The Ramsey Show - App - How Pain Deferred Is Actually Pain Amplified (Hour 2)

Episode Date: May 25, 2023

Dave Ramsey & Dr. John Delony answer your questions and discuss:  "How can I help my foster son make better financial decisions?" Why the pause on student loan repayments actually caused borrowers to go into even more debt, the study: The Student-Loan Payment Pause Led Borrowers to Take on More Debt, How to manage money well in retirement. Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Join a Personality-led FPU class. Click here! Enter The Ramsey Cash Giveaway for a chance at $3,000! https://bit.ly/TRSgvwy Shop our bestsellers during the $10 Sale! https://bit.ly/TRS10Sale Want a plan for your money? Find out where to start: https://bit.ly/3cEP4n6 Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Interested in advertising on The Ramsey Show? https://ter.li/s64ye3 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 we help people build wealth, do work that they love, and create actual amazing relationships. Dr. John Deloney, Ramsey Personality, is my co-host today. Thank you for joining us. Open phones at 888-825-5225. Kim is going to start off this particular hour.

She's in San Francisco. Hi, Kim, how are you? Great. Thank you for taking my call. Sure, what's up? I need you to give me some advice on how to get my foster child to make better financial decisions. What's going on? He was given a, and on April 14th, he had about $2,600 that we put in a college, um, savings account, or I guess it's a checking savings account. Um, I had to leave town for a little bit and then he figured out, he didn't have the card, but he figured out how to use the pay on your phone app, and I just saw it vanishing before my eyes, and it's down to about $1,000 now since April 14th. And I've had multiple conversations with him about budgeting,

but I think he's just impulsive due to his history. How old is he? 17 and a half how long you been with you since april okay um well you don't really get to play the mom card when you've been with them since April. Right. In other words, it's tougher. This is with a 17-year-old especially. I would think you're in the persuasion business. And how do we, you know, help a young man who has presumably been in several different houses over his life have a sense of foundation and a sense of vision for his life

that makes him think longer than Friday and plan longer than Friday, which is what you're trying to get him to do. And so I think it's more about having a vision for your life, which you had for him more than he had for him. What's he spending this money on? A lot of food. He bought a model the other day, just kind of silly things. And he even came in a few days ago and said that he looked back on, you know,

he can see everything as well in the he looked back on, you know, he can see everything as well in the bank account and said, you know, I kind of wish I hadn't bought all that stupid stuff is the exact words that he used. And then I was able to have a conversation with him, but he just still can't help himself in the moment. Do you have the ability to restrict access to these funds? I'm not sure. I was thinking of that myself, but I was hoping that, you know, maybe having a conversation with him, another one. It's a common trajectory for kids who are aging out of the foster care system is a almost obsessive need for autonomy because they've never had it.

And so suddenly this kid who's just inches away from being 18 has an account with a couple of thousand dollars in it. I'm not going to begrudge. I completely understand where his sweet brain is going, which is I can finally eat where I want to eat. I can finally buy a thing that I want to buy. And Dave is right. It's, I'm asking if you can restrict it,

but that's not something you do just behind his back. That might be a conversation you'll have sitting down together with him. I think I would sit down with him and say, listen, we love you and we're worried about you. Would you like us to put the money in our name to protect you from you? Yes. And then we're going to decide together what's good for you, for your future. We don't want your money, but would you like us to control it to protect you from you so that you can get the best use of this going forward in your life.

And we'd be willing to take that role, but you have to volunteer it to us. We're not going to force it on you. That's a great idea. It might be worth painting a picture of what he felt like when he was 16 and had no money in a bank and was somewhat on his own without somebody who cared for him like you do and say, hey, you're about four months away from that picture being true again. Let's don't do that.

Yeah, you don't want to be aging out and broke. Exactly. Yeah, I really like that idea. Thank you so much but um but again then you it's incumbent upon you to uh what what legal scholars would call a be a fiduciary meaning you are doing nothing with this money except what is really his best interest and that might even include something you don't totally like but it's for his best interest. And at some point, it may even be that you just turn the money over to him and go, I can't do this anymore.

