The Ramsey Show - App - Most People Have Too Much Month at the End of Their Money (Hour 2)

Episode Date: November 29, 2021

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the 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. Thank you for joining us. Ken Coleman, Ramsey personality, best-selling author of the book Paycheck to Purpose, is

my co-host today. We're taking your questions about life, money, career, jobs, whatever you want to do. It's the Ramsey Show, which means it's all about you. The phone number is 888-825-5225. Michael is in Orlando. Hey, Michael, welcome to the Ramsey Show. Hey, Dave and Ken, thank you so much for talking with me. I just need to start off by saying you need to apologize to Kelly, your screener, for me

because I had to lie a little bit to get on the phone with you. But since I got you on the phone here, I just wanted to let you know, Dave, I called you a year and a half ago. You recommended us to sell our condo because the HOA dues were insane. Well, we finally did that. We have $100,000 in equity and we just paid off our credit cards last night, and we just want a little direction. How should we properly invest this money so we don't squander it on dumb things like tractors and stuff we don't need? Okay. I'm confused why you had to lie to get that question on. Because we tried three times, and she said, we can't take that now.

You've got to call back another day so at any rate okay well what happened was you got lucky kelly wasn't here laura was here today so all right that's okay so you got a hundred thou you got a hundred thousand dollars in money laying around you're afraid you're going to fritter it away yes sir okay we have we work we're thinking 20 000 for our emergency fund okay we have three have, we're thinking $20,000 for our emergency fund. Okay. We have three small kids. We're not super stoked on college just because the way the world is turning.

However, we do want to maybe stock a bunch away in mutual funds for them. We just don't know exactly what that looks like and where we should park most of that money. Are you going to buy another house? My wife would like to purchase another property house or property and we just don't know kind of if that's a good time to do that now or not okay well what i would do is just give each of these dollars a name like you named 20 000 of it your emergency fund i'd set that in a separate account for emergencies only and i would never touch that account except for emergencies only and then if you give um 60 000 down payment on future house

a name i'd put that in a different account also and then that keeps you for none of these accounts are attached in any way to your checking account so you can't get to it easily and uh the both of you agree that we're not spending this money. It's our house down payment money. It's our emergency fund money. We've given it a name. It now has a purpose. It now has a mission. It can't function otherwise outside of its mission that it has now been given. And if you want to spend, you know, the remaining money, if there's any remaining money after that that still needs a name, give it a name. We're going to enjoy some of this money, this amount of money for enjoyment enjoyment meaning we don't have to report back to ourselves

on it with we can spend it without regret we're gonna uh be generous with some of this money hey it's the holidays great time to be generous it's always a good time to be generous never a bad time to be generous so maybe be generous with some of it uh but give the dollars an assignment because when they lay in a quote-unquote savings account, that's an account we put money in, take money out of, put and take account. Put it in, take it out. Put it in, take it out. And it doesn't have a name, and it does get frittered away at that point.

Yeah, it's too much of a temptation. And I love what you're saying there, Dave, putting a name on it. Don't just put a name on it. Make the decision. Go ahead and put it there. Get it out there. Sit down and go, what's most important? important i think you got to look at the big picture too when you get a big sum of money like this i think obviously the savings part is huge

some celebration is i think very healthy but then you got to say okay what's the best use of this money long term let's look at our joint goals as a couple what matters most this money needs to go to fund that not just well we could buy a house what makes the 10 year old 10 year from now version of me happy with the current version yes i like the long view if you come into a big sum of money like this this is of course walking through the baby steps right so it's not outside of our baby steps plan but i i think in that situation i want the biggest roi now i want to make sure i'm out of debt and baby step two yes and i'm going to make sure i have an emergency fund three for sure and then you know then you decide what are we going to do with this uh we're

going to invest some of it we're going to put some of it for kids college uh we're going to uh put towards the house i don't care what you do with it the trick is this what you're concerned about is the most important concern is you want to be intentional not accidental adults devise a plan and follow it children do what feels good as long as you have a plan no one sits down and goes i'm going to intentionally be stupid we all wander into stupid because we didn't have a plan that's right i actually want to ask you a question because he brings up a very good point. And you and I are a little bit different on the college play. I'm a guy that goes, if it's not the only way to get where you want to go or the best way, don't do it.

