The Ramsey Show - App - How Does the 25% Income Rule Work With Roommates? (Hour 1)

Episode Date: July 9, 2020

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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. My co-host today here on the Dave Ramsey Show, Dr. John Deloney, Ramsey personality, and we will be answering your questions. This is just nuts. Yeah, Arby's is great. I like the cheddar cheese stuff on it.

But we will be answering your questions about life and money, hypothetically, assuming I can string a freaking sentence together. The phone number, 888-825-5225. That's 888-825-5225 that's 888-825-5225 you jump in we'll talk about your life and your money heather's going to start us off in florida hi heather what's up in your world hi dave um i started the total money makeover about 10 or 12 years ago wow and it was just a book on tape in my car on a car ride to visit my sister in north carolina and um to this day right now i've um actually just paid off my house in december yeah a decade later the house is gone yeah Yeah. I love it. Way to go, hero. Yeah, thank you.

And I have quite a good stash in my 403B and my Roth IRA. But I was actually, unfortunately, I had to leave my husband in December due to domestic violence but i'm super grateful that i was able to leave him financially because it wasn't a good situation for me and my kids and i just i have you to thank for that to be able to sorry it's okay i told myself i wasn't gonna cry well you got you got control of your life and it gave you choices i'm proud of you yeah yeah when, yeah. When you had to make a difficult one, you were able to. Wow. Yeah, yeah. And I'm still doing the best I can. I'm staying out of debt, and the only thing that will put me back in debt is, unfortunately, probably lawyer bills.

But hopefully I can get ahead of that. But I am really, really, really grateful for all your advice and your help. And it definitely was a hard decision to make, as you can imagine. So, yeah. How old are you? 37. And you have a paid-for house. Yeah.

Yeah. I'm actually renting it out right now. So, I have it paid for and I'm renting it. So, making income on it 100%. Very cool. Yeah. yeah well good for you very proud of you well done well done okay so there's a lady out there listening right now maybe to the show instead of a book on tape yeah and she's just thinking about maybe trying this stuff what do you tell her because you did it yeah i did the debt snowball and all that and

i mean it's definitely hard to get started but once you get going it's super duper easy to pack your lunch every day and not eat starbucks or drink starbucks coffee like my coffee from the keurig is really good so um i definitely you know definitely make that jump because you'll be thankful in 10 to 12 years from now so um and I've encouraged a lot of other people in my work. Um, I've done your smart dollar program, like for my employees and stuff. So, um, brought this to other people and I've had a lot of really good successes from it. And, um, one of my best friends, Betsy, she did a really good job. She's listening right now and she, um,

paid off about thirty thousand dollars in debt in two years by doing it as well so all right a lot of a lot of grateful people so thank you well thank you well done very proud of you miss Heather so Heather can I ask you this question this isn't why you called but but you got me on the phone now so I want to piggyback off Dave's question. So you've got a mom who's sitting at home right now who's finding herself in a situation where her husband sucks and is not treating her with the dignity that she deserves.

He's hitting her. Yeah. Yeah. What do you tell that mom? Save your money in cash and definitely make a plan to get out. There's ACT. Um, I, I participated in the ACT treatment program. It's the youth counseling treatment. It's very,

very helpful and informative and make a plan, have a safety plan and definitely get out because you don't want your kids to live that life. Um, and repeat that for future generations. Do it for your kids if you can't do it for yourself because most moms can. You are a courageous, powerful, extraordinary woman, Heather, and I'm grateful to have got to talk to you today. Yeah. What a gift. Pretty incredible. Pretty incredible.

Well done. Well done. You know, you've worked around that disastrous situation, and so have I, sadly. And if you have not been in that situation, it is difficult to understand how much it took for her to go from the lowest of low spirits and the lowest of low self-esteems, because it steals your spirit and your self-esteem. It takes everything. It just wrings you out up to where she is.

I mean, that's the distance she has traveled in raising herself up and in walking through that program and walking with friends, walking with God to be able to find the courage to get out because you begin to believe you deserve it. You're worthless, right? Yeah, you're worthless and you're stuck and all of that. And like she said, make a plan, get out, because otherwise it will be a high probability of it being generational. High probability.

John is with us in Minnesota. Hey, John, welcome to the Dave Ramsey Show. Hi, Dave. I'm so grateful for your time. Thank you so much for taking my call. Sure. What's up? So I started a business this April, and it was just a couple weeks before the pandemic kind of started.

