The Ramsey Show - App - Marrying Someone With a Lot of Debt (Hour 1)

Episode Date: February 19, 2019

The show about you

🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, 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. Jake is with us in Shreveport, Louisiana. Hi, Jake.

Welcome to the Dave Ramsey Show. Hey, thanks for taking my call. I have a question about commercial real estate. Honestly, if I'm really in a position to pursue it or not. My wife and I are both 29. I'm a fireman, she's a nurse. And together we bring home about $2,000 every two weeks. We don't have debt on anything except for our house.

And there's a town not far from where we live that is growing very rapidly. They're clearing land, and that side apartment here, a bunch of stuff that's going on. I was just wondering if it would be worth purchasing property there for like a strip center or something like that. And if so, what steps to take toward that because I don't know a whole lot about that. Just a little bit I've been researching lately.

Well, I'm a big fan of real estate, big fan of commercial real estate. I own a bunch of it. It is developing a strip center from the ground up in an area that is growing, in an area that we might say is green. It's not all the way mature yet. It's pretty risky because you can sit there with a ton of time with the thing sitting empty until you fill it, and then when you fill it, you're going to have some more costs out of pocket to do your tenant improvements and so forth,

depending on how your leases are structured and those sorts of things. But usually you've got some more out of pocket after you get it up. It sounds like you don't have any money. We have around $8,000 or $9,000 in savings, and then I have $10,000 in a Roth IRA that I moved over from another place I worked at. My retirement's all state retirement. I have a pension. Gotcha.

And how old are you? 29. Okay, good. Well, you're doing good. You're on the way. So what I teach people to do, Jake, and what I did personally, is to get your home paid off first before you start buying investment real estate. Be putting 15% of your income into retirement and let that grow and build you towards wealth. Buying paid-for real estate is a second phase of your wealth building, not your first phase.

You're still in the first phase. And if you start buying real estate with no money, which you basically, when you start talking about a $2 million, $1.5 million strip center deal, land and building and leasehold improvements and everything, when you look at it in light of that, you have no money. Okay? I mean, you didn't call me up and say, Dave, I got $600,000 I want to play with towards this $2 million deal. You know, that's not where you are. Okay? And so what I would tell you to do, if you're interested in it, keep reading about it, studying

about it. And I use that personally because I'm a real estate guy. I desperately wanted to own some real estate, but I don't borrow money. So I got my house paid off. Then I started saving up, and I bought my first rental property, and I bought another rental property. And every time you you buy one you don't have any payments on them they make a lot of money the rent's all pure it's pure cash man it just comes at you like crazy it's wonderful and so it snowballs in a good way towards your building

wealth but so let me kind of outline it this way 15 of your income going into retirement, pay your house off. When your house is paid off, save as rapidly as you can and buy you a nice rental house and get started for cash. And then use that one to grow. And if you want to buy another one, that's fine with cash after you do that. And then from there, let the strip center idea, you're probably not going to do the deal you're looking at. That's probably going to be long gone by then. It's going to be several years down the road. But let it be your third or fourth or fifth piece of real estate that you pay cash for, and it could change your life. But if you buy it right now, it could change your life in a bad way.

It could bankrupt you. Yes, sir. So it's just real estate is not a game to play in when you don't have a lot of liquid cash. You need cash for it to play in real estate. It'll bite you otherwise because it takes a long time to get stuff through. Building permits, get stuff drawn, get the building out of the ground. It takes forever. I'm in the middle of building a big office building right now.

Oh, man. It's like pulling teeth. It's unbelievable. Everything takes time. Everything is slow. And it's just, it drives me nuts. And if I was sitting there waiting on that thing to get built, to get money coming back out of it, and right now I was only feeding it,

oh, and I was doing that with all debt payments, I would be sunk. It would be awful. And that's not what I want for you. I debt payments, I would be sunk. It would be awful. And that's not what I want for you. I want a different answer for your equation. So, hey, thanks for the call. Open phones at 888-825-5225. Ryan is with us in Dallas, Texas. Hey, Ryan, how are you?

