The Ramsey Show - App - How to Go From Broke to Millionaire (Hour 1)

Episode Date: October 1, 2018

The show about you

Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show. Where debt is dumped, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. You jump in, we'll talk about your life and your money. It's a free call at 888-825-5225. That's 888-825-5225. Brittany starts off this hour in Washington, D.C. Hi, Brittany.

How are you? Hi, Mr. Ramsey. I'm fine. How are you? Better than I deserve. What's up? Great. I have a question.

I currently have a whole life insurance, and it's like $100,000. I've had this policy about maybe 15 years now, and I pay $40 a month. I also work for the federal government, so I have life insurance there as well, and it's five times my salary. I was wondering, should I just cancel my whole life insurance policy and just go out there and try to pick up some insurance fees, term insurance? Well, to start with, if you need insurance, you never cancel insurance you have until the new insurance is in place. So if you were going to get term, you would get the term in your hand first before you canceled it. But I would always own term, and I would never own cash value insurance.

It is a horrible rate of return. Now, but if you're sick, you've gotten sick and you can't get insurance, or you're uninsurable or something like that, you may be stuck with it. And so that's why you don't want to cancel it until you have the other policy in place. But as long as you've got the new policy in place, term insurance and investing your money anywhere, except in life insurance companies, is a better place to do your investments. I mean, a fruit jar, you'll come out better. So, I mean, literally, just bury it in a coffee can in the backyard, you'll come out better.

Colton is in British Columbia. Hi, Colton. How are you? I'm good. how are you i'm good how are you better than i deserve what's up hey so i'm 20 uh i own my own business which has been profitable uh i'm about 17 000 in debt and i'm kind of lost i don't know what i should do with with my business and the lease is up in two months here. So I'm not sure what to do. What do you mean you don't know what to do with your business?

I'm confused. You don't like it? I don't really. It's not really my passion, my business. So I've decided that I'm going to travel in a few months here. That's what the plan was. You're $17,000 in debt and you're going to travel? Yeah. I mean, with the intention of paying off my debt first before I travel.

Oh. I've been listening to you quite a bit, and first, my plan is to use the business, you know, kind of get the money out of it while i still can uh so what are you making what are you making on this business well i mean there was weeks where i was making seven thousand a week but with me not you know showing up so much um i mean i'm making more around four thousand where have you been not showing up traveling doing stuff I shouldn't be doing. Oh, okay.

Well, I think we've defined the problem. I mean, if you have a business that's making $7,000 a week and you're 20 years old, I think you probably have something at least you could think about selling the business and not just closing it and walking it away, walking away from it. I mean, that's like $350,000 a year, dude. If you're really doing that at 20 years old and you're not even working that hard at it, I mean, come on. That's kind of ridiculous.

There's something going on here that doesn't meet the eye. Connor is in Midland, Texas. Hey, Connor, how are you? I'm good, Dave. How are you? Better than I deserve. What's up? I have a question.

I'm 24 years old, $25,000 in my emergency fund, and I'm about to start Baby Step 4. And my company offers a Roth 401K, and I was looking at the four mutual fund categories that you recommend, and three of them average between 10.5% and 12% returns over their 10-year to since-inception date. But the international fund averages about 6%. That's the best fund in the category. International as a category is a laggard for the past 20 years.

And we just did some fresh analysis on that because I actually was considering pulling that out of the mix of the offering. But we did some long track record analysis on it, and it's the one category of the four that runs exactly the opposite of the other two. And we ran it and said, okay, in the last 40 years, if you had run it without international and run it with international, what would you end up with? And you end up ahead having run it with international

because in the down markets, the internationals are generally up, and they pick up the slack. And so even though it's the laggard, I still have it in my mix, and I'm still going to recommend you do. But you're right. What you found there is representative of the real track records. Would you still recommend 25%? Yes, yes, yes, yes.

