The Ramsey Show - App - Real Estate Investing As “Passive Income” Is a Myth! (Hour 2)

Episode Date: September 15, 2022

Take our Audience Survey & Enter to Win a $500 Visa Gift Card: Click here to take the survey   Dave Ramsey & Kristina Ellis discuss: The myth of "passive income" from no-money-down real estate investing, The peace that life insurance can bring, Applying for scholarships.    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 Studio, 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, is my co-host today. We're going to be joined by you from all across America as we talk about you right in front of you. We'll talk about your life and your money.

The phone number is 888-825-5225. Teddy is with us in New York City. Hi, Teddy. How are you? Hey, Dave. How are you? Better than I deserve. What's up?

Thank you for having me on the show again. I called you last year to get a little guidance in terms of my career and whatnot, especially financially, and just to kind of remind you, you told me to potentially hold off on my master's. I'm going to be pursuing that due to the fact that I just got engaged over the summer and my fiance has one more year in the same school. So we're just going to finish up our degrees, her undergrad and grad school, and then head to the beautiful state of Florida.

But my goal long-term is to have a good career and more importantly, to have financial stability, ideally in the aspect of real estate, passive income and whatnot. I have no real guidance in that regard. So I'd love to get your take on it. What's your master's in? Mechanical engineering. And what career are you pursuing after this? Mechanical engineering. Okay. Do you have a job already lined up?

I had a couple for this year. But like I said, I decided to just get my master's. It just didn't seem reasonable to take a job for one year and then, you know, head to a different state. Okay. In addition to that, my master's degree only costs less than $14,000 for the whole program, and I'm currently debt-free as well. So it's something that I can reasonably pay off while I'm in school. That's awesome.

How did you pay for your education? Predominantly through scholarships and some financial aid. I'm in New York, so there's a lot of that. That's awesome. I'm all for you buying some real estate, but when idiots on the Internet say real estate is passive income, that means they've never owned any because there's nothing passive about dealing with renters

and heat and air that goes out and roofs that leak and a coach department shows up and wants to shut you down because somebody across the street cut a sewer line. There's nothing passive about managing real estate, nothing whatsoever. You want passive, buy a mutual fund. They'll just put the check in your mailbox, and you don't have to think anything about it. But real estate ain't passive. It's very active.

Even if you're managing the managing company, they've still got to call you and approve the $8,400 new heating and air system that blew up. Or the other day, I had a $26,000 one go out on one of our commercial buildings. Didn't feel passive to me at all. So anyway, I love real estate, but please enjoy the idea that this is going to be some hassle factor that other investments don't have. It does give you a better rate of return that other investments don't have. But when I hear someone say passive income and real estate in the same sentence, it means they've been on get-rich-quick websites because they make it sound like,

oh, well, the renters will just pay for it. Nope, you're going to pay for it. Maybe the renters pay you. That's how it works in the real world. So, you know, go buy you some real estate after you get your life started and pay cash for it after you get your home paid off and after you get your 401ks and other stuff started. But this idea that you're going to build a portfolio of heavily debt-ridden real estate and the renters are all going to make

you rich is so freaking laughable that it makes my head spin. And it's all by people who have never done it before. Well, and you're in such a good spot right now. You went through college debt-free. You're walking straight into baby steps four, five, and six. I think that's really where your focus needs to be right now. Real estate can happen someday, but focus on retirement starting out and get that primary residence in place and pay that off.

Once you get to that spot, then we can start talking about really investing in real estate for profit. But you've got some very clear steps ahead. And if you do that right, you're going to really, especially at the age you're at right now, set yourself up for success versus getting kind of lost in this get rich quick world that's so prevalent right now, like you said, on TikTok and Instagram. It's like very, very popular, but it's also really leading a lot of new grads down some crazy routes yeah and sometimes people misunderstand my sarcasm or anger at that stuff like it's because it disagrees with me that's not it at all it's i know what it's going to do to you when they mislead you and you people listening go along with some of the stupid butt stuff that is out there, you're going to end up like I did in my 20s, broke.