Hey, Dave, I'm doing pretty good. How about yourself? Better than I deserve. How can I help? I've got a question for you. I'm supposed pretty good. How about yourself? Better than I deserve. How can I help? I've got a question for you. I'm supposed to be getting married here in October. I found out that my fiance has $34,000 in student loans and about $12,000 on her car left.

I myself do not have any debt, and I have recently backed down my 401k contribution to about 8%, and I was wondering what your thoughts were about completely holding off on doing any contribution and just focus on piling up cash for when we do get married. Oh, I would, yeah. I would treat it like it's a debt snowball, but in a savings account until we come home from the honeymoon. What is your income? Okay.

About $67. What's hers? A year. About $67. What's hers? A year. About $26. Okay. Is she doing anything towards this? Are you in agreement on this issue? Yeah, she's able.

Right now she moved back home with her parents. She's able to put about $1,000 a month towards her debt, so it's helping a little bit there. Good. I'm just trying to, I got about 25 saved up myself just in cash. So I'm hoping to have everything saved up to be able to pay it off. And I'm just thinking if I'm able to withhold my, okay. Yeah, I would stop everything and treat it like you were married with a $34,000 debt.

Only you don't pay directly on the debt until after the honeymoon, as you said, put it in savings until then. But when you come home from the honeymoon, write a check. It's gone. Now we are debt-free. And then we start our budget, and we restart both retirement accounts and, you know, make sure your emergency fund is there of three to six months of expenses and so on. Yeah, you got the plan. You're right on track.

How old are you two? I am 27. She is 25. Man, you're going to kill it. You are on fire. And you're. You're right on track. How old are you two? I am 27. She is 25. Man, you're going to kill it. You are on fire. And you're on the same page on this. She's in agreement that this is our game plan. Yeah, it's taken her a little bit, but I've been working with her

and trying to show her your ways and explain to her why we're doing this and what it can do for our future. Were you engaged before you found out she had $34,000 in debt? I knew she had some debt, but I didn't know she had that much. So you didn't have a real good clear money talk before the engagement then? That's interesting. No, not to that depth. Okay, cool.

Cool. That is an interesting part of the discussion. So warning, warning, folks. Have a good clear money talk when you're dating before we put the ring on the finger. Not that he wouldn't have. And he's cool. He's got it figured out. We're good.

Everything's good. But he sure is good to know it on the front end. Let's have that stuff come out on the table real early. This is the Dave Ramsey Show. You know, I still get lots of questions about ID theft, and now is a good time to delve into this a little deeper. ID theft has become a huge problem, and most people think it's all about financial fraud. But there are so many other areas where people are being victimized. Tax refund fraud, for example, is out of control.

Last year, the IRS paid out over $3 billion in fraudulent refunds. Thieves are filing false returns and stealing your refund. Credit monitoring and prevention plans don't detect this type of ID theft and don't help resolve the problem. That's why the only plan I have for my family and all my team members is through Zander Insurance. They cover all types of ID theft, including tax refund fraud and work with the IRS to get your refund resolved. Go to ZanderInsurance.com or call 800-356-4282.

This is the smartest, most affordable way to protect yourself and your family. That's ZanderInsurance.com. Sailing takes me way to where I'm going. So, Fox News article. Some of you have seen it and been sending it to me on Twitter. Couple sells all possessions for sailboat Sinks two days into trip. A Colorado couple who dreamed of a life sailing around the world had the wind taken out of their sails when their boat capsized nearly two days into their trip. The couple's plan for a better life has been sunk. Okay.

Nikki Walsh, 24, and her boyfriend Tanner Broadwell, 26, decided nearly a year ago that they were tired of working. How can we live our lives when we work most of the day, and you have to pay so much of it just to live, Walsh said, who booked timeshare tours for a living. Most of the work you do just goes to your home. There has to be another option, she added. So the Colorado couple sold all their furniture and

their suv and purchased a 49 year old boat in alabama to live on and eventually sail the world in the couple moved on to the 28 foot boat which was in the marina of tarpon springs a town of florida's gulf coast lived there for months with their two-year-old pug remy while they stocked up on food and supplies the couple had planned their trip for a year, both quitting their jobs and selling all their worldly possessions in Colorado before moving out to Florida to live on their 28 foot boat. We were pretty prepared, Walsh said, of gathering items to last them for their planned trip to the Caribbean. However, the two were not prepared for what happened next.