I'm still doing it. It's what I'm personally doing. We just finished the analysis. I sat down with our ELP and had him run some hypotheticals back, and we went back 30 years and 40 years and 20 years and looked and said, what would it look like with them, with three funds? And I actually ran a real estate investment trust as a possible fourth. So I ran three different scenarios. The current four, three, not counting the international, and then I ran and pulled the

international out and put a REIT in, a high-performing REIT, because the high-performing REITs are doing pretty well. And the funny thing was, the international, the current mix beat all the other two on a 20-, a 30-, and a 40-year track record. So hypotheticals, you know, real funds in the real marketplace. So sticking with it. But I was like you. It's disillusioning to look down and see how poorly they're performing,

to the point that I was considering the advice that I've given for 30 years, changing it. I mean, we were looking at it and going, you know, have we missed it? Has this ship sailed, you know? But really, because it runs inverse of the other funds on returns, it's good to have in the mix. It becomes a hedge for you against a downturn. So good question, man. Thanks for calling in. Open phones at 888-825-5225.

That's 888-825-5225. Johnny's on Instagram. Is it ever a good idea to prioritize student loans over smaller debt balances in the debt snowball, given the collection practices and punitive measures when default. Dude, every debt has collection practices and punitive measures. Every one of them. Student loans are no exception. And no, you're not going into collection.

You're paying it off. So this is the opposite of collection. This is you're paying extra on it. You're getting rid of it. You're piling on. You're going to list your debt smallest to largest. You're going to pay them off in that order. You're going to be in attack mode, and that's exactly what I would do with it,

and that's exactly how I would do it. So now list your debts, and when you're listing your debts for the debt snowball, folks, smallest to largest, that's not categories. If you have a $1,000 student loan and a $2,000 credit card and a $4,000 student loan, you'd do student loan, credit card, student loan. It's not student loans are all the total category. You know, that's not what we're doing. We do the whole thing.

We do the whole thing. You break it out by individual debts and list those individual debts, smallest to largest, pay minimum payments on everything but the little one, and attack the little one with a vengeance. Thank you for following us on Instagram. Appreciate it. This is The Dave Ramsey Show. Are high health care costs getting you down?

Are you confused trying to navigate your options? Do you wish you could find an affordable, biblical solution to your health care costs? Based on New Testament principles, Christian Health Care Ministries, or CHM, helps Christian families, churches, and ministries join together as the body of Christ to share their major health care costs. Christian Health Care Ministries is the original health cost-sharing ministry. A Better Business Bureau-accredited organization, CHM members share to pay each other's medical bills. It's not insurance. It's Christians financially and spiritually supporting each other. It's what Christian Healthcare Ministries has done for over 35 years, and our members have shared over $2.5 billion in medical bills. To learn more, visit chministries.org. That's chministries.org. Christian Healthcare Ministries is a proud sponsor of Dave Ramsey Live Events.

chministries.org. Wow, America, thank you. Thank you, thank you. I was just looking over our live events ticket sales report. I am leaving in the morning to go to San Francisco. Chris Hogan and I are doing our very first event live event ever in the history of our company in san francisco and it is tomorrow night tuesday night and uh a smart money event for chris and i to do completely sold out over 3 000 folks thank you guys so much we really appreciate that that's a neat neat, neat thing. And so really, really fired up about that.

The other thing is Anaheim. So this is California week, I guess. Anaheim is where we're having the Marriage and Money event with Rachel Cruz and Les Parrott. And I think we can announce that. That's on October the 4th, which is going to be Thursday night. And I think we can safely say that it is a sellout because there are six tickets left, 2,000 tickets sold, over 2,000 tickets sold. And I think there's 1,994 sold when I looked at the report a minute ago. So another sellout there.

I mean, you can still get a ticket, but it's another sellout. So thank you. And then the last one is October the 13th, which is one week from this coming weekend, about two weeks from now. There's about 90 tickets left is all for the SMART conference, the day-long event in Kansas City. Almost sold out as well, and will sell out probably in the next few days at that rate so thank you thank you thank you san francisco kansas city anaheim smart money smart conference money and marriage big time so i went out the commercial break about a week ago i always step out during the commercial breaks and meet folks that are stopping by our lobby and having our – we have free cookies and homemade cookies and free coffee and all kinds of goodies that Miss Melissa makes in our little cafe here.