Because if he's continually trying to get you to do negative things and, you know, all you are is just becoming a bad guy at that point, you don't want to stay in that seat either. Exactly. So this doesn't have to be forever, and it doesn't have to be for long, but you told me this is stupid stuff. Would you like to put together a plan with me where we don't do stupid stuff because I'm really worried about you aging out of the system and not having a plan and not having this money to do something with, and I really want to help you do that and move you towards some kind of, I don't know,

post high school education ideas, you know, to getting a certification on coding over at the code school or going learning, get a heating and air certification, learn how to be a tech or whatever it is he's going to do with his life. Or maybe he's going to go to college. I don't know. But, uh, whatever it is, I mean, this money can move. There's a little bit of it left and it by the way it was a scholarship for education not for models and food another really valuable tool that a parent can use is really what dave and i do and all all my personality

colleagues do which is provide a picture from our own life so there may be a moment when you needed somebody to step in and help you, or you had to put some hurdles in front of you, you between you and a behavior, man, that'd be a great moment to be vulnerable and say, Hey, this has happened to me. It's like I've said on this show, there was a season when I gave my debit card to my wife because I, I simply did not control my spending. So I needed to start from ground zero. I just gave it away. I took my ability to do that away.

And it's a story like that that you can share with him about your own life that may provide him an empathetic path back to you relationally. Dave, I love that idea, and I wouldn't have thought of that, but that's really wise. You're in the influencer role. You are not in the you-do-what-I-say role. You can play that game and you got about six months on it. He turns 18.

You will never see that kid again. Yeah. It's a persuasion. Let's create a vision for your life. Yeah. I love you. Where there's no vision, the people perish.

Kim, you're a hero. Thanks for stepping in for a kid in the last stages of the foster system. Man, that's a big, big deal right there. You're amazing. Thank you. Thank you. Thank you for doing that. This is The Ramsey Show. Hey, you guys, health insurance costs are only moving one way, and that way isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer, and it's harder than ever to get anything approved through the bureaucracy. So if you feel like the

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So learn more today and join at chministries.org slash budget. That's chministries.org slash budgets. That's chministries.org slash budgets. Dr. John Deloney, Ramsey personality, is my co-host today. He does a show called the Dr. John Deloney Show that is a very popular Ramsey Networks podcast, and you should tune into it. It's all about relationships and boundaries, and Dr. has a phd in higher education and also a phd in counseling and so anytime those two intersect uh we really get into a great discussion and he sent me an article this morning and said let's talk about this here on the air so uh hat tip to the guys at marginal revolution i love those guys um so it's a paper from the national bureau

of economic research um diner stein and yannelis and chen here's here's the study so most people don't know this but when it comes to student loans there's we'll distill it down but there's two different paths you a college can take let's just stop saying this is a white paper a white paper yeah there you go this is not an article on yahoo finance yeah by some yahoo yeah this is a research okay this is actually a research paper by a nerd by egghead several several of my of my nerd friends several of your nerd friends yes okay um so there's two separate paths one of the paths is the government makes the loans and the others the bank makes the loans and the government guarantees them for the average borrower you're never going to know which which one of these

paths your college took but when biden i think it was biden maybe been trump did the first um pause on student loan repayment it instantly created a pretty cool uh study that could be done because you had a group of people biden couldn't pause the bank loans because he didn't have the authority because it was the banks that made the loans but he could pause the loans that the government made and so these researchers came in and said what was the what was what actually happened there and dave i i used i was sending emails to dave this morning as i was going through the math on this thing. At the end of the day, they found that the payment pause helped for about 30 seconds. And the people who had to keep making their loan payments did not have any increase in defaults.

They didn't have any increase in their life falling apart. The word I kept coming to was, or the words I kept coming to was they figured it out. Conversely, those that were beneficiary of the pause ended with more debt than they started with. And I just have to keep reading that and reading that and reading that because Dave, I remember Twitter tried to set you on fire when you said that $1,300 isn't going to change your life. It's not. Or $600 isn't going to change your life. And what they're saying is actually that pause made it worse. People took the money that was in cash that they weren't sending to student loans and they went and put it on down payments for more debt. So it looked like a great political move. It helped for a few months and then it got bad.

