The Ramsey Show - App - Is It a Good Idea to Buy Company Stock? (Hour 3)

Episode Date: July 27, 2018

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🎵 Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. You jump in, we'll talk about your life and your money. It's a free call at 888-825-5225. 888-825-5225. Wayne is with us in Jonesboro, Arkansas. Hi, Wayne.

How are you? Better than I deserve, Dave. Thanks for taking my call. Certainly so. About two weeks ago, I got sick and tired of being sick and tired, so I downloaded the EveryDollar app on my phone. Within about 15 minutes, I had a household budget set up that looks good. Here's where the question comes in.

I am a commercial driver driving a one-ton pickup, get paid by the loaded miles, so the more I drive, the more I make, but the more I spend business-wise, fuel, eating out, that sort of thing. Right. So I'm needing some help kind of setting my – I'm terming it as a personal budget and a business budget, and need some help kind of getting my business budget set in place because I'm still kind of, well, if I drive an extra day that week, I'm using more fuel. So I can't say I'm limiting myself to X amount of money a week for fuel. Right, right. You can't. So the difference in a business budget in a situation like that and a personal budget is that you have two types

of expenses in business you have fixed expenses and variable expenses fixed expenses are the insurance on the truck it doesn't change whether you drive 10 loads or one load it's fixed right um the um you know other things are Variable expenses would be anything that's wearing tear on the truck, the tires going down, you know, the gas bill. As you said, the more you drive, the more that cost goes up. And so what you can do is play with the numbers depending on how nerdy you want to get. You can develop what's called incremental profit above fixed costs. And all that means is this you say all right i'm gonna drive enough to cover the fixed costs and the first what's your normal week how many

loads let me just use an example well uh two loads a week okay grossing in netting between 12 and 18 okay and so if you went crazy you might could do three or four. Yes. Okay. So two a week is all. All right. And so, I mean, you double your time. If you did four, that would be very difficult to do and maybe even illegal, I don't know, with your drive time or whatever.

I don't know what your limitations are with a bin only on one time. But you see what I'm saying. So anyway, so you look at it and you say, okay i do two loads this is what i make and if i do three loads well my variable expenses go up but this is what i make um and so what happens is you see then that that extra load makes you and every load that you do after that is going to make you x because the gas is going to go up but the insurance isn't and so right what ends up happening is is you're going to make you X because the gas is going to go up, but the insurance isn't. And so what ends up happening is you're going to make what we call incremental profit. And so the profit you make on that third and fourth load, for that matter,

if the first load covers your basic fixed expenses, your second, third, fourth load all have the same. And if you look at it on a monthly basis even, you know, you could do it that way. But just, you know, your first load or so covers your fixed expenses and everything after that. Well, I'm going to, you know, I'm going to bill out $1,000, but my fuel cost is $400. So every, my incremental profit, once I've covered my fixed expenses is $600 in that example. You see how I did that?

And so every time I do an extra load once I've done that, it's about $600 because my fuel is always going to be this, my wear and tear is going to be this, whatever your variable expenses are. And then you can say that gives you real reason to work then because now you've set some goals and you're going, all right, I'm going to go do a bunch of dadgum work and pay this debt off over here in my personal budget. I'm going to make some money to do that.

But you're right. Your expenses don't go up more than your cost goes up because your costs don't go up more than your income goes up on that load or you wouldn't be making a profit to start with. Right. So we know you make a profit, and you make more of a profit on these later loads or runs because you've already covered your other fixed expenses, the ones that don't change no matter what you do. So just break your budget into two types of costs, costs that go up as I do more work and costs that are fixed no matter what.

An example around here is the more books we sell, the more our shipping bill goes up because we have to ship that book to you. And so my UPS bill goes up. And so we have to calculate that on a per book basis and so if we sell a hundred books in a sale or a thousand books in a sale um you know that you know we got to pay the rent anyway we got to pay the light bill anyway and but but our shipping cost is a variable expense and then the operations of the business are the fixed expense and you just have to run the incremental back out that way but you can do that it's uh and if you need some help get in touch with our Entrez leadership team, the all-access group and all that.