He has to bring up some very interesting questions. So I have a question for you on behalf of the audience because I want to know what you think. So he's saying, well, we don't know if they're going to go to college. Is college going to be relevant? It's basically what he was saying. It'll still be relevant on some level. But as a parent, so they're walking the baby steps, and they're like, I don't know if our kids are going to go to college. Whether you agree with them or not on college as a destination, if they pause or they just don't do that step, what do you advise them to do with that money?

If they're not going to invest it for their kids, college. Well, I think you should. I think you should save some. Regardless. I think you should save some for college because education of some kind is going to apply to a 529. I mean, you can go to a technical school and use your 529. That's what I thought. You can get a welding degree.

That's right. And get your 529. And so, you know, and you're going to have to learn to do something. Right. So the 529 can do anything. Couch potato is not a job. So it's like you've got to have something you can do, and you're going to have to have the brainpower, the skills to do that thing. And generally, that's going to require some training that you pay for.

Would 529 also go towards technical training, any kind of trade, anything? Yes. Okay. Anything that falls under, quote, higher education. That's what I thought. And it goes to your spouse and to your siblings as well That's what I thought. So that can be used. And it goes to your spouse and to your siblings as well. You can go, mom and dad can use it.

A kid can use it. It doesn't have to be that kid. If that kid just decides to go. And if they do go to school and they do get scholarships, the scholarship you can take out. Say you get $8,000 scholarship that year. You can take $8,000 out of the 529 and pay no taxes and no penalties on it. Completely tax-free growth. You can take out the equivalent amount of the scholarship each year and file it on your

taxes, and you have no taxes on it. Follow-up question on that. I've always wanted to ask you this, and it's relevant at this moment. Let's say they're walking the baby steps out, and the kids are late elementary, maybe fifth, sixth grade. What do you recommend as far as the amount? So they haven't been able to invest from the time the kid is maybe a toddler. You probably can't do enough to overdo it.

Right. So you're saying play catch-up aggressively. That late in the game, you probably can't. Most people won't have $10,000 a month or something. They're not going to put that kind of – it's not a situation situation and there's not a 529 that will allow that anyway right but um but but you you probably can't either by law or by personal income capacity have room to overdo it if you're getting started in their 12 you only got six years exactly so you're not gonna you're gonna be short right even if you wanted to pay for all of it in most cases.

So just look at that and make some common sense decisions. But I think it's a bad idea not to save for making your brain grow for your 3-year-old. Your 3-year-old needs to have a growing brain when they're 18. And we need to invest in that. And so just saying I'm not going to have their brain grow. No, I'm not up with that. This is The Ramsey Show. In an uncertain world, being a good steward of your money is more important than ever.

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slash budget. That's chministries.org slash budget. Christian Healthcare Ministries is a Ramsey trusted provider. Ken Coleman Ramsey personality is my co-host today. Open phones if you want to talk jobs, career, money, life. We're here to help. The phone number is 888-825-5225.

Brittany is in Seattle. Hi, Brittany. How are you? Hi, Dave. Thank you so much for taking my call. Sure. What's up? I just want to first say that your book, Total Money Makeover, and the podcast really changed my life and my financial future.

I'm on baby step four. And in addition to this, I have about $50,000 saved for a home purchase. Well done. Good job. It's a really high cost of living area here. So I know it's going to take me a lot longer to buy. And I'm in no hurry to do that. The reason for my call, though, is my grandmother passed away earlier this month and she left me

with a hundred thousand dollar inheritance. And I just want to make sure that I honor her memory by doing the right thing with the funds. Um, so I laid out a couple of options. First being, should I add it to my home fund? Second being, should I buy index funds? Or third, what I really want to do is potentially use a small amount to facilitate a career change, but I'm not really sure where to start. So that's kind of where I'm at with things. Okay. The greatest rate of return will be the career change. Yeah. That's where you'll make the most money on the money you invest,

assuming you're investing in some kind of certification or education that's going to allow you to make more money. Yes. So what are you talking about doing? I work for a large tech company out here, and I make great money right now, but I don't love my job. What I would eventually like to do is own my own business and potentially work in real estate. I'm really good at numbers.

