The Ramsey Show - App - No Excuses! Push Forward One Step at a Time (Hour 1)

Episode Date: February 25, 2019

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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 am Dave Ramsey, your host. This is your show, America. Thank you for joining us. It's your show because we talk about you every day right in front of you. Open phones at 888-825-5225. 888-825-5225. Starting off this hour is Angela in Cleveland, Ohio.

Hi, Angela. Welcome to The Dave Ramsey Show. Hi, Dave. It's a pleasure to speak with you. You too. What's up? I have a question about how much car I should be looking at purchasing. I'm a road warrior for work. I travel probably 40,000 miles a year, and I know I'm not supposed to buy anything, you know, more than half of what I make,

but because of how much I know it's going to go down in value, I'm wondering how much is too much. Well, number one, we're paying cash. Yes. Okay. And number two, the total of all your vehicles should always be less than half your annual income. This is for everybody, because if you have too much tied up and things going down in value, you don't win with money, and so total up all the things that got a motor in them. If it's more than half your annual income, you probably got too much stuff with a motor in it, and I'm a boy. I like

motors, so that's hard for me, but I get it, but that you get toys will kill you so having said all that then what do we do with the road warrior well the rule of thumb there is you need to you whatever you drive at 40 000 miles a year i think it's easy to establish that whatever you drive you are destroying its value instantaneously so how much do you how much money do you want to light on fire? You know, the least possible. Right, that's my problem. Yeah, the least possible. I mean, right, right. You want to light the least amount.

Because whatever money you spend on this car, you're putting it in the middle of the fire pit in the backyard. You're squirting lighter fluid on it, and it's going whoosh, and it's just gone, right? Because you're just frying this. So what I'm doing, if I'm in your shoes, it's like a fleet truck or something. You know, if I own a heating and air, I got a friend of mine who owns a heating and air company, and he's got like 40 or 50 trucks running all the time, okay? So what's he want there? Well, he needs the least cost vehicle that will, in quotes, get the job done.

Now, if I'm in your shoes, get the job done means two things to me. Number one, it means reliable. Can't be stuck out on the road. I your shoes get the job done means two things to me number one it means reliable can't be stuck out on the road i can't get my work done so it's got to be reliable number two it needs to be reasonably comfortable you spend a lot of time in the car and so you know i ain't riding to 40 000 miles a year in a smart car that'd be the definition of dumb you know i mean your knees are up in your chin and you're gonna be in the chiropractor it's just not going to work so you got to have something that is reasonably comfortable and very reliable and past that it doesn't matter because you're just you know you're putting the money in the fire pit in the backyard you're burning it

so i'm thinking i just didn't i'm thinking i'm buying a $10,000 to a $12,000 car once a year. Okay, that's basically what I have now. I spent $12,000 and paid cash for what I have now. And buy another one next year. And I'm hoping, yeah. Run it a year and sell it. Well, I'm hoping I can get another year out of it. Yeah, run it a year and sell it, like a Toyota Camry, right?

A $12,000 Toyota Camry, run it a year. Run the miles up on it. Take the beating. Sell it. It's part of the cost of doing business for you. And if you run it out there three years, your reliability is going to go down. It'll still be comfortable. It'll still look and feel right. But the reliability is going to go down because you will put 120,000 miles on it in three years.

That's exactly what I just did. Yeah. And that's too far. I'm rolling that thing every 12 to 18 months if i'm in your shoes into a fresh one okay and just you know and whatever your loss in value is if you buy it for 12 and 18 months later you're selling it for eight that four thousand dollar loss is probably about right that's probably the cost of part of the cost of you doing business perfect okay what

do you make so much how much do you make what do i make i make uh 125 okay good okay i was hoping you weren't gonna tell me make i make 30 and i'm losing four grand in your own cars okay no so yeah i mean like you said i travel a lot and i know that's a pretty good income but i still didn't feel comfortable spending what somebody might that wasn't in my shoes. Well, if you do, if you do, it's your weekend driver. I mean, it's OK to have another car in your case. Yeah, but it's still it's your weekend driver.