And it's been really, really successful. And it kind of fell into my lap a little bit. And so it's a seasonal business though. And so I am contemplating whether it would be a good idea for me to relocate my family to a different area, like the Southwest or something to continue the business there. I have no degree, so I don't have like a job that I can fall back to but also in the cards is my wife and I are property managers

so we have like $400 rent and so if we move to the southwest obviously it's going to be more expensive for those months but I wanted to know what things you might think I should think about So you're talking about temporarily moving to the southwest or permanently?

I would I think the business would be seasonal in Minnesota, but it could also be seasonal in the Southwest. So I would move there temporarily to start, and then if I can somehow maintain operations. So it might just be temporary, but it could lead to full-time. So you're not talking about doing a half a year in Minnesota, a half a year in the Southwest, back and forth, back and forth? I am.

Oh, you are talking about it? I kind of am, yeah. Okay, going back and forth. Possibly, yeah. For as long as possible. My wife is kind of a homebody, so she's going to want to end up somewhere, which makes sense. Yeah.

But, you know, just to think about, you know, for this coming season, to see if it has legs, I want to see if that's even a good idea. It's a brand-new business. I would wait a cycle. Let's get through a year, maybe two years of doing it this way, before you start expanding to another state, which is basically what we're talking about here, and find something else to do in the off-season that's right around home there for right now. You've done a good job with what you've built.

Let's not mess it up by trying to go 1,000 miles away. Yeah, you're 1,000 miles away while it's still young and tender. This is the Dave Ramsey Show. In today's world, technology and innovation are crucial for any company's success. But the primary focus should always be on you and meeting your needs. That's why you get the best of both with Zander Insurance and their term life plans. Zander uses time-saving technology like over-the-phone applications, voice or electronic signature, text message updates, electronic policy delivery, and even plans with no medical exams to speed up the process of getting you the protection your family needs. One of the reasons I've endorsed Zander for 20 years is they never skimp on service. They are committed to serving you, whether you want to do business online or need that personal touch.

You pick your path. Go to Zander.com or call 800-356-4282. Zander will guide you through the whole thing, keep it simple, and find you the best rates. That's Zander.com or 800-356-4282. my co-host today here on the dave ramsey show ramsey personality dr john deloney is with me open phones at 888-825-5225 jessica is in ari. Hi, Jessica. How are you? Good. How are you? Better than I deserve. How can Dr. John and I help? Yeah, so I'm currently Baby Step 3D. I'm saving up, looking to buy a house or a townhouse in the next year or two. Cool. But my question is, if I'm looking to have roommates because I am single, is it okay to include in that 25% of your take-home pay, right, for the payment? Is it okay to include what I would charge roommates in that or no?

No. Okay. And the reason is they might not pay, they might not be there, you might get married and run them off. Right. Okay, okay. And then you'd be right back where you are so i'm just going to be conservative what do you make uh i make 44 but i supplement it with uber reach good

for you you're a worker hustling yeah i heard in your voice i get it back i heard in your voice you've you've already got a place picked out don't you um not not specifically i have like a dream in my head but i'm gonna settle for a little bit lower yeah yeah i can just hear the disappointment and you're like ah i thought i'd worked around the 25 yeah i mean you can cheat up a little if you want but the danger is if you don't get the money out of them yeah for whatever reason uh you pick a bad roommate or they get they get laid off for covid and then they can't pay you you know or something that's a fickle fickle yeah yeah then then you really get in a mess so i'm just trying to i'm just trying to keep your life smooth that's all yeah thank you so cool hey thanks for calling in Open phones at 888-825-5225.

That's what I'm here for, to burst the bubble. John's in California. Hey, John, how are you? I'm better than I deserve, Dave. How are you, sir? Just the same, sir. How can Dr. John and I help? Well, I want to give you guys this advice.

