's going to come back.

And so you probably paid a premium for these vehicles that have now depreciated. And so you may not want to just hit eject and say, ah, to get out of debt, I have to do this right now when the reality is your cash flow may dig you out in the next 6 to 12 months when things come back. Yeah, I don't know how quickly you can pay off the debt. How much profit do you have that you can throw at the debt, and how much debt is there? And then it's 6th grade or 4th grade math where we just say, okay, I can make $50,000 a year and I got

$100,000 in vehicle debt. Or then, okay, it's going to take you a couple years, two years. That's what we can do. That's the way you look at the math on the thing. Well, and I also want you to factor in a percentage of your profits, not just going and tacking all the debt, but starting to set aside some for retained earnings because there's going to be more speed bumps just like the one we have right now and you don't want to be back in the same situation where you're going i have no cash flow and i have no cash and i've got the debt so pay down the debt in a reasonably aggressive amount of time while you're also setting aside for the rainy day wait a minute he's driving a dump truck and has an off-road thing and he just said speed bumps i heard that i heard it i heard

it it just happened it's all right alfred is on I do that stuff all the time, Tardy, and they make fun of me, so I couldn't resist. All right. Alfred's in Texas. Hey, Alfred. Welcome to the Dave Ramsey Show. Hey, Dave. It's good to be with you. I've been a long-time listener and a first-time caller.

Well, thank you, sir. So what I've got is, let me just kind of give you a little bit before I get to the question. I'll tell you what. You need to go straight to the question because I don't want to run out of time on you. Okay, all right. Well, the question is we have 25 employees. We have most of them on 401K,

and since they've received their 401K quarterly report and everybody's down, they're asking me if they can stop their contribution until things get better, and I'm kind of at a loss as to what to tell them. Tell them that the stock market is on sale and they should keep buying while it's on sale. Okay. That's what I would tell them. That's one of the things that I mentioned, but, you know, again, on their side, they look at, well, you know, I'm contributing this much, and we and we put 4 000 in this last quarter we lost

all the 4 000 and i'm saying well i mean basically no they don't worry that's not that's not true that just didn't happen they did not put 4 000 in and lost 4 000 unless they had unless they had uh 25 000 in yeah i mean if they had 25 000 in000 in, it would have gone down by 4,000. That's true. But the 4,000 that they put in, they did not lose 100%. The stock market didn't go down 100%. So people's emotions tell them a bunch of stuff that isn't true. So, you know, if your 401k plan allows for people to stop in the plan and start,

then you don't have a choice. They get to do what they want to do legally. But in terms of what's the smart thing as a leader, I would just sit down and have a teaching moment and say, here's what happened after 9-11. Here's what happened after Y2K. Here's what happened after 2008. Here's what happened after the swine flu.

The stock market went down, and then when it came back, it came roaring back. And you're going to miss the roaring back because you're panicking when it's down. It's not how you do investing. Investing, you ride the roller coaster for the full ride. Nobody gets hurt except those that jump off in the middle of the ride. That's what I would coach them to do. Well, a big down, it's just a number until you sell it. So, I mean, if you sell at a loss, then you lost it.

Well, you lock in your losses. Well, you lock in your losses, but it's going to come back up. And when it does and you sell at a loss, then you lost it. You lock in your losses. You lock in your losses, but it's going to come back up. And when it does and you sell at a gain, then you made money. And, you know, you ride that roller coaster until the ride's over and you're ready to sell when it's on top. Alfred, one of the things I try to do is love my people and the folks on our team enough to coach them about life. Don't do this. It's not good for you. It doesn't cost me a dime.

I've already given you the money for the 401K. It's costing you. And I don't want you to hurt yourself. And here's why. And I coach them through that all the time. Ken Coleman, Daniel Tardy, thanks for hanging out. Thanks, Dave. Thank you.

Puts an Entree Leadership Theme Hour in the books. All kinds of free offers out there. Be sure and check on them right now. That puts this hour an Entree Leadership theme hour in the books. All kinds of free offers out there. Be sure and check on them right now. That puts this hour of the Dave Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. In the middle of these uncertain times, Ramsey Solutions wants to give you some hope.

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