I followed the same siren song, the exact same one, only it was just the 1980s version. Okay? And, oh, Dave, you just didn't understand. Listen, honey, believe me, if there's one thing I know how to do, it's numbers. Okay? So I completely understood. And I did it with great gusto. Starting from nothing in three years, I had over a million-dollar net worth, 125 properties.

Okay? So starting from nothing in three years. So I didn't half-butt do it. I did it all out. I mean, I got a PhD in DUMB, and I knocked it out in a short period of time. You know? And here's the thing I discovered, Christine. I PhD in DUMB, and I knocked it out in a short period of time. You know? And here's the thing I discovered, Christine. I'm not directed at him.

By the way, for you, sir, you are an engineer, which is the number one of all careers, most likely to be a millionaire when we study millionaires. Number one was engineer. Number two was accountant. Number three was teacher. Okay? So you got a lot of good stuff on your side. Just don't fall in to get rich quick. So in our day, they didn't call it passive income.

They call it nothing down. And there was a guy that wrote the book called, the book was called Nothing Down. It was a best-selling book. And a whole bunch of people, including me, followed a lot of his strategies on buying a house with no money. Because that's precisely how much money I had, none. So that's all I could use. So I used other people's money, O talked the bank into 100 financing 90-day notes I bought a property made money on it bought another property made money on it every time I

made money on it the banker gave me more money it was a nice formula and until it wasn't nice anymore and uh you know a few years later the guy that wrote the book went into bankruptcy ouch I joined a group an investors group a real estate investors group that were following this A few years later, the guy that wrote the book went into bankruptcy. Ouch. I joined an investor's group, a real estate investor's group that were following this guy's – he put together groups in cities that were following this guy's guidelines and got to be friends with a bunch of guys. We would – you know, one of us, we couldn't do a deal. We find a deal.

We find somebody else to do the deal. We give it to one of our buddies, right? And we swapped it around. There was about – there was probably 60 people in that group that were doing this stuff actively 10 years later from the time we all started that how many of them were still buying real estate and not broke none nobody made it not one i take that back two guys made it but the reason they made it was they woke up watching the rest of us go broke and they turned a whole bunch of their properties took the equities and paid off the rest they became debt free and they came out of it with about 30 of the property

but it was all debt free instead of leverage to their eyeballs and they they they you know they re they reverse engineered and got out by the skin of their teeth. And I ran into one of those guys the other day. That was 30 years ago. He's still buying real estate, and he's still healthy. But he was one of the few smart enough to look at the rest of us and go, these fools are all going broke doing the same thing. And I was one of those fools.

But you find people get rich in real estate. They're not ones that leverage up to their eyeballs. It's hard to find somebody who follows this passive income crap and 10 years later is not broke. It's very difficult to find 10 years later a real estate investor that follows that plan. They're very rare. They're unicorns. But you can still invest in real estate with cash. Pay cash for it. I mean, look at you now.

I own a bunch of real estate, but just pay cash for it and grow slower. And don't try to go follow all this mind-numbing, get-rich-quick stuff. thank you for joining us america christina alice ramsey personality is my co-host today have you ever noticed that when you commit to change in one area of your life, it becomes easier to make progress in the other areas? I've met a lot of people on their journey to building wealth who accomplished other amazing things along the way, like losing 50 pounds, finding a career they love, overcoming stress and anxiety. What seems impossible becomes possible when you have a smart plan and you turn up the focus and intensity on your goals. That's why we're bringing Smart Conference to Dallas, Texas on Saturday, October 22nd.

Some of the leading thought leaders in every major area of your life. Best-selling authors will be there speaking. Christina Ellis, right to my right, number one best-selling author. Ramsey Personality will be speaking for the first time at Smart Conference. Dr. John Deloney in the area of mental health, Own Your Past, Change Your Future, number one best-selling author. Ken Coleman from Paycheck to Purpose on the area of career. George Camel, one of the most exciting new Ramsey personalities, will be on stage.