I'm trying to help my mom make a good choice about a move. She's had a little history of codependence with me and she lives in Oregon. She wants to move down here to California, but I think it's too expensive for her to do that. And I'm just curious, John, how I can walk her through the baby steps and explain to her maybe what might be the best choice for her right now at her age. How old is she? She's 70 and she's divorced. And when I was 13, my parents went through a pretty horrific foreclosure and lost everything in that process. So there's a lot of history there too with this. Do you have grandkids? Do you have kids running around that

she wants to see or does she want to see you? I'm being more serious with my girlfriend and I think she sees that in the forecast for sure, but not right now. I'm currently a bachelor. I'm getting more serious with my girlfriend, and I think she sees that in the forecast for sure. But not right now. I'm currently a bachelor. I'm a baby step 3B, 36, self-employed here in L.A. So, and Dave, you can hop in. I'm going to recommend you don't try to solve this as a math problem. There's a math component to this, but you may be dealing with a 70-year-old lonely mom who recognizes that she's 70 and wants to be around her baby boy.

She may be feeling that there's some other woman that's going to replace her, and so she wants to make sure she can get down there and get wedged between the two of you where she rightfully should be. And I'm just kidding, by the way. But this sounds like a really emotional conversation that, again, sitting down with a calculator isn't going to convict her heart. I would want to sit down and want to know what she wants to do and why she wants to do it. But if she can't afford the property, if she can't afford a property, obviously that's part of the conversation. But I'd honor her. And just my lonely mom wants to be around me in her last 10, 15, 20 years.

Yeah. So she has no money. Is that what you're saying? Well, actually, Dave, it's fascinating. She took a horrific fall a few years ago, and there was a settlement last year of $72,000 that she put into our money market account. She also has no debt.

She's got no car payments. So I've been, again, trying to walk her through the baby steps. I'm on 3B right now personally, and she's got $138,000 in her money market. So I'd love to see her use that to buy a condo, but as we know, that won't get you anything in Southern California. I mean, there's some options for her for condos in Oregon, maybe Arizona or Nevada.

But like you said, John, it's a math thing, but also it's so emotional because when we lost the home, it was just my mom and I lived in a hotel for a while. We were on food stamps. So I think she's kind of in shell shock that she actually has money to do something with it now. Yeah, and sometimes that makes the $72,000 feel like it's $720,000 for her. And so it feels like it's a lot of money and you and i know it's not especially if you start talking about buying something in california so um i i you know i think you talk work through the heart side and let's just admit where we are and then let's look

at the reality of the math and math says mom you're going to be one state over that's probably what the math says but you don't start with that as the opening salvo in this discussion. And so, and you don't bring her over there where you are supporting her, but just because she wouldn't make a decision to live within her means and demanded to be, was entitled to be close to you, because that's not true. And so, you know, you have to be, was entitled to be close to you because that's not true. And so, you know, you have to be kind and loving and put her in a position where she's self-sustaining, and that gives her dignity, and then from there you can work out travel or whatever needs to be done to maintain the connectivity.

I've got a little bit of what I would consider an unpopular belief on the kid side of this conversation. And I don't like to think of it as an obligation, Dave, or a rule. But I do find people my generation, their 30s and 40s, who don't feel like they have a responsibility. I don't even like that word because it makes it sound like mowing the lawn. But I think we should reach out to our parents. And I think we should love our parents. And I think we should spend intentional time trying to connect with them and i think that i need to build into my life space where i'm with them either physically or if we can't do it where we're connecting um and i know that turns into well then you got to move into the basement and there's all kinds of it turns into a a job right to like uh well it can be a a rhythm

of travel between la and in oregon and oregon you know i mean because it's not that big a jump yeah or or nevada but you're you know the responsibility wasn't what you were saying where you were so responsible for paying the bills to pay their bills no no but but i do i do hear this talk of my parents my mom just wants to come see me. And I want to say, yeah, because that's your mom, and she loves you. And if you have hardened your heart to a place where you just don't want to be around them, you don't want to see them, man, you've got to look in the mirror on that one, because that's your mom, that's your dad.

And, of course, everyone's got their histories that they've got to deal with. But I just want to see people my age, and this clearly isn't this guy. I love John here. He's trying to solve this problem, both in a heart place and a math problem. But I want to see all of us lean more towards respecting our folks, trying to honor our folks, and trying to be in connection with them in some shape, form, or fashion. We've got to reconnect with our lineage in those ways i think a lot of people have trouble delineating the the emotional responsibility for connectivity versus financial responsibility for caretaking that's right it's like if i do one i got to do the other and it's easy to get taken advantage of oh they're telling me they're taking me hey can i

five hundred dollars right now and i get the short leap mom's mom's a travel agent for guilt trips you know so that's right like you know i was you know, I was the one who changed your diaper. You ought to give me some money, you know. And so that kind of stuff. If more young people were like John, who sees his mom and loves her, wants to honor her, and also sees the coming cash flow train wreck that's on the way. It's a really healthy place. What a gift, yeah.