So everyone's life is going to fall apart because of COVID and you cannot afford to pay your student loans. So we, the government, are here to help you. We're going to put your student loans on pause. The net result is that people took that pause and used it to go further into debt proving that they were not in much trouble to start with or that they had the capacity now to get even more trouble exactly exactly compare here's the note from the actual white paper comparing borrowers whose loans were frozen with borrowers whose loans were not frozen due to differences in whether the government owned the loans we show that borrowers whose loans were not frozen due to differences in whether the government owned the loans. We show that borrowers use the new liquidity to increase borrowing on credit cards, mortgages, and auto loans rather than to avoid delinquencies. So the narrative was,

we are here to help you poor people who have had your lives destroyed by COVID, and you're not going to have to make your payments because we know you're starving to death and everyone said hold my beer I'm going to go buy a car sweet now I can get a car sweet now I can get a car here that's exactly what the net result of this is here's the line by the end of the sample period student debt borrowers have about five percent more household debt than the ones that did not get the government help of the pause. Perhaps paradoxically, temporary student debt relief leads to higher overall household debt levels and larger future debt burdens. This is good news for debt pauses as stimulus payments, but bad news if you think that debt pauses are just the nudge, people need to get their financial house in order. None of them did, statistically.

Wow. They went further in the hole. So, once again, your government interferes in the economy, and once again, they screwed it up. Well, I think this is a good moment for me to say I was wrong. Because I remember when you said it's not going to help save your life, and I thought to myself, I think it will. I think it will make a huge difference. And, Dave, in front of America. I'm glad you kept that to yourself.

I did. I would have made fun of you on the air. I was a new employee here. But I think it's fair to say I was wrong, man. I was wrong. Well, I mean, the point is. It didn't work. The point is not a philosophical let them eat cake statement when you say $1,300 doesn't change your life.

But really, I mean, if you are at the poverty level, $15,000 a year, $1,300 is not even 10% of your income. So mathematically, the arithmetic says $1,300, if it changes your life, you really have already a major screwed up life long before COVID came along yeah and it doesn't fix it yeah you got some pretty doesn't fix it it is uh one more time the government's saying they are doing something and that was a different thing that was a Biden bucks it was a 1300 that set they set Dave Ramsey's on fire all over effigies all over reddit and everywhere else and poor you know dave ramsey's just one of those people that doesn't have any compassion and you know whatever oh crap it's just an obvious it's just an obvious it's an observation of the

obvious political college professor that told me one time he said mr ramsey you have a firm grasp on the obvious little did he know i was going to make a living doing that. But yeah, so there you go. I do have a firm grasp on the obvious. The meta I took away from this nerd paper, and this, just for y'all listening, these kind of nerd papers make my heart beat a little bit faster. I love them. I think this lesson is applicable to my marriage.

It's applicable to raising kids. It's applicable to being a good neighbor. It's applicable to my finances. There is no such thing as I'll deal with it later. That doesn't exist. It's a false premise that I can kick a can down a road on any issue in my life. Man, pain deferred is pain amplified, man. And the more we kick stuff down the road, the bigger mess we are making. And I think it's an ethical issue when we are, A, knowingly putting hurting people into more pain down the road, or B, we are making our grandkids that we've never met yet have to deal with this chaos, man.

It's just unethical. It's evil. Debt ceiling race. It's evil. Here we go again. We're going to do it again. Let's just go further in debt. Because none of those people voting on it are ever going to pay any of it.

Zero. Because they're going to be dead. Zero. They're going to be dead. Most of them are almost dead now. They're so old. But, yeah, unbelievable. But, yeah, it's crazy.

So, yeah, it is unethical. And the thing, though, Dr. Les Parrott, our friend, you know, we've spoken with him a bunch of times. He's been on the SMART conference a bunch of times, and he always says, these negative emotions, these negative situations, whatever they are, whether they're mathematical, whether they're relational, whether it's a career decision, you kick the can down the road. This stuff has his famous phrase, it has a high rate of resurrection. It will be back. It will be back. It will be back.

Yeah, I'm coming back. And so, you know, don't let the sun go down on your anger. Sit down with your spouse and get this straightened out. It will be back. You can't sweep it on the rug. It's not going to go away. It just gets bigger and bigger and bigger. That splinter, if you don't pull it, will fester, and gangrene will set in.

