The Ramsey Show - App - Porsha and Desmond Paid Off $173k in 23 Months! (Hour 3)

Episode Date: October 23, 2018

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Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. This is your show, America. Thank you for joining us. Open phones at 888-825-5225 that's 888-825-5225 zach starts off this hour in fairbanks alaska hi zach how are you hey doing well thanks for taking my call dave and uh thanks for being a mentor for many many years for for me

i uh started out in junior high school. I go with my dad to Financial Peace University classes at our local church. Wow. I just have to say I'm truly appreciative of your time. Cool. How old are you? 26 years old. All right. Neat. How can I help today, sir? Yeah, so I just have a pretty quick question.

With my employer, I have two different retirement accounts. and when I leave, I will be vested, obviously. Should I convert them to a traditional IRA or a Roth IRA? Right now, they're 401A and 403B, and they're with Fidelity. Okay. Well, the 401A is after-tax. Correct. So that doesn't have any penalty to convert it to a Roth. I always suggest, as a general rule, when you leave your employer,

take everything that's vested and roll it into an IRA and good growth stock mutual funds. You have more accessibility, more control, and more options to pick from in the open market than you do leaving something behind and trying to manage it through a former employer. Right. That makes sense. Now, I would not convert it to a Roth if it's pre-tax unless you're out of debt, have your emergency fund, and have some extra money to pay the taxes that that creates. But the 401A, you can go ahead and stick that into a Roth.

It doesn't cost you a dime. Okay. Because already after-tax money that's in there. There could be some growth in there that you haven't paid taxes on possibly, but it probably wouldn't be much. So just ascertain. Are you out of debt? I will be.

I have about $10,000 left on a student loan, but by the time I make this transition, I'll have that covered. Okay. Well, then the other question is you're not going to have your emergency fund in place. So we don't want to do anything that creates any taxes. So when you sit down with your SmartVestor Pro, roll it all over to IRAs, traditional IRAs, unless you can move some of it to a Roth IRA in similar mutual funds without any taxes. And then later on, if you want to convert it to Roth from traditional,

the taxes that are created, you just need to be able to pay those in cash as extra money you've got laying around. Louis is with us in Dallas, Texas. Hi, Louis. How are you? Hi, Dave. How are you doing? Better than I deserve. What's up?

So I had a question. I'm baby step four, putting 15% of my income into the Roth 401k at work. Good. And I was kind of wondering why your general rule is to put it into a Roth. I was talking to a coworker and he was saying, you know, right now my income is 70,000, so I'm in the 25% income bracket. Let's say one year in my retirement, I only pull out $49,000. That would be in a lower tax bracket. So wouldn't it be smart to kind of have a mix of both? No. Roth and traditional?

No. Because when you – how old are you? I'm 23. You're 23. Okay. Yeah. Well, let's just deal with some numbers for a second then. How much are you putting in a month? You're 23? Okay. Yeah. Well, let's just deal with some numbers for a second then.

How much are you putting in a month? Almost $700. I think it's $389 a check. Okay. So I'm just going to use $700 as an example. Okay. Let's start with that. You're 23. So in 40 years, you would be 63. Does that sound right? Sounds right. Okay. If you're investing, and if you averaged 12%, you'd have about $8 million in your 401K.

All right? Mm-hmm. Now, let's understand this. 752, or it's not 52, 12 times, and then we said 40 times. So out of that $8 million, 300,000 of it is money that you put in. All the rest of it is growth. So we're saying like 98% of the money in that account when you get to age 65 in our example, or age 63 in our example, okay? 97%, 98% of what's in there is all growth and it's all tax free if you save a little money on your taxes now on this 300 000 like your buddy is suggesting

which is stupid okay if you save a little money on $300,000, you get to pay taxes on $8 million. You see the problem? That makes sense. I had not thought of that. Yeah. Almost all the money at your age, especially, that will be in the account will be growth. And the growth being tax-free under the Roth heading is way more important than the tiny, tiny little tax break that you would get today by screwing around and having some of it be pre-tax and some of it be Roth. So I would tell you, man, there's no way.

