The Ramsey Show - App - How Should I Invest My Money? (Hour 2)

Episode Date: April 7, 2023

Dave Ramsey & Jade Warshaw answer your questions and discuss: "I drive Uber for work but need to sell my car", "How does capital gains tax work?" "Should I invest in company stocks?" "How do I budget getting paid 5 times a year?" "Can I afford a $130,000 car?" Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Want a plan for your money? Find out where to start: https://bit.ly/3cEP4n6 Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Live from the headquarters of Ramsey Solutions, broadcasting for 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. Jade Walshaw, Ramsey Personality, is my co-host today. Open phones at 888-825-5225. You jump in, we'll talk about your life and your money. Jerixa is with us in Boston.

Hey, Jerixa, what's up? Yes, hi. Thank you for taking my call. Our pleasure. How can we help? So I was watching your show for a while and I was starting to save and trying to get out of debt and doing all that stuff

and obviously I do have a finance car so I was thinking about it but not willing to but then I had an insurance problem and they realized or I realized

that I had points on my license a lot so my insurance went up to $600 a month, plus my car now up to like $450. Your insurance went up to $600 a month? Yes. Why?

I have five points on my license that I didn't realize until I updated my license on my insurance. Okay. Okay. Wow. So now the penalty is 35 months for it. So I have that, and then I have my car payment, which I know was kind of stupid. It's $450.

So my idea was to get rid of the car because my kids' schools are a distance where I can walk them. And then get an, the only issue is I work in my car. I do Uber, but I just feel like it's not worth it anymore. So it would make more sense for me to get a real job or something else, I guess. And I won't have a car though, but I have the T station across from my house, like right there. I think you have a great plan. I think that have a car, though, but I have the T Station across from my house, like right there. I think you have a great plan. I think that's a great plan.

I guess my question is how to go about it. I don't know if it's taking advantage, but I do live in Section 8 8 housing and I have a lot of like government assistance so I know the goal will be to move up and away so I do have a few options and I get that without with my question do I lower my rent and take two part-times and then start career searching and you know figure out what I want to do for 27 and then i have two kids i'm a single mom of two kids and i'm 27 okay you got your hands full okay all right listen let's back up whoa stop stop stop let's back up okay one of the you're asking really really good questions after you got this really stern

wake-up call from your insurance company uh and it's kind of shook you and you're you're really relooking everything and that's very wise that's very smart so the one of the things i learned many many years ago i read a piece of research that said that rich people, when they're making decisions, think about how it's going to affect them 20 years from today. Poor people think about how it's going to affect them Friday. And I've been both by the way I've been the thank god it's Friday oh god it's Monday barely hanging on by my fingernails where you are right now and so what I learned to do is I said if I want to be rich people rich people don't make decisions because that way because they're rich they're rich because they make decisions that way and so what we want to do is increase the

planning window and so when I run into someone in your case, and you're a very inspiring young woman, I think you're going to really be somebody someday. I want to ask myself, 10 years from today, where do I want to be and which of these decisions take me there? Because if you're not careful, you make short-term decisions which keep you in a short-term situation if you make long-term decisions let me tell you what almost always happens they're almost always painful now and awesome later short-term decisions are almost always awesome right now but painful later because i'm stuck. Does that make sense to you? Yes. So what's the best career path for you that makes you have an amazing life 20 years from today?

And what are the steps along that ladder that are there? And what's the first step of that? Even if it's a painful step or something you don't want to do right now and it feels icky right now, but by summer, we'll start to see the light a little bit, and then by the next summer, really start to see the light a little bit, and so on. And so, you know, an example of that is Uber is a valid good side hustle.

It's not a real good long-term career play. Agreed? Yes, I finally agree with that. So, I mean, even if your car insurance hadn't gone up, you don't want to be, if you're 27 now, you don't want to be a 57-year-old Uber driver in flying cars or whatever, right? But, I mean, that's not a good long-term play so what is our long-term play what do we want to be and what are the steps to get there what must be true about you and your life that's not true about you and your life today to get you there and when

sharon and i went broke and lost everything and we had a little baby and a toddler and we were so scared we couldn't breathe and the electricity got cut off and the water got cut off because I didn't pay the bill because I didn't have any money. I had to stop and think, A, I've got to get those turned back on, but B, what do I do so that I'm never here again? And I started asking myself those questions, and that's how a lot of the principles on this show were born. So we've got three issues on the table today we need to make decisions about with a long-term mindset, career, housing, and transportation. Yes. Okay.