I love working with people, too. But that's such a big jump that I'm not really sure where to get started. I know, though, that that's what I'm supposed to be doing is helping people. Okay, so define that a little bit more. What do you make now? I make $180 a year. Okay. Go ahead, Ken, I'm sorry. Well, define the real estate in numbers. So is that all one thing, or was that,

I want to do some real estate, I also love helping people because I'm good with numbers. Can you define that more specifically? Give me that, at least at this moment, that top of the mountain that you're aiming for. Yeah, so I, okay, so I guess it's less about money, but I like to be the person that kind of sits with people, learns about their needs, and then helps them get to the next step. When I was a lot younger, I wanted to be in finance. I'm good with numbers, and I was good at advising people. The reason I brought real estate up is I just find that world and that area to be really fascinating and I'm passionate about it. I like learning about real estate. I think potentially fixing up homes and then reselling them could be really interesting.

So I don't know if that's the best definition, but that's what I think about when I think of owning my own business. Yeah, well, so here's the deal. This could be a both-and, and I think what you have to do, I'll just motor through this because it's really simple. You're kind of paralyzed with where do I enter in because you're not quite sure what mountain you want to climb. It's either, well, I'm not sure. So here's what I want you to do. I want you to spend some time with a Ramsey SmartVestor Pro in your area. I want you to look them up.

You probably already use one. I hope you're using one locally. I'd spend some time with them, coffee and lunch, and really just do a quick term paper style questioning on them. Like you're doing a college term paper and get the ins and outs, the highs, the lows, because this enjoyment for advising people and this enjoyment with numbers and helping people take steps, that's a guide. That's an advisor.

And so I would look into that because, you know, being a smart investor pro, that fits really well with what you're saying. But then helping people make decisions on their home. That's a big financial decision. Eventually getting into all cash, of course, your own real estate investing, that's a part of the process as well. It doesn't have to be either or. It could be both and, but it could be seasons. But I think what you have to determine is, would I rather sell homes and help people get a home, or would I rather advise them on their investing and their retirement? Because once you decide which of those is going to give you the most juice, that becomes now, okay, how do I enter into that?

So I'm clear, get clear, stage one. Stage two is I have to get qualified to do that. What do I have to learn, do, how much is it going to cost, how long is it going to take? Then it's not so scary. And the $100,000 could go, or some of that could go towards that financial training. But I think on the career side, depending on what Dave wants to weigh in on the $100,000, you got to get a little bit more clear. You're really close. Then you know what the pathway is. And then we know how much that's going to cost. Yeah. It sounds like, I'll give you an example of what could happen.

You could say, all right, I want to be a real estate agent making $200,000 a year. And in order to do that, it's going to take me two years. Six to eight months of that is going to be getting licensed and starting my training process while I keep my $180,000 a year job. Maybe the next six months is even selling real estate part-time while I keep my $180,000 job. And then once I've got some closings in the hopper and some notches in my belt, so to speak, then maybe the next year I'll make a jump. And maybe I don't make $180,000, but I only make $120,000. So we budget $60,000 of this to cover the difference, if you even need all of that to live. That's true.

And so I'm good with holding all of it back uh for the transition uh as long as the transition is done with a plan and not just this i'm going to leap off the cliff and hope that i i you know i really needed an extra large parachute but i brought an umbrella that's not a good plan because you can blow through that hundred grand in a heartbeat right if you do that so you need a detailed plan of exactly how this is going to cause you to make the transition but if you end up at the end of this story having used some of the 100,000 to make the transition into being a real estate agent that makes $200,000 a year and you gave up $180,000 job to do that that was a good move yeah if you end up being a real estate agent that makes thirty thousand

dollars a year and you gave up a hundred and eighty thousand dollars a year that was a dumb move yeah not a good move and same thing by the way the same thing that dave just walked through that works on the other side if you want to go into financial investing and here's the key day job to dream job you've got a great day job you do not have to jump and just go we off of a cliff here. We can incrementally get to this top of this new mountain. Don't Mary Poppins it. Yeah, please don't.

Don't use the umbrella. It's not necessary. My goodness, $180,000. She's the only one that flies with an umbrella. The rest of us don't. That's right. It's a Mary Poppins rule. That's right.

I tell you what, hang on. We're going to send you a copy of Ken's book, From Paycheck to Purpose, that will help you make that analysis. And then once you've made this decision, then that will tell you how much of the money is freed up to maybe put into an index fund for a future home purchase. You might do a one-two combo of those two ideas. Jeffrey is in Salt Lake City. Hi, Jeffrey. Welcome to the Ramsey Show. How are you doing, Dave?