I personally, I'm 57. I do only a Roth. And the numbers are nowhere near as cool for me as they are for you. Because, I mean, it's just not anywhere near that good. But, hey, thanks for calling in, man. I appreciate you joining us because it's a great discussion and a great lesson to learn. Open phones at 888-825-5225. How exciting is it that I get two calls to open up this hour from a 23-year-old and a 26-year-old?

Asking good questions, questions too by the way not stupid questions both intelligent well thought out questions and get did you get what they were both talking about by the way we didn't set these calls up it's just what came in what were both the questions about investing and retiring with dignity so if you're 23 and you're 26 you know what you're called a millennial have you not heard that all the millennials are dead beats and stupid have you not heard that well i'm here to tell you they're not because i talk to smart ones like those two every day not all of them are living in their mother's basement looking at their participation trophies a lot of them are awesome and they're killing it and they're thoughtful and they're thinking about their future uh they're mission driven i mean so so don't let somebody

trash the millennials in your presence and don't you be trashing them now some of them are dead beats but some of your baby boomers are too i mean and and i meet some gen xers whose parents are cousins okay so seriously dumber than a rock but the point being every generation's got some idiots right every race has got some idiots every region of the country's got some idiots every sex has some idiots there's idiots they're everywhere but there's some cool sharp young people out here asking very cool questions if that doesn't give you hope for the future of this nation when you got a 23 year old asking how to invest his 401k then you're just not smart that gives me hope that says that it's going to be okay because there's a whole bunch of them that are thinking and focusing. And, man, once you see, when I was 23, I saw a compound interest table, man.

I went, oh, yeah, baby. Yeah, the eighth wonder of the world is what Einstein called that. You ever look at compound interest? That's what turned his $700 a month into $8 million in that discussion a minute ago. It's called compound interest. It's something you ought to learn about, especially if you've got a little time on your side like those young people do. This is so exciting. Ha, I should have given them retire-inspired books, shouldn't I?

Ha, ha, ha, ha. This is the Daveave ramsey show 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. When it comes to ordering a cheeseburger, the meal deal works fine. But let's get real, people. We're talking about the largest investment you'll probably ever make, so don't be naive and trust an order taker who pressures you into a pre-packaged loan. My friends at Churchill Mortgage have been helping my listeners for over 25 years. Call Churchill Mortgage and get custom solutions from an expert within 10 minutes.

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Equal housing lender. 761 Old Hickory Boulevard. Redwood, Tennessee 37027. Open phones at 888-825-5225. Jacob follows me on Twitter at Dave Ramsey. What's the best way to decide which payment plan I should go with for my student loans? Minimum payments on everything except your smallest loan and throw every dollar you

can possibly throw at it. When it's gone, attack the next one down. When it's gone, attack the next one down. That's called the debt snowball and that is the most efficient way and the highest probability way to get out of student loan debt. Very fast and very hard.

Do not get into income-based repayment plans. Do not get into, I'm going to pay the minimum I can pay. I want you to pay the freaking maximum you can pay because I want Sally Mae evicted. Get that old, ugly woman out of your house. She is not a good roommate. You want her to leave. Louise is on Facebook. Should I pull $1,000 out of my 401k to do baby step one?