Long-term, riding the subway or the bus is not going to make you wealthy. That's right. Short-term, it might enable you to save up and pay cash for a $2,000 car, and your insurance won't be much on a $2,000 car. Okay? So maybe we do that for a little while. Long term, living in subsidized housing obviously is not going to make you wealthy. But short term, it might give you the footing to take some steps towards getting out.

Right? Yes. So we start setting some dates and stuff in front of us of where we're going to go from there. Yeah. You know, Jerixa, the situation that you're in, I relate to in some ways, and there's something about kind of feeling rock bottom, right?

You feel like you're at the bottom, but now the way to go is up, right? You know, necessity truly is the mother of invention and sit down, like Dave said, and really start looking through, okay, what can I do? I want to give you Ken Coleman's Paycheck to Purpose and start thinking through, all right, what can I do with myself career-wise? What will that look like with childcare? And really start putting this, I don't want it floating around in your mind. I want you writing these things down on paper and creating a clear plan for what you're going to do next. Before I let you go, let me, right quick, I'm going to jump in on you, Jade. I'm going to give

you so much stuff, it's going to be unbelievable because I think you're awesome and I want you to go do everything we tell you to do. I'm going to put you in Financial Peace University. We're going to sign you up for Ken Coleman's career assessment. We're going to send you his book on Paycheck to Purpose that Jade was talking about. We're going to send you his book on paycheck to purpose that Jade was talking about. We're going to send you my book, Total Money Makeover. I want you to work six extra jobs. I want you to stay in that place right now and get you a $2,000 car. By one year from today, I want you out of there,

and I want you in a decent full-time job taking you towards your career, your short-term steps to get to your long-term goals. Hold on, we'll pick up. We're going to give you $1,000 worth of stuff right there, kiddo, but do everything we said. And call us back and let us know how it goes. Question coming in about taxes. Oh, we get it. Taxes are confusing.

But to help you get a better handle on them, let's unpack a question from one of our listeners. Can you explain how capital gains tax works? Yes. There are two types of income tax, mainly in America, a classic, what we call ordinary income, which is your income tax. And then there's a gain on an asset, like a share of stock, a piece of real estate. Your gain is what it goes up in value over what you paid for it with a few adjustments, but that's basically it. That is a capital gain.

You've gained capital on this. So you buy a piece of land for $100,000 and you sell it for $150,000 after expenses. You net $50,000. That is your capital gain. If you make under $450,000 married filing jointly, your capital gains tax rate is only 15%. It's even less if you have a small income, and it's 20% if you make over $450,000. But it's still less than ordinary income. Well, can be less than ordinary income. So generally is. So if you, you know, certain assets can be exempt from capital gains taxes altogether.

For instance, your personal residence, you can make up to a half a million dollars. Married filing is only $ filing jointly 250 as a single on that if you've owned the property for two years or longer you have zero taxes on that so i recently sold a home uh 18 months ago and the half a million dollar gain was tax free you don't have to buy another house with it it's just free you can buy another house with it but you don't have to in the old don't have to buy another house with it. It's just free. You can buy another house with it, but you don't have to. In the old days, you had to buy another house, even on your personal residence, but that's all changed now. So for online software that includes all major federal

forms with low upfront pricing and no hidden fees, check out Ramsey Smart Tax for additional support if you've got a complicated return. Check out Ramsey Trusted Tax Pros like one of our endorsed local providers. Go to RamseySolutions.com slash tax, and you can learn more. RamseySolutions.com slash tax.

