The Ramsey Show - App - Pay Off My House or Expand My Business? Help Me Decide (Hour 1)

Episode Date: December 5, 2022

Dave Ramsey & Kristina Ellis discuss: Expanding a business or paying off debt, Using savings to pay off debt, Taking out a 401(k) loan, College gambling, Selling a house vs. renting it out. Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Live from the headquarters of Ramsey Solutions, broadcasting from the pods, moving, and storage 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. We help people build wealth, do work that they love, and create actual amazing relationships. Christina Ellis, Ramsey Personality, number one best-selling author,

is my co-host today. Thank you for joining us, America. We are so glad you are here. The phone number is 888-825-5225. That's 888-825-5225. So a little inside baseball and stating the obvious for those of you watching YouTube. We're trying a new rig today that is going to be our new thing with microphones and actual in-ears. We've worn the sports headsets for, I have worn the

sports headsets for 20 plus years. And the reason was we used to do a lot of remotes and things out and the microphones and the earphones and so forth were better for that. And I tend to wander all over the place and flap my hands while i'm talking and it kept me on mic back in the day but i started on traditional radio mics back in the day of course and did the first decade on microphones much like are in front of me again right now and are in front of christina again so the team has uh said every 20 years you ought to change something you know so we changed something so if you're tuning in today, you're getting a full bald head with no microphone to cover it up.

So I had to really work on my hair for the day, make sure it's all dialed in. And Christina's hair is not messed up for a change. Right? Thank God. So all of our guests, except me, are going to have a much better hair day, and it's hard to improve my hair day. It's just about as good as it gets gets and it's that way all the time so if you're tuning in on youtube or you're watching a podcast in some form that has the video with it uh yes we know there's a change thank you we're just saying it out loud

888-825-5225 michael is with us in madison wisconsin hey michael welcome to the ramsey show oh thanks for having me on sure what's up um so i'm wondering i read your book total money makeover and i'm reading babes of millionaires but my question is for my business i'm debt free and i decided to buy a building using your method of paying cash for it and now i have all my debts gone except my house. Good. And I'm wondering, when does the math play in? Like if I'm expanding my business,

just continue doing that debt-free or pay down the mortgage? You're saying whether you use some extra cash you've got from this point forward to pay off your house or whether you expand your business. Right. Yeah. Both. I'm going to take a good amount home and get my house paid off as soon as I can reasonably, and I'm going to keep expanding my business. But am I going to pay nothing on the house so that I can expand the business more? No, I'm not.

I want to get the house mortgage gone, too. Because here's what happens, Michael. How many people have you got on your team in your business? Six. Okay. I was at 10 or 15 people when I got my net worth back to $1 million, and I was 100% debt-free. From that day forward, my business decisions were affected positively because I was not afraid.

Yeah, I'm kind of at that point. Yeah, you feel that way around the business, but you're going to get one more click on the notch, not 10 clicks, but you're going to get one or two clicks more when you pay off the house. When you go, now we're just in a Monopoly game. Right. And every time we pass go, we click $200. Oh, and we hit free parking.

Woo-hoo! Here we go. And it changes the way you look at your business. And you'll never – I take a lot of risks with our business but all with cash and so if it goes sideways and i lose my butt on something uh it's my butt not the bank's butt fair enough yeah and it changes you're gonna love it you're gonna love it so yeah go ahead and work towards getting your house paid off well what's your hesitation so after you know buying you know the business building in cash and going on this journey, what kind of switch made you question? that's my only hesitation. My decision has given me a double-digit return on the building.

So, no, I have no hesitation. So what I'm proposing is that you're going to make a lot more on your business because you're going to make different decisions than you're making on that mortgage. Okay. So you've kind of got it envisioned. I'm borrowing money at 3%, so I'm making money by reinvesting it somewhere else. I'm saying your decision-making paradigm will change enough to offset that interest rate because free people make different decisions than slaves.