Nearly two days into their venture, the couple's boat capsized in a channel of water called john's pass we thought the channel was where we were going but it wasn't walsh told the post telling the publication they were armed with a g GPS and paper navigation charts. Local boat captains say the sandbars often shift in John's past. John's past. We started freaking out because waves were coming. Well, you were on the ocean. And it was tossing our boat back and forth. You wanted to sail the world.

Broadwell was near the rear of the boat holding on to Remy. We're in the trouble hit. My hands were shaking. We were terrified before abandoning ship. Walsh said they grabbed some clothes and important documents as well as things for their dog. I also grabbed Remy's food, just about everything he needed, said Walsh. He doesn't deserve to go without his favorite toys. Walsh admitted she and her boyfriend, who used to drive for Uber,

were new to sailing. Yeah, I think. Once the boat flipped, the couple lost all their material possessions. I shouldn't be laughing. This is a sad story. The pair said they have $90 and no jobs and no boat insurance. What? I thought you were prepared. However, the couple who has been left with just $90 in cash, no jobs, no boat insurance,

say they're still hopeful for their world sailing plans because they've started a GoFundMe, begging people to give them, help them not give up on their dreams, in quotes. The pair is seeking $10,000 to rescue the ship. This is not a ship, boys and girls. It's a boat. It's 28 feet long. It's in four foot of water. Sunk off the coast of Madeira Beach, Florida.

Said raising the boat alone will cost $6,700. We've got a lot of family helping us, but it's hard when you've lost everything. You only have one life. Why not spend it doing what you love? Why spend it doing what you don't love? Money isn't everything. He told the Post. Money isn't everything.

Why is the GoFundMe there? Apparently money is something you need what i'm having trouble with is they're 24 and 26 and they were tired of working. I mean, if you were 44 and 46, 54 and 56, or 64 and 66, but you're 24, you haven't been working long enough to be tired of working. It's impossible. But money isn't everything. Boat insurance is, but that costs money, but money isn't everything boat insurance is but that costs money but money isn't everything yeah so um this is so hard to not be harsh i just want to be funny instead of being harsh. It's just it's but it's so sad because I got to tell you, I have done so many stupid things in my life. And the list of stupid things in this story is so long.

And every time I do something stupid, you know, because it costs it brings me pain and cost me money. And that's what happened to these guys. So my prayer for them is that no one gives them a dime for their GoFundMe account. Because these two really just don't like to work much. They're not very responsible. They, you know, when we get off the boat, the main thing we do is we save the pugs toys. Because the pug doesn't deserve, that pug doesn't deserve to be with you people you're irresponsible pugs are great i like pugs he doesn't deserve to go without

his favorite toys this is what's occurring to her as her boat is sinking without insurance the pug toys. It's somebody will give this, get money. They just go fund me. I'm sure because you only have one life. Why spending it? Why spend it doing what you don't love? Money isn't everything.

No, it's not everything. And you shouldn't spend your whole life doing what you don't love. But unless like your goal is to not work ever and have other people give you money so you can sail around the caribbean and call that fulfillment that's not going to work out for you i can't imagine having a 24 year old daughter and coming in and telling me hey dad my boyfriend and I are going to the Caribbean. We have no clue what we're going to do. And we think we're prepared, and we just don't want to work much.

It would just break my heart. Because here's what's going to happen. These people are going to be, it's going to take them a decade to recognize that they're going to have to work work is not a bad thing work gives you dignity work is where money comes from not go fund me and um you know and if you call yourself prepared but you are have no idea how to sail and yet're sailing, and you forgot to buy insurance on your boat or just chose not to, you're what we call sunk.

Right? I mean, really? Oh, gosh. So I hope they, I hope, yeah. The problem is your dreams become your nightmares when you don't know how to live life like an adult. That's the problem is your dreams become your nightmares when you don't know how to live life like an adult that's the problem and adults devise a plan and follow what children do what feels good these are a couple of children and uh i'm not making fun of them i'm not picking

on them it's just it's just sad and what's sad is is it's actually a news story, and I'm so stupid I actually read it. And then took a whole segment of the show on it. But, you know, the point is that sometimes I'm poor. Sometimes I struggle with money because of my stupidity. Sometimes I struggle with money because of my lack of character. Sometimes I struggle with money because other people take advantage of me. Sometimes I struggle with money because of the situation I was born into, and I haven't learned to rise above that particular situation yet.