Very cool. Deb is with us in Michigan. Hi, Deb. How are you? rain wreck that's on the way and wants to reach a really healthy place what a gift yeah very cool deb is with us in michigan hi deb how are you i'm great dave how are you better than i deserve how can we help well um back when i was a kid my parents bought me a whole life um uh life insurance policy yeah everybody did back then so i was listening to you and i i sold it i got rid of it and i helped pay off some of my bills with the money i got wonderful but since then they've been sending me a dividend check every quarter for like 12 to 13 dollars and i don't know why they didn't cash your policy out they're still holding your money. They sent me $3,000.

I know, but did they send you a loan against your policy instead of you cashing it out? I don't know. Jump on the phone customer service and let's make sure we have a real clear understanding that this policy is canceled. Why am I getting dividend checks? Because the policy is canceled and closed out completely and you got all your cash value. There should be no dividend checks. There's no policy outstanding. Is there a second policy you forgot about in the drawer?

That could be the other thing. This is the Dave Ramsey Solutions, Adam and Savannah are here. Hey, guys, how are you? We're great. Great. Glad to be here. We're honored to have you. Welcome.

Where do you all live? Oxford, Alabama. Birmingham area? Yes, sir. Very good. Well, good to have you. How much debt have you paid off? We paid off a total of $154, 000 over just shy of four years um we also cash flowed

about another 25 30 in purchases during that time wow and your household income ranged during that four years uh we started approximately 100 000 and ended around 150 well good job what do you guys do for a living i am a controller for a family business, electrical contracting. I'm an outside salesman for an industrial pipe company. Wonderful. Good. So what was the $154,000? We had a vehicle, a lawn tractor, and our house.

You paid off your house? Yes, sir. I'm looking at weird people. Yes. Awesomeness. How old are you two? 36 years old. 36.

And you have a paid-for house before you're 40. Yes, sir. Touchdown. I love it. Way to go, guys. And the lawn tractor's paid for. Yes. Yeah, that's a big deal right there.

Because I can tell you bought one of those good ones. Oh, yeah. Of course. A manly lawn tractor. That's right. Okay. Yeah, with some zeros big deal right there. Because I can tell you bought one of those good ones. Of course. A manly lawn tractor. That's right. Okay. Yeah, with some zeros on it.

Awesome! So what in the world happened that woke you guys up four years ago and made you think, we're going to pay off our house before we're 40? We just kind of sat down. We were making more money than we had in the six years that we had been married, but we still felt like we were living paycheck to paycheck. So I sat down one day. We used a credit card for everything and just paid it off. And when I totaled up how much we spent on food and just needless things, it made us sick.

It made the controller controlling. Yes, it did. So we decided to start a budget and see what we could do. Okay. And that's how you found us? Yes. We had heard about it at Sunday school at church. My sister-in-law had talked to us about it.

But when we first discussed it, I sat down and I would read the book at night after he went to sleep. And I would wake up so excited. And I would read these success stories. And I thought, we can do this. So we made our first budget, and from there it was history. Wow. Who was the hardest one to get on the train? It was the pipe salesman, wasn't it?

Yes, this guy. The guy with the lawnmower, yeah. And the truck. Oh, yeah. Oh, yeah. Bass boat. Oh, everything. The boat and the bows.

Yes. I love it. Very cool. Man. Man. Okay, so she starts reading this book and starts giving you a hard time about it. How did you guys decide to get on the same page? Well, one of the things that we, you know, you talk about what he spends, what she spends. What we did was, you know, we gave ourselves an allowance.

And I just told him, I said, this is your money to do whatever you want to with. I don't care if you spend it on fishing lures or food or whatever. He lost a lot of weight that year and won a lot of tournaments. I love how you dubbed fishing lures and food in the same box. Yeah, and he lost weight, which means he wasn't catching any fish. Exactly right. So not even catching fish. Oh, man.

This is bad. Oh, wow. Very is bad. Oh, wow. Very cool. Very cool. And so what I'm interested in, you're a salesman. Yes, sir. You know how to take a no and twist it and get it the way you need it to be. You drive around and you get in people's yards where they don't really want you there and you convince them to buy.