Rachel Cruz, number one best bestselling author three times over. I'll be there. And Craig and Amy Groeschel from Life Church in Oklahoma City will be, Pastor Craig will be speaking on marriage there. October 22nd, it is the only live event with tickets left this fall. Everything else is sold out all over America. Thank you, America. We just came back from two sold-out back-to-back events in phoenix arizona a little bit earlier this week thank you to our ktar

listeners and other folks that came in for that event we appreciate you very much it was uh lights out amazing evenings so thanks for being with us you can get your tickets for this uh smart conference you'll be smarter it's all day long it's only 35 bucks you would pay more than 35 dollars to hear any one of these people speak uh that's almost free is what that is and so october 22nd get your tickets now uh ramsey solutions.com slash events thomas is with us in denver hey thomas welcome to the ramsey show oh hi dave Hi Christina. Thank you for taking my call today. Sure. Um, I, I have to tell you, I'm going to try to get through this call. I am definitely compromised. Um, I've been listening to you for a very, very long time, Dave. And, um, I'm 43 and widowed as of eight weeks ago.

Oh my unexpected. Um, I have a disabled six-year-old daughter and a 10-year-old boy. And I'm calling because I am just beyond grateful to you. Sorry, I'm nervous. It's okay. And I can talk to people now, is okay what happened what happened to your wife uh so um she had an unexpected and sudden heart attack in her sleep and um i found uh i found her so uh our daughter's disabled so she um, co-sleeps with my daughter and I work late. We were doing the, um, we're in the phase of our life where we have young kids

and she had the full-time job. And then I would work nights and weekends doing like Uber and part-time stuff. And I would take care of her during the day and my son. And that worked for us. And so I came home late one Friday night, which, excuse me, which happens from time to time. And I really wish I hadn't gone out that night, obviously. Not that I could have done anything, but I just would have liked to have been home. But so in the morning, I usually sleep in because I'm working late. And it was just odd because I didn't hear the pitter-patter of my daughter's feet, you know, running around the house and the cupboards and dishes and stuff. And I was like, that's weird. And so I was in a spare bedroom and I walked in and I heard the kids kind of giggling.

And I was like huh so i got up and i went into the master bedroom and the kids were on the other side of her playing and when i saw mary i knew right away obviously what happened and it's like oh my uh just the worst obviously obviously. Thomas, I'm so sorry. Yeah, thank you. I looked at my boy and my daughter, and I looked back to my wife, and these are microseconds. And he says to me, he says, Daddy, I think she's still sleeping. And I, whew, that one. Yeah.

That one got me. And then I picked him up, and I put him into his bedroom and shut the door. And I just lost it. I couldn't even get my fingers to dial 911. Hey, Thomas, how long were you all married? Almost 18 years and together for 23. Oh, goodness. So, yeah, it's not part of the plan to be widowed at 43, right? No, that's for sure.

So, let me check this out. So, the reason why, again, I'm calling is because I really do think that if you didn't save my life, you at the very least have calmed the worst season of my entire life. And I sincerely thank you. And I think life insurance stuff, some of it has come in, and some of it is still being worked out. I did the recommended amount that you had mentioned. And I know what to do. That's not my question today. I know the plan. I know what to do. Uh, we were on, we were on steps four or five and six. Um, and you know, just plugging away. And, um, and, uh, so obviously, you know, her life is cut short, so everything's changed. But I am taking that six months to a year.

And I'm allowed to do that because of your plan. So I can grieve my wife without having to, you know, go to work or whatever. So I know I said it, but I just wish that everybody would really take to heart. Because I've heard the call that I'm making right now dozens of times on your show, and it gets me every time. And I would just say to your audience, wherever you are right now, if you have life insurance, check it. Check it yearly to make sure it's in good standing and it's the amount that you need. And then also sit down with your spouse once a year and go over all the stuff.

Cause that's what Mary and I would do. I was the nerd. She was the free spirit. And we would have our budget meetings. And we got to the point where, you know, it was just finally tuned and I would handle basically everything. And she would, I would show her everything that was going on so that she was in the know. And, um, I even made a, uh, a spreadsheet, Dave, like, I thought I was going to go first. I didn't think it'd be this early. We would have this, but I was like, okay, Mary,

here's where you go on my computer. You click this and you just go from, you know, number or number one to 30. And then this is all of our bills, everything, uh, our tax person, everything, everything, everything. And so that you don't even have to think about it. You just go from one step to the next, and then, you know, that was the best. So the irony is I'm following my plan, right? You're doing the 1 to 30. Yeah, I'm doing the 1 to 30. Brother, thank you.

