The Ramsey Show - App - My Dad Spent All of the Money I Earned As a Child (Hour 2)

Episode Date: April 22, 2021

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Music 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, Dr. John Deloney, Ramsey Personality, host of the Dr. John Deloney podcast, which is unbelievably popular these days. I guess it actually is believable, but it's not unbelievable. I don't believe it.

I've got like 11 friends and my mom. Well, that started your base. And it has exceeded that. And they have all told six people each, and so we got it going now. My mom hits refresh a lot, and I thought that was just it, but it's more than that. No, it's actually a thing. It's more than that. And they have all told six people each, and so we got it going. My mom hits refresh a lot, and I thought that was just it, but it's more than that. No, it's actually a thing. It's more than that. You've become a thing, dude.

It's happened right here at Ramsey. We watched it happen. A weird thing. So check it out if you want to hear about life and mental health and boundaries and relationships. It's all Dr. John Deloney Show, and you will leave a lot of things, but bored will not be one of them. And so check it out.

We'd love to have you there. And his best-selling book, Redefining Anxiety, as well. So we're here to help you with your life, your money, your mental health questions, your relationship questions, your life, your money. All of that is woven in there together. Kim is with us to start off this particular hour in Roanoke, West Virginia. Hi, Kim. How are you?

That'd be Virginia. Hey, Kim, how are you? Virginia, I'm good. Thank are you? That'd be Virginia. Hey, Kim, how are you? Virginia, I'm good. Thank you so much for taking my call. I need some education and some advice. Okay. I am 51 years old. My husband's 57.

We're debt-free except for the house. We finally got our emergency fund fully funded, which means we were able to start our Roth this week. Great. Which brought us up to 15%. We owe $170,000 on the house. And my question, and because I don't know a lot about whole life policies, we have two. One is worth $26,000 cash value and one's $14,000.

And I want to know if we should take those and put them against the principle of that $170,000 and how that works. Okay. against the principle of that $170,000 and how that works. Okay. Well, life insurance is a crummy place to invest money. It is not for an investment. It's for replacing one of your incomes if one of you dies to help the other one get along. We have term.

You have enough term insurance in place? My husband's dad is a State Farm agent. He got him his whole life policies a long, long, long, long time ago. We have term insurance, $600,000 on him, $300,000 on me. From State Farm? No, that's a different company through our financial advisor. Oh, okay. Okay, good. Well, your husband's dad is still living? Yes, he is. Okay. He may not

understand, but I would cancel those. Okay. He likely won't understand, but that's not relevant to the conversation. This stuff, it's crap. It's absolute crap. And so you're better off to have your money going into things that are going up in value and that have a good rate of return and get the cash value out while you can. Because if you die, whatever cash value is in there stays with the insurance company. State Farm keeps it. They only pay the face amount of a policy. That's how whole life works.

That's one of the reasons it's such a rip-off. So you do want to go ahead and get rid of that. You may have some relationship issues in the midst of doing that, but you need to get rid of it. So folks, here's the way this works. Whole life life insurance is roughly 20 times more expensive for the same amount of insurance nationally. That's the averages. So what you can buy for $5 a month in term costs you $100 a month in whole life. But Dave, it's such a great investment.

And the other $95 that is not going to insurance then goes into an investment. And so let's learn the rules of the investment. The first thing that happens is the first three years of a whole life policy, your cash value is zero. So you invested $95 a month in our example for three years, and you have nothing. That's called a front-loaded financial product. If you're being kind, it's called getting screwed if you're not.

Then once you do get money in there and it starts building up, the average whole life policy in this nation today pays 1.2% interest. And this is a long-term retirement plan investment, which, by the way, the consumer price index was 4.2 for the last 74 years, meaning inflation. So if you're not making at least 4% on your money, you're not keeping up with inflation. So you're losing money when you save money long-term at 1%. That's after you lost all your money for the first three years.

But after all of that, if you do it for years and years and years and years and years and years and years, and you finally have $20,000 in this $40,000 or $50,000 whole life policy as your cash value buildup, that you paid an extra $95 a month for all these years and then you die. Your $50,000 policy with a $20,000 savings in it that you've paid 20 times extra

per month to get pays $50,000. What happened to your 20? Oh, they keep it. We gifted it to the insurance company. Yeah, because we're just those kind of people. We wanted a bigger, shinier building in our downtown. We needed another tower.