That's what you do. That's what you do that's what i do so what was it about this situation that you looked out at your tractor and your boat and your truck and your space and your yard and another hunting rifle whatever it was what did she do to turn your heart what did you have to do in the mirror to turn your heart well first off i mean that's kind of what she does for a living is finances with the company that she works for right it didn't take much for her to get me on board because i trusted her 100 on that so you're one of these crazy husbands who respects and listens to their wife that's the only way to work that's weirder than paying your house off man good for you but when we talked about the the end game is what got me on board yeah at a young age

and we broke down that time frame on when we thought we could complete this and i was like no let's go you know at 36 years old yeah let's do this game on what's the house worth uh today probably around 250 way to go we had some to go. We had actually gone to an older home, had a good bit of equity. The house was the hardest thing to get him on board with, but when I told him initially I think it was going to take us six years to get the house. And he said, well, if we can do that, you know, go for it. And we did it in three years, just the house portion. Oh, the house portion.

Wow. Wow. Touchdown. Well done. Sitting here 36 years old, a quarter million dollar house in Birmingham, Alabama the house portion only. Wow. Wow. Touchdown. Well done. Sitting here 36 years old, a quarter million dollar house in Birmingham, Alabama. That's a nice house. Well done. Everything's paid off.

How does it feel to have no payments, especially in times like this? Outstanding. Yes, definitely. Being in the same industry as far as work goes, we were worried. And we sat down back in March and looked at, okay, if one of us loses income or even both of us, and we realized we didn't have anything to worry about, we're set for a year if need be. It wouldn't be fun, but it took the burden away.

Yeah. Definitely. Complete smoothing out of everything. So do you have a little one? We do. We have one son, McKinnon. He's seven years old. All right. Is he going to do the debt-free scream? He's been practicing with you? Yes, he is. All right, McKinnon. This is your shot, man. It's your shot at being famous.

All right. So we've got a copy of Chris Hogan's book for you, Everyday Millionaires. That's certainly the next chapter in your story. You are well on your way. Tell folks what the number one key to getting out of debt is. Communication, basically, and just sticking to it. Trust in God. Amen. Amen. Well done, you guys. I'm very proud of you, heroes.

You guys took it. You did it. And you have paid for our house. You know that? Yes. Have you heard the news? It's pretty cool. That's pretty stinking cool.

Well done. All right, McKinnon, Adam, and Savannah, the Birmingham, Alabama area. $154,000 paid off. Cash flow, $25,000 extra during that time. Took four years. That's the house and everything. Making $1,000 to $150,000. Count it down.

Let's hear a debt-free scream. Three, two, one. We're debt-free! Yeah! Yeah! Woo! That is how it is done. Man, oh, man, oh, man. That is awesomeness.

That's incredible. And I'm looking at that little boy, and I talk about this every time. You do every time. But it's good. You're right. You're right. You're right. But he's going to walk on a different sidewalk because of the work y'all did. Yeah.

And he got to watch you. Half of his life is spent watching mom dig themselves out of the hole they dug themselves into. And the rest of it, the rest of it is going to be. The rest of it's building. Yeah. It's going to be a different thing. What a gift. Different thing.

Hmm. More is caught than taught. You want to change your family tree? That is how you do it. You do the work. Yeah. You've got to do the math, and you've got to do the behaviors, and the kids emulate the behaviors, and they'll pick the math up later.

And you do it every day. I love that old line, you know, there's no workout you can do that's so good on Monday that you don't got to work out for the rest of the month. And that's the worst part about being in shape, right? You got to get up on Tuesday and you got to get up on Wednesday. And they just got to keep waking up and doing it again and doing it again and doing it again. Very, very good stuff. Tim is with us.

Tim's in Mississippi. Hi, Tim. How are you? Fine. How are you guys doing? Better than we deserve. What's up? Yes, sir.

I got a question for you. We're in some financial issues. We had some medical bills that came up over the last three years that put us in financial straits, wiped out our savings, and we were being sued by a couple of our creditors. So we had no choice really but to file bankruptcy, so we did. It's not discharged yet, but they're telling us that we have a choice between keeping the car or turning it in. Turn it in. I'm thinking we should turn the car in and pay the house off quicker.

