The Ramsey Show - App - Learn to Live With Less and Love Life More (Hour 1)

Episode Date: July 26, 2018

The show about you

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. Rockstars in the house, people. Yeah, the minimalists are with us. Joshua and Ryan, famous guys, famous documentary, number one best-selling books, have taught a whole bunch of you to live with less stuff, to find a cure for your stuff-itis. And they've also modeled it. These guys are amazing.

The Netflix documentary is just enthralling, and it has done so well. They've been on everything new york times wall street journal boston globe forbes time abc cbs all the alphabets it's all there even in pr so they're there and uh they were in town rachel did a uh their podcast with them last night rachel cruz one of the ramsey personalities my daughter did and she said they're coming over the office you got to get them on the air and of course we got to get them on the air these guys are big time. Welcome, guys.

It's good to have you. Oh, man. Thank you so much. What a dream come true for us, Dave. Thanks so much for having us, man. Same for us, man. You guys have been tearing it up out there. We're so proud of you. And you've helped so many people.

Approximately 20 million people have been impacted by this message. By the way, if you are a minimalist follower already, which if you're not, that just means you live in a cave somewhere so get out more you should get out more but if you're if you are and you want to talk to these guys you got a question or comment for maybe you just want to tell them thanks we're going to take calls in just a few minutes so the phone number right now you can get online and tell kelly you want to talk to these guys it's 888-825-5225 that's 888-825-5225. That's 888-825-5225. Now, I don't know what percentage of our world knows every detail about you guys, but it's a bunch. The overlap. It's quite a bit.

Because we tell people to do beans and rice, rice and beans, which is a form of minimalism. No minimalism. You know, lower your lifestyle, stop your spending so you've got money to get out of debt. And that intersects with your all's message so much that a ton of our tribes, your tribe and my tribe, intersect, don't they? There's a ton of overlap. I mean, I think you are talking about the same thing that Josh and I are talking about. And that's really about how can we control these impulses that we have on a daily basis. And when we let these impulses run amok, especially with our finances,

we can find ourselves in a world of hurt. So, I mean, for Josh and I, our main mission really is to help people realize, well, a couple things. A, you don't need nearly as much as what the advertisements tell you that you need. And that you can be content without chasing that status quo American dream.

And really, when someone feels like they have enough, when they feel secure enough, that's when they start to look outward. And that's when they start to see what they can do for their community, what they can do for their friends and family. And that's the one thing we really love about you all is giving. I mean, in the EveryDollar app, that's the first line item that you have uh you suggest people budget for is giving and ultimately josh and i were trying to help people be content enough to where they feel like they can they can give beyond themselves in a meaningful way and you have that contentment is a big deal you know 25 years ago when we started teaching this stuff we told people then and it's still true today we live in the most marketed to culture in

the history of the world and marketing in and of itself is not evil right but the very essence of marketing including when you're selling a book or i'm selling a book is to plant some level of dissatisfaction discontentment until i get that item or the i what the item is going to bring me and then i feel or the experience it doesn't even have to be an item it could be a vacation but but when i get that then i'm supposed to be okay and the problem is the messages are exceeding the gathering of of these things and there's no way that we don't live in the most discontented culture so i think that's what you guys are tapped into and it's just gone zoom zoom congratulations thank you so proud of y'all man yeah it's wild when you think about

dave we see over 5,000 advertisements a day. I mean, that's over a million a year. They're in the bathroom. It's crazy. You can't go to the bathroom without an advertisement. It's ridiculous. So tell people that don't know, for the uninitiated, what is minimalism? So the way I think about minimalism is it's the thing that gets us past the things so we can make room for life's most important things,

which actually aren't things at all. The average American household has more than 300,000 items in it. And that's not me going around counting other people's stuff. LA Times reported that a few years ago. And it's not that things are inherently bad or evil, just like you talked about marketing. When marketing is done really well, you're being polite and saying, hey, I might have a solution to a problem that you already have.