They can coach you through some of that and walk you through it. The good news is it's not that difficult. It's just one more layer of difficulty than the every dollar budget is, and it allows you to accurately project that. And it's really good information to have, by the way, because it lets you know if you're charging enough for these loads. Again, not only have you covered the fixed expenses, but in addition to that, you're making that incremental profit above your variable expenses, your fuel costs going up,

your wear and tear on the car, tires, brakes, that kind of stuff going up. Catherine's with us in Renono nevada hi katherine how are you hi dave it's i'm doing great how are you doing better than i deserve what's up so my fiance and i are both 31 we're getting married in a month and a half and my question for you has to do with how we combine our finances after we're married so right now we have been you know getting paid into our personal checking accounts and then transferring the money that we use for our joint living expenses into a joint checking account. And that's been working out really well for us thus far. But once we get

married, I'm wondering if we should do something different. So both of us have lots of extra money in our personal checking accounts that we're saving after we contribute to our joint checking account each month. And I'm wondering, should we change it such that our paychecks go into our joint checking and then whatever amount of money that's our personal discretionary funds we then transfer into our personal? I think so.

We're trying to build wealth. I think so, because here's the thing. The separate accounts represent separate lives, and you don't want to live separate lives when you're married. The preacher's going to say, and now you are one. He doesn't say, and now you're a joint venture. And so I think there's benefit to this. It makes you talk about and combine your budget,

because you can't run off and spend something he doesn't know about and you haven't talked about if you if it's all combined the way it is right now you got this slush money over on the side and you don't have shared goals for each of your independent slush money things you need to have shared goals now you could talk about it a lot and have extreme trust but i think it forces you to talk about it when you combine all of this activity into one account. It makes you deal with it. It makes you communicate at a really deep level. Because if you don't, you'll be bouncing checks.

And, you know, you can still have slush funds that you set aside, but they're dictated and they're not laying in a checking account like that. I wouldn't do it that way. I'd put it all in one if it was me. This is the Dave Ramsey Show. Can you believe this real estate market? Home shopping has become so competitive. There's a ton of new buyers in the market, and bidding wars are the new normal. Folks are under a lot of pressure to offer more money to get into that house. Don't do that. Get certified

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761 Old Hickory Boulevard, Brentwood, Tennessee 37027. Thank you for joining us, America. Sarah from Fort Worth, Texas, says the EveryDollar budget app changed everything when it came to paying off her student loans. For the longest time, she was making little bitty payments against her student loan debt. Felt like she was barely making a dent. But with every dollar, she started realizing, I got money! And she paid off $70,000 worth of student loan debt. Now she and her husband are saving for a home, all because they started using EveryDollar. It's free! I hear stories like this all the time.

Go to EveryDollar.com. You can set up your budget in about 10 minutes. It's free. Three million people are using it. What are you missing out on? You can get a download for your iPhone free. Download the app. Download the app for your Android free.

You don't want to miss this. Every dollar. Everydollar.com. Check it out. Patricia is with us in Charlotte, South Carolina. Charlotte, North Carolina, maybe. Hi, Patricia. How are you?

I'm doing well, Dave. Thank you for taking my call. Sure. What's up? I'm in baby step two. I owe about $5,000 on a credit card and $12,000 on student loans. And I have a rental property in Maryland. I owe about $105,000 on it.

And right now I think it would sell as is for $145,000 to $150,000. But I believe on resale I could get about $275,000, just looking at Zillow. And I wanted to know what you would think about... I'm sorry. Is it worth $150,000 or is it worth $250,000? It's worth $150,000 as is. Oh, so it needs a $100,000 renovation? Not $100,000.

I do want to rehab it so that it would sell for about $2,000, $275,000. My Lord, it must need a bunch of work. I'm thinking maybe about $30,000 to $40,000 worth of work. Something's wrong with your equation. Okay. Right now I think it would sell as is for $145,000 to $150,000. Yeah, and you think you can spend $30, it and make it $250 to $275. Something's wrong.