You know, Dave, when you first told me this several months ago, I even got over the dismal return. What I didn't get over, it's just driven me crazy, and I'm driving home by myself. They keep your money. They go invest it at 12%, and they keep the 11% gap. Oh, yeah, because most of your shopping malls and so forth are financed. The mortgage company on major commercial projects is life insurance companies.

They loan money back out into real estate as a mortgage company and make 8, 8 10 12 on it wherever in there and so uh but aside from that so you have a banking system where you bought term insurance for five dollars you put 95 dollars into a savings program that for the first three years they keep your money after that they pay you 1.2 percent and when you die they keep your savings account now what kind of idiot would have a savings account like that none but of course it's never explained to you that way by those people because they sell this crap so there's only two people that sell whole life life insurance ignorant people that don't understand it who are actually good kind sweet people they're just ignorant because that's exactly how it works or crooks because if you understood that and you sell it anyway you're a

crook by definition and so um that means that sweet little lady's sweet little father-in-law, I just called him a crook, but oh well, or ignorant. He's more than likely just ignorant, though. Most of those guys I know in that world, they're – They just want to make sure they see that money. They'll make sure – Well, they mainly sell homeowners and car insurance. And so then, you know, their company has a whole life,

and they get them tied up into this. And they make good money. Because you get paid in the insurance world, you get paid on premium. And so if the premium is 20 times more, your commission is 20 times more. So, of course, they're going to go, oh, I think that's really good stuff. You know, but no one in the entire financial community, not a single person anywhere in the financial world today recommends cash value life insurance except people that sell it none of the rest of us none of us that have you know that are independent people in the investment world you know they tell you get you do need life insurance

but you need to get term insurance people anywhere else any kind of study you do any kind of formal academic study you do anything unless it's from the whole life world, unless it's from the people who sell it, they don't tell you to buy it. Because it's absolutely the payday lender of the middle class. Is there any data that shows that people buy that more than term? Oh, yeah. They buy a lot more than term. I feel like everyone I know has whole life problems.

And the reason you know why they buy it more than term is because it's sold more than term. It's pushed more than term. Yeah. I mean, until 15, 20 years ago, term insurance, nobody talked about it hardly. This was like, this was the, you know, but if you go into every major city in America, in the skyline is banks and life insurance companies. I wonder how that happened. Santa Claus didn't build those buildings.

You did, people. This is the Ramsey Show. With more frequency than you know, I get calls and emails from people dealing with the recent loss of a spouse or a parent. You can hear the struggle and the heartache that they've been experiencing. And at a time they should be grieving, what breaks my heart the most is the strain and tension

that they're going through because of money, especially when it's a situation that could have been avoided. If you have a family, it is your responsibility to have term life insurance. It's one of the things you do to say I love you. And yes, this is an ad for Zander Insurance. But since this is one of the most effective ways I have to get my point across, so be it. For over 20 years, I've been telling you about the importance of term life insurance

and protecting your family. Listen, you need to check out Zander.com or call 800-356-4282. I can't say it enough. Protect your family. It's what you're supposed to do. Go to Zander.com or call 800-356-4282. Dr. John Deloney, Ramsey Personality, is my co-host today. Thank you for joining us, America. This is the Ramsey Show. Common sense for your dollars and cents.

Teaching people to live on less than they make, a concept Congress can't grasp. Lydia is with us in Columbia, Missouri. Hey, Lydia, how are you? Fine, thank you. How are you doing today? Better than I deserve. How can we help you? My husband and I are currently renting, and our rent is priced roughly by July this year.

We've been planning to buy our own home and we started listening to your program less than three months. And we want to buy our own home because our kids are here to join us. We are immigrants. I joined my husband about two years ago in the pandemic or before the pandemic and I started working not long ago. Our income for the year is about 150, 160. My husband makes over 100 and I make about 30,000. We have car loans. My husband has student loans. We have IRS debt.

Our total debt is $125,000. Our question is... He's been here three years, or you've been here three years? I have been here two years. He has been here 20 years. 20? 10. 10? 10. 10.

Okay. I was thinking, man, he got car debt and IRS debt pretty quick. Okay. Wow. Okay. So now... Which country are you immigrating from? Ghana, Africa, Ghana.