Great, man. what's up i am 16 years old and i am wondering what i should be doing with my money as far as saving it and investing it okay uh do you have a car i do it is paid off i paid in, and the only thing I pay for is insurance and gas. Nice. How much money have you got saved? I've got roughly about five grand saved up that I have not touched in a couple of months. Wow. You're a stud. Well done. Where are you getting all this money?

I work as a server at a local diner just down the street from where I live. Yeah. You've been working your butt off, too. All right. Good job, man. Well done. uh thank you are you going to college uh i haven't quite made that decision yet uh as of right now i'm looking towards a trade school um and just get a degree something in there how you gonna pay for it uh ideally with cash and i don't want to go in debt as as i get older so

you gotta pay for it mom and dad aren't gonna write checks no okay i'm paying for it okay well i can tell you what are you thinking of studying in trade school um i'm thinking about following what my cousin did he went to an audio engineering and uh did internship down in L.A. Okay. So I'm following a similar path to that because for him being 19, he is making a pretty penny. Yeah. Okay. Do you have any interest in audio engineering? Or does it just look cool because your cousin's making good money?

I've been a song and music musician. I've played drums for 10 years. Okay. And audio has been very special to me. So I want to try to make that a job that I enjoy and want to go to. Got it. All right. Well, Jeffrey, I wouldn't do anything fancy with this money. Because the best return on investment that $5,000 will give you at 16 years old is to invest in some kind of education.

And that's what I would hold that money for. So I would set it aside on a simple savings account and keep piling it up. See how big a pile you can have. And so you can write a check and go become educated in whatever it is, whatever field it is that you're going to move into and pay cash for it. That's going to give you the best rate of return. Ken Coleman Ramsey personality is my co-host today. Open phones at 888-825-5225. In the lobby of Ramsey Solutions on the debt-free stage, Sam and Samantha are with us.

Hey, guys, how are you? Hey, good. How are you? Hello, how are you doing? Where do you guys live? Orlando, Florida. Awesome-ness. Welcome guys, how are you? Hey, good. How are you? Hello, how you doing? Where do you guys live? Orlando, Florida. Awesome-ness. Welcome to Nashville. Thank you. Very cool. So how much debt have you guys paid off? $59,000 in six months. Good for you. And your range of income during that time? We started off at $150,000 to $200,000. Cool. What do y'all do for a living? I am a CT tech, travel CT tech. And I'm a medical dosimetrist.

Ah, both of you there, huh? Okay, cool. Very good. How long have you all been married? Just over one year. All right. All right. What's the $59,000 in debt?

A little bit of everything. We had credit cards, student loan, car note note and also like a parent slash student loan okay so both of you brought dad in yes okay so what happened right as you're getting married you looked at this thing and said okay we have two messes we're gonna make a big mess in a one pile when we get married but we're gonna clean it up fast tell me the story how'd you get connected to us and what are you doing what What ended up happening was the SMART conference last year in November and we got a free consultation with a financial coach and ever since then is kind of when everything took off. We kind of saw what we were spending and that was very eye-opening and then kind of realizing how much

we needed for our future for retirement. That was kind of like, wow, like we need to get serious about this. We need to do something because we want a big retirement. We want a good, comfortable retirement. Yeah, you work too hard to be broke. Exactly. You make a lot of money and you're broke. Exactly.

All right, cool. So you sat down with a coach and then what happened? And then, so we've been with our coach coach Daniel Huck for a year now and he got us through our budget and he kind of gave us some tough love which is what we needed and we just attacked the debt we it kind of just it literally snowballed we just got so excited every debt we would pay it became more addicting to pay more and more debt off so we just got so excited every time we would pay we just it was great yeah and that's ended up what happened very cool so the one-on-one coaching was your whole

deal yes it was it was great huge yeah once he got us to do the first budget we did the budget before we started the program and um when we realized where our money was going because we we're both sporadic spenders you know we just used to just spend whatever we wanted to. We had, you know, a big shovel. So we decided to just, you know, put it down on paper and look at it and realized, wow, we're really spending a lot of money on things we should not be spending money on. Which I felt like not a lot to show for it, I guess, if that makes sense. Yeah.

It's kind of disgusting. Yes. You got a healthy level of disgust. Absolutely. Yeah. It's funny to watch you laugh, Samantha, as he was describing that. I want you to talk about that when the coaches get in there and they start really working with you on this, whether it's one of our coaches or a great accountability partner or somebody in the Financial Peace University class.