No! You don't cash out a 401k except to avoid a bankruptcy or a foreclosure. When you take money out of your 401k, they charge you a 10% penalty plus your tax rate. Now, that means if you make $75,000 a year household income, your tax rate is 25% plus 10%. That means you just got charged 35 interest in effect i mean it's not technically interest it's penalties and taxes but you never borrow money 35 interest to fund your baby step one no no no no no no and or would you use that to pay off debt 35 percent hit no no well they told me they're only holding 20 out out. That's all they're required

to withhold, but that's not the calculation of how much the government kicks you in the teeth. The government kicks you in the teeth at a 10% penalty plus your tax rate. You do not cash out retirement accounts unless it's to avoid a bankruptcy or a foreclosure. Now, if it saves your home, yeah, or if you're so far in debt, it's the only way you keep from filing bankruptcy, yeah, you would do that. But at that point, you're beyond desperate. You're in deep weeds, you know. But definitely not never cash it out to buy a car or, you know, just that kind of stupid stuff that people do all the time. No, never, never. Anna's with us in Washington do all the time. No, never, never.

Anna's with us in Washington, D.C. Hi, Anna. How are you? Hi, Dave. I'm doing well. Thank you for taking my question. Sure. So in 2006, my husband and I purchased our first home.

In 2008, the market crashed and slashed the value of our house. Now, three years ago, our family grew, and we bought a new home with a 20% down. It's been 12 years now, and our first home is still not worth what we bought it for. Wait a minute. Wait a minute. That's not economic. There's something else going on. Very few places in the United States have not recovered after 12 years.

Would you buy a bad neighborhood or what? I don't understand it either because we live in Northern Virginia, which is like very close to Washington, D.C., and right now it's worth $295,000. Who said? And we bought it at, according to my realtor, and we bought the house at 350k a recent comparative market analysis by quality real estate agent says this house is worth 300 grand

okay is that what you're telling me yes so you must have done the world's worst real estate deal i i did well like it like we said like i we bought the house in 2006 yeah what do you owe on it 2008 i'm sorry what do you owe on it um right now we owe about 60k on it oh sell it it it. It's crap. You think we should sell it? It's crap. It's the world's worst house. Well, here's the thing. Here's the thing. In 12 years, it sucks.

So you don't think we should wait for it? You want to wait 12 more years for it to suck more? 12 years? Alright. Do you? That was actually my question because right now we're at baby step number six. Here's the thing. If I gave you $300,000 in cash, would you go buy the house next door?

No. Why? Because it sucks. This neighborhood is not appreciating. For some reason or another, it's the world's worst rate of return. Meanwhile, the rest of the nation dipped way down and is up 20%. I agree with you. This is why I'm calling you, because I'm trying to decide if we should continue to rent this out.

No. And wait until, okay. No, it's a bad investment. It's a bad neighborhood. I don't know what's wrong here, but, I mean, a house you paid $350,000 for in 2006 before the crash, it goes down, and it's not even recovered back to $350,000? I mean, that's a very unusual real estate market, unusually bad, and I don't want to invest in it going forward. And so I wouldn't keep it going forward.

Take your loss and get out. You bought in a really bad place for some reason. I don't know what's wrong, but that's the worst numbers I've heard and I don't know when. I mean, everywhere else just about has recovered. Florida went down. Phoenix went down. Freaking Las Vegas crashed and has recovered.

You know, I mean, but there's some, you know, there's some parts of Detroit that haven't, but those are economic pockets. That's not an overall national economy thing. And so you don't buy in bad economic pockets. Yeah. And you don't keep in bad economic pockets. And so out of there, I'm out of there. If I'm you, I'm out of there.

Done quickly. Done. Yes. Thanks for the call appreciate you joining us sucks all right heather's with us in raleigh north carolina hey heather how are you i'm good i hope you are too better than i deserve what's up in your world okay i have a question on how long it should take me to pay off my debt how much debt do you have not counting your house 35 000 what's000. What's your household income?

My full-time job, I make $35,000. With my part-time work, I can make anywhere between $45,000 to $50,000. Whoa! You're doing better at your part-time than you are your full-time? No, no, no, no, no. That's combined. Oh, okay. Okay, good. I'd already quit the full-time by then. Okay, so $50,000 is your top end. You owe $35,000 on what? It's a car and my home equity line, which I combined my student loans and my pre-existing home equity line. Yuck.