You'll have to amputate your whole arm because you wouldn't pull this one little sliver of wood out of your finger. Or something scary. Your job is taken away from you overnight. Tomorrow morning at 6 a.m., you've got to be on the phone finding something else to do. You've got to be on that computer finding other work. You've got to figure it out. And I hate saying that because it sounds so callous, but it's me trying to tell you I love you, and I think you can figure it out. Well, step straight into the difficult things.

Go run into the storm. Do hard things. Yes. Michael Easter, comfort crisis. Do hard things. Step straight into the difficult things. Go run into the storm. Do hard things. Yes. Michael Easter, comfort crisis. Do hard things. Step straight into them. It changes your brain chemistry. Yeah, and what Michael would say, which I think is so true, is if you do hard things on the regular as a part of your life,

if you're constantly not running away from a conversation you need to have with your wife, but you're leaning into it, if you're constantly stepping into challenging moments with your kids, constantly doing things like exercising and not going for that extra dessert, when something like this hits, your brain and body are ready to run into the storm. You've been training them, right? When you just take the stairs, right? You're training your body and your mind over time so that when hard things hit, bring it on. Let's go do this. Yeah, that's exactly right. But if you've been avoiding everything else and you get the opportunity to avoid this, I'll kick this can down the road.

See, those of you that are kicking your student loan can down the road right now and you're not dealing with it, we're talking to you for the last five minutes. It is coming for you. This is not good for you. It's not good for you. We've been saying this. A, you owe the money, and B, it's not

going away until you pay it. This is The Ramsey Show. Dr. John Deloney, Ramsey personality, is my co-host today. If you're out running around America and you happen to be coming through Nashville, we're in Franklin, just south of Nashville. Our visitor center is a huge lobby. And our radio show, YouTube show, podcast thing that we do, whatever we call this, TBN show, is on the glass. And we do the show live every Monday through Friday from 1 to 4 Central Time. The cookies are homemade. The coffee is amazing, and it's all completely free. Come visit us and drop by and watch the show anytime you'd like.

We'd love to have you. One of the features in the lobby is the debt-free stage, where people come from all over America to tell us their story and do their debt-free scream. Kevin is on the debt-free stage. Hey, Kevin, what's up i'm doing great dave how are you better than i deserve man where do you live i live in spencer indiana which is near uh about an hour south of indianapolis okay we'll call it indy all right cool well good to have you you're one of the last guys left wearing cargo shorts yeah i'm i'm proud my wife

took all mine away so hang on to those things man congratulations thank you welcome so how much debt have you paid off i've paid off eighty five thousand dollars all right good for you and uh how long did this take you uh about 34 months from the time i took on the mortgage good for oh it's a mortgage yeah whoa all right so you paid off your house yes you're 100% debt free yep looking at weird people how old are you man i'm 26 way to go you have a paid off house at 26 yes what's the house worth uh it's worth about 160 to 180 i love it congratulations thank you and what was your range of income during that three years um starting out it was was about $25,000, but it went up to $50,000.

Cool. What do you do for a living? I'm an elementary school teacher, and I work part-time at Walmart. Awesome. Good for you. Okay, so you're 26 years old. You owe $85,000 on a house that's worth double that, roughly. And you looked up and said, I'm going to pay this off in 34 months.

What made you do that? Well, I took your class back when I was in high school. I was about 17 years old. I want to shout out Owen Valley High School and my teacher, Mrs. Nichols, for carrying your program and teaching it. Way to go, Mrs. Nichols. Foundation and personal finance from Ramsey Rocks. Yes. Way to go. I'm proud of you. Cool. Right from when I took that that class i started saving up my money working at pizza hut and uh graduated college debt free and uh from then on it was just saving money to eventually pay off a house so i could say that it took 34 months but really this has been in the works since i was about 17 years old 10 years yeah yeah yeah like sorta i mean you had the knowledge but you really weren't actioning on it because you didn't have the house then. So, yeah.

Man, do you understand how weird you are? How wonderfully weird you are. Yeah. You're a teacher. Awesome. Yeah. Cargo shorts. Awesome.