All right, Connor's in Cincinnati. Hey, Connor, welcome to the Ramsey Show. Hi, how are you? Better than I deserve. What's up? Great. Yeah, so my wife and I are recently debt-free outside of our mortgage. And my question is, yeah, thank you. My question is regarding my company's employee stock purchase

plan and whether it would be wise to invest in that as part of the 15% that goes into retirement or possibly even like a shorter term around seven to eight years. I wouldn't do it. I would invest the 15% into mutual funds because single stock and your company stock, I don't know what company you work for, but it's more risk to put basically all of your eggs in one basket as opposed to spreading them around like you would do in mutual funds. Yeah, if you're going to buy company stock or any single stock, I would only do it after your home is paid for. And that would be maybe step seven activity. Now, let's say we're over there and let's look at your situation.

Okay, by law, they are discounting the stock in an employee purchase 15%, correct? Correct, yeah. And so let's say you're putting 15% of your income into retirement, baby step four, you're taking care of your kid's college, five, you paid off your house, six. So now we're sitting at baby step seven. Do I want to play with this stock since I'm getting a 15% discount? You might. You might. You don't want more than 10% of your net worth total in single stocks because single stocks are a lot more risk and to prove that connor here well here's what would be interesting i don't even know your company name okay and i don't want to know so

i might in a minute we'll see but right now i don't to make this statement i don't need to know you know your company name go back and look you pull it up pull up your company stock on the internet and look at a chart that shows the 52 week high and 52 week low you likely will see a swing greater than 15 percent between the two in the last in the last year right now i'm sorry yeah it's a pretty large drop right now in the last year yeah okay and so um they sometimes they shoot up sometimes they shoot down but even a very stable name brand uh company like a home depot that we all know the name of or something it's not unusual it would be unusual for it to not vacillate as your possible high or your possible low so my point being is the 15

discount might just be enough to cover your losses that's a good point in the coming year and so the volatility of the single stock is represented there and tells you why we don't play single stocks i don't own any i don't own one uh and so that that's you know jade's right i'm gonna stay away from it until you get to baby step seven and even then don't think that the 15 is special it's all company stock is that way every everybody that has a company stock purchase plan it's 15 discount and uh unless it's a small closely held company they've got a different thing we're talking about publicly traded big board uh new york you know new york

stock exchange type stocks that's what it's going to be. And you're probably going to find your 52-week high and low to be the distance between those two to be greater than 15%. Yeah, I wouldn't do it. Yeah, and then if you're, so, you know, it's just if you got a real itch there, you want to scratch, put a little money in it after you're in baby step seven. But you're really not, it's not knocking it out of the park.

Oh, I got a 15% discount. I made money before I started. No, that's my point. You didn't probably. all right ryan is with us in mayfield kentucky ryan what's up hey no uh good afternoon jayden dave thanks for taking my call sure how can we help um so i have a question about um about the budget uh i've changed it's been about two years now from teaching i taught for nine, and got a monthly check. It was easy to figure out monthly expenses and plan. But now I'm farming, and I get paid five times a year.

It's regular. It's kind of predictable five times a year. But I'm having trouble. It's about 70 days, I think, per paycheck or something like that. And I'm having trouble planning when i write myself a check now you know from the farm what how to figure out what expenses to cover do i do i kind of do a a budget for every what two and a half months or i'm trying to figure out the logistically the best way to plan for that now the first thing is farming is a business

and so you're running a business as a separate checking account now once you've paid your expenses at the business your net profit is what you can take home so when you get a crop that comes in you got to clear your you got to clear your stuff right and then what's left and what you don't need to replant and so on is what you can take home. Now, once you take that home, then you say, we need X number of dollars, $5,000 a month, $7,000 a month, whatever it is to exist. And then you just pay yourself $5,000 a month out of the business account. Okay.

Well, so I have how much we need and what our expenses are, and we're good as far as it's about five times a year, but we do about maybe $12,000 each time, and we're good on the farm, and that pays our bills. But it's the planning ahead of time for 70 days, like using the app, like the logistics of saying it's because we pay ourselves. It's a poultry flop. Keep the money in the business account and pay yourself a monthly pay check.

Yeah, just give yourself the $5,000 once a month. Okay. Okay. Yeah, so instead of paying at the end of the flock when the farm gets paid, just go ahead and divide that monthly and pay myself 12 times a year instead of five times a year. Yeah, that's what I would do. It's easier to keep up with. Yeah, that's probably it.