So there's legitimate reasons that people are poor that are not their fault. Not these two. These two, 100% of it is their fault and uh that's pretty much stupid tax on steroids right there and and i hey i was older than that when i lost everything because i was stupid and i lost a lot more than that and uh for a lot of different reasons, but, yeah, it just doesn't work, folks. You're going to be doing work, and then if you're smart, once you get your bills paid, then you'll start doing work that you do love and that you do care about and that does have meaning, but you're going to be doing work.

It gives you dignity. It causes your brain to work, and it causes you to be able to live your dreams rather than somebody else's nightmare. What a mess. This is The Dave budget each month. Pure Talk USA offers smarter wireless with unlimited plans starting as low as $20 per month. You never pay data overage fees and we never turn off your data. No contracts,

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That's puretalkusa.com. In the lobby of Ramsey Solutions, Todd and Melissa dropped by. Hey, guys, how are you? Hey, Dave, good, how are you? Better than I deserve. Welcome, welcome. So, where are you from? We're from Kansas City, Kansas. All right, very cool.

Well, our daughter-in-law is from there, so very good. That's a great place to live. Yeah, good stuff. So how much debt have you two paid off? We paid off $160,000. Very cool. How long did that take? 30 months.

Wow. And your range of income during that time? We started off about $90,000 and went up to about $130,000. Okay. So what kind of debt was the $160,000? 100% of it was his vet school loans,000. Okay. So what kind of debt was the $160,000? A hundred percent of it was his vet school loans. Whoa. Okay.

Yeah. So, but you didn't even hardly make $160,000 during that time. How'd you do this? That's wow. Well, it started with my sister and brother-in-law. They went through financial peace before they got married. And we started thinking, man, we need to get on top of this. Our minimum monthly payment is $2,000. We're going to do that for 10 years. And we just thought, there is no way we want to do that. And with the friends

and family, they were just supportive of us. And Todd came home from work one day and I had this whole spreadsheet made out. And I said, I think we can do this in four years. And then we did it in two and a half. So it was exciting. I mean, you guys have lived on beans and rice. Yeah, mostly rice. Mostly rice. Yeah, I mean, like nothing. And you've been kicking that income up a bunch of that time. I mean, because that's $80,000 a year for two years.

And you did it in two and a half. So that's still very, very impressive. Thank you. Very amazing. So the good news is, as a vet, you can make some bank going forward, right? Absolutely, yeah. And it's a great, great field of study, a great career space to be in, really good money. A lot of vets that we know make more than docs.

Yeah, well. Of course, you have to know more than one species, so that's fair. Yeah, I mean, it's harder. It is. We've got to do a lot more, right? I've got a friend of mine who was in vet school when we were in college, and he's kept going, hey, med school's got it easy. Med students got it easy.

They just got to learn one species. That's right. One set of anatomy, one set of, yeah, I mean. That's right. So, hey, very, very cool. So what do you tell people the key to getting out of debt is? You did it. Definitely got to stick to the budget.

We started using the EveryDollar app right when we started following you. And I was shocked to see where all of our money was going before we started budgeting. Especially eating out. We were eating out a lot. So we learned how to cook more.

Most people do. Yeah. So that's one of the biggest things is just having that plan in place. And you just got to want it. You got to be able to attack it and, you know, sacrifice everything you can to get that out of there. And we were really lucky. Our families were so supportive of us.

Absolutely, yeah. I'm going through a summer master's program, and my parents knew how hard we were working on this, so they chose to gift me with my tuition for my master's so we had some things that we were very lucky with and we wouldn't have been able to do without our families wow blessed very good very cool good very neat yeah so you really had i mean you you had so many cheerleaders you didn't have a choice that's pretty much yeah we were going to succeed or uh or else really. So either one of you a little bit reluctant once you realized this or once you just both looked at it, you went game on?