And it's paid for as well. Yeah, if you buy a nice $30,000 car, that's OK if you're paying cash for it in your income bracket. But you just don't want to turn that into zero as fast as 40,000 miles a year will. And so that's your weekend driver. It's not your, it's not your road car and your road car might only be a road car. I'm okay with that in your case, because again, it's like a fleet vehicle. Look at it like a, like you're running a fleet of one and you're a fleet manager.

When you're making these decisions, how's a fleet manager that's got 40 trucks. How do they, that are running that kind of, they're service trucks, how do they keep that? Well, they got to keep them maintained. They got to keep the tires and the brakes, the fluids going. And, you know, you keep a regular service schedule that you're just vigilant about.

And just like you were running a fleet, right? And then you roll that sucker every so often, meaning you sell it and get another one because you're destroying it and there it reaches a point of diminishing value so quick you know on its reliability because of the miles you're putting on it good question though thanks for the call open phones at 888-825-5225 Wyatt is in Sioux Falls South Dakota hi Wyatt how are you I, Wyatt. How are you? I am doing good. How are you, Dave?

Better than I deserve. What's up in your world? Hey, thanks for taking my call. So the other day, my mom and I sat down. I've been doing your system, the baby steps, for a while now. I'm working on getting myself out of debt. My mom came to me and told me she was basically scared and wanted help creating a budget and getting herself out of debt. Was kind of wondering, she's getting her paychecks garnished. By who?

Part of her paychecks garnished. By who? Medical bills. I don't know if it's the collections company or who yeah i'm sure i don't exactly understand garnishment okay well garnishment is this they sued her and they won which they're going to win because she owes the money and they won the lawsuit and then when she didn't respond to that they they execute on the judgment, which gives them the ability to garnish wages in some states. And also it gives them the ability to capture other assets.

If she's got money sitting in a savings account, they can scarf that. So what does she owe on all this stuff, do you think? I'm not exactly sure. Roughly? $5,000 maybe. Okay, yeah. What does she make a year? $40,000.

What do you make a year? I make $40,000. What do your siblings make a year? My sister, I'm not exactly sure. Big money, little money? She just got a job. Little sister. Little money or big money? She just got a job. Little sister. Little money or big money?

Little money. Okay. All right. So there's nobody in the family making $200,000 that we're talking to. Okay. So here's what I would do with mom. Let's find out the details on this, and I would start systematically saving as aggressively as I could

and pay cash for a settlement offer to get rid of this garnishment. It'll free up a ton of money and give her the sense of traction of having turned this around. She feels so under their thumb right now because she is so under their thumb. So save up and offer them $2,000 settlement on the $5,000 bill. 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. In the lobby of Ramsey Solutions, Russell and LJ are with us. Hey, guys, how are you? Great, how are you? How are you? Better than I deserve. I hear you guys drop by with a question.

We do. We have a son who's 21. He's graduating from UTK in May, and he has grown up hearing Dave Ramsey, and we wanted to give him Financial Peace University as part of his college graduation present, but he's not having it. He's pretty frugal, but we really would like to see him go through the program. He'll be entering the Air Force in May, and we just want him to get started on the right track.

Do you have any suggestions? Because at this point, he just really doesn't want to hear about Dave Ramsey. Well, he just graduated from college. He's a genius. He got that from me. So I guess he's going into officer training? He's in's in the rotc so he'll go in as an officer go in as an officer okay i'll tell him thanks for serving his country i appreciate that um well uh it is one of the most painful things we do as parents i i'm convinced having grown

kids is probably the toughest time because you can no longer tell them what to do great worse than that they have grandkids and you can't even tell them what to do yeah so unless they're my house and then i will but short of that i mean you just have to convince them like you would a friend and the problem is that you guys him having grown up around our stuff, he probably hears your mom voice or your dad voice rather than your friendly, advice, wiser, older person voice when you start talking, when using my name. And I don't know that that can be fixed, probably. I mean, there's a possibility it can't.

You know, what I might do is whoever. It sounds like LJ, you're the one that's talked to him about this. I have. And he's very frugal with his money. That wasn't what I said. I was just talking about how to get him convinced. I get that he's not irresponsible. Yes, I've talked to him.