We do kind of have a problem. When we moved when I was a kid, one of the boxes, you know, you label the boxes you pack stuff in? Yes. Was labeled seldom used kitchen items. I mean, that is the world we live in. That's rather specific. And I think the thing is, with all those items, they actually get in the way of what a more

meaningful life can be. We make these aspirational purchases, like, oh, that looked really great on that mannequin, or that car looked really great in that ad. I think it's going to add value to my life, but is it really going to add value? So for me, minimalism was a way for me to figure out what are the things that are truly going to add value to my life, that amplify, that augment my experience of life, and then get rid of those things that are just in the way? What is that excess? I mean, I look at our items as there are three different types of items. There are the essentials. We all have the same basic essentials, right? We all need clothing and shelter and food. And then there are non-essentials, the things that truly add value to our lives, things that will make our life better when we have them. And there's the

third category, and that is junk. That is the seldom used kitchen items, right? And seldom used actually means just in case. I think those are the three most dangerous words in the English language, right? It means I'm going to hold on to these just in case I might need them someday and some not. It's a line of somebody that has the psychological disorder of hoarding. Yeah. They use that same line.

And in a sense, we all have a little bit of that disorder in this culture, don't we? Well, I was a well- Just in case. I was a well-organized hoarding. They use that same line and in a sense we all have a little bit of that disorder in this culture, don't we? Just in case. I was a well-organized hoarder. You came to my house I wasn't a candidate for the TV show because all of my stuff were in all of these bins and boxes and ordinal alphabetized system of stuff that I was never going to use.

In my basement, in my second living room, in my attic, all of these things. I had built this mausoleum of stuff called a suburban house and decided, well, I think these things are going to make me happy. Well, maybe the next thing will make me happy. Maybe the next thing. But, of course, you get that next thing, and the ephemeral pleasure, it doesn't last far past the checkout line.

It turns out the VHS collection probably isn't going to work out. Someday, just in case. The cassette collection is probably just not going to work out. That's right. So what led you two into this? I know the story, but I'll throw you the other hand pitch. It kind of started with me. We both grew up really poor in Dayton, Ohio, so just right up the road here in Dayton.

And, you know, we thought we were so unhappy because we didn't have any money growing up. I was on food stamps and government assistance, and there was a lot of alcohol and drug abuse in the household, a lot of bad decisions. And the reason we were so discontented had to be because there was no money. So when I turned 18, I got the entry-level corporate job,

and I spent the next decade climbing the corporate ladder. And by my late 20s, I had achieved everything I ever wanted, six-figure salary, the luxury cars, plural. I don't know what the plural of Lexus is, but... Lexuses? Lexi? Lexi. Lexi.

That's it. I had all this stuff, the closets full of really expensive clothes that I seldom wore and all of these things. But, of course, with that American dream came my version, which was the American debt. I made really good money, but I spent even better money. And that wasn't a dream at all. I realized this was someone else's dream that they had conjured up for me.

And this template wasn't necessarily working anymore. The Minimalists are our guests, Joshua and Ryan, this half hour. If you want to talk, the phone number is 888-825-5225. Kelly's keeping the lines open just for you guys to jump in and have a chance to talk to them. If you haven't seen the documentary, be sure you look it up. If you haven't followed them on social, you should. Minimalist.com will lead you to everything you want. Very highly rated podcast, and you can see why.

We're going to talk more in this next segment coming up. Stick with us. This is the Dave Ramsey Show. Hey, this is Dave Ramsey. You know, most of us have gotten behind on our bills at one time or another. That's nothing to be ashamed of. It happens. And many of us know the embarrassment that comes with those harassing calls from collectors. Some of these guys are just scum. But then there are the collectors that are just plain crooks. These are the guys that take it a step further and they violate the Federal Fair Debt Collection Practices Act on a daily basis.