Correct. And that's what it comes down to. And so I've watched businesses and entree leadership do this for decades now, and when they get everything paid off, building, house, everything, they have zero debt, their need to take on a marginal customer who's high maintenance and just to take on the cash flow, it's like, yeah, you're a high maintenance customer.

I don't make much money on you. I'm going to go ahead and fire you as a customer. Oh, by the way, that frees up resources and bandwidth to take on good customers that are a lot more fun and you make more money on them and so but you don't drop that marginal customer if you've got a mortgage hanging over your head you hang on because we got we need the cash flow you know and that kind of stuff and that that's the way it works in your brain when you're running a business. So which path 10 years from today, 15 years from today, do you think will take you to the best place? And I'm sitting there 10 or 15 years the other side of you, having done the exact same thing you're doing, and I can promise you the one I'm giving you will be a place that you'll be happy you went to.

And there's no economic situation or political party in power that will make you sad that you're debt free. Absolutely. Yeah, your story is literal walking proof of this. You didn't go the fast way. It's similar to a lot of our money principles where, yes, there's other ways that people tout is getting rich quicker. But sometimes the slow and steady path with biblical principles is the way that will get you further in the long run. Yeah, it always does. It just, it's never the microwave. It's always the crockpot.

And I'm now starting after 30 years of doing this to really see in a lot of our customers and a lot of our friends and in our family's lives, what we didn't realize was going to be positive. I mean, first thing is you go, oh, I'm saving all that interest. Oh, I can't get foreclosed on. Oh, and then you start to realize I make different decisions. My tolerance for crazy customers is much lower, which also makes you more profitable by the way it makes your life

better if you're running a business my tolerance for team members that misbehave is much lower i have grace for them but my need financially to put up with someone because they're bringing money into this building is zero zero so it causes me to not make decisions based on anything except principle. This is the Ramsey Show. Cynhyrchu'r ffwrdd o'r ffwrdd a'r ffwrdd o'r ffwrdd. Cynhyrchu'r ffwrdd a'r ffwrdd a'r ffwrdd. Cynhyrchu'r ffwrdd a'r ffwrdd a'r ffwrdd. Cynhyrchu'r ffwrdd a'r ffwrdd a'r ffwrdd. Cynhyrchu'r ffwrdd a'r ffwrdd a'r ffwrdd. Cynhyrchu'r ffwrdd a'r ffwrdd a'r ffwrdd.

Cynhyrchu'r ffwrdd a'r ffwrdd a'r ffwrdd. Merry Christmas America in case you couldn't tell the debt-free screams are kind of a big deal around here because the folks who stand on that stage are heroes they choose to live like no one else and now they get to live and give like no one else and that's why we have started the giving i started giving every one of them doing their debt-free scream the live and give box it's the toolkit that'll help you walk out the whole baby steps journey so it's the Total Money Makeover book, the Baby Steps Millionaire's book, and an entire year of Financial Peace University. All of this is just $99, and that's over $200 worth of items. So it's a great deal. If you're brand new to the Baby Steps, this takes you all the way through the Baby Steps and gives you every detail putting you into Financial Peace University that you should have been living with all along.

So if you're debt-free and you're on your way to being a Baby Steps Millionaire, this is how you can give like no one else and pass on the freedom, the live and give box. Go to RamseySolutions.com slash box. RamseySolutions.com slash box. Christina Ellis, Ramsey personality, number one best-selling author, is my co-host today. Ron is with us in New York City. Hi, Ron. Welcome to the Ramsey Show. Thank you. Big fan. Big YouTube fan. Well, thank you. How can we help, sir? Yeah, so I have roughly about $17,000 in student loans and around $58,000 in my savings account. And I just wanted to find out it was

a good idea to kind of pay down the loan completely, but it would deplete my savings about one third. So, you know, they say cash is king, especially post COVID. So I'm kind of just fearful of like not having too much money in my savings, but I just wanted to know your opinion about paying that down. Pay off your loans. i love that this is an easy conversation because you got the savings you got the money to do it i mean we we walk people through the baby steps thousand dollar starter emergency fund then paying off the debt and you got it which is very exciting ron you're having a hard time getting a date so you want to date Sally Mae? No, not specifically. I do have aspirations of buying a home, and this is the most money that I've had. Would you borrow a student loan to buy a home?