Wonderful. And is this a permanent citizenship or green card or what? I am on green card. He's permanent resident. Okay. All right. Wonderful. So you'll be able to get your citizenship then, right?

Yes, yes. Wonderful. Awesome. Good. Well, welcome. We're glad you're here. Thank you. And what do you guys do for a living?

He's a nurse, and I'm also a nurse as well. Okay. But I am a medical assistant. He's a nurse in the psych field. Gotcha. And how old are your children? Our son is 21. Daughter is 15.

Our two little ones, 10 and 8. And they're all in Africa? One is here. One is my step. My husband had a child out with someone when he was here without me. And they're all in Africa? One is here. One is my step. My husband had a child out with someone when he was here without me. And then I have, in actual fact, I have two kids. He has two back home.

But we both are out of our first marriages. So we have been together less than five years. I understand. Okay. And the so you could rent a home for the children that would live in your home if they were to move here, correct? Yes, correct. Okay, that's what you need to do. You need to get

out of debt first, build your emergency fund of three to six months of expenses, second, and then start saving to buy a home. When you buy a home with all this debt hanging around your neck and with no emergency savings the home will end up being more of a curse than a blessing it is not a uh it is it is home ownership when you're broke is a bad thing it will

get you it will bite you um and so you've got you've got good incomes. He's developed some bad American habits with money. I hear them in the mistakes he's made. You may have participated in a couple of those, but you've got car debt, you've got IRS debt, you've got some other things you need to clean up here because that's a mess, and then save your emergency fund for a rainy day and then do this. So what I want to do is I want to help you with this because I'm inspired by your story. We have a class called Financial Peace University. We have a budgeting app called EveryDollar.

The premium version of EveryDollar and Financial Peace University are all included in what's called Ramsey Plus, a one-year membership to that to be able to watch those videos go through this financial class you and your husband do that together uh obviously we charge a hundred dollars for all of that per year if i give it to you as a gift will you promise me that you and your husband will do everything in there yes we will okay i think you might so you hold on and i'll give it to you kelly will pick up and we'll get you signed up. That's pretty cool. That's super cool. And I love how you framed that. You've picked up some bad American habits. You don't do that in Ghana.

Hey, man. You don't have IRS debt and car debt in Ghana. No. It's the truth, right? It's a cultural thing. I mean, there are countries that do the same stupid butt stuff we do. Australia, they're about as, you know, UK, you know, England, about as stupid as we are on stuff like this, or dumber in some cases as a culture. But, you know, you can observe these things in different cultures, the way people handle money, the way they see money. And it has a lot to do with a lot of different factors, economic factors and other things. But you know what's interesting is if they get their act together, they have a higher probability of becoming wealthy than someone that's born here.

Why do you think that is? I think they believe that it's a land of opportunity, and some of us aren't sure. We just don't believe it anymore? We're waiting on somebody else to do it. And all they wanted was a chance, a place that they could do it. And they just see fields upon fields to go be tilled, right? It's the land of opportunity, not the land of entitlement. And they see it that way.

They think the Statue of Liberty is real. And I do because I'm an old-fashioned American softy. Some of the coolest, most inspirational folks I've been around in my educational career was international students who would come over and say, you're telling me I can get a law degree here? You're telling me I can go to med school? You're telling me I can go to Walmart and they have seven kinds of milk? Game on.

Yeah, let's do this, man. This is the land of abundance. Yeah. Yeah. Gift upon gift upon gift. Two aisles of cookies? Work hard, hard, hard, hard, hard, yeah. What do you mean?

You've got to be kidding me. Yeah, it's real. John's in Arlington, Virginia. Hey, John, welcome to The Ramsey Show. Yes, sir. Thank you. Thank you. Hi, David.

Hi, John. Hi. How can we help? So I have a question. I'm on Baby Step step six of your book. I have a network is about one, 1.8 million free. Thank you.

I didn't think it would happen. So network I'm debt free. Definitely have an emergency fund. My mortgage is $381,000 left on it. And I'm considering, out of my brokerage accounts, there's one fund that has about $314,000 in it. And I'm wondering if I should sell that to pay off my mortgage. It's returning about 13%. How old are you?

I'm 52. Okay. Way to go. Did you inherit any of this $1.8 million? No. I inherited $9,000. $9,000. Yeah.