Okay, and how much do you owe on your stupid car? $20,000. Sell it. I knew you were going to say that. Yeah. You don't make $35,000 a year driving a $20,000 car. That doesn't work. You've got too much tied up in things going down in value.

And you've got a $450 car payment, don't you? $416. Almost like I've done this before. Yep. Yep. That's killing you. It is not a blessing, is it? I kind of love the you. It is not a blessing, is it? I kind of love the car.

It's not a blessing. It's financially killing you. It owns you. You work for this car. Your part-time job that you took is because of this car. It's not worth it. Sell the car and then work your way through the debt. And then you'll be debt-free in about a year, year and a half max.

And, you know, including the car that you buy that's very, very cheap, that's used like a $5,000 car that you pay cash for or you pay it off very, very quickly with your other debts. But, I mean, you can love this car if you want, but I don't love this car. It's a stupid car, and it's killing you. Your numbers are horrendous on this. If you have more than half of your income tied up in cars or things with motors in them all totaled up, then you have too much of your life tied up in things that are going down in value, and you're always going to struggle.

It's causing you to be middle class or lower middle class, socioeconomically speaking, financially speaking, and it's all because of a choice of what you're choosing to drive. I would not choose to drive that. I would rather be wealthy and drive whatever I want later. Drive like no one else so later you can drive like no one else. Get your life back. This thing owns you.

I hope that helps you. I know it wasn't what you wanted, but we don't give you what you want. We give you what you need, what's good for you, because we care about you. We want you to win. Thank you for being a listener. This is The Dave Ramsey Show. Let me tell you a story about two families that are very much alike in a lot of ways. Both families have two working parents and a couple of young kids. Each has debt and has struggled to make ends meet.

But they're starting to make headway with their budgets and smarter decisions with money. They have dreams and plans, and the only real difference is that one family has the right amount of term life insurance and the other doesn't. Big difference. If one of the parents die, and that does happen, their well-being would be destroyed. Paying for the mortgage, utilities, food, and other bills would be impossible, let alone saving for education or retirement. That's why every day I talk relentlessly about getting term life insurance. Just go to ZanderInsurance.com or call 800-356-4282 and see how inexpensive it really is. Be the family that takes those deliberate steps to be different and responsible.

It really does make you the hero of your story, and it puts you on course for better things ahead. In the lobby of Ramsey Solutions, Desmond and Portia are with us. Welcome, guys. How are you? Good. Doing well. Good. Welcome. Where do you guys live?ia are with us. Welcome, guys. How are you? Good. Doing well. Good. Welcome.

Where do you guys live? We live in Baton Rouge, Louisiana. All right. Welcome to Nashville. And your shirt says you're a YouTube crazy. Yes. Love my YouTube family. All right.

Very cool. Very cool. And Desmond, your shirt says I'm not a chicken. That's right. All right. I've got to hear about this story, but I'm going to wait a second. There's got to be a story to that. Definitely.

I must have called you something. So anyway, that could happen here. So how much debt have you all paid off? We paid off $173,327. Wow. And cash flowed $30,000. Murphy. Whoa.

And how long did this take? 23 months and two weeks. That's amazing. And what was your household income during this time? Household income was $145,000 to $165,000. Cool. And what do you all do for a living? I am an officer in the reserves and also work for a Fortune 500 company as operations manager.

Oh, wow. And Portia is a retired medical military and a home entrepreneur. There we go. Very good. Cool. So you're killing it. Well done. Thank you for your service.

What kind of debt was the 173? And looking at these numbers, you must have sold something big. Yes, Dave. I would have sold the bed and step on the air mattress if my husband would have let me. All right. Yes, Dave, I would have sold the bed and step on the air mattress if my husband would have let me. Well, at the top of the list, eighty six thousand dollars student loans. Wow. Gave Sally Mayher eviction notice. Fifty thousand in vehicles. Sixteen thousand timeshare.