Because you're controlling 100% of both accounts. There's no other players, right? Well, I do have a business partner, 25% on the farm, but I'm still controlling. I just cut him that disbursement. Then you may want to just set aside a separate personal account and chunk 70 days worth of monthly rate in there. Let's just call it 90 days worth.

Put three months in there. Yeah. And then just divide it, you know, take out a third, a third, a third, and then do it again. Yeah, because looking at the monthly bills, it's like, well, okay, it's about $3,000 a month is kind of what we need, but it's like, well, if it's two and a half months, it's like, well, okay, it's about $3,000 a month is kind of what we need. But it's like, well, if it's two and a half months, it's like, do I write myself $9,000? That's where I was having trouble with the logistics on planning that, like with the budget.

Yeah, it helps to have a separate account. I probably would open a third account. I probably open a third account separate from the business or separate from your checking and say, okay, I'm going to move this money because it helps me to visually go, I just got paid for the month of March. I just got paid for the month of April. Yeah. And I'm taking it out of there. He doesn't need to move three months of money into his personal checking account and try

to keep from spending it for three months. That's a terrible idea. That's a problem. Yeah. Good question, man. Thank you for joining us. This is The ramsey show jade warshaw ramsey personality is my co-host today brock and rachel are with us they are on

the debt-free stage right here in the lobby of ramsey solutions hey guys what's up hey welcome where do y'all live in houston houston texas welcome to nashville how much debt have you paid off five hundred thousand dollars how long did this take five years 60 months to the day wow awesomeness and what was your income range during that time started about 160 and ended about 220 wow that incredible. What kind of debt was this that you paid off? Oh, let me tell you. A lot of ignorance. Are you getting out the list out of your pocket?

Yes, ma'am. Let's hear it. This is a five-year list that we kept. Oh, my goodness. It was two homes, credit cards, a loan to buy her a wedding band, a new HVAC system for our house, a new car, some floors. Just live and life. You were normal.

Yeah, normal. Just like everybody else. Normal, normal, normal. So what was the wake-up call 60 exact months ago? We got married. Oh. We both came into marriage with different amounts of debt, and we just realized that that's not what we wanted to build our marriage on,

and we wanted to have more fun yeah so yeah our church decided to bring you on a board for fpu and and sure enough the light went off at that point very cool what church should go to second baptist oh yeah okay cool cool yeah we had a big deal there yes sir yes sir we were there very good good for y'all so that that that church doing financial peace university church wide got you guys plugged in absolutely and about the time that you wanted to be anyway yes sir we were dating at the time and so we were actually in separate small groups um but having really good conversations on afterwards of what we wanted our life to look like if we got married and so so that was our, how much later were you married after that? Less than a year. Yeah. Okay. It was real quick, but I will be honest with you.

It took about a year before I finally got mad enough to actually do something the right way. I was going to ask, were you both immediately on board or was somebody, so she was, she was, you were the reluctant one. I'm the spender. So, you know, Hey, I want to keep buying. Oh, okay. So how did you, how did you whoop that out of him, Rachel? I didn't. I did it with a lot of conversations. My parents did Financial Peace University. And so they gave me the book, I think in college, if not right after. And I was like, this is cute, but I'm good. And it wasn't until we realized that we were having to deal with debt and deciding what we were going to do with our money. And if we were going to be dictated by our debt, deciding what we were going to do with our money and if we were going to be

dictated by our debt or if we were actually going to prepare a life for our kids one day that we wanted and so it really was doing it um together that we decided like we have to do this but then a year later it came down to i don't know what huge hit happened oh i looked at her and she's about three months away from giving birth to our first son. And I said, this ain't happening no more. Oh, the baby coming. That's a wake up call. Yes, sir. Ding, ding.

Yeah. This just got real. Oh, yeah. Yeah. And I'm not going to saddle her. I'm surely not going to saddle him with my ignorance. Right. So we fixed it quick.

I love that. Way to go, you guys. This is amazing. Yeah, and I told her the other, probably back in November, it got pretty tough there at the end. As you can imagine, you see the light at the end of the tunnel, but that tunnel seems to get longer and longer. And we just did a few numbers, and we realized we had a really good income,

but we were only living on $50,000 a year. Wow. Everything went to the debt. So you mean you can actually live on less than you make. And we did. And it was tough. Because our friends, they live high on the hog. And we thought we were weird.