And people come and watch the show and eat the free stuff and all that. And I come out and sign books and take pictures, all that kind of thing. A lady handed me this. She found her – I guess it was her great-grandmother or her grandmother's marriage certificate. And she made a copy of it for me from Iowa. And the date on it is 1926. And along with the marriage license or marriage certificate, which is very interesting just to read the marriage certificate, was a thing that apparently the pastor had stapled to it.

This is from 1926. Man! How to perpetuate the honeymoon. Number one, continue your courtship. Like causes produce like effects. It worked when you were courting. It'll work when you're married. That's very interesting wording.

Do not assume a right to neglect your companion more after marriage than you did before. Number three, have no secrets that you keep from your companion. A third party is always disturbing. Number four, avoid the appearance of evil. In matrimonial matters, it is often that the mere appearance contains all the evil. Love, as soon as it rises above calculation and becomes love, is exacting. It gives all and demands all. Make the best of the inevitable.

Persist in looking at and presenting the best side. Number six, keep a lively interest in the business of the firm. Two that do not pull together are weaker than either alone. Very good. Start from where your parents started rather than from where they are now. Ding, ding. This is why she handed it to me. Hollow and showy boarding often furnishes the too strong temptation, while the quietness

of a humble home would cement the hearts beyond risk. Love the wording. This is so good. Here we go. Avoid debt. Spend your own money. Then it will not be necessary to blame anyone for spending other people's. This is great.

1926. How to perpetuate the honeymoon. Do not both get angry at the same time. It takes two to quarrel. Do not allow yourself to ever come to an open rupture. Things unsaid need less repentance. That phrase right there is tweetable. As a matter of fact, that could just put Twitter out of business.

Things unsaid need less repentance. That phrase right there is tweetable. As a matter of fact, that could just put Twitter out of business. Things unsaid need less repentance. Study to understand your companion's disposition in order to please and avoid friction. Study to conform your tastes and habits to the tastes and habits of your companion. If two walk together, they must agree. And here you go gauge your expenses by your revenues love must eat the sheriff the sheriff often levies on cupid long before he takes away the old furniture i love that stuff oh i'm getting old but 1926 how to perpetuate the honeymoon our question of the day comes from blinds.com they have a 100 satisfaction guarantee that means even if you mismeasure you pick the wrong color they will remake your blinds free you get free

samples free shipping and when new promos you you save even more money. Always use the magic word, the promo code RAMSEY at blinds.com. Anna's in Oregon. I'm in the process of choosing a financial advisor. I've talked with five smart investors now. My parent's advisor told me that the vetting process for smart investors is simply a fee they pay your company for the stamp of approval. That seems a bit dumb, but it did make me think about asking, what is the process for investors to become advisors to become a smart investor?

Well, your parent's financial advisor is a liar. So you should stay away from him because he wouldn't know the truth if it bit him on the butt. So, no, the only, yeah, we just take money from any idiot out there that says he's an advisor, and then we send all of you people to them, and there's never been any backlash. Oh, come on. That's absolutely asinine. That's ridiculous. Of course I couldn't get away with that. You people would string me up.

Social media would be full of the complaints. And rightly so. Now, I've got a 100-person team that works on the SmartVestor program. They follow up on every lead. They follow up on every person in the thing. We make sure they have the heart of a teacher, that they're teaching stuff and giving you advice that's consistent upon the advice that you hear here or in Financial Peace University or when you read the Total Money Makeover. And so, no,

I'm not a prostitute. I don't just sell for money. It's short-sighted in business, number one, because you would have to do the business over and over and over and over and over again, and the turnover among listeners, because you people wouldn't trust me, would be astronomical, and my endorsement would become worth nothing because it would not be worthy of trust. So, God, that pisses me off. That guy is lying and saying that I'm a prostitute. Unbelievable. So, no no we don't just sell

out for money boys and girls well for a lot of reasons number one it's the wrong thing to do but number two it really wouldn't work as a business model i mean think about it because i would put every scumburger on the planet in the program and then you people would go and you'd come on you'd be on you know there'd be facebook pages and dave ramsey hires or dave ramsey endorses scumburger pages everywhere right and then dave ramsey's name would be mud that would be so short-sighted and dumb because really all i've got to sell is my word my trustworthiness you folks trust me or you don't and if you don't trust me then you wouldn't take my endorsements right and so i would ruin would ruin my, I would spoil the well, you know?