No. Okay. If you use money that is in your account that is equal to your student loan, you realize it's the same thing. Yeah, yeah, yeah. So I've got aspirations of you buying a home too, but I don't want you to do that with Sally Mae having to live in the extra bedroom. Since y'all aren't going to date, she shouldn't live in the house. Yeah.

Even if the interest rate is pretty favorable, I think it's like a 3.4%. Yeah. If you could borrow $20 million at 3.4%, would you? I think I would, yeah. I think you'd be broke in a short period of time after that. Now, if I were you, you called and asked us what we think you should do. Christine is right on it. I would pay off your loans as soon as you possibly can, quick as you can. Get rid of them.

Get rid of them now. And that's your shortest distance. The shortest distance between where you are and being a Baby Steps millionaire or being a millionaire is to get rid of your debt and open up your most powerful wealth building tool, which is your income. Yeah. And I just think it's such a mindset shift because I think there's a lot of fear in the world and there's a lot of misperceptions and people feel like they need to hold on to their cash. But if you have debt debt that's not safe yeah what's interesting is is that you're afraid of the wrong thing you know you're you should be more afraid of having that debt if it's a fearful time out there and it is a fearful time out there for a lot of people

but you should be more afraid of being in debt at times that are crazy like this than you should be $17,000 less in your $58,000 bank account. Exactly. Dude, you're not even going to know the difference. Yep. And going into purchasing a home. Buying a home when you're debt-free outside of that mortgage is going to give you so much more security. You don't want to have a mortgage payment in addition to having student loans that you're still dragging around. Absolutely.

Regina is in Las Vegas, Nevada. Hi, Regina. How are you? Hi, Dave. Hi, Christina. Happy holidays to both of you. You too. How can we help?

I have a question, and it's going to be a Dave, what would you do in my shoes? I have a debt of $6,800 total, been following the baby steps, working desperately hard, three jobs. I have a specific debt that is owed to my ex-husband of $1,700. He has threatened to take me back to court and to incur fees on this debt. I do owe him the money. I fell behind because I owed him $150 a month.

And unfortunately I was down with COVID. So he is now threatening to take me back to court. And then they actually add on fees and interest. I want to kind of jump off the baby steps, pay him from a loan at a 401k, and get rid of him and get him off the ledger for the year. What's your thoughts? So you're working three jobs. How much are you paying towards debt each month with those three jobs? Honestly, I went from having six or seven debts to having these last two. How much a month are you paying on debt? Currently, I'm paying about $500.

I'm trying to pay off my automobile. That's the only loan I have outstanding. And him? And him, yes. But I want to just pay him off. How much money do you have in savings? Zero. I literally have...

You don't have the $1,000 save that we told you to have? Unfortunately, no. I had an emergency, so I did have to use that okay what do you own that you can sell i am i have everything for sale except my bed it's online already and i'm working on that and it's just not coming quick enough what are these three jobs that you're doing? What type of work is that? I do different lift platforms like ride share platforms, and then I also have a day job, and then I donate blood. What is the money due to him for?

Child support? No, it's attorney fees that I owed from the pandemic. They extended and extended and extended and extended, and unfortunately I incurred the attorney's fees. Oh, that you owed before the pandemic. Yes. You had to pay your ex's attorney's fees. Why?

Because I had a bad lawyer. You and I have already discussed this, unfortunately. Okay. All right. So this money has been outstanding a while. I have been consistent until the last six months. I just fell off the bandwagon because, again, I was down with COVID. You weren't down with COVID for six months.