What happened where you went, oh, my gosh, because you were laughing, thinking about something. Yes, I was thinking the biggest for me was the food and grocery budget and that was huge because when we when he gave us our like budget that he wanted us and I was seeing how much we were actually spending that was like hugely eye opening like where we were versus where we should be and I was kind of like wow that was crazy and he even told us a story about his um what he does because he's really just very Dave Ramsey. And he would split his cheese in half because that's just, they don't have extra budget. And so that was like, wow, people are doing this.

He's serious and we want to be serious. Absolutely. Wow. Split the cheese in half. Yeah. I haven't heard that one. You mean like one square of cheese? Mm-hmm.

You get half. Oh, my gosh. That's next level. I've heard of rice and beans. Now it's half a slice of cheese, Dave. It's gone next level. And worse than that, it was called Very Dave Ramsey. I just heard of it.

By the way, people don't know this, but I've seen Dave fix his own burger. It's a whole piece. He does a whole piece of cheese. He really does. Well, when it's in the budget, you can have the whole piece. There it is. Well played. Yeah.

Good answer. Good answer. Oh, man. Well done, you guys. Thank you. How does it feel to be free? Amazing. Yeah, very good.

It's a feeling that I didn't know existed. I didn't realize what it would feel like until it happened. Yeah. You ever been debt free as adults? No. Neither one of you. We went normal. Yeah. And then you combined and then now you cleaned it up yeah yeah absolutely

what do you tell people the key to getting out of debt is um for us i guess budgeting dedication and working together yeah definitely every month we would sit down and budget and talk about what we want to do what we want to focus on. And yeah, just being on the same page. Now we're using every daughter. You're doing it on paper. Just on paper. Yeah. Paper.

Okay. Yeah. And remembering our why too was the future. And with a little one on the way now it's even a bigger why. So that was big for us just to remember the why. Yeah. Change your family tree. Yeah.

Correct. Yeah. So all that stuff is singles. Now we're married. Now we've got a baby on the way now we're grown up now we're going to live big time yeah yeah well done y'all yeah very very very well done so proud of you well we've got a copy of baby steps millionaire for you that's a pre-release copy and it's the one we send out to the press the advanced reader copy and that's the

next chapter for you guys you're going to be millionaires now you're on your way to do that and uh build some serious wealth and generosity and be set up for this new baby this is very very cool and a copy of total money makeover for you to give away and pay it forward here through the christmas holidays you have a chance to say merry christmas and get somebody started on the same journey you started on a year ago yeah yeah wow and you did this at six months i mean you guys leaned in hard. I even got rid of my Mustang. Brand new car. Oh!

That hurt. Ouch. Yeah. I had it for one year, but, you know, I enjoyed it while I had it, and that was the decision I made. You know, it's like, we got to go gazelle type, so. Yeah. What did that sell for?

I actually, last year, January, it was $21,000 I sold it for, which is what I owed left on it. Okay, so you broke even on that. But that's $21,000 of the $59,000. And then game on, and six months later, you're done. So a little bit of a tear when it left the driveway? Yeah, a little bit. Not going to lie, a little bit.

I would have. I got a little tear, and it wasn't even mine. You going to get another one? Someday. You know, it's crazy because, you know, when I sold it, I said, yes, absolutely, once I get the cash, I'm going tear in it. It wasn't even mine. You going to get another one? Someday. You know, it's crazy because, you know, I say when I sold it, I said, yes, absolutely. Once I get the cash, I'm going to buy it. But now that we have the cash, you know, to buy it, now I don't want to buy it. You know, it's hard.

You know, maybe buy that $10,000, $15,000 car that's going to keep me going. There you go. When you have to spend like real money instead of borrowed money, it's a different flavor. It changes the old priorities. It's a game changer. It changes things around. Yep. So well done, you guys.

I'm so proud of you. Thank you. You're so fun. Who were your biggest cheerleaders? Our coach, Dan Huck, and then my mom. Yep. Ah. Yeah.

So mom's proud. So proud. Getting ready to be grandma. Is this her first baby? Yes. First grandbaby? Mm-hmm. Yeah.

She's excited. Her life is good yeah great stuff good job you guys very very well done all right it's sam and samantha orlando florida fifty nine thousand dollars paid off in six months making 150 to 200 count it down let's hear a debt-free scream. Three, two, one. We're debt-free. Yeah. Woo. You know, they got through that debt-free scream about the same pace they got through that $59,000.