That's just so dumb. That's ridiculous. No, we spend an amazing amount of money, an amazing amount of effort, an amazing amount of time selecting the smart investors, selecting any of our ELPs on the real estate side or any of the other ELP programs, and then we spend an amazing amount of time making sure that they're taking good care of you folks. Are they perfect? No. There's 3,000 of them.

They're not perfect. But we work our butts off to make sure the right people are in there. And stay away from your parents, financial advisor. He's a crook. This is The Dave Ramsey Show. You've heard me talk about ID theft for years and how it's only a matter of time before you become a victim. But I ran across some numbers that even surprised me and shows the real nightmare that people go through when they become a victim. Of the 16 million victims of identity theft last year, yes, 16 million, 26% of them had to borrow money from family or friends, 22% of them lost even more money by taking time off work,

and 900,000 victims took out payday loans. This stuff is a freaking nightmare. That's why the only plan I have for my family and my entire team is through Zander Insurance. Zander takes over all the work to solve these problems and more, along with the systems to reduce your risk and protect your money if your accounts get hacked. Visit Zander.com or call 800-356-4282.

It's the smartest, most and Sarah are with us. Hey, guys, how are you? Hey. Hey, Dave. Welcome, welcome. Where do you guys live? We are from Cornelia, Georgia. Oh, fun.

Good to have you. And how much debt have you two paid off? We have paid off about $80,000 in 33 months. Very good. And your range of income during that time? We started at $80,000 and we ended in about $120,000. Cool. What do you all do for a living?

We're both teachers. We're both public school teachers. Cool. What subject do you teach? I teach social studies in middle school. And I teach fourth grade reading and language arts. fine good for you guys cool so what kind of debt was this 80 000 bucks well it was a mixed bag of a lot of different things you know we were super normal um most of it though was student loans where we actually had uh gone back and gotten our master's and just added on to our debt.

Mm-hmm. Mm-hmm. Okay, cool. And how much of it was student loans? Like $54,000, I think. Okay, so yeah. And then what was the rest of it? Just credit cards, cars, a personal loan, a down payment loan that we took against a 403B.

You know, just a lot of different things. You were normal. Yeah, absolutely. I love it very cool how long you two been married five years okay so what happened two and a half years ago that got you started on this program 33 months ago uh well um we got our master's degree and we thought we're going to get a pay raise and uh and after their student loan bill kicked in it was like a 60 a month pay raise so um we I kind of started feeling the burden of the debt.

And I started kind of mentioning it to Sarah and saying, we need to do something about this. And she wasn't fully ready to be on board yet. But actually what happened was, yes, I didn't want to hear it. I didn't want to admit to my spending habits but I went I've taught with a lady who did your plan the Dave Ramsey debt-free snowball she the envelope system cash only and I was like I could do this so I came home and told him about it and he's like I've been telling you that the whole time so at that point we were both on board. Okay, cool. And what did you do exactly?

Well, we both took second jobs. What were your second jobs? We both started moonlighting teaching. I actually started teaching in a maximum security prison as a second job. And she was working for the same group but on the outside world. So we were both doing that. Okay, so you went to prison yep and she didn't we actually teach your personal uh finance class in the prison oh thank you

yeah thank you thank you it's real rewarding work thank you for doing that very good job good good very cool very cool so what do you tell people the key to getting out of debt is? You paid off $80,000. I mean, really. I mean, for me, I think it's sacrifice. I drove a Dave car. I mean, it was a beater for a year. No AC, no radio. It was a rough year in that car in Georgia, you know. Specifically, I remember in that car one time, um, listening to your podcast, um, on my headphones and the car was, I was in a drive-through and I looked down and the

car was overheating and I had been working outside and at a third job and, um, had my shirt unbuttoned. I was sweating. I mean, literally looked like the biggest redneck on the planet and, uh, cars overheating. I had to turn the heat on. And I was just thinking, is this worth it? Doing this. And it has been. Been there, done that.