That's the greatest answer I've ever heard. Not exactly a trust fund baby. Okay. I'm just saying. I did have inheritance of $9,000. $9,000. That's the greatest answer I've ever heard. Not exactly a trust fund, baby. Okay, I'm just saying. I did have an inheritance of nine. $9,000. My granddad left me $9,000. What's been your income through your working life here? When I was 20, it was down somewhere some years $50 to a couple thousand.

What's been your best year? What did you make in your very best year ever? $160,000. What's your career field? Software consulting. Way to go. I'm so proud of you, man. Awesome, man.

So here's the way you answer the question. There's an old thing from the Harvard Investment investment newsletter that's called sunk cost analysis and you just reverse engineer your question and it'll answer it for you if your home was paid off and you did not have this investment come brokerage would you go borrow on your paid for home and put three hundred thousand dollars in a brokerage account no same thing every day that you don't pay this off you borrowed it No. Yeah. math side of your brain. The other side of your brain called your heart is where you measure risk. And when I suggested that you borrow on your paid-for home, it kind of put your stomach in your throat a little bit.

And that means that you all of a sudden started measuring the risk of this. You're not going to go bankrupt and you're not going to get foreclosed on. You're worth $1.8 million. You've done it, dude. You're good. But this is just a measurement of peace when your head lays on the pillow at night. Pay off your house today, sir.

This is The Ramsey Show. Thank you for joining us, America. Dr. John Deloney is my co-host today here on the air. You can add hope to your inbox, hope to your inbox with the Ramsey newsletter. Whether you're on Baby Step 1, 2, 3, 4, 5, 6, or 7, it's packed with actionable guidance on up-to-date ways to save money, stay on a budget, invest smarter, give more. Every week we walk with you as you tackle debt, as you build your savings. Plus, you'll never miss the latest articles, shows, products from Ramsey Solutions. Of course, it's free. You can subscribe to the Ramsey Newsletter today at RamseySolutions.com slash newsletter. Our question of the day comes from Blinds.com.

Find out for yourself why Blinds.com is the number one online retailer of custom window coverings. You get free samples, free shipping, and with the new promos they run every month, you'll save even more. The promo code is RAMSEY. All right, today's question comes from Robbie in California. At age five, I started piano lessons, and five years later, I got a job playing at a restaurant on weekends. I was paid $60 a night plus tips. My dad said that since I was a minor, he would save the money for me. I don't think the relationship problem here is with money. I think you got to say what your dad did sucks. And there's a period at the end of that sentence.

And then you got to move on. I'd add one more sentence. What he did sucks. He sucks. Yeah, he stole from his kid. What a scumburger. Stole from his kid. You scumburger stole from his kid and let me tell you it'll just tell you when i say that everybody goes yeah but when this young

man hears me say that or you say that it's hard for him to hear it's hard to hear your dad the bad guy oh yeah your mom's a bad lady because we jump in and want to defend him well i mean it's just it's just that's it's against our nature to think that the person that's supposed to take care of you screwed you over yeah but you got you got to say it i often tell people to write it down and put a period at the end of that sentence yeah and then you got to feel it and it hurts and then you got to go make a decision what you're gonna do next yeah and so you, what are your takeaways from this? How do you defeat the emotional scars and trauma? You have to intellectually get above them and then you feel them. Yeah, you got good at the piano. People will pay you for it.

B, you have the ability to make money and save money. He works hard. Yeah. You've got a good work ethic. I mean, 10 years old, he's at the piano. Am I reading that right? Five plus five, yeah? Yeah.

And so... Don't trust your dad with money. Yeah, we're not going to give him any money. We're not going to trust him with much of anything, really. You know, just five minutes of our time, maybe, but I'm not going to leave my kid there either. You can't trust him stealing. I don't know what else I can trust him with. So, I mean, I'd be there with my kid but not leave my kid there by himself. So, I wouldn't.

Not until this is not to sell some kind of noticeable change in the old man's life because he's crook. Yeah. Then the other thing is, is that you probably have learned a lesson that you do want to learn. And that is you don't trust other people to take care of your money. Now, when you're 10, you're supposed to. He's a child. But you can take that away and go, you know, when I'm 40, I'm not going to let someone take care of my money blindly. That's right. I'm going to always be involved. I'm going to always know when I'm 40, I'm not going to let someone take care of my money blindly. That's right.