Yeah. That's quick. They don't mess around. They did a good job on it. Very well done. Very impressive. Great couple. So here's the deal.

When we tell someone, they say, oh, God, all that debt, and I say, well, you were just normal. That's not a compliment. Right. No. By the way, normal sucks in America. 78% of Americans have too much month left at the end of the money. Yeah. That's eight out of ten houses on your street are out of money before the month's over.

Yeah. There's a lot of stress. It's the number one cause of divorce in North America today. Credit card debt is a way of life. There are entire segments of the population that think you can't own a car or a house without a car payment or a house payment. There are entire segments of the population that think you can't be a student without a student loan. Normal sucks. They'll forget the amount of people in the population that think it's okay

to go into debt for Christmas presents. Oh! Very normal. Very normal. That's horrible. I know. It's horrible. Be not conformed to this world, but be transformed

by the renewing of your mind. New ideas and new behaviors change everything. This is The Ramsey Show. We'll be right back. Well, Christmas is coming up. You hear it. It's coming at you. Tick-tock, tick-tock. Here it comes.

It's in December this year. They don't move it. How are you going to pay for presents, the bigger grocery bills, the travel? You need a plan. And that's one of the things we do in Financial Peace University is we make sure you have a plan not only for Christmas but for the rest of your life. And you can still get ready for Christmas. You can make it.

In Financial Peace University, you learn step-by-step not only how to get out of debt, how to save money, how to build wealth, but outrageous generosity, all with intentionality. In fact, the average household saves $2,700 and pays off $5,300 in just the first 90 days. And Financial Peace University is available as a part of your Ramsey Plus membership, and you don't have to live with a stressed-out Christmas year after year. You can make this the year that right here at the end of 21, going into 22,

you can just step it up and say, that's it. We're doing it. You can get started today, or you can give FPU as a gift by visiting ramsaysolutions.com slash FPU. Always Ramsey Solutions. ramsaysolutions.com slash FPU. Financial Peace University. Almost 10 million people have now been through this class.

Wow. It changes everything for you. Kathy is with us in Phoenix. Hi, Kathy. Welcome to the Ramsey Show. Hi. Thank you for taking my call. Sure.

What's up? Well, I'm not calling for myself. My husband and I are debt-free and have really just always lived, you know, by saving money and not living beyond our means. I'm calling about my son because we constantly have a battle with him. He is 24 years old. He's amazing. He has worked a full-time job for the last two years since he graduated. And he also sells tennis shoes on the side. And he has saved up about $120,000. But he does not believe in putting any of his money into the bank. He tells us,

why would I do that if I make 20% by reinvesting it in tennis shoes and reselling them. So now he makes $60,000 a year and he's made in the last year about $60,000 profit from selling tennis shoes. So all that money just goes right back into tennis shoes. And I guess I'm old school. It's hard for me to understand that he's not putting some of it away and not just reinvesting it constantly in tennis shoes. And he just recently bought a car and he put down 10,000 and he's financing 20,000 and it's at a 6% compounding interest. And I'm, I'm telling him, no, you have the money pay cash, and he's like, why would I do that? I'm making 20% off these tennis shoes.

And then my last problem that we always have with him is he wants to quit his job and open up a tennis shoe store, and he's going to have to pay $75,000 down for that, and he has this debt. And so he convinces me when I talk to him that I'm like, well, I guess I'm just, that's smart. That's smart. But I listen to your show all the time, and I'm almost positive that it might not be the smartest thing for him to be doing. Can I ask a quick clarifying question?

You led off by saying he saved $120,000. Then you went into all these details, and it got murky for me. Does he have $120,000 in cash sitting in a safe? You said he won't put it in the bank. I'm confused. No, he has about $20,000 in cash, and he has about $100,000 in tennis shoes. Oh, in inventory. In inventory. So he goes to different tennis shoe shows and he

sells to also different tennis shoe stores and he will sell them, make 20% and then he will reinvest all that money. He lived with us for two years, but he is now on his own. Okay. All right. So, um, number one, uh, forget all the tennis shoes and the money for a second um the hardest stage of parenting for me has been when i no longer had control over my kids because they grew up i agree a lot a lot of your sentence structure and the way you told the story told me that you're struggling with some of that too a hundred percent and i'm trying really hard to let him do his own thing yeah but it is hard but i also want to it is hard to watch people you love do something that you think is stupid.