Thank you for calling and sharing your heart. I'm so sorry. Yeah. I guess that's it i you and i have been friends for a very long time you just don't know it um and if you don't believe me you can ask all my friends they'll tell you all about it well i'm honored you know so yeah i'm honored to be your friend and um yeah thank you i'll tell you what we're going to do. We're going to have Kelly pick up, and we're going to set you up with one of our Ramsey coaches at no charge

just to make sure you're 1 through 30, give you some other folks looking over your shoulder, just to love you right now and give you a hug. And, you know, I bet you're 1 through 30 is perfect, but we'll walk with you some more here because that's what friends do. But thanks for sharing your story. And I'm so sorry. What a horrible thing to go through.

Yeah, I'm so sorry for your loss. And I'm just so grateful for you calling and kind of leading that segment and walking people through what they need to know. Obviously, that's, you know, everybody's nightmare and such a scary thing, but I'm so glad you were prepared that you had life insurance in place that you had the one through 30. And I think this conversation is going to help a lot of people have that conversation with their spouse. One way you say I love you to your family is make sure life insurance is in place. That's one way you you do it and you know that's true when you

sit in a situation like he is oh my goodness i'm so sorry this is the ramsey show Thank you. We'll be right back. Christina Ellis Ramsey personality is my co-host today in the lobby of Ramsey Solutions on the debt-free stage Andrew and Taylor are with us hey guys how are you hey how's it going we're doing great how are you better than we deserve Where do y'all live? Over in Frederick, Maryland, closer to Middletown. Okay, wonderful. Good to have you guys. And how much debt have you paid off? We've paid off $58,123.79. Good for you. How long did that take? 18 months. Good. And your range of income during that time?

About $63,000 up to $85,000. Good. Boy, you guys got with it. Oh, yeah. That's pretty impressive. What kind of debt was the $58,000? Most of it was student loans, but we did have a car loan, some tiny medical debts. We even borrowed on a phone. Of course you did. Of course we did. Yep. Wow. Got to have those iPhones, right? Yeah, that's right. So what happened 18 months ago that woke you guys up and you said, okay, game on? Well, we both grew up in households that, you know, our parents worked very hard and they worked very hard. They would often work multiple jobs to make ends meet, but

they live paycheck to paycheck. And, you know, they would use credit cards, use all the loans and everything. And, you know, we grew up as we moved into our early adulthood. We did the same thing. We did the same thing that we had saw modeled. So we got the student loans. We got the car loans. We got the credit cards, all those things. And that pursued, you know, it moved into our marriage as we, you know, got married in 2018.

About two and a half years into our marriage, we looked up and realized, you know, we weren't doing any intentional money goals. And so, you know, we would get the money that we got in every month. We'd just kind of spend whatever we want. And then if there happened to be a few bucks left over at the end, we'd throw that into a savings account. And, uh, you know, after a couple of years of that, uh, we had a friend, our friend, Emily, uh, was the person that kind of plugged the Ramsey bug into our ear. She, she first started with Taylor and, uh, you know, saying, Hey, there's this guy, Dave Ramsey, you should probably look into working the plan. And that was something that her family had been working on. And so Taylor brought it up to me. And I was like, you know, I don't know about this. Yeah, I did shut it down. So I was the one that

shut it down. But around that same time, you know, spring, summer of 2020, I actually decided I wanted to apply to be a police officer at a couple of our local departments. And part of the application process was actually listing all of your debts and totaling it up. Yep. I didn't know that. Are you a security risk? Yeah. Yeah. Yeah. And so that I didn't know that at the time. But when that happened, that was the first time I had done that. I never totaled up my debt. I never totaled up her debt and definitely not totaled up the two of our debts together. And so when I saw that number on the paper. Oh, crap.