Twenty one thousand in credit cards, personal loans and stupid tax. This is everything but the house. Yes. So did you sell some cars or boats or anything? Oh, my gosh. We sold. I had a convertible Camaro that I sold. I know it.

He had a Tundra Platinum. Platinum Tundra. Yep. A boat, pool table. You sold the boat. Tundra? Yep. Sold it all.

And you sold the boat. Yep. Sold the boat. Sold the custom LSU tiger print pool table. Oh it all. And sold the boat. Sold the boat. Sold the custom LSU Tiger print pool table. Oh, whoa. They make more. What does a custom LSU pool table bring in Baton Rouge? Actually, it originally was for $3,000.

Yeah. What did you sell it for? We sold it. I got it off a Craigslist because I'm a big. Okay. So I purchased it for $1,100, and I was able to sell it for $1,100. All right. So it got out.

Good. That's good. That's a substantial deal. Wow. So you sold everything. What are you all driving now? Well, I drive a Toyota Camry, and he has a 4Runner. Okay.

It's not bad. That's not bad. Not bad. You're making $165,000 a year. That's right. And now you're not broke. Yeah. But, man, y'all went all in in tents for 23 months here.

People must have thought you'd lost your mind. That's right. Yeah. Yeah, because we also downsized from a 3,500-square-foot house to an 1,100-square-foot apartment. Oh, so you sold your house? No, we was renting. You were renting. We had just moved to Baton Rouge.

Right. And we planned on buying, but then we took FPU, and I was like, oh, no, we need to wait. So you had to clean up. Now you're ready to buy, though. That's right. Well, we've got to buy cash, though. Really? Well, at this rate, I think you could.

That's pretty amazing. Cool. Okay, so, Desmond, I hate to ask, but why are you not a chicken? Tell me the story. You know, my wife probably tells this story better. All right, tell the story then porsche why is he not a chicken well actually i called in the show about a situation that we wasn't agreeing on and we said whatever dave says that's what we're going to do and so we agreed to

that and so when i called in you called him a chicken and said that he wasn't going to have the conversation he needed to have so boundaries discussion oh he had to tell that he wasn't going to have the conversation he needed to have. It's a boundaries discussion. Oh, he had to tell somebody he didn't want to tell no. Yep. That's right. And I said, if he doesn't do that, he's a chicken. Exactly. So you had the conversation, so that's why you're not a chicken.

Exactly. All right. That's definitely. Touchdown. Touchdown. Go, baby. That's it. Yep.

I was very proud of him. He did it. Hey, man. That may be scarier than the boot camp of the reserves, I'll just tell you. It seems that way. That's awesome, man. I love it. Well, now I love this shirt.

I need a shirt. I'm not a chicken, Dave. That's good. I couldn't figure out why I called you a chicken. That's great. Now, it makes total sense, though. That sounds like something I would do now that you describe it. Wow. You guys are fired up.

I mean, what got you this on fire? Because, I mean, you did go nuts in a good way. You got your life back. I mean, it's got to feel great. Does it feel great? It does. It feels awesome. But, I mean, you're so enthusiastic that you sold off all your really killer cars, all of your stuff.

You move out of the big Taj Mahal rental house into an apartment, and now you're free. But what made you get that wired up? You know, I was actually a volunteer at this nonprofit organization, and there's this guy there. He tells everybody about Dave Ramsey. Listen to the radio. And so y'all was coming to Baton Rouge, and the class was about to happen, FPU.

And so he was like, are you going to the class? Are you going to the class? So we signed up for FPU and I was gung-ho from then. I was like, oh, we got to do this. And so that's what did it. Okay. And then you told Desmond we're going to class. Yeah.