Yes. Yes, you don't need the car. I just want to get more. You owe more on the car than it's worth, don't you? No, we're actually, we're slightly over, slightly below what we owe on the car. So it's financed or it's leased? It's financed. Okay. So it's got a little bit of leased? It's financed. Okay.

So it's got a little bit of a... So what's the car worth? Probably around $12 or $13. And what do you owe? Over in that range, about $12. So we're about $600. Turn the car in. Turn the car in.

Okay. You don't need a car payment. You don't need trouble. We can get you a hoopty that you pay cash for. And if you've gone through a Chapter 7, you need that fresh start. Don't hang on to the past. Let it all go and get the fresh start. If you drag the stuff with you through the bankruptcy, there's no fresh start because it all came with you.

Dump it. Dump it. Cut it loose. Do not reaffirm debts in the bankruptcies. If you're going to, you don't need to file bankruptcy. So, yeah, get rid of it. Get rid of it. I'm sorry you're going through that. Hold on. We're going to pay for you to go through Ramsey Plus for a year and take care of your healing.

This is the Dave Ramsey personality, is my co-host today on the air. This is the Dave Ramsey Show. Common sense for your dollars and cents, your life, your career, whatever you want to talk about. 888-825-5225. The worst feeling is to pay someone who does a sucky job. And the hard thing to admit is that it may have all started with a bad choice. Comes to buying a home, you get a real estate agent that does a bad job. It could be because you made a bad choice with a real estate agent that does a bad job it could be because you made a bad choice

with a real estate agent well it would be because you made a bad choice and maybe you were ignoring the signals maybe you mailed it in when you were doing your selection and just kind of went well we're going with charlie at the church and that'll always get you messed up sorry charlie sorry charlie there you go so good agents are really hard to come by uh you don't need some joker who just got his license and looking for a commission check what you need is someone who really knows the business sells a lot of houses and can walk you through the whole process and for them it's a machine they're just walking you right through something they do all the time do not settle for a crappy agent doing real estate deals.

Go to DaveRamsey.com slash agents and get the right kind of high-protein, high-octane agent. DaveRamsey.com slash agents, especially if you're buying in this market right now. All right, Jeremy is in Ohio. Hi, Jeremy. Welcome to the Dave Ramsey Show. Yeah, hello, Dave. I just got a question for you, or a little bit, or maybe you can think about my situation here. I'm a laid-off coal miner of 15 years, and I'm wanting to start a business,

and I'm wanting to do a rollover for business startup. Have you ever heard of the Rob's account with my 401K? Yeah. Sounds like somebody's trying to sell you a franchise. startup have you ever heard of the rob's uh yes account with my 401k yeah and i know it sounds like somebody's trying to sell you a franchise yeah well it's not a franchise it's just starting to start the business and they're trying to sell you a business in a box though i mean this no no no no this is a business i want to start a uh a service center in my local hometown which is a college town and it should get enough business to uh sustain itself okay and uh like an auto service center yes sir uh like uh tires and

brakes and oil changes and uh is there a brand name company that's trying to sell you a dealership that's pitching you the rob no really you just dug this up off the Internet? Yes. Okay. Because 99% of the time I get this question, it's some franchise salesman trying to show you how to finance the deal that they want to sell you. And that's what I was trying to figure out. Okay. So you're starting something from scratch. You're going to put your name on the front of it, and you're starting cold turkey. So how much is in your 401K?

$174,000. What's it going to take to start this place? The building is $120,000. Why do you need to buy the building? Why don't you rent it? I got the building that I talked the guy down from $155,000 to $120,000, so I figured if it doesn't work out, I could sell the business and make money on the 401K. Well, you'd need to keep the business and the real estate separate, at least in your mind, okay?

Yes. You could buy the building by rolling the 401K into a self-directed IRA and put the real estate in that and then build the business using the other technique. Yeah. But you're not going to have any money. Well, throughout the years, I've saved about $13,000 to live off of, and I don't have any debt. My home is paid for.

My cars are paid for. I have no credit card. I have no student loans. So the only thing I have is cell phone, electric, water. How long do you think it's going to take you to get this business up and going? I'm hoping about a year. Okay. Why don't we rent this building from this guy for two years with an option to purchase it?

Okay, he won't do that. Then get a different building. Because you are going all in. You're doing James Bond on me. You're pushing all the chips to the middle of the table on one hand. And this is either going to work or it's not, and you're going to be broke, or you're going to feel like you hit the home run. And I don't push my chips, up into the middle of the table anymore.