Yes, sir. Are you currently working? I am. I have a great job that I work remote, so I can stay with the day job, but I couldn't be with the public and do the platforms or donate blood. What do you make? Currently, I make right around $57. I'm sorry, $47.

I make $57 annually when I do both the other jobs. So you're bringing in $4,000 a month? Roughly. Yeah. I also have child support out of that, so it does decrease that quite considerably. You have to pay him child support? Yes, sir.

How much? It's $350 a month. With this $1,700, what do you feel like is the runway before you're in trouble with it? Like, how much longer do you have to pay that? She's already waited too late. Correct. Yeah. I mean, if you send him hundred dollars a month for three months

he'll lay off because he can't even get a court hearing before then he's probably already had the paperwork submitted he's that person you're the person that worries about him being that person more than he is that person this guy's been ringing your bell a long time i'm tired are you i'm tired of it already um that's why i want to get rid of him yeah you're not gonna get rid of him you pay him 350 a month till your kid is grown so he's in your life and your kid is in your life i hope absolutely yeah uh so duber's in the picture. You're just not getting rid of him. Amen. Tellers. Okay. I don't borrow on 401Ks.

That's why I'm hammering around the edges of this trying to figure it out. Have you tried anything like your credit union to borrow the money? I can't. No. And what I would do is just stop spending on anything and start sending him $500 to $1,000 a month and get rid of him. And then catch up on your other stuff. If you get behind on something, so what? But you're paying your car nothing extra or paying it a month late. You're paying your light bill a month late.

You're going to crimp down and just get him some money really, really fast and get him out of there. But I'm not going to tell you to go borrow on your 401K. It helps in the short term, but long term, it's going to cause you all kinds of problems. Christina Ellis Ramsey personality number one best-selling author, is my co-host today. Open phones at 888-825-5225. So for the email inbox, you can always send us an email if you want. The email address is ask, ask, at ramseysolutions.com. Dave, I recently read an article that said you called the universities that are promoting online gambling idiots.

I cannot agree more. I myself got addicted to gambling online and it started in college. It was accessible, but not as easily as it is today. I was a functional gambling addict for almost 20 years. It got so bad. I embezzled $1 million from my bank that i was working for to pay for gambling and i served a three-year prison sentence for my crime i am recovering

and doing well but obviously no gambling thanks for speaking out this addiction is serious and it's the real thing and the last place it needs to be is on college campuses, that's heavy. Yeah. So the Caesar has invaded the college and the colleges are selling some of them for big money access to sports online gambling to alumni and students. The colleges themselves? The colleges themselves are selling off their their mailing lists oh basically and uh serving up the people that they're supposed to be serving the students uh serving them up to caesar no pun intended actually caesar yeah really caesar you know caesar's palace like the little weird commercials with the guy with the thing on his head and all that crap that runs over and over and over and over and over and over and over and over.

Like all prescription drugs run over and over and over and over on the sports shows. I wish by God they had more than three commercials while I'm trying to watch a football game. Oh, drive me nuts. That is so toxic and so crazy. In an industry that already has so much toxicity around student loans, to now be selling their list to gambling companies. Big money, too. Big money. They're making money from selling the list? Or do they get commissions from?

They're making millions and millions and millions of dollars. Deloney and I covered an article on it here on the air the other day, and that's where I went off and called them all idiots and morons and all those names I'm not supposed to use that I do on the air. Names that are legal by the FCC but not by my wife. And so the FCC says I can call people those things, but when I get home, Sharon says, you shouldn't talk like that on the radio.