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collection agencies from bullying and threatening you anymore collectionbully.com go to collection bully.com today that's collectionbully.com Joshua and Ryan join us, the minimalists, for this half hour. If you want to talk to them, the phone number is 888-825-5225. So Joshua was telling his story. He was doing the corporate ladder, gathered up all the stuff, and the stuff doesn't do it for you. You buy enough stuff, just more stuff. I tell people all the time, you eat enough lobster, it just tastes like soap. There's just only so much of this

stuff you can do, right? And then it reaches a point of satiation in your psychology, and it just doesn't do it anymore. You figure out, you know, there is no rider truck following a hearse. The stuff is not going to do it. So what was your story then, Ryan? How'd you get here? So for me,

you know, it's weird, Dave. If you were to have told my 18-year-old self what my 28-year-old self was going to have, I would have been the most excited 18-year-old. Like, wow, I'm going to be buying a new car.

Well, you know, borrowing money to buy a new car. I'm going to be able to buy a new car every couple of years. I'm going to be able to get a 2,000-square-foot home with two living rooms. I'm going to have a to get a 2,000 square foot home with two living rooms. I'm going to

have a good job at a respectable corporation and I'm going to be so happy. And I did have everything that I ever wanted at 28 years old, but I didn't have happiness. I had a lot of discontent. I had a lot of debt. I was miserable and I didn't really know which way was up. And I remember seeing Josh make these changes in his life over several months to the point where he started making... I remember what really, really caught my attention. He started giving our boss rules when our boss was allowed to contact him. Hey, man, I'm not going to answer my phone after 9 o'clock. If it's Christmas Eve, it's 6 PM and I'm at the dinner, I'm going to ignore your call because it's Christmas Eve and I'm spending time with friends or I'm spending time with family.

And that type of talk was kind of sacrilegious. So I went to Josh and I'm like, dude, what are you doing? Like, what is going on with you, man? Why are you so happy? And that's when he introduced this thing called minimalism to me. And not only that, he showed me a whole community of people who called themselves minimalists. And it was a wide range of people. There was a guy named Colin Wright who was traveling the world, carrying everything he owned on his back. I like having a kitchen table, so that wasn't like the most appealing life. But then there's a guy named Leo Babalza. He had eight, or I'm sorry, he had six kids, him and his wife living out in San Francisco.

There was a gal named Courtney Carver. She was living in Salt Lake City with her teenage daughter. But what I realized is that there are these people living meaningful lives, and they're using this thing called minimalism to do it. So I got really excited. I looked at Josh. I said, all right, man, I'm in. I'm going to be a minimalist.

Now what? I didn't really know where to start. You're going to get rid of your stuff. Right. So we started with, I didn't want to spend several months packing up like Josh had. I mean, that was a great approach for him, but I w you know, I just needed, uh, some faster results, typical American attitude. Right. So, uh, we came up with this crazy idea called a packing party where we decided to pack all my belongings is if I were moving and then I would unpack only the items I

needed over the next three weeks. So Josh came over and he literally helped me box up everything, my clothes and kitchenware, my towels, my TVs, my electronics, my frame photographs and paintings, my toiletries, even my furniture, everything. We literally pretended like I was moving. So after, uh, you know, three weeks of unpacking, you can imagine those first things. I'm unpacking some clothes for work, a toothbrush, some toiletries. Well, after those three weeks, I had 80% of my stuff still sitting in those boxes, just sitting there unaccessed. And I had this huge, just light bulb moment about how I have spent this past decade of my life accumulating tens of thousands of dollars worth of things to make me happy, and they were not doing their job.

So I decided to donate and sell all of it, and that's really where TheMinimalists.com started. It was with that 21-day packing party story. And what happens, I think, with people that are following you guys is that some of them do it by degrees in that they just limit. Yeah. They take their life and just cut it some. Yeah. And so that's a level of influence. And then some of them go down further than you.