Yeah. That's awesome. Very cool. What do you tell people the key to getting out of debt is, Sarah? A lot of sacrifice. You definitely have to communicate. And we sat down and did our budget and we did the cash only envelope system, you know,

to this day, even now we're debt free. We're still doing the cash system. Once that money is gone, it's gone. We have an 18 month old at home. She even has a budget. So once her money's out,

it's out, you know? Um, but I think too, you just have to trust in God. He has gotten us through everything. There were a few bumps in the road along the way, one being last summer of 2017. He was supposed to work three weeks of summer school, and he was going to have to give up some nights at the prison to do Bible school.

And sadly, his grandfather passed away. And so all of these plans for this extra income coming in was shot. But a few weeks later, God came through. We got an unexpected reimbursement check from the hospital from where we gave birth to our daughter. Oh, my goodness. And it reached about the same amount that we were expecting to bring in that month. So God's there. He's going to get you through no matter what.

And you just have to trust in him. No matter how many bumps along the way you're going to hit, he's going to pull through for you. He's on your side. Good. That's fun. Good for you guys. Very cool. We've got a copy of Chris Hogan's book for you, Retire Inspired.

That's the next chapter in your story for you to be millionaires and outrageously generous as you go along. You're on your way, without a doubt. So who were your biggest cheerleaders? I would say both of our parents were really supportive. A lot of people, once we actually would share we're doing this, people like, they connect to it. And we had more cheerleaders than we had people that were heckling us, I would say. Hecklers, that's a good, cheerleaders are hecklers. I may use that.

That's pretty good. I used to say people that are just calling you crazy, but yeah, but that's a heckler.'s a good cheerleaders or hecklers i may use that that's pretty good i used to say people that are just calling you crazy but yeah but that's a heckler that's good i think too like if somebody's out there that's kind of in the middle of this and they're struggling with it um you know at the beginning it looked like just a mountain of debt that we were up under and we ignored it and it was blocking our future but we didn't realize it and when we finally realized hey this thing's in the way we got to go over it you know and here we're standing on top of it and it's a freedom like none other yeah we're so excited for what the future holds

because now we can see it yeah well and and the math is the math i mean you you chip away you chip away you chip away it doesn't seem like you're getting progress. And all of a sudden, there's a break loose. It breaks loose, and there's this flood, and there you stand, and you're done. And then you know, wow, I can control this stuff called money, and now it's going to be a tool in my hands. I'm going to make it behave. Absolutely.

It does change the hope factor where there's a light at the end of the tunnel that's not an oncoming train. Well done, you guys. Well done. I'm proud of you. Thank you. Very good stuff.

Thanks for coming all the way up to Nashville to do your debt-free scream. Thank you for having me. Curtis and Sarah from the Atlanta, Georgia area, $80,000 paid off in 33 months, making $80,000 to $120,000. Count it down. Let's hear a debt-free scream. Three, two, one. hear a debt-free scream. Three, two, one. We're debt-free!

Love it! Yep. That's how you do it right there. Oh, man. Oh, man. That's fun. That is fun. You know, teachers were in the top 10 professions that have the probability to become

a millionaire an everyday millionaire when we did the study with chris hogan our research team and the outside research team that we had to help us structure the study of millionaires it became the largest study of millionaires ever done over 10 000 millionaires surveyed and then chris wrote it up into a book called everyday millionaires how ordinary people built extraordinary wealth and how you can too teachers just like curtis and sarah making 120 a year between the two of them both of them master's degree teaching in public school, were in the top ten of the professions that become everyday millionaires. Most millionaires, over 90%, did not become millionaires because of inheriting it. No, I'm nothing extraordinary.

I struggled in college college i got married young found a good job took advice to invest in my 401k as soon as possible says cheryl net worth 2.8 million we've always lived well below our means and we don't keep up with the joneses says genie 1.9 million net worth if a poor kid who came from welfare can become a millionaire, anyone can do it, Jimmy says. $2.9 million net worth. You want to learn more about this? The book's called Everyday Millionaires. It comes out in January. We've got it on pre-sale right now. Why would you buy it now? Because we're going to bribe you with $50 worth of free bonus items to do a pre-purchase. Everyday Millionaire's audio book is thrown in.