It might be, Russell, that you do instead. He's probably about hurt all his mommy once. I right um i'm guessing nothing wrong with ulj but it's just i'm just guessing you know that didn't work so let's try the other run you know and just a cup of coffee dad and son you know this is not me here's your dad this is just man to man you're going into the military and all the data says that a whole bunch of folk in the military struggle with money because they're around a whole lot of stupid. When you leave the gates of any installation base anywhere in the world, down each side of the road for two miles is stupid. I mean, every dumb human trick you can do because there's a bunch of 19 to 21-year-olds who got their first paycheck, and they're about to go to the carnival. I mean, it's bad.

And just say, son, you know, you're set up to lose here. You're naturally frugal and already smart. And, you know, just as your friend, I'd pay you $200 to go through it. Okay. Because I'm your friend. Okay. And just dad to dad to son. And it might be just a time you all begin to build that kind of a man-to-man relationship

a little different than father-son. My son's 26, so not that far off. He and I have breakfast once a week. And, you know, it's been a real pleasure to get to know him as a man, you know, and kind of build that different kind of a connectivity, you know, that way. If that doesn't work, it's just treat it like it was one of your friends you're having breakfast with. You offer them $200, they should do it, but they're not going to do it. And, you know, dude, I love you anyway, and you're still my friend and all that.

But this is smart, and smart people do this kind of stuff. But, you know, if you're not going to be that, I get it. I got friends of mine today. I'm 57 that, you know, don't do any of the stuff I teach. Understand. So I can't, you know, I can't, you know, you borrow money on what? That's what runs through my head yeah i understand so i can't you know i can't you know you borrow money on what that's what runs through my head looking at one of my buddies you know right so that's all you can do is you just you know put the goods in front of them uh in a winsome way let

them know you care about their heart and sometimes and i you know i in a situation like that i paid kids for a book report grown kids or i Or I paid employees, team members here. Look, I'll give you $100 if you read that book. That kind of thing. Just to kind of get somebody, what? Because this is going to mean $10,000 to him. It's not $200. And the good news is he's already probably got a lot of the messages in his head.

It probably won't be as difficult for him as all that. But the problem is the military is a wonderful environment filled with a lot of wonderful people but they're also a bunch of young kids and crazy ain't on is on the list it's out there man and he's just in that environment and even his best common sense upbringing uh may escape him for a little while and it could take him a decade to get over some of those mistakes and just tell him that just so you know this is the environment you're walking into i know you're grown man i know you're a good man i got faith in you i do not have faith in some of the stupid people you're getting ready to be around okay and um you know just that's the truth because you go

up there and you look down the side you guys are from jackson i'm from nashville you know examples right outside of you know base up here clarksville right hundred and first you go right outside the base you drive down that road they're stupid on both sides for two miles i mean and every time i go in one of these military things to speak to these guys that's what it is it's just like temptation and human every human dumb thing that can be done money or otherwise is right there in front of you that's all i know to do and if that doesn't work just let him go he'll be fine he'll be fine he's gonna be all right He's going to be all right. Good question.

It's an interesting time of life, though. Is that your oldest? It's our only. Your only. There you go. There you go. Okay. He'll be all right.

He's got good foundation. And sometimes they circle back and come back to that if they need to. He hadn't even strayed away from it yet. We're just trying to keep him from it. Thanks for the call. Thanks for coming by. Good to meet youall. Thank you. Open phones at 888-825-5225. Chris is in Allentown, Pennsylvania. Hi, Chris. How are you? I'm good, Mr. Ramsey. Thank you for

taking my call. Certainly. How can I help? All right. So my wife and I are currently on Baby Step 2. We owe $96,000. We're both 30 years old, and my wife has the opportunity to possibly go back to school. What do you owe $96,000 on? The majority of it is student loans, about $80,000, and then credit cards, medical bills. You've got a lot of school already. Yes, sir. What are your degrees in?