My life's too short. I don't want to do that. And so I want you to break this up in some way where you're not using up every dime you have on an idea that is completely unproven except between accepting your dreams over coffee in the morning. And he mentioned this is a college town, so there will be enough traffic. And I'm watching my old college colleagues talking about not coming back or doing the whole fall online. So it just takes one weird glitch in the matrix when you're all in. Even when it's a sure thing, the college gets to come back.

There is not a sure thing. There's no such thing as a sure thing. The rules in business are it takes twice as long as you think it's going to, it costs twice as much as you think it's going to, and you're not the exception. Those are the three rules. And I have to remind myself and my team of them all the time because we always get all hyped up, and we can always see, you know, every entrepreneur is an optimist. We have six ideas in the shower every morning, and we just know that we know that we know that this is all going to work out, and most of our ideas suck. Now, I don't think this is a bad idea, but I don't think you don't.

I'm positive you don't know what you don't know about what's going to happen here and how long this is going to take and how hard it's going to be. Please don't use up your last dime, and most of it really not on the business, most of it on the piece of real estate. So when you walk away from this shop and you come back a month later, there's a real good chance he's going to rent it to you with an option to purchase over the next three years. You get the business up and running, and then you want to roll some of that money into a self-directed IRA and buy that shop.

I won't gripe about it too much, but you call me. I love your dream. I want you to run a business. I want you to open the shop. I do not want you to put all your chips in the middle of the table on one hand that's scaring the crap out of me for you and i wouldn't do that and i wouldn't recommend my best friend do that and uh for this moment you're my best friend don't do that so hold on i'm gonna send you a copy of the book entree leadership which is our playbook around here how we grew our business from a card table in my living room over to where it is today.

And so it's our playbook. Hold on. Kelly will pick up and get you one. Open phones at 888-825-5225. Amy is next in Illinois. Hi, Amy. Welcome to the Dave Ramsey Show. Hi, Dave.

Pleasure to speak with you guys. You too. What's up? Well, i am a school teacher in illinois i coach a couple sports i'm advisor pretty much to everything at the high school so i hadn't had a lot of free time but um due to covid had a little bit more free time lately um so i when i thought i was being gazelle intense, when I started last October, I realized I wasn't cause then I binged your entire 14 day series, uh, your 14 day free trial and realized I could be doing a lot more.

So I went for it. I went gazelle intense and I had student loan debt, um, car debt. I ended up selling my car. Um, and now I am down to the final to the final student loan, a little bit left. And my situation is I currently rent my home that I own. And I have terrible tenant, but that's besides the point. So I've been hesitant to go ahead and pull the trigger. Tomorrow I could potentially make my last student loan payment if I really put down the extra money that I had just kind of gotten in, or I could reserve that additional $2,500, make my regular $1,500 payment since there's no interest and kind of hold back on using that $2,500 because I have this little hesitation.

Is your income stable? My income is stable. My hesitation is my tenant, something going wrong with the house. They will be out in two months because their lease is up and I'm choosing not to renew it. But there's just this little hesitation. So I don't know if I'm too intense or if I just need somebody to say go for it and be okay well let's play it out okay are they going to pay you uh i pray that they do each month no and i i heard that but i heard they suck i got that part but are they going to pay you? Do you really think? What's the probability?

50-50? 90-10? I'm going to say 90-10. Good chance they're going to pay you, but they're just a pain in the butt about it. Big time. Big, big time. That's all right. We'll create a reverse pain in the butt until we get our money.

Okay. So you're going to get your money, and you're going to be okay. They're going to move out, and then you're going to, but if you pay off everything today, you can pile up cash between now and the time they move out. As long as they keep paying you, you're going to be fine. So, yeah, play through. Play through. You got the baby steps?

Be out of debt. Be out of debt today. And then let's play it on out. You're going to be okay. It's going to work through. Good question. Congratulations. Congrats.

Yeah, that's awesome. Puts us out of the Dave Ramsey Show in the books. This is James Childs, producer of the Dave Ramsey Show. On your smart speaker, you can add our skill by saying, Alexa, open the Ramsey Network skill. From there, you can listen to all our shows. Ask Dave money questions like, how do I invest my money? Or what is the debt snowball? Find out more at DaveRamsey.com slash smart speaker.