Like, for instance, the guy from The World that's in the documentary that you mentioned, he's down to just two bags of stuff and is on his shoulders. Everything he owns is on his back. Right there. And at one point you were like 288 items you were yeah yeah just uh that was sort of a i realized that there was this weird sort of competition going on in this this whole minimalism space where i was like because i think minimalism is not about deprivation right no that's what i was getting towards because if that's a contest i'm not going to win because i saw one guy who owned 50 items and someone else

was like well no i own 45 and there's someone else was like, well, no, I own 45. And there's someone else who owns 15. And eventually, you're just naked and running in the street. That wasn't appealing to me. I'll tell you what, Dave. If you came to my house right now, we have a five-year-old daughter. So my life looks appreciably different now at age 37 than when I was 28 and I first discovered minimalism. And so you came to our house now, you wouldn't say,

oh my goodness, this guy's a minimalist. You'd probably just walk in and say, wow, they're pretty tidy, this family. Yeah, they're simple. Yeah, yeah. It's so simple living. It's because we don't own much, but everything we do own adds real value to our lives.

Each of our belongings, like my car, my clothes, my kitchenware, my furniture has a function. It changes the way you purchase something. Yeah, absolutely. You start looking at it like my car, my clothes, my kitchenware, my furniture has a function. It changes the way you purchase something. Yeah. Absolutely. You start looking at it like, really? What's the real cost of this? Because sometimes there's a price tag.

The price tag says this widget's $100. But what does it also cost to fuel the thing, to change the oil in the thing, replace the batteries in the thing, store the thing, clean the thing? The more stuff you own, the more repairmen you have to know. Yes. Then it ends up owning you. Yeah. It piles up, piles up. Very cool. All right, let's jump on the phones and see who's out there. Looks like Kansas City's calling in, and Elizabeth is with us. Hey, Elizabeth, your question for Joshua and Ryan. Hey there. Hey, Dave, I just want to say thanks for all that you do, and I'm so excited that Ryan and Josh are talking about this. This is so needed

in our society. I'm a single mom and I wanted to know, I have two kids, a 10-year-old and a 15-year-old. Their father is a very successful attorney and gives all kinds of fun, expensive gifts, and they're actually going on a trip right now overseas for two weeks. So you've got Disney dad in the background. Yes. So what's your question? How can I influence my kids towards minimalism and wholeness. It doesn't come from things.

What do you guys think about that? You know, I first embraced minimalism. I had this pivot point. My mother died. My marriage ended both in the same month. And these two events forced me to look around and start to question what had become my life's focus. And Elizabeth, I realized that I was focused on the wrong stuff. And so when I started to simplify my life,

it took me about eight months, I radically simplified. People around me started noticing something was different. Ryan came to me and said, hey, why the heck are you so happy lately? People at work were saying, you seem less stressed.

You seem so much calmer. Why aren't you being as mean as you used to be? And it opened up the door for me to talk about this thing because I never jumped up and said, look at me, I'm becoming a minimalist and you need to be. And it opened up the door for me to talk about this thing because I never jumped up and said, look at me, I'm becoming a minimalist and you need to too. It's not about the proselytizing of minimalism. It's about showing people what the benefits are. So I always start with a question, how might your life be better with less? And we do that with our five-year-old daughter right now.

Also, how might your life be better if you're giving instead of just taking all of the time? So I think whether we're dealing with adults or kids, we have to talk about what are the benefits of simplifying for you? Because I think they're different for each of us. For me, it was just finances at first. But then it was rediscovering time for my creativity and for other values in my life that were important. But what are the benefits for you, Elizabeth? And then what are the benefits for your kids? Yeah, just talk it through with them.