We were now that Ramsey was weird. It is. We felt like we were missing out. And now I wouldn't change it for the world. You were missing out. You were. You were missing out on stupid. Yes.

And I was a teacher before I stayed home with our boys. And so I always thought, well, I don't have the income to do this. I don't have enough money to save or enough money to truly get out of debt. And it wasn't until we realized how much money we were actually spending that we didn't have that I could have done that years before. And so that's one thing I regret, not doing it sooner. Yeah. And I've told her a number of times, I wish I wouldn't have been that stupid prior to knowing her and settling her with my decisions. We all got that in our rearview mirror.

That's okay. That's okay. The trick is the change. The trick is the transformation, which you've both gone through. So did you say this is house and everything? Yes, sir. Way to go. Y'all are so weird.

On December 30th, her, the two boys, all four of us walked into Wells Fargo and said, get out of my house. Okay. We broke up. I love it. And we had all the bankers come out

and they said, this isn't normal. I said, good, because I ain't never coming back. So how long has it been since you made that final mortgage payment it is one month today oh so you're feeling it now you're starting to feel that good wow what's your first big thing y'all are gonna do coming here this is it this was our trip i mean after this yeah oh gosh after this do more you don't have any payments no we don't um actually one thing that we talked about when we were redoing our budget of okay how much we want to put towards savings.

Like, this is our new income. We don't have debt. How much do we want to do? We realized that we really want to put that money back into savings to buy him a car soon because he's driving one of those reliable old cars. 13 years old. Yeah, you need to get another car. So, want that um but we also wanted to put a line in our budget of just giving of being able to like pay for someone's meal you know or buy groceries for somebody and not feel like well

now we don't have that money to do something and so we put a line item in our budget of just being able to spoil other people random acts of kindness yes i think both of our parents did an amazing job of teaching us the joy that you get from giving. And I think that's what I'm most excited about going forward to the next five, 10 years. It's like the best is yet to come for our boys of like the life that we get to do with them. But then how we get to teach them to be generous. You teach them to hear God whisper and say, take care of that lady over there. We actually have a thing we say. I read it in a book and it's look for the God winks along the way.

Yeah. That's good. That's good. That's a good word. Well word yeah well done y'all well done i'm so proud of you thank you how's it feel to be completely free really good i was telling him it's this trip has been hard because i'm so used to counting pennies and like well are we on are we on our budget have we spent too much and and it's been nice just to relax and enjoy our income. So that's been fun. It's fun to know we're okay, to know I'm not going to make her hurt by doing something a little too much or a little too little. And I will tell you, the last month was really tough at work. And then to walk in January 2nd and say, I don't care what happens.

I'll go push carts around at Lowe's and be just as happy now because I don't have to pay anybody anymore. Changes the way you work. Changes the motivation behind what you do. I'm there because I want to be there now. Now you've got a choice now. Yes, sir. Well done, y'all. What do you tell people the key to getting out of debt is?

Doing it together. I think if we hadn't been on the same page and had the same vision it wouldn't have happened and I was I was lucky enough that I had parents that introduced me to this whole concept before but then I had a sweet friend Kelly that through our single days of all of the weddings and all the bridesmaids dresses that we had to buy and all of that she was the one that would eat before we would go out to eat and she would eat chips and salsa and that's it because that was not in her budget that month.

And it gave me the support of like, someone else is doing it, I can do it too. And so I would just say to find someone to do it with, because then you don't feel like you're on an island. You're doing it together. Yeah. You know, and for me, when I said it took about a year until I got mad and it's the age old adage

that everyone has said, I got sick and tired of being sick and tired. Decided to draw a line in the sand. Yes, ma'am. Change your life. Way to go, y'all. Way to go. Hey, we've got the Live and Give bundle for you, the Baby Steps Millionaires book, the Total Money Makeover book, and another Financial Peace University membership. That'll help you with your generosity plan. You'll be able to give those and catch somebody and get them going, get them motivated, moving, and they can have the same story you've had or their version of your story so way to go y'all you're while we come down here you're inspiring very very well done brock and rachel houston texas 500 000 paid off in 60 months that's five years for those of you that are counting. And they did that 100% house and everything.