Something's wrong. I mean, I doubt that very seriously. You need to get some better information than Zillow, okay? You need to get online at DaveRamsey.com and click on one of our realtors there and figure out, you know, what is the house worth renovated, and what is it worth as is with a good, high-octane, high-protein real estate agent that actually knows the market right there at their fingertips. Zillow is not that accurate. And so I wouldn't depend on that to make this decision.

I'm guessing that the house is either not worth what you think it will be when it's fixed, or if the fixed price is correct, that it's worth more than you think it is today. I think these two numbers are closer together. That's what's throwing me off. Okay. Okay, my question to you is, I know I'm going to need the rehab done, but my question is, would you recommend me borrowing from my TSP account? No.

Okay. Never. I'm probably going to sell it as is, because I think you're going to find these numbers are closer together and the rehab is not going to yield as much as you think it is, and you're rehabbing a house many states away, and, man, that's just a recipe for disaster for you. And that's a large rehab. It's not a small project you're talking about.

That's a lot of work to be done here. So let's pretend for a second, let's use a couple of pretend numbers that are different than yours, okay, as an example. And that will help you make decisions later, okay? Let's pretend that the house is worth 140 today as is but if you spent 30 on it it would be worth 200 okay then i would sell it as is in a heartbeat okay because i but let's pretend that it's worth $275 after you fix it, but it's worth $190 to $200 today, as is.

I'd sell it in a heartbeat. Because you're not getting enough bump for all the hassle and pain in the butt you're going to go through with this renovation, and I really don't think the differences are that extreme. They're usually not. I bought a lot of real estate. And, you know, someone, you know, in a good market will give you, even if the house is rough, will give you a decent price.

You know, if they spend $30, they get $60 equity off of that $30. They'll do that. But usually it doesn't cost you the property's worth half which is what you're outlining roughly and so i think as you do get detailed numbers i would sell it as is because you're going to find that numbers between what it's worth today or what it'd be worth after spending 30 are too close together to make it worth fooling with, and you don't have the 30 anyway. So I'm very going to lean real hard in almost any scenario to selling it as is

where it is and getting out of it. That's going to be my general direction with your situation. You don't have any money, and you're going to have to borrow, and you're going to have to deal with a property long distance to do a renovation. Just nothing in this picture sounds fun. Richard's in Bloomington, Illinois. Hi, Richard. How are you?

Good. How are you, Dave? Better than I deserve. What's up? So I sell cell phones at Sprint, and I have two kids and a fiance, and we all live on my income, and I make an irregular income because I make commissions. And I was just wondering, once we are, we're almost done paying off our debt, once we are done paying off our debt, how would I go about choosing what price to buy a house at?

I agree with my mom. She says if you don't make six figures, you don't buy six figures. And definitely I'm not going to go that high, but I just don't know how much of my income I should allocate towards housing. How long have you been doing this? Six years. Six years? Yeah.

Okay. So what was your taxable income last year? Taxable income last year, for example, was I'm pretty sure $43,000. What was it the year before? Again. What was it the year before? The year before was right around $42,000, and then it dips below that. The year before that, it's down to, let's say, $39,000.

Yeah, so you're making $40,000 to $45,000 a year. Yeah. Pretty consistently. Yeah. So you buy a house based on that income. Okay, okay. And then you usually say 25% is around what you would spend on housing 25 25 of your take-home pay per month on a 15-year fixed rate mortgage okay not not 25 of your income

okay that would only be a ten thousand dollar house and that'd be that'd be really low yeah that's not what we're talking about but no, no, you figure out your take-home pay, which would, in your case, probably be $2,700 or so, and a fourth of that on a 15-year fixed-rate mortgage, and back that out. And then, of course, you add your down payment, whatever you've saved up, to the top of that, and that tells you what your price range is that you're looking at. So you're looking at a modest home. If that's your total household income, if your wife's working outside the home in addition to your $42,000, then you would add that together, obviously, your total household income take-home

pay. Matthew is with us in Cleveland, Ohio. Hi, Matthew. How are you? Dave, I'm doing wonderful. How are you today? Better than I deserve. What's up? Well, I've been listening to the show a long time, and so I...