And you just, the thing is, what do you, what do you, how do you define what's important? That's part of it, isn't it? Absolutely. It's just, you know, we're redefining what's important. Yeah. The gathering of stuff is not what's important. Right. And it's not a lack of stuff no it doesn't have to be

that you you know you're not a bad minimalist if you have over 104 items i mean you can't there's not a market that it's it's a mindset that says stuff is not where i'm going to draw my happiness stuff is not where i'm gonna draw my meaning is that right exactly i'm so glad you bring that up because the packing party you're right like me packing up my stuff and being confronted with 80 percent of my possessions it wasn't you're right it wasn't the packing up of you're right. Like me packing up my stuff and being confronted with 80% of my possessions. It wasn't, you're right. It wasn't the packing up of the stuff. It wasn't getting rid of the 80% of stuff that, that was freeing. What was freeing is reprioritizing what my priorities were. Because up until that point, if you would have asked me, Hey Ryan, what are

your priorities? I would have said, well, uh, my health, that's a major priority, but I was eating fast food every day. My finances. I want to retire. But I was spending money on all that stuff. And what I realized is my priorities, it's not what I say I do. It's what I actually do. Joshua and Ryan, thanks for hanging out. The Minimalists.

Man, it's been awesome. We are slightly cooler than we were a few minutes ago. Get out of here. Thanks so much for having us. Hey, you guys, check out their podcast, The Minimalist. It's one of the top podcasts in the world. TheMinimalist.com for all the information you need. I follow them on Twitter.

You can. Check all of their stuff out. Check the best-selling books out. You won't be sorry you did. 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.

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Call 888-LOAN-200 or visit churchillmortgage.com. This is a paid advertisement. NMLS ID 1591. NMLSconsumeraccess.org. Equal housing lender. 761 Old Hickory Boulevard, Brinkwood, Tennessee 37027. In the lobby of Ramsey Solutions, John Mark and Crystal are with us. Hey, guys.

How are you? Fantastic, Dave. Good to have you guys. Where do you live? Tyler, Texas. Tyler. I love it. And all the way up here to do a debt-free scream.

Yes, sir. Fun. How much have you guys paid off? We've paid off $398,000. Woo-hoo! Look at you! And how long did this take? Eight years and nine months.

All right. Very good. And your range of income during that eight years and nine months? $100,000 to $275,000. My goodness. That's a jump. So what do you guys do for a living? I'm a financial advisor. Ah, very good. And I'm a stay-at-home mom.

Very cool. Good for you guys. So I'm guessing eight years and almost $400,000 that you paid off your house. Yes, sir. Woo-hoo-hoo-hoo! I'm looking at weird people. Way to go, you guys. How does it feel to not have a house payment? It feels incredible.

I bet. It's awesome. Wow. What's the house worth? $360,000. All right. Fun. So $398,000 was a bunch of other stuff in the house.

What was the other stuff you paid off? We paid off a student loan, credit cards, and two cars, and of course the house. Yeah. Very cool. Good for you guys. So what happened eight years and nine months ago that put you on this journey? Well, in 2008, John Mark's income was cut in half because of the recession. And we had built a new house, been there two years. And then we received a letter that we

were $10,000 short in our escrow. Oh, timing. Yeah. And we also had a tremendous amount of debt. I think it was around $100,000. And so we just didn't have the cash to pay that. We didn't know if we were going to lose our house. And so we were just desperate. And I remember just praying to the Lord, asking him to help us to get out of this deep, deep debt. And we came across your book, The Total Money Makeover, and read that. And we also took FPU.

And it just gave us hope that um that we could do it cool so um with the financial being a financial advisor and a financial background when you saw this stuff your shields had to go up you had to go oh i don't know what'd you think john mark dave they did it first yeah mine would have would have. Right. Then what happened that caused that to be overcome? I don't know. Just like Crystal said, God just was at work in our marriage, and we just jumped all in, and we decided to do this together. And we knew this was the right thing for us to do. Yeah.

And during this time, your income has almost tripled, and so I'm guessing probably a few of your customers that you advise over the years have heard your story then. Yes, sir, they have. Yeah, when you start thinking different like that, it changes things. Absolutely. Very cool. Congratulations, you guys. What do you tell people the key to getting out of debt is? I think the first thing is just to have hope.