Oh, crap. And so I felt all that anxiety and that risk that she had been trying to communicate to me for those past couple of years. Well, it's free. And I just said, that's it. Game on. We're going to do this. And our finances were separate up until that point and so we just like got married and we're like oh you know what it's just easier like i have my own account you have your own account like you'll pay these bills i'll

pay these bills like we'll be roommates yeah yep that's your mustard yeah yeah so so you uh then the Dave Ramsey night the Ramsey bunch comes back up and you get plugged in huh yeah yeah so we just started you know once Andrew was on board I was like okay awesome game on but we had never done a budget before like I don't think both of our any of our parents were on budgets And so we sat down and I think what really got us is we totaled up how much we spent on eating out and like coffee and groceries the month before. We're like, oh my gosh, how is this even possible? We're two people. And so once we sat down, um, and before this, like sometimes like we thought a good month was like, oh, we have $500 left over at the end of the month. Let's put that in savings. And I think once we actually did our budget, we had like, I think like $2,500 that was like extra

that we really didn't need to spend. And we were like, oh my gosh, like what have we been doing with this $2,000 like before? So we just got really, as you like to say, gazelle intense. And so we started DoorDashhing was probably like our number one side hustle um and so we would work our normal job eight to ten hours and then pack our food that was like kind of we'd pack our food for dinner and like go and door dash to like 10 or 11 o'clock at night and then um andrew did some random whoever like needed something fixed at their house he was like oh i'll jump on that for some extra money and every dollar yeah so i babysat and um pet set just kind of whatever but what's the story on the t-shirts yeah you can so so we put these together because um

the why is the most important reason that we did this because it's not getting out of debt is a math thing, but it's not just a math thing. You can run the math out all day, but the hope, the motivation behind what you do is the thing that's going to keep going and keep pushing you forward. And so when we sat down, we realized that, Hey, we grew up in these households that, you know, didn't model that financial fitness. They, they loved us to death and they, they got these households that, you know, didn't model that financial fitness. They loved us to death and they got us a lot, you know, and they taught us an amazing work ethic, but we want something different for our future kids. And so that hope, that was our why. And that's what kept us going on the days when we were exhausted, you know, leaving our normal job

and going out to DoorDash until midnight or, you know. For those of you listening on the radio, it says it's not just a math problem. It's also a hope problem. And on the back, it says solve for freedom. Wow. Hashtag debt free. Hashtag debt free. Hashtag debt free.

Man, you guys are changing your family tree. That is just so cool. And I love that your story, you guys were living so normal before, like the fact that you didn't know what your debts were and you were shocked when you saw them written down that you were buying coffees and doing all these things. And you're like, where is my money going? So many people are living in anxiety because they just have no clue about their money. So what would you tell someone who's in that space, in that mindset of just kind of closing their eyes and not wanting to look at their financial situation,

what would you tell them to snap them out of it? I'd say that it's like, okay to not be normal. Like even once we started our journey, I would talk to friends and I feel like, right, we just live in a culture now that it's like, it's all about me. And like, I deserve like, kind of like the treat yourself mentality.

And so I would talk to friends and they're like, Taylor, why are you working this hard? Like to pay off all your debt and you're not enjoying like going out to eat. Like I would tell people like, sorry, can't go. Like that's not really in the budget right now. And they're like, well, are you, are you poor? And I'm like, no, like I have money. That's just like not what we're doing right now. And they're like, well, Taylor, like I want to, I work hard, so I want to spend that money. And so I would just tell them like, well, we do too I want to, I work hard, so I want to spend that money. And so I would just tell them like, well, we do too, but that's why we're working really, really hard on this goal for the next 18 months. We thought it was going to take longer than that. And then after that,

then we can live, you know? Well, and you're able to say that because you, like you said, you grew up in a household where you watched paycheck to paycheck happen year over year. And so now you guys are just kind of resetting the game. You're saying, okay, we're going to work hard now so that in the future, our kids can just have this completely different life than what we grew up with. Yeah. And I'd also add to what Taylor said, just humble yourself. Because if you don't, that was the first thing I had to deal with was me. When that first time I went out and DoorDash, I was like, I have a full-time job. Why

am I doing this? And I just had to remind myself, I got a goal and this is going to inch me closer to that goal one step at a time. And that kept me going. Or like when we would see people like out, like they would be eating with their families and I'm kind of like, oh no, do I hide or do I like say hi to them? You know, so. Definitely delivering other people's food that smelled really good when we weren't eating out was very difficult but you guys you guys are incredible i'm so proud of you thank you very well done how's it feel to be free awesome amazing we have options amen we got a copy of baby steps millionaires for you that's the next chapter in your story for sure a one-year subscription or membership rather to Financial Peace University

and also a total money makeover book for you to give away and help somebody get started like you did, like that friend did for you. Very well done. Andrew and Taylor, Baltimore, Maryland area, 58,000 paid off in 18 months, making 63 to 85.