I'm sorry, you're breaking up. Try again. No. My income, better? Barely. Your income is all I heard. What you got? My income today, it shot from thirty thousand dollars to eighty thousand dollars wow way to go thank you thank you it's all based off your principles so thank you um so my question is my parents were kind of um they weren't being nosy but they were just curious of what i'm making and i i've I'm doing well. But based off of what do you say, do I tell them what I'm making? I'm just wondering, and Mike, do I tell people what I'm making?

I'm just wondering what your philosophy on telling people your income. I very seldom do. There's not much upside to it. There's mainly downside. True. In my case, I'm paranoid about it because, you know, people already gripe about us, you know. Dave, you're getting rich off those poor people. You know, I get all that crap already.

So, you know, nobody hardly knows my income. But in a normal situation, a more normal situation where you're not quite in the spotlight like that, you know, I'm pretty closed-vest about it. Yeah, I don't know what the upside is to sharing your income. I don't know hardly any of my friends' income exactly. I've got general ideas about what some of them make, but I don't know of any of them exactly. Let me tell you a story about two families that are very much alike in a lot of ways. Both families have two working parents and a couple of young kids. Each has debt and has struggled to make ends meet.

But they're starting to make headway with their budgets and smarter decisions with money. They have dreams and plans, and the only real difference is that one family has the right amount of term life insurance and the other doesn't. Big difference. If one of the parents die, and that does happen, their well-being would be destroyed. Paying for the mortgage, utilities, food, and other bills would be impossible, let alone saving for education or retirement. That's why every day I talk relentlessly about getting term life insurance.

Just go to ZanderInsurance.com or call 800-356-4282 and see how inexpensive it really is. Be the family that takes those deliberate steps to be different and responsible. It really does make you the hero of your story, and it puts you on course for better things ahead. Thank you for joining us, America. We're glad you are here. Open phones at 888-825-5225. Sarah is with us in Richmond, Virginia. Hi, Sarah. How are you?

I am fantastic, Dave. Thank you so much for taking my call. Sure. What's up? All right. So I turned 29 last month. I am currently on baby step number two. I still have $37,000 left to pay off. My take-home pay is about $41,000 a year for my full-time job. And then my second job just varies depending on

what they need. I'm a nurse. I can earn between $5,000 to $10,000 a year depending on what they need. But I just feel kind of stuck in my life and I'm hoping you can give me some advice. Before I really got started on your plan, I bought a house, which was a really bad idea. So I sold that house. I moved back in with my parents because I'm really sick and tired of being sick and tired. I want to get rid of this debt. But, you know, it's not a great situation. I don't really get along with my mom. So I'm trying to figure out, or I guess I'm just looking for some reassurance

or for permission if I can move out and pay rent, even though I'm really knocking out this debt now that I live at home. Yeah. and pay rent even though I'm really knocking out this debt now that I live at home. So you said $37,000 in student loans? I have $22,000 left in school loans, $12,000 on my car, and about $3,000 in personal. Okay, good. And you're making, over time and everything, 60 to 70, it sounds like. Take home would probably be about 50.

Yeah. Well, I'm just saying, yeah. Your gross would be 60 to 70, yeah. Because you said 41,000 was your base, yeah. I would move out. Okay. It slows down your debt snowball some um there is something intangible that happens in a situation like you're in that will cause you to get out of debt just about as fast okay um you're going to lose whatever the rent factor is per month right uh but you gain um a solid emotional adult base to stand on

and there's something that happens with that um and let's just say it didn't and i'm wrong there's no there's no shift in that and it causes you um to get out of debt um eight months slower okay so what yeah so what you have a good life you're working your butt off you have a total goal you're knocking the goal out you're crunching through it get some roommates you know just go on the cheap on the rent because the cheaper you go on the rent but the controlling your own space thing at 29 as productive as you are is i mean for a short time you know a couple months or something being at home but you're talking about being there a while and it's a little bit untenable and so um i just i to me it's worth it if i'm you so a really quick follow-up question. I would like to eventually