You know, if you don't have hope, you're stuck. But when you have hope, you can move forward. That's a big deal. And then I also think the budget is definitely key in the envelope system. After we paid our consumer debt off, we ended up falling off the wagon, and we quit doing our budget. Uh-oh. Yeah, and, you know, after living that way for a while,

we just didn't know where our money was going. We didn't feel peace, and we were like, we've got to get back on this. And so we did and started doing the budget and the envelope system. Stuff like the budget and the envelope system, it's not taught in the courses that John Mark and I took in finance. We're taught all these other things that are sophisticated corporate maneuvers and measures of risk and statistics and all these other things. But something as simple as doing a budget. I would wager, John Mark, I mean, what percentage would you guess of the financial advisors that don't have a budget?

Almost all of them. Most all of them, Dave. Yeah. Most people don't. And it's like the cobbler's kids have no shoes kind of thing. Absolutely. Yeah. And I was no different.

I mean, I had all the licenses and letters after my name that said I was supposed to be a money expert. And I had no money and no budget and no plan and no envelopes. And my wife didn't know what was going on. And some of the basic common sense stuff. I mean, it's just amazing. It really is. Well, congratulations, you guys. And you brought the kiddos with you, right?

We did, Dave. So what are their names and ages? Hannah Grace is 15. Mm-hmm. Mark is 14. Mm-hmm. And Hadley is 10. Okay, cool.

So they've grown up over the last almost nine years watching this unfold, right? They have. Yeah, so this is very cool. You've changed your family tree. Yeah. Congratulations, you guys. Very proud of you. We got a copy of Chris Hogan's book,

Retire Inspired, for you. And that's the next chapter in your story. If you're not millionaires already, you probably are, then you will be soon. You're well on your way. Way to go, you guys. Very, very proud of you.

All right, John Mark, Crystal, and the kiddos. $398,000 paid off in eight years and nine months, making $100,000 up to $275,000. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free!

Great job, you guys. Great job. Well done, well done, well done. Open phones at 888-825-5225. That's 888-825-5225. Lisa is in Chicago. Hi, Lisa. Welcome to the Dave Ramsey Show.

Thanks, Dave. I just want to thank you. I appreciate all you do. My husband and I are on Baby Step 5, 6, and 7. Cool. And we're one of the lucky winners from Monday to be first-time coordinators of FPU. We just had a question of how do you approach individuals

who don't know your practices? Not many people are familiar or as familiar with you in our area. How do you sell them like do you have an elevator pitch that we could use to have a successful class sign up well um basically what financial peace university is it is god's ways of handling money and i assume you're teaching this in your church right yeah okay and so i would start with that that god you know it's shocking to some people to find that the Bible has a lot to say about money.

There's over 2,500 scriptures dealing with money and possessions. And the cool thing is when you learn how to handle money God's way, several things happen. One is your stress goes down and your security and your protection goes up. Two is your relationships are improved. And three is your connectivity to God is improved. And that's how I would start it if it was an elevator pitch inside of a church with another church member, another congregation member that I know. It is not a get-out-of-debt class, although that is one of the things we teach people to do. It is not a get-rich class, although that is one of the things we teach people to do.

It is not a get-rich class, although that is one of the things we teach people to do. It is not a budget class, although that is one of the things we teach people to do. And I would not frame it as any of those things. And it's not a class for broke people, although some people come that are broke. It's not a class for rich people, although some people come that are rich. It really is God's and grandma's ways of handling money. And when you apply these common sense biblical principles to your life, you end up with better relationships, including your relationship with your heavenly father. You end up with a better quality of life, lower stress, and you

have a higher tendency towards wealth. And that's what this is. It's how to drive a car if you've never driven a car well before. It's how to get your body in shape if you've never done that before. And it is the proven step-by-step thing that does that. Over 5 million people have been to it. And that's really all you need to talk about. There's not a lot to this, but there's a been to it. And that's really all you need to talk about. There's not a lot to this. But there's a lot to this.