I'm like, well, there's only one way to describe people like that, morons and idiots. That's the only thing I can come up with. So, I mean, who trashes the next generation and puts them, exposes them to the second fastest growing addiction in America today? Fastest is online porn. Second is online gambling. And you don't think we know these numbers? I mean, guess who we get to coach and counsel for crisis financial counseling

all across america every day not just here on the air but with our 5 000 plus ramsey coaches that have been trained by us you know who walks in their office most often addicts because 100 of addicts have financial trouble eventually and so guess who what we get to see we get to see the actual ends of the research that shows that oh yeah actually pornography online is destroying families at a rate that no one talks about and is unbelievably addictive and uh then right with it right with it gambling and uh but it's cool to bet on the football game now because by god we have advertised until we made it cool and so um used to be you went to some back alley bookie i wondered if you were gonna get shot um but now you just log online

and it's a cool dude from caesars and um and other cool dudes are on the commercial with him shouldn't have done that peyton bad call just calling you out there my brother think about what you're setting people up for ah it's awful just awful i mean these are the same people that are allowing 18 year olds to take on thousands of dollars in debt so it doesn't completely surprise me hundreds of thousands exactly we're not only allowing encouraging gary's in houston texas hi gary welcome to the ramsey show hey hi dave how you doing buddy better than than I deserve. What's up? Hey, Hey, yeah. Well, I'm a, yeah, here in Houston, I'm 72. Um, I don't actually have a retirement other than social security. I get about 2,400 a month and I have $30,000 in savings. Okay. savings okay so i have my house up for sale uh my fiance lives about 150 miles from me

and uh she has a house that's paid for so i'm selling mine and we'll get married i'll move up there okay but here we are talking about how are we going to develop money and of course if i sold it i would be able to make about 200 000 on it okay yes sir um if i she says why don't we just lease it out because my lease my my payments are only 882 and i could lease it out for 18 1900 dollars and so i've just been struggling with this. So I thought I would touch base with you and see what your thoughts on this, because, um, um, you know, I'm trying to, I'm 72, but I'm healthy. How long has the house been on the market? Oh, you know, I got on in the market late and I think, um the first of september last of august and so

it set for 72 days and i had two buyers that fell through and uh so now i lowered it my realtor said well let's lower it from 320 to 305 and i still haven't gotten any bites okay well i mean typically december would not be the hottest month for people to be looking at houses. Correct. We used to have a saying in a real estate business, if somebody wants to look at a house in December, by God, show it to them. They need a house.

Because everybody else is out shopping for Christmas and seeing Santa Claus and all that stuff, right? So not a great month for you to expect big results on a price reduction. I agree. Once you approach Thanksgiving, the market slows down until after the first of the year dramatically. Okay, let's back up a second. No, I want you to sell it. I don't want you to rent it.

Your fiancé is wrong. Here, let me give you two major reasons why. Okay? Good. One, $1,800 minus $800 when you're renting a property is not $1,000. It sounds like it is, but once the property is empty a while, you don't get the full $1,800. Once the property is not paid by the tenant and it takes four months to get them evicted, you don't get the $1,800. Once they decide to change their Harley oil in your living room and you get to replace the carpet because you can't find them because they skipped town after that, it's not $1,800.

So with the numbers you're giving me, you're about going to break even. Okay. So I don't want to break even. You want some money, number one. Number two, it's very, very difficult to be a landlord, particularly a first-time landlord from 150 miles away. Correct. And do a good job at it. Even if you had a management company or a trustworthy relative to watch over the property,

it's still not going to be watched over like you would watch over it, and you're a first-timer. You're going to make mistakes on which tenants you put in. All of us do when we start that so i would rather you take less money and have all the money and none of the hassle you know that that was my thing i was trying to tell her you know hey well you know i think we ought to sell it and i do want to plug this in real quick. Of course, I've got a realtor that as of January, my contract ends. And just out of the blue, okay, well, I'm a Christian. I believe in praying, okay?

So I've been waiting and waiting and waiting. You know, I just felt like I needed to wait. And so I've been patient. And then all of a sudden, this Chinese lady knocks on my door yesterday. And she says, hey, how come you took your house off the market? I said, well, it's around the end of the year and people are really not looking. And she said, well, my sister doesn't speak English, but I know. I said, well, I still have a realtor.