No payments anywhere. $160,000 to $200,000 income living on 50. Count it down. Let's hear a debt-free scream. Ready? Three, two, one. We're debt-free! Yeah!

Woo-hoo! Yeah, baby! Yeah! I don't know where those people live. They have paid for cars and a paid for house. Next door to you. That's where they live. This is The Ramsey Show. Jade Warshaw, Ramsey personality, is my co-host alexander is in philadelphia hi alexander welcome to the ramsey show hi how are you thank you for taking my call i appreciate your time sure what's up um so i want to buy a garage ornament and i want to be on the smart side of the spectrum and

have a conversation with you before i end up on the stupid side of the spectrum and have a conversation with you before i end up on the stupid side of the spectrum okay how expensive a car uh all said and done everything it's about 130 000 cool what do you make uh take home uh with me and my wife it's about uh 14 000 a month with net so 150 grand it's about $14,000 a month with net. So $150,000? Whatever the net is. Probably close to $200,000. Yeah, okay.

All right. As far as debt is concerned, why don't you ask the question? That's okay. How much debt do you have? That's good. That's okay. How much debt? $150,000. On what? My house.

Okay. And what's your nest egg? How much money you got? I got about $800,000 in retirement. I got about $430,000 in liquid assets, I guess. I have two sons and i have about 90 000 in each of their 529 plans okay so the rule of thumb i use on uh toys which you're at the level of toy on this um yeah and i've got some toys so the rule of thumb i use and that I teach. I'm sorry, I'm a guy. It's in my DNA. That's okay, man. I don't have a car payment. I have a Subaru. Like, I had enough.

You're going to pay cash for this car, right? I'm going to do what you tell me. I mean, if you say no, then no. Okay, if you're not going to pay cash for it, don't do it. Okay. Number one rule, okay? Number two rule is cars go down in value, things with motors and things with wheels. Cars, boats, Sea- sea dues, their sisters.

I've got a bunch of things that go wooden, wooden, and I like stuff like that, but they all lose value. And so we don't want to have a general rule of thumb is you're a millionaire, okay, a little over a million dollar net worth um if i understood the numbers correctly and um and it sounds like you make a couple hundred a year the trick is we use a rule of thumb it says don't don't buy things with cars with motors and wheels all total including your other car your subaru other stuff like that that equal more than half your annual income because they go down and we want to have small amounts

of things going down in our life now you've got an unusually high net worth you're paying cash for this you're probably going to violate that 50 when you buy it okay matter of fact we know you are because you make about 200 a year and you're going to spend 130 just on this one car and your other cars on top of that are going to put you over that um Normally, I would say that's a no-go. It kind of makes me question it here a little bit. What's your question? Well, I mean, I just don't want to put too much in things that go down in value. And I'm trying to look at the ratios of your network it's like uh not to you know it is a g it is a nissan gtr i don't know if you know anything about nissan gtrs but they're very very very hard to find yeah they are and if you go on auto a trader or something like that right now um they're they're astronomically priced even in the used market. Yeah, likelihood. Even if you're lucky to find a new one.

The new Raptor just came out, 700 horsepower. They're running about 120, okay? But they're not going to go up in value. I understand. Even though they're much like your Nissan that you're talking about. Yeah, I've looked at that car. It's a very sweet car. And so, yeah, you can do it but

what you've got to realize is you've put a little bit more into a depreciating asset because 10 years from now let's face it that thing's not gone up in value no no i mean i've got a 60 1960 corvette that's frame upup restoration that is fabulous, and I've had it for probably 10 years. I don't think it's gone up a diamond value. I don't think it's gone down any, but it might have gone up a little bit. But the classic cars, some of them like that, some of them will go up a little, or a super, super rare item that you can't get,

like stuff that's running off the auto auction, that kind of stuff, the rare car auctions, sometimes those will go up in value. But I don't think your Nissan is going to qualify. And I don't think that Raptor is going to qualify for that. So anyway, all that to say the way I'm not going to tell you what to do. The way I make decisions is, am I putting too much of my asset base in things that are going down rather than up. And normally our guideline is A, pay cash, B, don't have total of more than 50% of your household income in there.