But I wouldn't get down into the nuances. The big thing you want to avoid is getting trapped in one of the pigeonholes. This is a get-rich-quick scheme. It's not. It's a get-rich-slow scheme. That this is a get-out-of-debt class for broke people. It's not. It's not.

It's one of the things that happens because it's one of the things you do to build wealth and to get peace in your life and to, you know, have a lot less stress is get rid of the debt. But it's, you know, the debt is just a part of the picture. It's just a part of what's going on is all. And so that's how we would couch it and help you get your hands around it and so forth. And people deserve to do. You know, most people make too much money to be broke. You ever thought, make this much money, why do I not have any?

That's kind of a ridiculous thought. Look at how much money we make. We have no money. We make too much money. We deserve to do better than this. Why aren't we? Well, I can show 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.

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600 million people worldwide have downloaded Anchor Free's Hotspot Shield. Download it now. Thank you. Download Hotspot Shield today. Brianna is in Kansas City. Hi Brianna, how are you? Hi, good, how are you? Better than I deserve. What's up? I and my husband have been working on Baby Step number two. We started FPU

just doing it at home in January of this year. We started with about $44,000 in debt and have paid everything down. We are only right around $20,000 now. Good. The goal is to be paid off by the Smart Conference here in Kansas City in October.

Love it. And we just found out that we are receiving $75,000 from my husband's deceased father. His retirement account ended up giving us $75,000. So subject to a 20% tax if we take it now. So it's about $55,000. We're just wondering what should we do with that? Okay. It's not subject to a 20% tax.

It's subject to 20% withholding. It will be taxed at your tax rate. What is your household income? About, well, it fluctuates. $100,000 as of right now of right now you're in a 24 percent tax bracket and so you will pay 24 on it but aside from that so what are we going to do with the 50 000 approximately net of taxes right so you're proper proper to hold the taxes back have your tax person advise you exactly how much but it looks to me like about a fourth of it would be accurate instead of the fifth.

But then what do we do? We work the baby steps. If you have any debt left, when's the money coming? Two weeks. We mailed off the death certificate and everything that we needed to today. So they said once they receive that, it'll take about a week. Okay. Then when you get the money, go ahead between now and the time the money comes

and verify that the tax information i'm giving you is correct get with your get with your tax professional but i'm almost positive i'm right and you're going to set us out of one-fourth of it exactly because 24 tax bracket set that over into a separate savings account just for when you pay your taxes next year okay yeah we're both self-employed, so we already pull out 20% of every commission that we do. So we'll just throw it in that account. Yeah, just throw it in that pile. That's fine then. Then what do we do?

We work the baby steps. You write a check and you're debt-free, except your house. That's baby step two. Then we say, how much is baby step three? Three to six months of expenses in your household. What does your baby step three look like, your fully funded emergency fund? Just shy of $40,000. Okay.

What's your household income? $100,000? About $100,000, yeah. But we're both on our own businesses. Yeah, that may be still a little rich, but somewhere in there. Okay. Somewhere in there is okay, $30,000 to $40,000. Okay.

And so the money's gone right yes 50 000 minus 20 000 of debt remaining and you put 30 in your emergency fund and you've got 50 net of taxes we're pretty well there aren't we yeah if you got a little left over we're going to move on to baby step four which is% of your household income, now starts going into retirement. You need to set up SEPs and Roth IRAs or, you know, simple IRAs or whatever it is you're going to set up as a self-employed person. You probably don't need lump sums to do that. Do you have children? We do. We have two, three and two.

Okay, cool. So if you had like five grand left after we did those other two things, right? Really, Baby Step 4 shouldn't take any of the money. Five could take some of the money. We could throw some of the money into the kids' names and get their college funds started. That'd be pretty cool. And that'd be pretty honoring to his dad's memory as well, wouldn't it? Right, yeah, exactly.

Yeah, so you're going to be into Baby Step 5. We just don't know how far, and I don't think you're going to have enough to completely do your kid's college fund forever and never have to touch it again. But it sounds like you're going to have $5,000, $10,000 or so to throw towards the kids after you're debt-free and have your emergency fund, and then get your retirement plan started and get your kid's college fund started and throw some money at that. I don't think you're going to have excess above that to go on to baby step six if I understood everything we were covering properly.