You can check with him. And she said, oh, well, if you didn't have a realtor we would like to negotiate with you and my sister doesn't speak english but we would like we're interested in buying your house yeah if you're a good christian you also believe in the devil so you should be real careful here this smells like a scam scam scam scam scam scam scam scam scam scam scam scam scam scam scam run run run run run run run run if they can walk through your realtor and make you a valid offer Scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam, scam show Welcome to the Ramsey Show. Christina Ellis, Ramsey Personality, is my co-host today. Open phones at 888-825-5225.

Alex is with us in Louisville, Kentucky. Hi, Alex. Welcome to the Ramsey Show. Hey, guys. How's it going? Great. What's up? So I got a $20,000 debt that is being garnished weekly from my paycheck. Ouch. What's that from? It's from a side-by-side that I purchased and then lost.

Wow. Okay. Expensive side-by-side. Yes. Yeah, I've got all the bells and whistles. Okay. Yes. Yeah, I've got all the bells and whistles. And I'm curious, I have about $80,000 in equity in my home and another $6,000 in personal loan and credit card debt. If I should sell my house and pay off all my debts and just rent until I can buy again?

How much other debt other than the $20,000? Say it again. It's $26,000 total in debt. But 20 of it is this garnishment? Yes. What's your car worth? About $5,000. Are you married? No, divorced.

How much do you make a year? $68,000. And you have no money, I assume. No. You would have already paid it. You wouldn't have called no money, I assume. No. You would have already paid it. You wouldn't have called us, right? Right. Yeah.

Okay. And is that $68,000? Okay. Is that just from one job, or do you, by chance, do other things? Okay. There's just one job. Well, that's good news. How much is your house payment?

My house payment's right at $1,100. Okay. You have kids,100. Okay. You have kids? Yes, four. Okay. Do you have custody of the kids? 50-50. Okay.

Well, the house is always the last thing I sell. And the question I always ask myself, and all of us here on the show ask ourselves is, what will we do if we woke up in your shoes? What will be our next step? So if I'm a divorcee, a bachelor, the house is not that big a deal. I do need a decent place that I'm renting that I can take the four kids to, right, when it's my turn to keep right but um but home ownership uh just a bachelor you know loading up your stuff and moving out it's not that big a deal emotionally how long ago was the divorce

about six months ago yeah okay um if i'm in your shoes a fresh start does sound pretty appealing. So, yeah, cleaning this thing off and then, you know, storing the rest of that and restart my baby steps. You're debt-free. Now you build your emergency fund. Then you start saving to buy a house. Because my guess is if you had $80,000 in the middle of the kitchen table, you wouldn't go buy a house right now.

No. Obviously, you would pay these things off. You'd set your emergency fund in place, and then you'd start working towards a house. Is there anything in particular about this house that causes you just dying to keep it? No. Actually, the house is almost getting too small for the number of kids I have. Mm-hmm. Okay.

Well, I'm kind of thinking if I'm in your shoes, $26,000 when you make $68,000 isn't that much money. We have people pay off a lot more than that and not very long. And you have 50-50 custody. So you said that $68,000 is from one job. And so you have margin with your time when the kids are with their mom. If I'm in your shoes, I'm going gazelle intense and just knocking off that $26,000. Now that's not to say you don't sell the house

just because you want to sell the house, but I think he can knock this out. Yeah, you could probably be done in nine, 10 months. I mean, 2,600 bucks a month, but that's just living on beans and rice rice and beans and working two jobs you know and um you know just rolling up your sleeves and saying i want this crap out of my life i want all this negative things in my rearview mirror now that the divorce is in my rearview mirror rather than looking at and then i've got a clean future out ahead of me