Well, she has two double majors in sociology and criminal justice. And she went to a pretty expensive school. Sociology and criminal justice, with the goal of doing what? She had planned on going to law school afterwards and what was what is she wanting to do now go to law school okay so right with the plan i'm going to keep going yes sir all right but there was about an eight year gap here now that she's been she started she's been a paralegal for 10 years at the same company and um if she goes back to school and does go to law school, you know, she's been told she has a spot there as an attorney. So with my calculations, this is how

I have it planned in my head. And I wasn't sure what your thoughts would be. Well, I figured we could pay off the $96,000 in about five years. Right now we take home about $70,000. So my math told me about five years to pay off $96,000, and that would be pretty much the exact same time she would be graduating law school. So that's if you pay for law school? How are you paying for law school? No, that was my question. I don't know that we'd be able to cash flow law school, so I didn't know if I should pay off the current debt while going to law school. Then when she graduates, she takes on the new debt, but we're debt-free because we just paid off all our old debt.

You know what I mean? Yeah, there's no sense just switching the P between shells. That doesn't serve any purpose. So, you know, probably what I would do is I would guess the student loan that you currently have could go on hard. How much of the 96 is student loans now? About 80. What's the other 16? Credit cards and medical bills.

No car debt? No. Good. And you make $70,000 household income? Yes, sir. What do you do? I work for a family company okay i do pest control okay not making a ton not right now we're still pretty small growing okay uh well what i would do is uh put her student loans on deferral while she's in school and cash flow law school.

If you can reduce debt and cash flow law school, I would reduce a little bit of debt. But my primary goal is to cash flow law school first. Add no more debt. Add no more debt. That's your first goal. Then the second goal, if you can get past that, is to reduce some of the debt. That would be okay. And, of course, when she comes out, hopefully passes the bar and her income goes up.

But I'm not adding new debt while I'm paying off old debt. That's just swapping the pea between shells. That doesn't do anything for you. Cash flow law school. That's your first goal. Why in the world would you trust some random guy in a cube when getting your mortgage? Do you really think he cares about your long-term money goals? Well, he doesn't. Those companies care about getting you into whatever home loan program they're pushing that week.

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Hey, Jonathan, how are you? How are you doing, Dave? Better than I deserve. Where do you live, sir? I live in Fort Gordon, Georgia, Augusta. Oh, cool. And all the way up here to do a debt-free screen. Yes, sir.

Love it. How much have you paid off? Paid off $51,000, sir. $51,000. How long did that take? Took 28 months. Good for you. And your range of income during that time?

$48,000 to $50,000, sir. Cool. And what do you do for a living? I'm in the U.S. Army. Very cool. Thank you for your service. Thank you, sir. What kind of debt was the $51,000, Jonathan?

Well, personal loans, payday loans, A300, TSP loan, $4,000, iPhone, braces, credit cards, $8,000, and the car loan. How long have you been in the military? I've been in 22 years, sir. Okay, cool. Were you in here when that guy just asked me about his son going into the Air Force? Yes, sir. Yeah, you need to do a video for them. You're in the military.

You could tell that young guy what not to do. Yes, sir. You could get their camera out if they're still in here. Actually, I talked to him like five minutes ago, sir. Okay, good. Yes, sir. Very cool. So what happened to you 28 months ago that made you turn this around?

Well, sir, back in 2010, I was stationed in Fort Riley, Kansas, and our chain of command showed your military portion of the financial piece before we deployed. And I was kind of bored. I didn't really get into it. So that day, I bought your book, Total Money Makeover. And, I didn't really get into it. So that day, I bought your book, your financial, which, Total Money Makeover. And so I didn't really think about it. You know, I stuffed your book on a coffee table, used it as a, yeah, put drinks on it. So I didn't really think about your book.

So let's fast forward 2015. I was about, I was doing stupid stuff with my money. I was making big mistakes. I was, I was like almost saving $800 in the hole in my checking account. And I was really scared. And I didn't know what to do. So I had a Les Brown moment. I had it.

So I was like, you know what? I'm going to Jurassic Search. So what I did was I sold my bedroom set. I sold my couch, my TV. I went full on. And I got about $800 out of it. And I bought a mattress, like an air mattress from Walmart. I slept on it the whole time.

Yes, sir. And I sold it. And I got that up to even, sir. And I sold it and I got that up to even, sir. And I also, as I was doing that, I took Financial Peace University and got into that. And I want to give a shout out to Julie Cooper, who is my financial peace coordinator. Once I got that done, what really pushed me over is when I got the every dollar budget. I got that. It squared away.