Right. Or questionable in judgment or whatever phrase you want to put on it. So number one thing is just Papa Dave to Mama Kathy, you're going to have to start treating him like he is the son of one of your friends who's 24, and he's like a man and stuff. Yes. Because you're using your mom voice on him. I heard it. And it has no power anymore.

I know. So if you were talking to the son of your friend, you would use the persuasive voice, and I never heard you use it yet. Okay? So that's thing one. Regardless of what the content of our conversation from this point forward is, that's your only shot because this boy is known as a man now. He lives on his own.

He pays his own bills. He's free. He's allowed to do whatever he wants, and he's not living his life to please his mom anymore. And it's not his job to either you wouldn't want him to that would be known as a mama's boy i know that'd be a mama's boy you didn't raise him to be that you raised him to be a man all right now then let's go to if i was coaching my son's friend who was 24 not my own son how would i talk to him about this okay

you have done an amazing job young man with this tennis shoe thing you are a freaking entrepreneurial rock star i'm so proud of how much money you've made now what you need to do to go to the next level if you were to ask me you might not be asking me but if you were to ask me as a person who's older and knows something about business i would say that you have too much tied up in inventory. If he were coming to one of our Entree Leadership courses and I was sitting and having a cup of coffee with him at the break at the edge of the stage, I would tell him, you have too much tied up in inventory. You're illiquid, and you need to slow down just a little bit.

You're making really good money, and you fooled yourself into thinking you're a genius. You need to slow down about three clicks. And no, you don't need to open a store right now. You're making bank. Yeah, you may want to quit your job and do tennis shoes full-time because you're apparently very good at it. You pay off his stupid car. That was ridiculous.

And then you need to just work your tennis shoe business and do it out of the apartment or whatever you're doing it out of now. Don't go open a brick and mortar and lose a bunch of money because you've got this thing on the run. It sounds to me like he's got an entrepreneurial gift, but he needs some business acumen to go with it to fine-tune some of his finances so that he can take this tennis shoe thing to the next level. I hope he does that and walks away from his job, and I hope he pays off his car, and I hope he doesn't open a brick and mortar until he has to later on,

because right now he's making bank and he has no overhead. Ken? Yeah, Kathy, I hope you heard what Dave said here. There's a lot of practical stuff, but what Dave's genius is on this is that you are now not telling him what to do, but you are now giving him advice on what he is already doing, what he wants to do. It's a total shift. And I've got to tell you, you said twice in this conversation, and I'm a dad, and so I'm only speaking from where I've blown it in this

particular area. I kept hearing you say, I'm trying so hard. I'm trying so hard. I think that's not just a phrase. I think that's your real emotion coming out. I want to tell you to stop trying. And Dave just gave you the new pathway. You know what I'd do? I'd send him a link to an article or two of some hot young entrepreneur who cash send him a link to an article or two of some hot young entrepreneur who cash flowed his way to an unbelievable business. Give some evidence of what Dave's talking about, how cash is king

and how cash eliminates the risk. It sets him up to blow this business up. How brick and mortar is maybe a thing of the past. Things like that that are more like, this is awesome, you're doing great. I think what Dave just laid out was a pathway for you to no longer try hard. Stop trying. Stop.

Stop trying so hard. Inject some information and some people in his life to polish this business acumen. And cheer him on when you give him that. Yeah, because this guy's a stud, man. He took air and turned it into tennis shoes. Yeah, he's just young. You know what I'd do? I'd buy him a ticket to Entree Leadership event.

I'm not kidding you. Here, let me send you an Entree Leadership book. Let's do that. Let's give him an Entree Leadership book for Christmas. Get him to something like that. He's definitely an entrepreneur. He's definitely got skill. And he's got backbone.

He's got moxie. He's got swagger. Yeah. I mean, this kid, man, he's amazing. Yeah. He's very impressive. So, yeah, hang on. We'll send you a copy of Entree Leadership.

We'll be cheering him and you on from the sidelines. And all of us parents who have kids that grew up, it's a heartbreaking equation. I know. It's heartbreaking while they're still growing, Dave. Oh, man. And just mix in a little family business with it. That doesn't make this too interesting. Oh, you got And just mix in a little family business with it. Oh, nice. That doesn't make this too interesting. Oh, you've got to love it.

This is The Ramsey Show. This is James Child, producer of The Ramsey Show. Did you know The Ramsey Show is one of the most popular podcasts in the world? Subscribe or follow today wherever you listen to podcasts.