and i'm a homeowner with a bunch of equity. So, yeah, I think it's an awesome opportunity to just clean it up if you go do what Christina said. That's probably a better plan than I was coming up with. I'm just trying to think it's probably emotionally wrung out after the divorce. But you don't have the, you know, the constrictions on your time. So you got the kids when you got the kids, but when you don't be at work. Right. Well, I can hear so much heaviness in his voice. And it's easy when you're in those really heavy situations to only tunnel into in on big switch sweeping action. So paying off the house, selling the house, having that $80,000, that feels good because it's an immediate win. But I think you can fight through this. And I think that you need to hear that you can do this. I think, I mean, we see people on these debt-free stages, on this debt-free stage all the time who've paid off way more money than that and have a really difficult situation. So I think right now, I just want to encourage you that you can do this. You can have a house with $80,000 in equity and have no debt if you're

willing to fight for it. Yeah. One of the things we always say around here, we got something tough in front of us business-wise as we say, what must be true? So ask yourself, what must be true for me to have $3,000 a month on this debt and be done in nine months? What must be true? That means I'm working two jobs, three jobs, and I'm living never seeing the inside of a restaurant,

and we're not buying a bunch of crap, and we're not going on vacation, and we're going to clean up the mess and the mess that we made with the side-by-side freaking Bentley side-by-side but um that you end up 20,000 bucks upside down on it I mean that's a story how do you I mean I can imagine buying one for 20,000 but how do you end up losing 20,000 on one but I think he already feels that shame like I can hear that no I'm he already feels that shame. Like I can hear that in his voice. No, I'm just saying that that's the thing. I want all that. If I'm him, I want all that in my rearview mirror.

Right. And so you can channel that if I'm him to be angry, not at myself, but just at cleaning up the mess. Exactly. And how good is it going to feel to know that you fought through it, that you took ownership of it, and that you fought to pay off that debt? When you get to the other side of that, you're going to have such a feeling of just relief and pride in the fact that, yeah, you made a mistake, but you know what?

You fought to overcome that mistake. Caleb is in Fort Myers, Florida. Hi, Caleb. Welcome to the Ramsey Show. Hi, how's it going, Dave? Better than we deserve. What's up? So I am currently 18, and I have two credit cards. However, I've had, I set them up on automatic payments, so they don't hold any value at the end of the month.

So I'm debt free. However, I have been saving up some money and I have about $70,000 saved. And I was wondering, should I invest that money or should I go ahead and look towards a place to like buy a condo or apartment did you say $70,000 yes at 18 yes way to go Caleb that's impressive how'd you do that what do you make? I mean, worked through high school and saved my money. I'm not really a huge spender. I can tell. You don't spend on anything.

What do you do for a living? Well, that's the thing. I'm not going to college, and I started a family business with my dad a couple years ago and just working with that right now. And you're making obviously good money. Not really. I mean, only taking in about like $45,000 a year out of that. Are you still living at home with your parents?

I am. Okay. First thing I'll tell you tell you is go get an apartment before i talk about buying a house okay or go get just go get your place to live and establish yourself as an adult somewhere you don't have to do it today but but that's an interim step before you talk about buying a house way to go on the 70 000 so the answer to your question is i always ask myself what does the data say what do the actual facts say to become say a millionaire okay we studied 10,000

millionaires the number of them that said I became wealthy because I have credit cards that I pay off every month and never carry a balance the answer that the people that became wealthy because of that action is precisely zero none of them did now some of them do what you're talking about and most of them don't if you're going to pay it off every single month just use the debit card and then you're not carrying a rattlesnake in your pocket hoping it doesn't bite you because if you keep playing with snakes eventually they're going to bite you i mean you've made it like one whole year or something of your adult life doing this so um you're asking for trouble i wouldn't ask for trouble i would just

get debit cards use those and continue to pile up cash and buy a house someday when you're ready you're doing really good but I wouldn't play with snakes. This is The Ramsey Show. Have you been inspired to make a change with your money? Want to know where to start? Take our three-minute money quiz to get a plan you can follow. Go to RamseySolutions.com and search for Get Started to get a plan for your money.