You own your house outright at 26. Awesome. You know what I knew when I was 20? I didn't know what day it was when I was 26. You own a house. Way to go, man. Yeah. Way to go. Jeez way to go so fun so

fun so how much support did you get cheering you on versus how much people told you you were nuts well I had a lot of support from my family my mom and my dad were always there when I was making big career choices or money moves and just walking with God daily was an important part of the whole process. So without him, glory to him because I couldn't have done it without him. Amen. So $84,000, what kicked it off for you? What'd you say, all right, I'm going to hit the gas on this thing? Well, by the time that I actually stumbled upon this house and it was just a blessing how it landed on my lap um i already had about 20 grand saved up because i was saving for a down payment so really i only had another 65,000

to go so i was like i i just want to get this taken care of you know one day when i have a family and kids i want to be able to provide for them and have not have a mortgage be a problem for me so absolutely well congratulations thank you all right uh wow so this i gotta let our education team know that this is the impact this is having on a high school student 10 years later they'll be so blown away this is such good work they're doing absolutely and um what do you tell people the key to getting out of debt is you have a paid four house at 26 years old um i think one of the biggest things to be able to tell yourself is just tell yourself no uh when you need to because i i drove a 30 year old car the whole time i was getting out of debt what kind of car it was a

1992 geoprism oh god what a piece of crap that's number four weird keep going and you know you want to get a new car but you got to tell yourself no you got to stick to your goal and i live with my parents through college um to save money so you want to move out you know but you got to tell yourself no not yet and um when i was in college actually i was at indiana university i lost my scholarship and so that was the hardest no i had to tell myself was leaving there. And I had to take a year off and I worked and I went back to school online and got my degree in elementary ed much cheaper. So I kind of missed out on the college experience, but I also missed out on the experience of

being in 40 grand in student debt. Well, everybody listening to this, send this to your local congressman. Yeah, for real. Because 26-year-old Kevin has a thing or two, some wisdom about how the world works. Yeah, pretty amazing. Golly, you're incredible. Well done.

Incredible. Well done, sir. Hey, and let me tell you, I got a seven-year-old little girl. She's a first grader going to second grade. I would just about bend the earth sideways for a teacher like you to be in front of my kids. So on behalf of all of us who have elementary school kids,

thank you for being a teacher at elementary school, and thank you for being the kind of caliber person that I want in front of my kid, right? That's incredible, man. That's so incredible. Thank you. Beautiful stuff. And now when your principal says, you guys are going to do, and you can go, no, I'm not. want in front of my kid right that's incredible man it's so incredible thank you beautiful stuff and now when your principal says you guys are gonna do and you can go no i'm not i'm not doing

that wait a minute that no i'm not i don't do that i don't have any bills so uh i'm just gonna go back to my classroom and teach my kids because i love them absolutely that's incredible very cool very well done good job kevin hey we've got the Baby Steps Millionaires book for you, the Total Money Makeover book, and a Financial Peace University membership as well. That's the Live and Give box. So live some of it if you want to live some of it. Give some of it if you want to give some of it. It's all there for you to say thank you for coming down here to do your debt-free scream

and to say congratulations. I've got to tell you, we're proud of you, man. Awesome. Well done. Very, very well done. Good stuff. Very cool. All right.

It's Kevin from Indianapolis, or just an hour south. $85,000 paid off house and everything at 26 years old. Did that in 34 months as an elementary ed student, as an elementary ed teacher. $25,000 to $50, 50 000 income count it down let's hear a debt-free scream three two one i'm debt-free yeah yep that's it that's how we do that i'm also gonna encourage kelly to put this this call in my call my show notes when people call and say,

there's just no good guys left and there's no good guys making decisions. I know of one just south of Indianapolis that's making good choices out there on the market. Absolutely. Definitely. You're pretty eligible. Cargo shorts or not, you're pretty eligible. Hey, my wife married me with cargo shorts.

You stay strong, Kevin. Stay strong. I love it man that's fun what an absolute what a hero jeez that's so fun and here's the thing okay you guys got it we'll style through back through that story for just a minute because at some point possibly all the way back in high school, he took debt off the table. It's not a thing. I lost my scholarship. I can't go to school here. I got to figure it out. I got to figure it out.