get out of health care actually and I'm wondering when do you think is a good time to make a you know a career transition? Would you say be debt-free first and have some savings just in case? What would be the transition? Well that's part of what i'm trying to figure out but um i'm really passionate about animal welfare and i'd really like to work for a non-profit or something like that and of course you don't really make much money in that sector let's do that as your volunteer hobby until you figure out a way exactly because you don't need to take a pay cut and have to play with puppies right uh it doesn't work okay um i wouldn't i mean go go volunteer the humane society and stuff and help people with you know with animal rescues and

things and whatever whatever it is that that is uh you know that fits in the category of what you're talking about rather than necessarily making your entire uh career shift unless you can find a way to shift the career in a non-traditional way that does pay okay and i always want to always want to shake it up and say i can do that i'll give an example okay this is an extreme example i'm basically a teacher but a pretty well paid one so you know when people say i'm a teacher uh so you can't make any money teaching i always but a pretty well-paid one. So, you know, when people say I'm a teacher, so you can't make any money teaching,

I always go, well, I do pretty good. So teacher doesn't necessarily mean you're in a third-grade classroom. There's nothing wrong with being in a third-grade classroom. But, you know, people say, well, I make $100,000 a year, but I've always wanted to be a teacher. Well, be a teacher that teaches something that makes you more than $100,000 a year then. And so maybe that's what I'm saying. If you start looking at the animal welfare through that lens, and not that you're trying to necessarily profit off of a horrible situation or something,

but if you can bring service in scale to animal welfare something, you you might make 300 a year i don't know the pet business is a multi-billion dollar business i know that yeah and so uh and it's not all evil i mean some of it is because people care so much for their pets so uh you know veterinarians for instance make great money so um the better ones do so anyway that's a way to look at that and um you know but i i think if you're gonna move down in income i would wait number one and uh number two if you're gonna spend some money on some retooling some education or something to keep from moving down an income i'd probably you know make sure you got the money to pay for that so let's spend uh the next little next few months getting this current mess cleaned up.

Yeah, I'd move out for the dignity aspects of it while you're doing that. Good question. Thanks for calling in. Carl's with us in San Antonio. Hey, Carl, how are you? Hi, Dave. How are you? Better than I deserve.

What's up? Well, Dave, I'm 30 years old, and I just graduated college, and I've got my first professional job. Cool. What was your degree in? Marketing. Good. Who are you working for? I'd rather not say.

Okay. Cool. So, anyway, I'm trying to get my retirement plan situated, and I decided I was going to max out my Roth IRA and then do a Roth 401k to the 4% company match. And then the last little bit, that brings me up to about 12.5%. Your own baby step four. Yes. Okay.

And so the company offers the ability to purchase stock up to 3%, and they match that 100%. Oh, nice. So I was wondering if you thought that would be a good idea, because I think you don't really like purchasing company stock. No, I don't, because people get too heavy into it. As long as you stay out of it too heavy. I don't buy any single stocks, but the recommendation I use is never have more than 10% of your nest egg tied up in single stocks if you're going to, particularly if it's with one company. But you're getting a nice bump there if they're going to match you in company stock up to three.

I'd do that even if you rebalance your portfolio every so often and drain it back out. How long do you have to hold it for? You're vested in what they give you. You're immediately vested. Wow. So you could take the match and flip it the next day? Yes. Wow. Okay.

Yeah, I would take some of it in the mix that you're doing. You got this thing on the run. You're doing really well. No debt. Got your emergency fund in place. Doing your 15%. And if you want to put some stock in the mix that's fine just don't let it look up and go you know like i had a lady with a million two in her portfolio 900,000 of it in procter and gamble stock and procter and gamble stock dropped 30 you know i don't want you in that world it's just i want to be more diversified than that it's because she worked

there her whole life you know that was years and years and years ago but i just don't want you in that world. It's just I want to be more diversified than that. And it's because she worked there her whole life, you know. That was years and years and years ago. But I just don't want somebody to get hammered, you know. So, and what happens is you get a, you know, you got all the good news about the company coming across your desk. So it's easy to stay enthused about investing in that company. But there's things you don't know, too. And so you just don't know all the details about the environment that you're playing in and everything. So no more than 10% of your nest egg.