I'm going to always be involved. I'm going to always know where my money is. I'm always going to understand it. No one's got, like, power of attorney. So, you know, I'm in Nashville. We're in Nashville. And over the years, I've become friends with a lot of folks in the music business. They get scammed.

They just get robbed. And the stories of the guys that are 60, 70 years old and how they got scammed when they were making big hits because they turned everything over. It's like an athlete. And they knew this guy. Yeah. And I loved him. And he hung out with my kids and my family. And $100 million later. He took a lot of my money.

Yeah. I don't have any money because I turned it over to him like this kid turned it over to his dad you have to do that when you're 10 you don't have to do that when you're adults so it's a good it's a good takeaway and that's not being bitter or that's not being toxic or something you know i don't trust anymore because of my father no you just don't you know it's your job to manage the money and understand what it's doing you can help get advice from people but you can't get a babysitter for your money. So there's been some – I've been doing a lot of reading on trauma the last few years, Dave. And there's two guys, Dr. Peter Levine and another guy named Dr. Bessel van der Kolk.

They have a description of trauma that was transformative for me. And it was it's less about the issue and more about your body's response in the present to that issue so what i would tell this young man is when he's about to do something related with money and his heart starts racing just stop for a second and acknowledge oh my body's trying to take care of me and then you can say i'm good i appreciate your body taking care of me but i know what i'm doing now or i've got trust here. Or I've dug into this account. And what you want to do is make peace with your body in the present. Because it's just trying to take care of you, and it will take care of that little 10-year-old kid for the rest of your life if you don't acknowledge it.

But we spend so much time trying to replay what has already happened, trying to edit that story. You can't edit the fact your dad stole your money. What you can do is learn to make peace with your body moving forward. That's interesting. Your body reacts as if the same event is happening again. Yes, over and over and over. It remembers to warn you that it could be happening again. And that's why we often...

So it's a warning mechanism. All day, every day. And we even will fall into similar relationships to people who hurt us in the past because our body wants to correct it and fix it. And we'll end up in the same situation over and over like i remember when we were i was a little kid we were coming home from my grandmother's uh several many like a 10-hour drive and uh we came across the top of this hill two-lane road and stopped because a guy was turning left in front of us guy came over the hill and plowed in the back of us. I mean, knocked us in the neck, totaled the car. Wow.

It was a bad car wreck. And that was 50 years ago. Yep. And when somebody gets up on my bumper from behind now, I still feel it. It takes off. That's right. That's the same thing, isn't it? That's interesting.

And so there's a little part of your brain that's is gonna scan your environment the year forever until you say oh there it is i'm good i'm in a big raptor now right yeah i'm good yeah i'll win this exchange yeah yeah but it's just like whoa i want to get one of those old people bumper stickers like get off my butt you know kind of thing you know get off my lawn you know that kind of thing and uh it's just but it's thing. But it's associated with that trauma. Your body remembers that. The name of the book is The Body Keeps the Score, right? And so think about when an adult –

Like when these guys are called up in their second marriage, but their first wife blew all the money and stole everything, and so they have trouble trusting the new wife. And so, Dave, we are in a culture that is so obsessed with new information, and we can shove it all in our frontal lobe, new facts. But that part of our brain that's looking for threats is still running and running and running. Lizard brain is real. It's always running.

Until you make peace with, she walks in holding the checkbook, and you go, you got to go, hey, she's different. She's new. I trust her. She ain't got the same name. I trust her. That's right. I trust her. She looks totally different.

Yeah. Right? And your body will begin to go, okay, cool. Just want to make She ain't got the same name. I trust her. That's right. I trust her. She looks totally different. Yeah. Right? And your body will begin to go, okay, cool. Just want to make sure that she's not a threat. And once you make peace with your body, man, that's when your body, you receive this healing from this trauma. You know, that's what happens when people get their emergency fund. That's exactly right.

Because they've been living on the edge for so long that every stinking little thing was a crisis. Everything. I mean, every hangnail is a crisis when you're broke right i mean every little dinky fifty dollar thing is a crisis when you're broke but when you got ten thousand dollars in the bank it's an inconvenience it's annoying it's just an annoyance but when your emotions still go oh god yeah oh god and we hear about people who get out of debt and they say i can't spend now that's it yeah because they've got a

part of their brain saying you will never spend again because we remember what happened last time yeah and you got to make peace with it yeah and that's when that's that's why you're coaching you can retrain it because it requires it requires intellectually getting above it that's right and going wait facts are my friends as you always say yeah and so like you know but you can't you can't steamroll your feelings with you got to know i mean like Sharon, when we went broke, she was terrorized by us being broke. Yep. And so, anytime we do anything that feels like the stuff we used to do, like we might. The alarm sets off.