And what did Desmond say? Desmond was all for it. He was like, okay, we can do it. But the thing was we had a trip planned to disney in december oh yeah so i was like oh no we need to cancel and he's like uh well no we could wait and so actually we prayed and fasted for 40 days whoa for god to bring us on one accord because i i'm kind of extreme that's what he calls me i'm just dedicated i'm not extreme i'm just motivated to get out of debt you know and so

that really helped us you know bring us on one accord and yes it is that's a huge deal well and once you are of one accord nothing can stop you exactly nothing can stop you and you guys you you're a force to be reckoned with now i mean you'll be able to pay cash for a house you're going to be able to do anything you want to do the rest of your life the generosity you'll be able to do you're going to run into people that need help and you'll be able to pay cash for a house. You're going to be able to do anything you want to do the rest of your life. The generosity you'll be able to do. You're going to run into people that need help, and you'll be able to just do it and not think about it. Right. Because nobody owns you now.

That's it. You're no longer a slave to the lender. That's right. That's pretty impressive stuff, guys. Wow. Very cool. So what do you tell people the key to getting out of debt is? That's a great question.

One thing I can say is you have to be committed. Once you agree to do something, you have to be committed to do it. And you have to see beyond your current situation. You have to see where you want to be more than you see where you are. So once you can see beyond that, then you can start to dream. And there's many times where we actually drove through neighborhoods and looked at the nice houses and say, you know, when we do this right, we can go pick a house. We can do that. But we wanted to do it right.

You know, I hadn't thought about that. Sharon and I used to do that. We would go drive the rich neighborhood and go, you know, someday we could do that. And here's all we got to do. We got to do this, this and this. And then we can get there. And it wasn't like, oh, we'll never get there, roll our eyes, those bigger evil rich people. It was more like, I'm going to be one of you.

You know, and that's what you do when you drive that neighborhood. I'm going to live here. That's it. I'm going to live in that one. You know, just like that. You know, right? That's a good idea. I had forgotten we did that, too.

Because it gets down inside of you then, doesn't it? It does. It does. And then you can sell stupid cars. That's right. You know, and we did that, too, because it gets down inside of you then, doesn't it? It does. It does. And then you can sell stupid cars. That's right. You know, and get you whatever. You can sell a stupid boat and get you one later, man. Yeah, exactly.

Because you can live like nobody else later. You can live and give like no one else because you're not giving up forever. That's right. If you think you're giving up that stuff forever, it's real painful to sell all that stuff. It is. But you guys, you cleaned house literally. I mean. Literally.

Wow. Yeah, my husband's still mad because I sold the dining room table, so. Whoa. We still don't have a dining room table, but. Get you another one. He'll be all right. Man. I think it's healthier to eat standing up anyway.

Oh, my gosh. She's a little extreme. She's not kidding. Yeah. Not kidding at all. Well, you guys, way to go. And your young men are with you. These are your sons, I take it?

Yes. All right. And their names are? We have DJ, who's 12 years old, and Christian, who's 13. All right. Cash is king, debt is dumb, their T-shirts say. So well done, you guys. Well, we've got a copy of Chris Hogan's retire-inspired book for you.

That's the next chapter in your story to be millionaires living in that house you used to drive by, right? That's right. I love it. I love it. I love you guys. You all are fun. This is great. And, of course, you know, be outrageously generous along the way.

That's what you're set up for. Desmond, Portia, Christian, and DJ, Baton Rouge, Louisiana, $173,000 paid off. Cash flow to another 30. They did it in 23 months. They sold everything in sight. They are free. $145,000 up to $165,000 income. Count it down.

Let's hear a debt-free scream. One, two, ready, sing. We are, we are debt-free. Debt-free! Debt-free! I love it. I love it. Dead free. Dead free. Yay. I love it. I love it.

Good job, you guys. That's fun. Man, that's a blast. By the way, I'm not calling people on YouTube crazy. They self-named themselves the people watching this show on YouTube everyday live. They self-named themselves the YouTube crazies. Might have been Ken Coleman involved in that, 19. Many are the afflictions of the righteous, but the Lord delivers him out of all of them. Washington Irving says,

Little minds are tamed and subdued by misfortune, but great minds rise above them. Danny is with us in Orlando. Hi, Danny. How are you? Hey there. Hi, Dave. Hey. How can I help today, sir?