Rockstars, count it down. Let's hear a debt-free scream. Three, two, one. hear a debt-free scream 3, 2, 1 We're debt-free! Yeah! Woo-hoo-hoo! That's how it's done, boys and girls This is the Ramsey Show សូវាប់ពីបានប់ពីប្រាប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់� Christina Ellis, Ramsey Personalities, my co-host today.

We know a lot of you are scared out there with inflation, debt, recession, interest rates going up, terrified you won't have enough to take care of your family. Well, you shouldn't have to live in that kind of fear. But you do have to get to the point where you say, I've had it, and you're ready to make a change. When you get there, we can help. The way we help you is the best thing we do around here. It's called Financial Peace University. Over 10 million people have learned how to get out of debt, become wealthy and outrageously generous.

It's a step-by-step plan, and we're offering it right now at the lowest price we ever have in 35 years. Yeah. It's pretty amazing. So stop living in fear. You can do this. We can show you how. Yeah.

Not only be debt free, but become wealthy. Not only become wealthy, but become outrageously generous and change your family tree. RamseySolutions.com slash FPU, Financial Peace University. RamseySolutions.com slash FPU. Open phones at 888-825-5225. Our question of the day comes from Blinds.com. They have a 100% satisfaction guarantee. That means even if you mismeasure, you pick the wrong color,

they'll remake your blinds for free. You get free samples, free shipping, and with the new promos they run every month, you'll save even more. Use the promo code RAMSEY to get the best possible deal. Today's question comes from Lucy in Florida. I'm a senior in college and I have no student loan debt. Currently, I have enough scholarships and grants to cover about 85% of my expenses, which include my tuition, class materials, and rent. Out of pocket, I pay for my food, toiletries, and car expenses. I work about 19 hours at $14 per hour a week at a student position at my college, which covers the other 15% of my expenses. I am seeing multiple scholarship opportunities that would apply to my

senior year award letter should I apply to them. The reason I am hesitant is because I feel comfortable with my financial situation and I don't want to take the funds from students who might need it more than me. Even if I was able to get 100% of my college expenses covered, I would still keep my student position because it's valuable work experience towards my future career in data analytics. What should I do? That's an interesting question. I love that you haven't taken out any student loans. I love that you can pay for your tuition and it doesn't sound like student loans are on the table. So if you feel comfortable continuing to do what you're doing and pay for your expenses and graduating debt-free, then, I mean, by all means, continue doing it. The fact that you're asking this question makes me think that you feel a little uneasy with taking the scholarships. And if you

don't want to, I mean, that's fine. But also, there's nothing ethically or morally wrong in going for the scholarship. So I really don't think you can go wrong either way. Yeah, you're not doing anything wrong by taking the scholarship. You're really don't think you can go wrong either way. Yeah, you're not doing anything wrong by taking the scholarship. You're a very sweet, kind person, and you're not harming someone else. Okay, go get the scholarship, kiddo. Go get it. Put the money in the bank. Let it be your insurance policy that you are able to finish up school debt-free. You're a very content person, which also means you have a very high probability of building wealth. It's one of the big ideas that we push all the time is contentment.

And you're not a greedy person. You're not a person who sets out to harm others, you know, or to gain at someone else's expense. And none of that is occurring when you take this scholarship. None of it is occurring. There is bazillions of dollars of scholarships that go unclaimed every year. And so you need to go get this scholarship, as many of them as you can get. And you've done nothing wrong by doing that.

They're issuing the scholarship not based on whether or not you need it. They're basing it based on the information you give them in the application. Right. Yeah, you're not harming anyone else from pursuing these great opportunities. Absolutely. Open phones here at 888-825-5225. Anthony is in Phoenix. Hi, Anthony.

How are you? I'm doing great, Dave. How about yourself, sir? Better than I deserve. What's up in your world? So, Dave, I'm really kind of lost right now. Just give you a little background. I'm 28. My wife and I have been married about five years or so. Just had a baby in February, first child. With that, I was let go from my previous job and started doing HVAC out in Arizona.