And it's like, whoa, chill. We've got money. It's okay. With lots of zeros and commas. We could just burn that much in the middle of Florida. Nobody will care. It's okay. It's okay.

And she, okay. She has to revisit It's okay. It's okay. Okay. She has to revisit it, though. That's very interesting. The human body is extraordinary at taking care of us. Wow. This is The Ramsey Show. We'll be right back. Christy Wright is all about equipping women to make money doing what they love. One of the ways she does that is through the Business Boutique Academy, her exclusive online training group for women with businesses.

Having a business can be overwhelming. It can be lonely, but it doesn't have to be. With the right training, the right support, there's nothing you can't do. So whether you have a business or a side hustle, ladies, if you're looking to use your passion and skills to start a business and make extra money, Christy will guide you every step of the way. Enrollment for the Academy closes tonight. We only have open enrollment twice a year because we want everybody to be in the same

groups moving through the process, and only twice a year. Don't miss your opportunity to get it. It closes tonight at 8 p.m. Central Time. Join the Academy at ramseysolutions.com slash academy and become part of the incredible community of women who are making money doing what they love. Alex is in Santa Clara, California. Hi, Alex. How are you? Good, sir. Thank you for taking my call. How are you?

Better than I deserve. What's up? So my parents are what you might call rock stars. Mom's a teacher, dad's a cop, and they are multimillionaires just from doing all your stuff, which means that when I went to college, I went to this real fancy, expensive school and they were able to cash flow the whole thing. I'm 24 now. I can't help but feel like I, you know, I want to pay them back somehow, but I can't just cut them a check. You know, it's not like they're going to care about that. So what kind of things can I do as a son to honor the gifts that they've given me

and pay them back somehow? Get married and have babies. And be a good husband. Don't be an idiot. Yeah, you don't give them money. They don't want money. They don't need money. Let me tell you, I've got three kids that are successful, have great marriages,

strong followers of Jesus. They're experts in their fields. They're very giving and generous. They're good moms and dads, and they bring the grandbabies over to see Papa Dave. I don't need anything else from them, dude. That's everything. That's the best way they can pay me back. Don't be screw-ups.

Is it really that simple? It really is. Hey, Alex, and I'll tell you, I'll add one more. I can't believe it took me this long to do this. As I was leaving my home state to move to Nashville, I took

a detour. I drove about three hours out of the way, and I called my dad and said, hey, would you like to meet for coffee as I'm leaving the state? He said, sure. I had a moment to look him in the eye over coffee, and I just said, hey, I need you to know something. You did a great job, and I'm so glad I'm your son. That was an exchange that i should have had 20 years ago 15 years ago 10 years ago man you can't pay the light bill with that but i think my dad he walked about six inches taller after that and i think every dad wants to hear from their kids i'm grateful for you and man as a 24 year old your roi is money how can i pay you back? Man, letting them know, I'm grateful for you. If your dad is your hero, tell him.

To his face. Give him a hug. A front hug. Front hug. Front hug your dad. Don't be weird about it. Do it. And, you know, and every so often just go, you know, if you want to spend some money,

you know, buy a couple airline tickets and go on a blank trip, whatever it is you do, hunting trip, golf trip, I don't care, and that kind of stuff. My sons and I and my son-in-law's dads, we all went on a big golfing trip this summer all together, and that was more fun than I can think of doing anything. So those kinds of things. I have breakfast every Tuesday morning with my son, who is one of our senior vice presidents here and runs a big portion of this company and um he and i have breakfast here every morning every tuesday morning seven o'clock if i'm in town he's in town and um you know we talk about everything uh business kids everything all of them

down and it's just that that stuff is more important dude than you buying them a thingy but here's the thing the fact that alex at 24 is thinking about the character part how can i let these two important people know that i love them tells me he was raised right yeah beyond the fact that his parents didn't make a ton of money but they still figured out how to be millionaires it's a school teacher and a cop that's right. You're not making a ton of money in that house. And I've lived with a school teacher and a cop. But they taught this guy integrity. And don't, guys, life is a mist.