Well, I got to tell you first that I've read your books. I brought my daughters to your live event in Orlando. I've even offered to buy your program, your Financial Peace University, for my staff. Wow, thank you. So I really believe. You're welcome. I really believe in the message that you're giving. Thank you.

And you're welcome. I've got kind of a small problem. I just need a little financial marital counseling on an issue. Okay. Now, I have a wonderful wife. You couldn't ask for a nicer person. But she thinks that I should divest myself of a particular car that I own. It's my midlife crisis sports car that I really don't drive very much at all.

But she thinks it's not practical to have this car sitting in my garage. Okay. What is it? What is it? This is a 1992 Acura NSX sports car. I've had it since it was new 25 years ago. Okay. You bought it brand new.

Okay. Brand new. Before her. Well before her. Yes. Okay. All right. And so what is the car worth?

It's probably $35,000, $40,000 now. Wow, it's done well. Well, I paid $50,000 for it, but that's 25 years ago. Yeah, I'm still shocked it hasn't gone down more than that. Okay, and so what is your household income? Oh, probably $250,000 a year. All right, and what is your household income? Oh, probably $250,000 a year. All right. And what is your net worth?

Pushing close to $3 million. Okay. Well, I don't know why you would sell that car. No, you should keep that car. All right, I should keep that car, Dave. Yeah. Listen, let me tell you how I made the decision, okay? Here's how you make the decision.

The car is a... She's exactly right. It's completely impractical. It's a toy. Yes. Okay? It's emotional. But this is like asking her to sell her wedding ring, and she doesn't realize that.

Uh-huh. I would never ask her to do that. Right. And it's a car you've had for 25 years. It's a car that actually means something to you, number one. Number two, it is an ultra-small percentage of your net worth. If you had called me up and said, I make $60,000 a year, we're broken in debt, and I love my car, I would have said, wah, little boy, sell your car.

But you're not broken in debt. You're worth $3 freaking million. You could drive this car off a cliff and you wouldn't even notice. It doesn't change your net worth one iota. Okay? It's such a small percentage of your world, it doesn't matter. It's like most people buying a biscuit. Okay?

Correct. And so it doesn't matter. It just sits there. Tell him why you want to keep it. I tell you, I've got my copilot here. Yeah, I can tell. You understand. So I am afraid that this would be one of those cars that if you sell it 10 years from now,

you'll see it on TV at the auction. I don't even care about that. The point is, it's a toy. You like it. Yes. And it's so freaking small, a percentage of your world, it does not matter. Yes. If it becomes worth a dollar tomorrow, it doesn't matter.

It doesn't change your life. That's right. That's how you justify a toy. You do it on ratios, you know, and that's like this friend of mine just bought a jet. He just bought a $10 million jet. Okay. That's a nice jet. Very.

But he's worth $2 billion. $10 million as a percentage of $2 billion? Uh-huh. That's like this car for you or like most people buying a biscuit it doesn't affect his world 10 million in my world i grew up manning on tennessee 10 million dollars that's what we call a lot of money you know a 40 000 car sitting in your garage is what we call a lot of money you know i grew up that way but it's a small percentage of your world and that's how you can tell if you're out of whack or not with this it's just a toy it's just a toy it's just an expensive toy and so if she wants to renovate the dining room and spend forty thousand dollars um it's that you can afford it shut up yeah do it yeah and if you want to go on a vacation

and spend ten thousand dollars on a cruise you can afford it. Do it. You make $250,000 freaking dollars a year, and you're debt-free, and you're worth $3 million. You've done it, man. You've worked like no one else, and you enjoy some of it. I want you to be outrageously generous, on the other hand, and I want you to be wise and continually investing. And I don't want you to go buy something that costs a million dollars. It's a toy. That would be out of line in your world.