And from there, I went to the races, sir. And I attended a smart money conference, attended a smart conference, and retired and inspired, sir. Wow. You've been to everything. Yes, sir. Man. So when you went in, you went all in. Oh, all in, sir.

I had it, sir. And there's a picture of you with Chris Hogan up there a minute ago. Yeah, very good. Yes, sir. Fun, fun. So in 28 months, just a touch over two years, you knock off all, you clean up the whole mess. Yes, I cleaned it. You were intense. Yes, because I saw my family members, you know, going in dead, and I just got sick and tired of it.

And once I saw the light, I just couldn't believe it, that you can actually do this. Once you put your focus on it, you can actually do it, sir. You just applied military discipline to it. Yes, I did. And really, the budget helped me. And I did everything by the book, sir. Did your babysit, babysit one, two, three, and so forth. You know, it's not always true, but it's often true when we're working with someone in the military. You're used to following orders.

Yes, sir. And, you know, we give you a series of orders. Do this, do this, then do this, and then do this. And if you'll follow those orders, they work. Yes, sir. And I gained that discipline also from my dad. You he taught me you know just just no excuses son just push forward and that's what i applied sir no excuse a lot of times when you try to get uh make excuses to get out of debt people make excuses instead of looking in that mirror and

say it's your fault nobody else's fault but yours no excuse excuse. Very cool. Good for you, man. Good for you. How does it feel now that you don't have any debt and you've got control of your life? Yes, sir. It just feels so good because all my life patterns changed. My decision-making process has changed. My decision-making went from basically a mindset where it's a poor mindset to a millionaire mindset, sir. I'm focused on being a millionaire 20 years in the future.

You will be. Yes, sir. You will be, or quicker than that, probably, actually. Wow. Way to go, man. Yes, sir. I'm so proud of you. Thank you, sir.

And I give a lot of soldiers advice now. And a lot of people that made fun of me, they turn around and ask my advice now. Yeah, I guess so. Now that you're free. Yes, sir. Hey, you can talk about me wherever you want, but I ain't got any debt. That changes everything. Way to go.

So what is the number one, number two keys to getting out of debt? So the number one key I put is the every dollar app sir the every dollar app is something that i think is number one important because it's it's just it just makes you focus on everything every dollar app and the uh doing everything by the book sir no excuse and stop blaming others you gotta stop blaming others and and've got to stop blaming others and make no excuses and look in that mirror and say, no, it's your fault. Nobody else's. It's your fault.

Very cool. So when did you pay off the last debt? It was September of last year, sir. Okay, good. So you got a new bed then. Actually, I'm saving up, sir. I'm still sleeping on that air mattress. I'm doing the second one, sir. You need to get off that air mattress. I'm ready for that saving up, sir. I'm still sleeping on that air mattress. I'm doing a second one, sir.

You need to get off that air mattress. I'm ready for that. You've lived like no one else. Now you're ready to live and give like no one else. I'm happy, sir. So have you already got a copy of Chris Hogan's book? Actually, I do, sir. He signed it already.

All right, good. Have you got a copy of The Legacy Journey? Yes, I do, sir. You got them all. Okay. Well, you pick out something out of the bookstore, and it yours okay my goodness i appreciate that miss melissa will take good care of you because i don't want you to i want to give you something you've already got you've earned the right man thank you well done very well done and thanks again for serving your country i'm

honored to have men like you out here protecting us thank you sir i appreciate that good for you very well done all right it's jonathan augusta georgia 51 000 paid off in 28 months making 48 to 50 count it down let's hear a debt-free scream three two one i'm dead free there you go boom that's how it's done right there. Oh, man. You know, it is, we live in a culture where we're taught to be individualistic. We're taught to think on our own.

And, of course, one of the things to be successful in the military is you're not allowed to do that. You take orders so that a unit can, you know, cohesively take care of a certain mission. And in order to do that, people give up their individual rights for the good of the unit, for the good of the group, for the good of the country, and for the good of your family, what if you gave up your individual rights and submitted yourself to a series of orders? If you're not military, you're not used to submitting yourself to orders. I've never served in the military, so I've never had to submit to orders. As a matter of fact, I resist when someone tells me I have to do something.