It's a vapor. I've never, ever sat with somebody who said, you know what, I told my kid I loved him too much. I told my dad I loved him too much. Say it again and again and again. Cats in the cradle and a silver spoon, right? All right, Kevin in Spokane, Washington. Hey, Kevin, how are you?

I'm doing what I deserve, Dave. Good. How can we help? Well, I have a question, and I mean, to the gist of it, there's a lot of details to it, but the gist is I've been working in lawn care for a long time, and as most guys in the industry have thought about going off on my own, starting my own business. And my wife and I kind of came to that decision over this last winter, and we're kind of getting there. Should I do it the slow way, debt-free, where I get another couple customers every year, and I save up, and I buy equipment, and then I do it that way? Or, I mean, we both really decided to do this full-time,

that if I should take a business loan and get the equipment I need to really get started, you know, beginning. How long have you been listening to this show? Hi, Kevin. I'd like to introduce you to my friend Dave Ramsey. How long have you been listening to this show? Hi, Kevin. I'd like to introduce you to my friend Dave Ramsey. How long have you been listening to this show? Well, I mean, long story short, I actually... No, it's a simple question, Dave. How long have you been listening to the show? About a month. Okay. That's cool. And so you've listened to about 10 or 15 episodes or something. Okay. That's fine.

I mean, if you've been listening for two years, it's a different answer. So it's not as gentle. And so we teach people not to borrow money because the shortest distance between where you are in wealth is debt-free. Right. And so I started this business. It's $350 million this year off a card table in my living room. And every year we've poured money back into it and grown it organically with organic cash flow. We've never borrowed a dime. And, you know, so lots of times we didn't go do something or buy something because we were investing back into Ramsey and growing Ramsey,

and it's worked out well for us. So you can do the same thing here. So you start with the best equipment you can get with the cash you have, and you work like a crazy man because equipment is called overhead yeah and you know you so you always want to limit overhead in business you don't go by the the guys in the lawn business that have the biggest fanciest tractors are the ones that make the least money well that's a good point and um you, if you go up on a construction site, and there's seven pickups sitting there,

and there's three brand-new ones that look like they're off a Chevy commercial going through a mud puddle, and there's two beat-up ones, the guys with the two beat-up ones are millionaires. The other two twerps can't make their payments Friday. And this is how life works. So that's what you do here you buy the least equipment that will get the job done uh and as you make more and more and more money your equipment will be better and better that's fine and more and more equipment and you can run more than one crew and all that

kind of stuff the good news is you know the business well enough that you're confident that you can grow it that's good and so but you can the good news about lawn care is you can start it with very little money and you probably have the cash to buy that first tractor and little trailer and little pickup to pull it around and one weed eater and get her done baby i'd love to see him put a price everything out some good used equipment get a number and then sit down with his wife and say let's go berserker mode for nine months 12 months get that number and get this number yeah and then you slow down a little bit but i want you to go bananas and get that and just not worry if it's two thousand dollars and

you got two thousand dollars and you want to dump it in there and go do it get after it right go get it if you got the two thousand dollars laying there and but you don't need twenty thousand dollars to do this people just overbuy to get going. Well, you're going to buy the wrong stuff, and it's going to be different. I mean, the computer world. God, man, you know how fast our computers are out of date? As soon as we unpack them out of the box. That's kind of the new thing.

You buy this whole shipment of computers. You get them up. You open them all. You tear off that little piece of cellophane. Then you just close them and put them back in the box and send it to the used people. Yeah, ship them to somebody else. You don't even have to open them all, you tear off that little piece of cellophane, and then you just close them and put them back in the box and send it to the used people. Ship them to somebody else

because they're already done. You know, it's unbelievable. So, I mean, I can't tell you how many times we've replaced computers in 30 years of running this business. Wow. I mean, we just,

and they're just, they're dust. They're a doorstop. You know? But my dad's still using that same Honda lawnmower he's had for 111 years. Well, I mean, equipment is equipment.

It's overhead. And keep your overhead down if you're going to win in business. I think you're going to do great, Kevin. And I think you need to go do it. But you do it with cash, brother. Thank you for calling in. That puts this hour of The Ramsey Show. This episode is over, but if you heard about an event, product, or service

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