Now, an exception to that would be, let's say you called in, you had $8 million in mutual funds and your household income was $100,000. Well, we wouldn't hold to that 50% of the $100,000, right? I see what you're saying. Because you could afford to buy the thing for 130 if you had eight million dollars and drive it off a cliff tomorrow and you wouldn't even notice financially right that's the point so you're right on that you don't have eight million but you got a million and a half probably we didn't talk about your house equity but um you know you're right on

that and you're doing great so you're you're not going to go bankrupt because of this, but I wouldn't go buy another one. Alex. No, no, this is it for me. I mean, I don't drive a fancy car. You're about to. I'm not really like that, but I just, I've always liked this car for the last, you know, however many years.

It's a sweet, it's a sweet vehicle. I just don't want to, know i think i i you know i respect everything that you say you obviously you're in that man of position for a reason so i just didn't want to you know well you see you get the principles i'm using yeah i understand i completely understand what you're saying and so i based on those principles you're on the bubble you wouldn't be on the dumb side um you know if worth was $500,000, I'd say don't do it. Yeah, my house is worth a pretty good amount of money, too, and I don't owe that much on the house.

Like I said, I only owe $150,000 on the house. What's it worth? I just had my real estate agent look at it. He said $1.6 million, $1.7 million. Okay, so your net worth is $3 million. Yeah. Okay. i feel like that moves the needle that does move the needle that moves it in your favor see you see what i'm talking about here that's the whole thing i just don't we can rationalize our butts off and i

appreciate your calling appreciate the spirit you're being humble about it you're not being smart i like you're not being sarcastic you really want to know that house threw it over the edge in my book you're okay then then? Yeah, I'm good. I'm sleeping good tonight, Alexander, if you buy this car, and I'm happy for you. And she's the one that just yelled at all of America about car payments. So just keep in mind that that's true. Get you that $130,000 car. He's got over $2 million in net worth.

Three. Three. Definitely get it. And get me one, too. I'm just kidding. There you go. That get me one too. I'm just kidding. There you go. That is a sweet vehicle. Y'all look it up if you hadn't looked it up.

Oh, man. All right. So that's the thing. And these numbers do change. You know, here's an example, okay? Everybody says, okay, what percentage of my income should I spend on food? Well, if we give you a percentage that's true for people that make $100,000, what if somebody made a million?

That's right. They don't need to spend that much on food because they'd be large. And in charge. Okay. Okay. I mean, so, you know, these things skew out. If you have a very low income, you're, you know, very poor. Okay.

You're just barely getting started. You have to spend a larger percentage of your income on food that's right so you know to just meet necessities so these things skew out the principles that we give you skew out based on net worth based on income being at extremes and a three million dollar net worth is an extreme in america today the guy's very successful way to go alexander yeah i'm happy for him you know the thing is you just gotta get these Now, $3 million net worth is an extreme in America today. The guy's very successful. Way to go, Alexander. Yeah, I'm happy for him.

The thing is, you just got to get these principles down. Quit buying $50,000 cars when you make $50,000 and you got no money. Right. That's just straight up stupid. That's the point of these principles. And he's not even in that same book, much less the same chapter or the same page. Well, that's the point. You know, Dave, we yell at people a lot for doing dumb stuff, but we're equally happy

for the people who have worked hard. They've got the money. Then, yes, spend your money. Money is fun to spend. It's fun to give, save, and spend. It's fun to enjoy. It's fun to enjoy. And I think people think that we have forgotten that, but we have not forgotten that.

It is fun to spend no I've been able to buy some of the things in my life that I always wanted since I was a little bitty kid you know I've got mastercraft ski boats yeah it's unbelievably expensive boat but that's when I was a little kid and that sounds like a fast boat we got to ski behind the mastercraft the first time and we're up on the slalom course I thought man if I ever if I ever make it, I'm going to get me a Mastercraft. So I got me a Mastercraft boat. I mean, that's how this works.

Look at that. There you go. This is The Ramsey Show. Dave here. You can find all of our shows with the Ramsey Network app on your smartphone. It's the only place to listen to the entire back catalog of episodes. Download the Ramsey Network app in your favorite app store today.