But the answer to your question overall is that's the beauty of the baby steps. We just walk right up them with any income we have from any source. So whether it's an inheritance, a bonus, our income, our salary, the baby steps we just walk right up them with any income we have from any source so whether it's an inheritance a bonus our income our salary our business increases whatever it is uh wherever the money comes from doesn't matter it's just how fast can we move up the uh the baby steps and get on into getting the house paid off because then that's baby step seven when the house is paid off there's nothing left to do then you max out all your retirement accounts and you know we're investing heavily and we increase our generosity to where it's just outrageous at that point and so you're always

giving all the way through but you increase your generosity big time when you get to seven because at that point you know you're going to be millionaires very very quickly so good question thank you for joining us b Brian is on the line. Brian's in Pittsburgh. How are you, Brian? I'm good. How about you, Dave? Better than I deserve.

What's up? So I have a question. I currently have my degree in business. I'm an undergraduate, and I'm looking to make a career change into being a teacher. And in order to do that, I would have to go back to school and get a graduate degree, and that would require me taking out about $20,000 in debt. And I kind of want your advice. I'm kind of a little iffy about that.

Yeah. debt and uh kind of want your advice i'm kind of a little iffy about that yeah um well i've been doing this show almost 30 years and i've never told anyone to borrow money yeah with the exception of a mortgage so probably not going to start today so how can we in other words because i've found the best way for you to prosper and the best way to have a quality life is to get out and stay out of debt so then the question starts to be if if I'm in your shoes, how can I do this without debt? So what's your car worth? About $9,000. Good.

Okay. And do you own your home? I do not. Okay. You're renting? No, I currently am 25. I currently live with my parents. Okay, cool. So you got no overhead. What's your income?

I currently just moved back from abroad. So right now, probably $20,000 a year. What were you doing when you were abroad? I took some time off from the corporate world, and I was studying. I went to a Christian Bible school. Oh, good. Good for you. Okay. Yeah.

And so you spent a lot of time in school chasing different things then. Yes, I have. Okay. And there's nothing wrong with that. I just don't want you, every time you have a dissatisfaction with something, to immediately equate the solution to that dissatisfaction to be go get another degree. Because you're going to be broke and heavily educated at the end of that story, and we don't want to go that route. It's not to say you shouldn't change directions ever,

and you shouldn't go back and get a different degree ever. So I have a son who's 26. If this was a conversation with him, I would want to know more, obviously, and I would know more because he's my son. But with what I know about your story i would tell you to go get a really really good job and work it for two years and pile up the money to do this possibility by then that you would be very very sure that you want to be a teacher or maybe you would find that there's some ways you can teach in the business world

that scratches your teaching itch. You certainly can do any of these things as a ministry. Business can be a ministry. Teaching can be a ministry. It's the way you look at it and the way you say, this is how I serve God. I'm going to serve people this way. And I'm going to be a fabulous in-classroom teacher. I'm going to be a world-class corporate trainer and teach people with a level of excellence

and that's my ministry. You can be in the formal pastoral ministry side of things. Since you did some Bible school, that's why I'm weaving all that in. I would just tell you, let's go get a job and let's build a life.

Go make some money for two years and you'll you'll make you can you ought to be able to save twenty thousand dollars in two years pretty easy if you go get a real job now you right now you're just working you know some kind of i just got back from overseas job but i'm talking about a real job and you go take your business degree get into the marketplace land something making 30 40 5050,000. Get you an apartment. Rent. Move out on your own.

Pay your bills. Save $20,000. And then when you're looking at that $20,000 as a pile of cash in the middle of the table, you start asking yourself, do I want to be a teacher that bad? And it might change your direction. It might be that you want to be. But then you'll have the cash to pay for it. Hey, that's what I would do.

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