Rebalance every so often. Take that match. I probably would do it to take the match if I were in your shoes. I wouldn't because I don't buy single stocks in any circumstances. But it's a good deal that you got there, and there's nothing wrong with it. Good question. Thank you for joining us. This is the Dave Ramsey.

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These attorneys know how to stop collection agencies from bullying and threatening you anymore. CollectionBully.com. Go to CollectionBully.com today. That's CollectionBully.com. Thank you. Our question of the day is, our scripture of the day is Luke 631. As you wish that others would do to you, do so to them. Nancy Reagan said, I'm a big believer that eventually everything comes back to you. You give back what you give out. Savannah is in Charlotte. Hi, Savannah. How are you? I'm good. How are you, Dave? Better than I deserve. What's up?

All right. So I am 22, and I'm about to start my first job out of college. And the company, there's a lot of travel and job involved with the job and the company requires that i pay out of pocket for my travel expenses and then they reimburse me and they suggest i get a credit card to pay those expenses first but i don't want to do that so how should i work around that um do you have any money yeah do. I'm going into baby step four. Good. Good for you. Well done.

Okay. Well, how large a company is it? It's a medium-sized company. It's something in 250 employees. Okay. 250 employees. All right. Well, why don't you talk to someone in leadership and explain to them that you don't borrow money,

and I don't use credit cards, so I won't be getting a credit card. And I really don't think it's right that I'm using my money to travel for your company. And so I'd like for you all to furnish me a card. I don't think that'll work, but I want you to try it with humility and kindness, not being a jerk about it. I'm not suggesting you do something, lose your job, or that you have an attitude or something. Just go in there and just go,

Listen, hey, I'm 22. I just got out of college. I am not borrowing money. I'm not going to get into debt. So you guys got to help me, okay, because I'm not taking out a credit card so is there any way you guys could just furnish me a card because i'm by the way all this stuff i'm doing i'm doing for you i'm not gonna put anything on the card that isn't company

you know and if i do you can fire me you know but i don't think they'll do it but i would ask okay okay if that doesn't work then what we suggest to people is there's only two other options. Okay? One is get a different job, which is unreasonable probably. The second option is for you to get a separate checking account just for travel, open a debit card on it, and put the amount in there that your monthly travel expenses are going to be. And you only have to prime the pump, so to speak, one time. And so what do you estimate your monthly travel is going to be?

Do you have any idea? Well, to start out, I'll be doing a lot of training, so I won't be traveling consistently for about six months. So I don't know what the monthly expenses will be. Okay. Won't be much then. Okay. Yeah.

But let's just use use is it monthly that they reimburse um it's every paycheck so every two weeks okay all right so really all we have to worry about is two weeks worth of travel so let's pretend two weeks worth of travel was a thousand dollars okay okay if you put a thousand dollars in the checking account or twelve hundred dollars in the checking account and you use your debit card and you use $1,000 of your money, you turn it in, they give you a check for $1,000, you put the $1,000 back in this account. You see what I'm saying? You only had to put it in there one time.

And you're using your money, but they're reimbursing you, which is what you're doing, by the way, when you use a credit card. Yeah. I mean, what if they didn't pay you? Well, you'd have a credit card debt. That was my thing. You'd have a credit card debt. What if they don't pay you?

Well, you've lost the money. You know, guess what? You've lost the money either way. That's the weird thing. So I don't have anybody on my team that I ask to travel with their personal money. Okay. We always furnish the money for them to travel. We either furnish them a debit card from our company if they travel a lot,

or we advance them petty cash to pay for the travel, and we pay for the expenses. And they can't turn in anything on that debit card, obviously, or on that petty cash receipt that isn't, you know, I'm not buying their shampoo, okay? You know, I'm not buying a dress for you while you're on the road. That's your problem. But I'm talking about usable company expenses for travel. And, you know, that's what you limit this to. Be very, very careful that you don't use it for anything that isn't reimbursable.