You know, I think I was the first one to hop on board, but Todd was so fast to hop on. And it's been amazing. We've been married for four and a half years, but I feel like paying this off has brought us so much closer. We just feel like we have open lines of communication, and I think it's really started our marriage off on the right foot so that I feel like we can tackle anything now. It's kind of a good feeling. Yeah. Well, you look like you're just kind of in sync. Was there

any really big budget fights? Not, not really. I think Todd wanted a set of golf clubs at one time, but we just said, wait on that one. Okay. Now you can afford whatever you want, right? That's right. Yeah. We hope so. Yeah. Live like no one else later. Okay. Now you can afford whatever you want, right? That's right. We hope so. Yeah. Live like no one else later. You get whatever kind of golf club you want. Absolutely. Absolutely.

I love it. Very, very well done. What was the hardest part of this for y'all? I'm a teacher. I'm a band director. And I think the amount of hours that we were working and then still trying to find more money on top of that was probably our biggest challenge, trying to find that time. It takes time to cut out coupons when you're going grocery shopping.

So I think making that sacrifice of time when you really don't want to, when you're already working so much, to find those couple extra dollars every week, that could be a challenge at times. Amen. Very good. Good for you all. Well done. I'm proud of you. So I'm sure Mom and Dad are proud of you.

I think so. I think our families are at home watching right now, so we're excited for that. Good. We've got a copy of Chris Hogan's Retire Inspired book for you. We want that to be your next chapter, and you are well on your way. Thank you. Where you become millionaires and outrageously generous along the way. Thank you so much.

Thank you. Good job, y'all. Well done. All right, Todd and Melissa, Kansas City, $160,000 paid off in 30 months, making $90,000 to $130,000. Wow. Count it down. Let's hear a debt-free scream.

Three, two, one. We're debt free! Great job, you guys. Great job, great job, great job. Love it, love it. Well done. That's how it goes right there. Our question of the day comes from Blinds.com. You can upgrade your home with Blinds.com,

the number one online retailer of custom window coverings. With Blinds.com, you get free samples, free shipping, and with the new promos they run every month, you're going to save even more. Always put in the promo code Ramsey, and you'll see the best possible deal out there. Blinds.com slash Ramsey. Rules and restrictions apply. Today's question comes from Kayla in Nevada. She says, how do we get our kids ages 12, 8, 7,

and 4 on board with the Give, Save, Spend process when we don't have extra funds to pay commissions? We have well over $100,000 in debt and we use every dollar we have to pay on it. I don't want them to make the same mistakes I did.

Well, the book Smart Money, Smart Kids is the number one best-selling book that Rachel Cruz, my daughter, and I did together. And it's for parents on how to raise money smart kids. So it answers in great detail questions about raising money smart kids, including this particular question. I'm going to recommend that you do pay some commissions, even while you're getting out of debt. It doesn't have to be a lot, but it's just representative. Because what you need to keep in mind is the chores that a kid does to earn their commissions.

If you haven't heard, we don't do allowances. Allowance sounds like welfare. We don't do welfare. You're not entitled because you breathe and happen to hit the DNA lotto and landed in our family. You're not entitled to money. And so we don't do allowance. We don't make allowance for you.

We want you on commission. You work, you get paid. You don't work, you don't get paid. That age, they're not going to do anything that you're going to pay them the economic value for doing it. I mean, there is no economic value for somebody feeding the dog or cleaning the room. And so it's not like, you know, you would hire somebody to do that, and, you know, what you would pay them, you're going to pay your kid. There's just no way to measure it out.

This is more creating an emotional tie between money and work and when they get money in their hands from having worked then you can teach them to break it up into the three envelopes the give the save and the spend envelope and so it's not hard with four kids to do, you know, five bucks a kid per week or per two weeks or something. You can pull that off and it won't keep you from paying off $100,000 in debt. And it gets them on board and thinking with the whole family instead of whining while other parts of your lifestyle are being chopped. Because you're going to chop other parts of your lifestyle down to nothing. And, you know, these kids are going to feel that. And they've got to know, oh, we're sacrificing to clean up a mess right now.