I drive a piece of crap car. So what? I'm going to drive like no one else. So later I can drive like no one else. Because you know what you can do if you make $50,000 a year and you don't have a sinking sinking payment in the world not even a house payment anything you want to do you got nothing but cash flow and you don't buy a better car i mean he could buy that car uh three times a month now you know is that you know i'm saying that mathematically that's where it's obviously not gonna do that but i mean in color, my point, is not a big deal.

And he's 26. He's got the whole rest of his life to become very, very wealthy, outrageously generous, and continue to live out God's will for him. I mean, he's obviously walking with the Lord and saying, okay, God, what do you want me to do now? I have no masters in my life but Jesus. The borrower is slave to the lender. How many masters do you have?

He's an unstoppable person. He's unstoppable. He's a hero.ower is slave to the lender. How many masters do you have? He's an unstoppable person. He's unstoppable. He's a hero. This is The Ramsey Show. Dr. John Deloney, Ramsey personality, is my co-host today. Thank you for joining us. You can do the offense, get out of debt. You can do the offense, invest. You can do the offense, get out of debt. You can do the offense, invest.

You can do the offense, but you've got to do the defense, too. And the defense is protecting your money and your assets with good insurance. There are ten kinds of insurance coverage that you might need based on what your life looks like. And we built a tool called the Coverage Checkup to show you which types you need to add, drop, or adjust. We'll even rank your coverage list by importance. So check it out, ramsaysolutions.com slash checkup. It is a free tool, takes about five or 10 minutes, and you will know exactly what kind

of coverages you don't need and do need, and what your order of attack is, and even some suggestions, all completely free. It's ramsaysolutions.com slash check up art is in pittsburgh hey art welcome to the ramsey show hey dave john i'm gonna get right to my question but first i do need to mention i am wearing cargo shorts yeah baby good for you we got a club going here if anybody's wearing, wants to get rid of their cargo shorts, send them to me. I would love some new ones. Yeah, you got to get past Sheila. But yeah, okay.

Go ahead, Art. What's up? So I am poised to retire with a lot more money than I've been expecting to. And I had a whole plan worked out, and I need to, I'm feeling intimidated by that. And I want to know what to do with it. What caused the spike? My partner and I have been in business. We had a group health insurance business for about 20 years,

and then we took on a partner, and I hate the word synergy, but there's a synergy, and from 2019 when we did the merge until now we have quadrupled in size. And what was always a good, successful, comfortable business is now a thriving business. It's gotten the attention of investors. And they're going to buy you out for retirement. Yeah. So your original plan was to get how much out of the business, and how much do you get out now?

My original plan was to retire with between two and four million which you know comfortable um very comfortable but now it's it's looking to be um 15 plus okay congratulations very cool all right oh thank you thank you it is intimidating um and the pressure is uh i'm driving a car that is more powerful than any car i've ever driven and i'm afraid it's going to get out from under me you know what i'm saying yeah yeah yeah and then i've got kids and grandchildren now and now i feel more of a responsibility okay i don't want to squander this yeah yeah well i don't think you're going to squander it, number one. But the principles that keep you from squandering it are still the same as they were when you had four million. And let's review those, okay? Number one, you do not invest in anything ever that you do not understand. So if something sounds fancy pants, and the guy or gal pitching it is

really, really smart, and you understand about three quarters of it, and you're a little bit intimidated and kind of think you're too dumb to be doing this, but you think this is a smart person, I'm going to go ahead. That's right when you get ready to lose your money. Gotcha. You invest in stuff you

understand. And if that dumbs down the investments so what no big deal and you know it's incumbent upon you to manage a 15 million dollar portfolio for the good of your family for the good of the lord and to manage it you would have to continually learn more in the next five years than you know today about investments about but you don't have to become well you don't have to get a PhD in finance but you need to probably always be next year you need to know more than you knew this year and the next year more than you knew that year and so on so let's all be doing that that so thing number one is don't put money in things you don't understand. Thing number two is all of your financial people, whether they're estate planning, insurance, investment brokers, real estate, all have to have the heart of a teacher,