You'll get that in January. Everyday Millionaire's e-book is thrown in. You'll get that in January. You'll get a video lesson from Hogan on how to retire inspired and one from me called It's Okay to Be Wealthy. Those will come to you immediately. Get your copy at ChrisHogan360.com or DaveRamsey.com. St. George, Utah. Jace is on the line.

Welcome to the Dave Ramsey Show. Jace, how are you? I'm good, Dave. Thanks for taking my call. Sure. What's up? Quick question for you. Am I making a mistake by staying on Baby Step 3B for four to five more years,

not just for a down payment, but to actually buy a house cash before I start to invest in my 401K? How old are you? 37. Okay. Well, just run some numbers. You can jump on chrishogan360.com and use the RIQ calculator, the Retire Inspired Quotient Calculator, and look at your retirement IQ and say, okay, if I don't start saving for retirement until 40, but I don't have a house payment, and I invest a house payment, plus I fund my 401K, will I have enough? Okay. And the answer is going to be yes you will

okay but you have to you have to follow through with that i mean you have to continue to pay a house payment even though you don't have one only this time you pay it to yourself okay and then even the house payment plus like say my 15 percent there won't be 15 anymore because you'll be a baby step seven okay so go to baby step It won't be 15% anymore because you'll be a baby step seven. Okay, so go to baby step seven. Don't do 15% anymore. Yeah, you just max out and put everything you can in the 401K. What's your household income?

Depending on how much side work I pick up, 72 to 75 a year. Okay, all right. Well, I mean, if you're saving 20% of that, plus or minus a house payment, you're going to have a lot of money when you put that in the calculator from $40,000 to $65,000. That's 25 years of saving serious money. We're talking about saving, you know, $15,000, $20,000 a year. Which I can do that. Yeah, you can. Okay.

And then at my age, on my 401K, do I want the Roth 401 on my contributions? Yes, you want it to grow tax-free for sure. Okay. I wanted to ask you, I'm only sure it would be okay if I waited, like I said, four or five more years. Well, the only way you answer the question is, does it cause you to not be able to retire? And so I don't want people, you know, to stay out of their 401ks and miss it for very long. But you've got a big goal here, and your big goal is to not ever have a house payment. And, you know, what that does is if you turn that money into investing rather than consumption,

meaning you don't blow a house payment every month, you invest it instead, then the answer is no, you haven't waited too long, you're fine. But if you turn around and buy something with it every month, and you consume it all, and you only want to put 15% aside, then you might be making a mistake there. Tiffany's in Baltimore, Maryland. Tiffany, welcome to the Dave Ramsey Show. Hello.

Hey, what's up? I'm calling because I'm trying to decide if I want to file bankruptcy or not. How much debt have you got? I am in $51,000. What kind of debt is it? Loans and credit cards. I had a major medical, several major medical issues happen, and I had a disability in place,

and the insurance company is fighting me. It's been a year and a half, and they still haven't given me my money, and I wouldn't be in that situation that I'm in if they had given me my money. So I just got a lawyer, and they're just writing letters basically right now because I can't afford to get a real lawyer. So I'm just doing it through, like, prepaid legal. And so that's the situation I'm in. And it's really hard because I've always had things in place and all.

Are you currently disabled? Yes, I am. What's the nature of your disability? It's several things going on right now, several medical issues. So fibromyalgia and I just found out I just had a test on August the 20th, and I found out I have a liver condition. So what kind of debt is the $51,000? You said credit cards.

How much of it's credit cards? Let me see. Most of it is credit cards, and then I have personal loans. So for instance, one credit card company is $13,000. They just sent me a letter, and if I paid them $25,000, then they would, you know, I'm just going through them and calling them all and just telling them I'm having a hardship to see if they would lower how much I owe. Well, it doesn't do any good for them to lower it. You don't have any money.