They've got to get that dialed in. When they get that dialed in, it'll change everything. But that's the Smart Money, Smart Kids book. And, you know, for the ones that are 12 and under, this is Financial Peace Junior, which is a box of teaching aids. And it's got in there the dry erase board for the refrigerator door with the magnets on it. And you can write on there the chores they're supposed to do and then check off if they did them or not. Of course, there's no commissions due if they didn't do anything. What if they don't do what they just choose not to do the chores?

Eventually you make them. I make them bathe, make them brush their teeth, I make them study for school, I make them say, yes ma'am, no ma'am, yes sir, no sir. I make them close the door when they come in the house and not heat or cool the outside. I make

them learn to do some basic things and handling money is one of those life skills that it's my job to make you do if you don't voluntarily get with the program welcome to parenting this is the dave ramsey show Thank you. Thanks for joining us, America. We're glad you're here. Open phones at 888-825-5225. You jump in. We'll talk about your life and your money.

Candice is with us in Columbus, Ohio. Hi, Candice. How are you? Hi, Dave. I'm good. Thanks for Columbus, Ohio. Hi, Candace. How are you? Hi, Dave. I'm good. Thanks for taking my call. Sure. What's up? I don't know if there's a right or wrong to this, but I'm hoping to get your thoughts. I am a foster mom, so I receive a reimbursement from the county for the care of the children. It's not taxable. I don't file it as income. But I'm wondering what your thoughts are on tithing on that payment I received from the county for the children.

Well, the only guidelines we've got biblically are the tithe in Deuteronomy is defined as a tenth of your income, a tenth on your net increase, meaning you would not tithe on a business gross revenues. You would tithe on the net profit. And, of course, it's referring, in that case, it was an agrarian economy, right? And so, you know, if you had three sheep, you know, get eaten by wolves, but you had 13 that were born, your net increase would be 10 that year right and that kind of a thing is what that's referring to in that kind of a situation um and so uh there's a couple of rules i use in calculating my tithe i tithe on my taxable

and because if i leave it in the business, the profit in the business, it may still get spent. And so it may not be profit. It may not, you know, we may buy computers with it next year. And so I'm trying to tithe on my profits. And so I tithe when I take it home, in other words. And at that point, it becomes taxable. Yours is not taxable. It's caring for children.

You can make a case either way in your mind. You know, it'd be can make a case either way in your mind you know it'd be logical to discuss it either way uh what i always do when i'm when in doubt i do okay if i it's the way i'm leaning but i i didn't know but it's not but it's not a legalism thing it's just uh i can't outgive god thing and um you know i think you're probably okay financially you know it's not killing you it's not a big stress but when it comes to giving or generosity when in doubt do it and it works out now i try not to be sloppy i try not to be i look we look you know with our foundation we look at the ministries we're giving to and make sure that they're efficient with money

and they're not in debt and they're being run well and all that kind of a thing, like we were doing an investment for God, so we're careful with money. But when in doubt, I want to be caught having over-given rather than under-given if there were ever a calculation. And I honestly don't think God is going to hold you to the splitting of hairs, like, you know, well, you're just about $3 off when you get to the pearly gates. I don't think that splitting of hairs like you know well you know you're just about three dollars off you know when you get to the pearly gates i don't think that's coming up you

know right it's like you know what would your dad tell you to do if he was giving you money and your dad is a good dad and a loving dad and not a toxic dad and um you know that's kind of way i look at it is my heavenly father's crazy about me and he you know we being evil know how to give our kids good gifts how much more so our father in heaven and so i just generous and grace and grace and generous and they all kind of run together for me so uh if i kind of have a sense that i'm not sure what to do, but I feel like I might be, then I just do. I just do. You know, I'm going to tithe on the big one.

That way, if I'm wrong, I'm okay. You know, that kind of a thing. But that's not to say you're wrong if you don't. I don't think there's a real clear cut-and-dried legalistic thing in this situation. There's a real good, solid intellectual argument that could be made either way here. But this is not an intellectual discussion. It's a spiritual discussion.