not the heart of a salesman. And some of them in every category have the heart of a salesman they are impressed with their own voice they love the sound of their own voice instead of teaching you and again that goes back to number one where you can't put money in something you don't understand take your time go easy and the last principle is i have met with thousands and thousands and thousands of people in 30 years that have a net worth of, you know, a million to a billion. And anybody under 50 million in net worth, they all are really pretty boring with their investments the fans they don't do a bunch of fancy pants stuff they're not trying to get on the edge of something they're not trying to get out ahead of something and so they never do stuff like crypto ever in that kind of a thing they never do stuff that is um edgy or questionable

or high risk they put money in things they understand now it might be things other people don't understand like i know one guy who actually has about six million dollars of collectible automobiles and uh normally collectible automobiles would not be a category I would tell people to put money in. But he is one of the world's premier experts in collectible automobiles. So not only is it a great hobby, not only does he personally love it, his knowledge base in it makes this an excellent thing for him to invest in because that's his deal.

You know what I'm saying? But it's pretty boring. He doesn't do a bunch of other stuff he does that that's about it you know he and so this idea that you have to somehow be involved in something that's way more sophisticated than you are is a death trap don't fall for it does that make sense yeah it makes perfect sense gives meives me some ideas, actually. Okay. So, hey, Art, let me ask you this, Art. I don't have $15 million. Don't even have close to that.

But I grew up with very, very little, and money in my house was war. It was a scary thing. And then, as I moved up and got new jobs and was successful in those places, and then as I've worked here, and Dave takes care of us pretty well, I have found myself looking at, quote unquote, those people and realizing, oh, I'm one of those people now. And I didn't have a psychology for it. Does that ring a bell with you or no? Yeah, it does to a certain extent. I mean, I've been planning, I've been doing the steps for, you know, my wife and I since, we've been debt free since 2010. And I've, and she's a professor and so we're both professionals.

We've always made good money. And, you know, I was on this trajectory to be, you know, that person. Basically, when you talk about the millionaires between, you know, I was that person, and now this is hitting. So, yeah, no, that does hit. And also, she doesn't come from money, and neither do I. I mean, I come from a middle class, upper middle class family. If you told me it went to $100 million, I would say it changes the dynamic.

But the dynamic between $4 million and $15 million, it doesn't change at all. Not that big a difference okay just in my brain just do exactly what you were going to do with a little more money dave can you tell him okay dave taught me this thing privately about ratios and that has been that's been a game changer for me oh yeah it just it sets you free i mean you you're going to be able to do some stuff with generosity that when you that's going to shock your emotional system and you're going to be able to do some stuff buy a nice whatever for somebody in your family or for you or for your wife or whatever go on this trip that's

ridiculous like i know a guy that just spent 260 000 on a trip wow you know awesome and i was just kind of i'm kind of like you did what it's a quarter of a million dollars and he's like yeah well i mean he's got a hundred million so it's not a heck of a trip it's not really a thing you know it's that's the ratios i mean it's a for for most people him doing that's like buying a biscuit ratio wise i mean it's like other people buying a biscuit you know so if you I mean, it's like other people buying a biscuit. So if you can afford to go to Cracker Barrel, he can afford to do that trip. And so maybe in your head you were going to give your kids, your grandkids, you're going to put $5,000 in a fund for their college. Well, now that you look at the ratio, you might be able to pay for all their college

and put that in a fund, right? So just the numbers get bigger, but the ratios stay the same. And that's been a game changer for me. And any weaknesses that there were in relationships or in character of individuals that are arm's length, kids, parents, it's going to get expanded. People that are crazy, when this kind of money comes in contact with them, they get real crazy. People that are generous and this kind of money comes in contact with them, they get real crazy. People that are generous and this kind of money comes in contact with them, they get real generous. It magnifies all the stuff in your family, so be ready for that.

This is The Ramsey Show. Hey, it's Dr. John Deloney. If you like what you heard in this episode and want to know more about getting started on the Ramsey Baby Steps, go to ramsesolutions.com and click on the get started button. We'll help you figure out the best next step for you based on your specific situation. That's ramsesolutions.com and click get started.