But having my daughter made me start paying attention more to my spending a little bit because I want to set her up the correct way. And, you know, I've been looking up how to get out of debt and you always pop up first. So I just wanted to get some input. I have a bill. I have the paper here. So I have 19,000 in credit cards, 12,500 for student loans and 10,500 for a car. And right now I'm doing an apprenticeship, I'm making about 17, but that's supposed to change to about 30 coming this next summer when I turn to a service technician. So I really just need some guidance because it's, you know, it's something that I wait or stay up till two o'clock in the morning doing bills and

worrying, okay, you know, I know I need another job. It's just more so I don't know where to begin, honestly. Well, I love that you said what really motivated you to get to thinking about your finances is that baby because like you heard in the last Debt Free Scream, the why is so important and wanting to change your family tree, wanting to leave a legacy for your child, that is an extremely powerful why. Now, are you familiar with the seven baby steps? Just from what I saw, I just started looking at them this week. I know that I think baby step one is saving a thousand dollars, if I'm not mistaken. So let me ask you this.

Does your wife work outside the home? She does not. She's staying home with the baby at this time. Okay. Then you are. You're going to be working all the time. Yes, I am working. Because you're starving to death. Yeah, yeah.

$17 an hour in Phoenix, Arizona for a family of three. You're not going to make it. Yes, sir. You're not going to make it until next summer. So you're going to be working a lot. You're going to be working like three, four extra jobs, any extra overtime they'll give you at work for double pay, anything you can do to get an income up.

Got to get the income up. Got to get the income up. Because you're in a pretty good-sized hole here with about $40,000 worth of debt, and you've got a fairly small shovel right now. Yes, sir. So if you're committed to doing that, then worth of debt, and you've got a fairly small shovel right now. Yes, sir. So if you're committed to doing that, then we'll commit to helping you. We have a whole class that you go through with your wife, and it's $100 to go through it, but I'm going to give it to you free

because I've been right where you are, scared broke with a baby. Thank you. Oh, my goodness. If I give it to you for free, you've got to go through the whole class and your wife. Both of you. Promise me. Yeah. Yes, I promise you, brother.

Okay. And so we'll sign you up for Financial Peace University. That's what we were just talking about there a minute ago. And you can take it online. You can get the class there. And there's a lot of the classes are taught there in Phoenix and local churches. You can plug into one of those. Lots of ways you can do the class.

But we'll get you signed up. it won't cost you a dime and what we're going to teach you is to follow those baby steps that christina was referring to get you on a written budget you began to do that when you're staying up the middle of the night worrying and writing out your bills that's the beginning parts of a budget and you start figuring out that there's not enough coming in that's why i'm telling you you got to get more coming in so yeah you're going to be door dashing and the pizza delivery or working extra as a side gig on hvac or whatever it is for a while uh and then when you get to 30 dollars an hour that's going to help that's not going to solve the whole thing uh even then you're going to still be going a while and because you got forty thousand dollars

to come up with to be free because if you don't have any payments this would be a whole lot easier you'd still need to get your income up but it'd be a whole lot easier and that's where we're going to take you to so hold on and kelly will pick up and we'll get you signed up um you know the interesting thing is that fear like that will move you forward, but too much fear like that will paralyze you. So you've got to see a light at the end of the tunnel. It's not an oncoming train. Yeah. And that's what I was just thinking when you're talking about how this is going to be a long journey for him. But there is that light at the end of the tunnel. I love that this call is following the previous debt-free scream where

it's just such an example of if you have a strong why and you're willing to go through that season of hard, it's going to be so much easier for the rest of your life and for your kids. That beautiful baby that you are fighting for, she's going to know a completely different world with money. Absolutely. That's exactly how it works. Christina Ellis, my co-host, James Andrews, andrew zach ben austin kelly all in the booth helping us out the booth people i'm dave ramsey your host and we'll be back dave here we just launched a brand new audience survey for The Ramsey Show, and we'd love your feedback.

You could be entered to win a $500 Visa gift card. No purchase necessary. Take the survey at RamseySolutions.com slash survey. We'll see you next time.