And then the money will always go right back into the account. And the only thing you're at risk is two weeks worth of travel. And that works really well for people that travel a lot. And the debit card, by the way, on the road will do everything your credit card will do. I've heard people say, well, it doesn't work internationally. I just returned from three weeks in Europe. I just got back. I didn't have one single episode, not one negative episode with my debit card not one everyone took

it just like a credit card because guess what that's basically what it is except it's using the money out of your account britney's with us in chicago hi britney how are you hi dave thanks for taking my call good how can i help my husband and I saved up $100,000 as a 20% down payment on a home. Wow. And we're planning to purchase in about a year. Awesome. But by the time we plan to purchase, we'll probably be able to save up another $100,000. Great.

In the meantime, we've considered taking the money to buy a rental as an investment property in a different area from where we want to live. Do you think this is a good idea or is it something else you suggest we do? No, you're doing great. No, you don't need to buy investments. You need to buy a house. And then get your house paid off quickly. What price range home are you thinking about buying? $400?

Probably $400,000, $500,000. Yeah. And you're coming up with $100 a hundred every every year what do you guys make yeah well um my husband uh makes 130 but i will start working um in october and we'll be making about 310 by then ding ding no pay just pay cash for your house let's get the house out of the way. And then you've got no payments in the world and a $500,000 income? Oh, my gosh. Or $450,000 income? Oh, my gosh. You know, you're going to be able to do anything you want to do.

No, pay cash for your rentals after that, and your wealth will just explode because of your income. What are you, a doc? I'm a lawyer. A lawyer. Okay. All right. And must be some kind of cool specialization.

What are you doing? That's a nice job. I'll be doing patent law. Ah, very good. Very good. Good for you. Obviously brilliant, kiddo. Way to go.

Thank you. Thank you. So, well, congratulations. And you don't have any student loans? No, no debt. No debt at all. How did you do that? Well, through scholarships and savings and working.

How did you find scholarships for law school? People always ask me that. I looked online for an external scholarship, and I got a scholarship within my law school as well. Okay, all right. And how much of the – I'm being nosy because people are always saying, oh, you can't go to law school, but you did it. I mean, you're amazing. This is an impressive story.

So how much of your law school was paid for by scholarships? I would say about 80% or so was paid for through scholarships. Before I started law school, I saved up a good amount of money because I was working. I knew I wanted to go to law school. And then while in law school, I worked at law firms, and I used that money to pay the rest. Did you just slay the LSAT or something? I mean, did you have some kind of unbelievable grades? Well, yeah, I guess so.

It was an academic scholarship so yeah okay because i mean yeah you must be just brilliant okay wow did you finish the top in your class uh no i didn't um probably right around the top third maybe okay all right not bad excellent well i'm proud of you that's awesome what a great story. Thank you. At 410. Man, that's just our 310. I'm sorry.

That's what you said, right? 310? 310, right. Yeah. Wow. Zoom, zoom. Well done. No, just pay cash for your house.

Okay. What that does is it sets you on such a solid foundation, and you make different decisions then. You're going to have plenty of investment property. Five years from today, you're going to have so much rental property, it'll scare you. You'll probably got more than you want, you know, because you're going to be making so much and be able to do it, and you'll be able to do it all with cash.

And so, well done. Wow. Very impressive. Thank you so much. Very cool. Good stuff. Well, that puts this hour of the Dave Ramsey Show in the books. We'll be back with you before you know it.

In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. Hey, guys, it's Kelly Daniel, associate producer and phone screener for The Dave Ramsey Show. Hey, this hour of the show is over, but you can find our podcast on iTunes or Google Play. We're everywhere, for free, here to serve you. Okay, I need you to listen to this, because one normal routine that everyone does can cause total chaos in your life. Folks, I'm talking about the simple act of using Wi-Fi. When you're on Wi-Fi anywhere in public or at home, you're at risk of hackers easily seeing every site you visit and search you're doing online. It doesn't matter if you're doing it on your cell phone or your laptop. I'm not telling you this to scare you. I don't

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