Yes, sir. But this is a small percentage of your world and so that's why you win the argument she is correct that it is a useless impractical thing but so what they viewed a man so what it's No, she wins that part of the argument. I get that she doesn't get it. I don't blame her for that part. She's actually using common sense. But it's a small, it's a lint on the lint brush, you know? Yes, yes.

And that's the way you look at it. And so, you know, I've had to learn to work with that, working with wealthy people, because I couldn't emotionally grasp. And I caught myself saying stupid butt stuff like, no one should ever spend that much for a dot, dot, dot. And all that is is poor man thinking. That's all that is. That's loser talk. No one should ever have a house that big. No one should ever have two houses.

No one should ever have a $10 million jet. No one should ever have a $40,000 toy. I said stupid stuff like that. And I had to quit doing that because when I look up and I realize for some people, ratio wise, it's lint on a lint brush. And if that's what it is, then you can afford to do it if you can you know burn it in the backyard as on in next week's bonfire and it doesn't change your life then you can afford to quote waste the money unquote for enjoyment purposes and that's fine that's why you work but also be generous be giving be helping others with this wonderful net worth and this wonderful income have that as part of the mix i'm sure you are you told me you're

sending your employees through a financial piece and you're doing other stuff i'm sure it's your church or whatever that kind of stuff's all great but it just doesn't matter and it's just like me i'm looking at my buddy's 10 million dollar jet man it's a dad gum incredible it's a sweet ride i'll just tell you man but it's a small percentage of his $2 billion world. A billion. Y'all think about that with me. That's $1,000 million. That's $1,000 million.

He's got $2,000 million. And out of $2,000 million, he spent $10,000 of them. You see what I mean? As a ratio, that's not much that's like having two hundred thousand dollars and spending ten thousand bucks think about it it didn't change your life right you'd be all right but you it wouldn't you know you don't even feel it hardly it doesn't it doesn't move the needle and that's not being wasteful at that stage of the game so hold on danny that's a wonderful question made my day to get to answer it. And I'm glad the

co-pilot was there. It was a fun discussion. Hang on. I'm going to send you a copy of the book, The Legacy Journey. You too read that. You will enjoy it. It's where we discuss wealth. All my other books are about money. The Legacy Journey is about wealth. Wealth is different than money. Money creates wealth. But wealth is different than money. It's wealth, but wealth is different than money. It's a different subject, and it's a different subject biblically. For those of us that are Christians, those of us that are people of faith, the Bible addresses wealth differently than it addresses money.

Money is transactional. Money is the thing we use to buy food for our kids and that kind of thing. Wealth is different. Wealth has more problems with it, but more opportunities with it. And one of the things is that you are encouraged scripturally to enjoy the fruits of your labor. Not to be a hedonist and not to be braggadocious, but, you know, enjoy it. And I've got some nice cars. I've got a classic car.

I drove it Sunday out in the sun. My wife and I put the top down and drove. I've got a 1960 Corvette I drove it Sunday out in the sun. My wife and I put the top down and drove. I've got a 1960 Corvette I bought the other day. It's a sweetie. Looks like a Marilyn Monroe car, right? Sharon's got her little hat on. I'm not driving Miss Daisy. You know?

It was a lot of fun. Two old people riding around in this cool car. It was neat. But, hey, it's a small percentage of my world. A small percentage of my world. A very small percentage of my world. So, hey, it's a small percentage of my world. A small percentage of my world. A very small percentage of my world. So, hey, thanks for listening. That puts this hour of the Dave Ramsey Show in the books.

We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. Hey, it's Kelly Daniel, associate producer and phone screener for The Dave Ramsey Show. Did you know that in 2017, Dave Ramsey Show listeners paid off $50 million of debt? That's pretty impressive. And it could be you this year. Keep listening for more inspiration.