Well, my husband's income, I was thinking, but it's still not enough. Oh. Well, that's part of the I was thinking, but it's still not enough. Oh. Well, that's part of the picture. And what does he make? About $28,000 a year and that much because he lost his job when I first got hurt. When I first got hurt. Are you still not receiving disability? Nope. I'm applying.

The insurance company had a nerve to tell me to apply for permanent disability through the state, but I've been in and out of work so much that now it's going to be really, really low. It's not even going to be what I could get because, you know, it goes by the earned credit. So I've been in and out, in and out of work. So at this point, I went to a disability lawyer, and so I'm trying to find out. He said that he can't really tell me much until they go in and see if I should

do a 7 or if I could do a 7 or a 13. And then if I did a 13, he didn't know how much they were going to pay. So I said, I'm going to give you $1,800 to figure that out, and then I might have to wind up paying, I mean, you know, still owing that money. I don't understand. You gave him $1,800 to file bankruptcy for you? I didn't give him anything.

Oh, good. I didn't give him anything. All right, so you're not paying on these credit cards or these loans today, right? No, not right now, and I'm not. I'm just paying what's in the bank. So where are you going to be? Let's pretend you just didn't pay those loans for a year, and they just sit there. Okay?

Worst case is they would sue you, right? Yes. And what are they going to get? You don't have anything. You don't have an income, and you don't have any assets, do you? Do you own something that's valuable? Well, I have, yes. I own two homes.

I have two homes i live in i have two homes and i looked at the equity and the other home um i have about 50 000 in that house i can't sell the house though because i tried to sell it before i bought this other house years ago why can't you sell it and and then it just because they're selling houses in the area like for $60,000 or $70,000, some of them, you know, the houses in the area are going for like $150,000. Why can't you sell your house? There's a lot of them in the area that are, say that again? Why can't you sell your house?

The one over the other house that I don't live in, that's the one I'm speaking of. It has about $50,000. Why can't you sell it? Because in the area, you have a lot of foreclosures, and people are selling them for $60,000. And you owe what? I owe $98,000. Okay. So sell it and get out what you can out of it and pay some of your bills.

And pay off my debts with that. Yeah, definitely, before you go bankrupt. When you get ready to file bankruptcy, they don't let you keep investment property with equity and then not pay your bills. That's not how bankruptcy law works. So the bankruptcy trustee will force the sale of that property and it'll be forced to be paid against your bills. And I think you can get enough out of that to go to each one of these. And you can probably settle $50,000 in your situation for around $35,000 if

you negotiate with them. But you'd need the money in your hand to do that. You don't have any money. So this is a way to get this all cleared up. And then in the process, of course, we've got to figure out how to get your income back up and get your household income working again because that's the root cause of all of this. And so long-term, where are you going to be in two years? Where are you going to be in a year? Where are you going to be in three years? What's your long-term game plan, and what are you doing about getting there?

That's got to be your next steps because you've got to get either disability income coming in. You know, if you do workers' comp, if you were hurt hurt you said on the job or you were i couldn't tell from the way you're saying that which way it was but you know any money that is due you or any money you can create you use to create your future kiddo and that's what we want you to do we want you to have a future and so you start looking out there into the future and saying how am i going to take the next steps to get there? But as far as filing bankruptcy, I don't think that's going to be advantageous to you when you've got this much equity in a property,

and I think you can clear up the debt by selling it. Selling it, taking the equity, using that money, that $30,000, $35,000 that's there, $40,000, whatever you get out of it, and settle that $51,000 in debts by negotiating with them. Get that in writing before you send them any money. But I think you can work your way through this. You can file bankruptcy if you want, but I think they're going to make you sell the house either way. That puts us out of the Dave Ramsey Show in the books. Our thanks to James Childs, our producer, and Kelly Daniel, our associate producer and phone screener.

This is known as common sense for your dollars and cents. It's called The Dave Ramsey Show. Hey, it's Kelly Daniel, associate producer and phone screener for The Dave Ramsey Show. Did you know that in 2017, Dave Ramsey Show listeners paid off $50 million of debt? That's pretty impressive, and it could be you this year. Keep listening for more inspiration.