Steve is with us in Seattle. Hi, Steve. How are you? Very good. Thanks for all your good work out there. Thank you. And you personalized that real well on that spiritual comment. Thank you. How can I help? I've grown up on a spiritual comment. Thank you. How can I help? I've grown up on a cash basis, and I'm a self-employed contractor,

and I have heavy equipment. And so I've got into a few conversations with people that say I should have traditional retirement. And pretty much my retirement is in my investment in my equipment, which is pretty liquid. You can sell it pretty fast if you have to. Assuming the economy is decent, yeah. Yeah.

Well, lately I've gone into beef also, so I'm kind of keeping the food end of it going in case the construction end slows down. So what is your equipment worth? Some kind of a traditional retirement plan or my way off base? Good question. So what's your equipment worth? I'd say if I kind of keep myself on a cash basis, if I sold my house and everything I

own, I'd probably have about a half a million dollars out of free and clear. How much of that's the equipment? I would say about $250,000, $300,000. Okay, good for you. And how old are you? 55. And what's your household income? Well, my business, it's really not, you don't really have a number like that because...

No, I know, but in a a typical year what do you make well i'm single and so the way the tax laws are just uh have been changed so you don't have to deep uh depreciate equipment i i really don't live on much myself so my accountant comes out and i make uh 15 000 a year and the rest of it I put into my equipment. So it's kind of hard to say if I said that what my total earnings would be if I took my equipment investment and added it up, I'd say probably $75,000, $80,000 a year. That's what you're making, and you're just using it to put it back into equipment. Yeah, and that's my retirement. I got you.

I got you. Okay. Yeah, and that's my retirement. I got you. I got you. Okay. Yeah, I own a business, too. I don't have liquid equipment, but I have a business, and a lot of small business people face what you and I are facing, where the larger portion of our net worth is the business itself. And in your case, the value of your business is primarily the equipment that the business has. And in my case, it's more of the brands and the royalties off the books

and those kinds of things that have value. And yours is probably more liquid than mine. It is more liquid than mine. You could get your money out of that equipment easier, and I could sell this place. But in a lot of businesses, a friend of mine owns a heat and air company with about 80 trucks, and the trucks are not the value of that company. It's the income. That company makes a lot of businesses, a friend of mine owns a heat and air company with about 80 trucks, and the trucks are not the value of that company. It's the income.

That company makes a lot of money. But most of his net worth is tied up in that business. And he said, my retirement is my business. I always challenge. So I'm going to go with whoever's saying you probably ought to have some other money somewhere because you've got it all tied up in bulldozers i mean you really do and so uh number one dozers even though they're very liquid and you're probably really good at buying and selling them but in general over a 10-year period of time if you

leave that piece of equipment on your books it goes down in value not up that's correct well the equipment's kind of a weird thing because uh brand new it just drops and plummets and then uh well it gets to a certain level and it pretty much stays there but yeah but it's still it's not going up i mean no it's not you know a ten thousand dollar piece of equipment is not going to be worth 20 in five years right as long as i'm healthy i figure i can get on it and you know i can make a hundred dollars an hour so i kind of like that yeah but that's owning your job. That's different than investing.

And so, yeah, you need to be putting some money in something else that's going up in value. I don't care if you get to a million-dollar net worth and $500,000 of it is in equipment, and $250,000 is in your house, and $200,000 is in a good Roth IRA and some stock market. But I'd like to see have something kind of like feels like that to where at least you got a portion of your stuff going up in value other than your horse trading going up in value. What you're horse trading, you're making money probably on these flips. You know the business. You know how to turn a piece of equipment and turn it into money. But in general, you know, you're not making, you know,

last year I made 20% on my mutual funds. And mutual funds, of the three things that I have in my net worth, they're the smallest portion. Because, you know, just because the business has grown so fast, it's the largest portion of my personal net worth. And then a bunch of real estate that I bought at a deal, and it's gone way up, and it's the larger, huge portion of my personal net worth, and then a bunch of real estate that I bought at a deal. And it's gone way up, and it's the larger, a huge portion of my net worth. But the largest is the business, and then the real estate,

and then I've got some mutual funds. But I'm glad I've got a couple different things going other than just my business, and that's what I'd recommend for you. Good question, sir. And I think you're going to be fine. You've just got to think it through. That puts this hour of the Dave Ramsey Show in the books. Hey guys, it's Blake Thompson, Senior Executive Producer

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