And for my first reaction is, no, I don't. But you know what? If you want to lose weight, you should submit to what a guy who's built like a Greek god says you should do, right? I mean, he's got an eight-pack, you've got a keg. If you want to lose weight, you ought to do what he says, what he does. It'll get you there do right i mean he's got an eight pack you got a keg if you want to lose weight you ought to do what he says what he does it'll get you there right it's it's a great word submit yourself to a series of habits a series of processes a decision-making paradigm that's different than the one that got you to where you are. Maybe you need a new plan. Maybe you need a new path.

Maybe you need some new steps. Now, that's what Jonathan did. And look at his results. 51,000 paid off in 28 months. Way to go, Jonathan. Way to go. Good stuff. This is the Dave Ramsey Show.

All right. Thanks for joining us, America. This is the Dave Ramsey Show. We teach you to live on less than you make. A concept Congress certainly can't grasp. Zane is with us in Oklahoma City. Hi, Zane. How are you? I'm good. How are you? Better than I deserve. What's up?

Hey, I was just wondering if I should buy a house in the current market. Currently, my wife and I are renting, and we just finished Baby Step 3, but we don't have the down payment, say, that you typically talk for, but we have never bought a house before. Sometimes you tell people that it's okay to go ahead and buy. Yeah. you tell people that it's okay to go ahead and buy. Yeah, I mean, the trick is this. You're not going to put 20% down in your case, and if you are a first-time homebuyer, that's not unusual.

You just know that you're taking on PMI, private mortgage insurance, by not putting down 20%. But you don't use your emergency fund as your down payment either. Right. down 20 but you don't use your emergency fund as your down payment either right so um you know if you take out a 95 conventional fannie mae loan that's what i would recommend or less um where the payment on a 15 year fixed is no more than a fourth of your take-home pay i don't yell at people for that in your situation yeah but you'd have to have a five percent down payment okay that's your minimum i mean that that's the minimum to even get 5% down payment. That's your minimum. I mean, that's

the minimum to even get in the deal here. And that's the only way I would do it. But even then, you know that you're taking on PMI and per $100,000 borrowed, it's about 75 bucks a month. So you can really, you know, you're going to be giving them a lot of money for that. So you're going to want to get that thing paid down and get rid of that pmi as quickly as you can once you jump in there but hey congratulations on getting to baby step 3b lisa's in west palm beach florida hi lisa how are you hi dave how are you better than i deserve what's up i took your class at christ fellowship and we loved your class my husband and i thank you we you. We love Christ Fellowship. I know. We are 50 and 52, and years ago, before we knew about Dave Ramsey, I bought Universal Life to help a family member out,

and I know now that you're totally against it. I am married to a smoker for almost 23 years who is almost not a smoker. And when I've looked into getting the term insurance, it's outrageous. And I know I've paid a ton of money. I paid $280 a month for both of us for life insurance. And I just wondered, we are on baby step five, and I've kind of banked on the cash value because we have about $100,000 combined. Should I take that money out for my son who's a junior in high school to go to college, or should I take it out and pay off the $35,000 we owe on our home that has a value of about $350,000?

You can probably do both. What's your household income? I don't know. I mean, our household income is about $100,000. You can probably do both. What's your household income? I don't know. I mean, our household income is about $100,000. Okay. But you said there's how much in cash value? About $100,000 combined. We both have about $50,000. So if you got term insurance in place and you had $100,000 in your hand, you pay off your house, you still got $65,000 in your hand. Right, but we don't have term insurance yet. No, I'm just saying, if you did, the point the point is that 65 000 ought to take care of that college right absolutely okay so you

ought to be able to do both is what i was saying okay college and pay off your mortgage and if you make a hundred thousand dollars a year you don't have any debt in the world you can help cash flow college out of that budget if you come up a little short on that now term insurance um then the question becomes uh what is the size of your nest egg how much is in your 401k um probably about 250 okay so you're not quite self-ins like how much do we benefit no the death benefit what pay to pay if you die 250 on each of you yes okay all right and you price term insurance for 250 i have not okay what'd you how much did you price it for um Well, I guess everything I kind of plugged in on Xander, it looked like it was going to be a whole lot more than.

But what did you plug in, more than $250,000? Yes. Okay. My point is, if you go back just for a math comparison, you're going to find that even at 52 with a smoker on a 15-year or a 10-year level term, probably don't need more than about a 10-year level term, buying $250 on him and $250 on you is going to be cheaper than you're paying now. Right.

Okay, so let's walk through this. You're going to have a paid-for house and a paid-for college and pay less now than you're paying for the same amount of insurance, even though he's a smoker. Okay, and are there any penalties for taking that out? No. Okay. There's penalties for leaving it in.

I know. I'm stupid. No. We've all been stupid, kiddo. That's not the issue. So it's kind of what I've been thinking about all along, but I've never been able to get through. Yeah. So, I mean, the thing is you don't have to go by 10 to 12 times his income because you're debt-free. Your kid is almost grown and gone, and you've got $250,000 already saved.

So all I'm trying to do is supplement that situation with another $250,000 if he died today. Okay. that situation with another 250 000 if he died today okay you'd have zero debt kid is college is covered and a paid for house and you'd have 500 000 you'd be okay so we just go into prudential and let them know that we want to you don't have to go in and just send them just send them an email and say cancel the policy or a letter i wouldn't get in a big long discussion with prudential for god's sakes okay and then they just send you a check? They're awful. Yeah.

They'll send you some paperwork that you've got to fill out to cancel the policy because they want to make it difficult so that they have every opportunity to talk you out of it. But don't do that until you have your term insurance in place. So jump on Zander and look at like $250 and like $400 on a on a 10 year and that's probably enough in your situation especially on him because he's a smoker okay he's almost not a smoker though yeah should i wait well you could do that i mean or you could just rewrite the policy later might keep it a year and then rewrite it after he's not a smoker. Usually once you're quit for a year, your rates go down. Okay.

And then two years another time. So you can look at that. But no, I wouldn't keep paying this. It's just, it's trash. You need the money, pay off the house, get the kid in college, all that. So now let's get some term insurance in place now and cancel this garbage. Hey, thanks for the call. Joshua is with us in Kansas City.

Hi, Joshua. How are you? I'm good. How are you i'm good how are you better than i deserve what's up uh me and my brother were going to start a business so i was wondering if you had any business tips for us what kind of a business are you going to start we're going to start cleaning up people's backyards okay what's wrong with their backyards that needs to be cleaned up i'm confused well we were gonna uh mow their yards and uh like clean up after their dogs and oh i got you okay how old are you i'm 14 oh okay all right um well the the business tips are fairly simple. The basics of business are you need customers, and so that's marketing.

How are you going to get customers? We're going to the door-to-door. There you go. That's your marketing acquisition plan, your customer acquisition plan. You're going to go door-to-door. And then once you've got the customers, then you've got to just put together your pricing plan and say, well, how are we going to price this? By the job or by the hour or whatever. And then minus whatever expenses you have will be your net profit on that.

And I recommend you go ahead and put that on a little spreadsheet or something so you actually track your business and figure out what you're making uh instead of just getting the cash from the owner for the car for cutting the grass and then put in your pocket and then don't know what happened to it so let's actually track and go hey this summer we made this much money you know this year we made this much money and it's good to have a it gives you some feedback that says so this is working um also makes you stop and think well i'm not charging enough or i'm charging too much because i can't get customers in that case but um your pricing model whether you're going to do it by the hour or by the job tracking it that's called the accounting meaning you track your income minus your expenses as your net profit. A simple spreadsheet will do that in your situation.

And then going and getting your customers and, you know, whatever equipment you need to do this, if you're using your dad's lawnmower or whatever, that's fine. That's how I did it when I was a little younger than you, all the way up through your age. And you're probably going to learn a lot doing this. Good for you. Well done. This is the Dave Ramsey Show.

Hey, it's Blake Thompson, senior executive producer for the show. You know, you can listen or watch anywhere with the Dave Ramsey Show app on your smartphone. Catch the full show or watch the highlights and check out Dave's upcoming guests. Head to the App Store and download it today.