The Ramsey Show - App - Shortcuts Result in Setbacks! (Hour 2)

Episode Date: August 31, 2021

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🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Ramsey Show, where debt is done, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol for the choice. I'm Dave Ramsey, your host. George Campbell, Ramsey personality, is my co-host today as we answer your questions about your life and your money.

Open phones at 888-825-5225. That's 888-825-5225. Deanna's in Austin, Texas. Hi, Deanna. How are you? I am well, sir. How are you? Better than I deserve.

What's up? Well, we have an 18-year-old granddaughter that was in a car accident many years ago, and she has started receiving quarterly checks from the insurance company when she turned 18, and she will receive those until she's 21. And she has come to us asking us questions about what we think she should do, if anything, with that money other than just putting it in her bank account. I love this kid. She comes to us because we are debt-free,

and therefore we're able to, I think, give her probably a little bit better, hopefully a little bit better advice. But since I really don't have an answer to this, I'm coming to you. Absolutely. Well, she's got a good head on her shoulders because she's actually asking for advice, which is rare from an 18-year-old. So I'm impressed. Yeah.

Is she okay health-wise? Yes, she is. Okay. That's good news. So how much is this quarterly check that comes in? It is $3,700. Okay. So she will end up around $32,000, somewhere around there by the time she turns 21.

Okay. That's great. And do you know her plans as far as kind of next steps for her in life? Is she planning on going to school? Is she joining the workforce? Yes, she is. She actually has a little job, but she will be transitioning out of that. She's going to cosmetology school, which her grandfather and I will be helping to pay for.

So her question is, really, does she spend part of her money because we're paying for half of her cosmetology school, which is the total is about $16,000. So we're going to pay for half. And her question is, should she pay for the other half with that money? Or should she go ahead and work as much as she can, I guess, in the hopes of trying to pay for it, which I don't think she can because school is Monday through Friday, 8 to 5. Or should she try to borrow that money to complete the other half? Well, I'll tell you one option that is off the table, and that is borrowing money. The first two are fine.

I mean, I like her continuing to work, and if she can't cash flow it, I mean, these quarterly checks are going to do it for her. And so I see no problem with her using that to cash flow cosmetology school, get on her feet. I assume after that, she's going to live on her own after cosmetology school. Is she at home right now? She is at home. She lives with her mom, and our hope is that she will move out onto her own at that point that she completes school. Once she's out of school and has a job in cosmetology. Yes. Okay.

Well, what I would do is cash flow this thing. There's really three things you can do with money. You can spend it, you can save it, and you can give it. And so I love her really learning how to be generous at a young age. And I love her having some fun because she's 18 and she needs to have a life and go out with friends and do all the things 18-year-olds should do, and she should absolutely save a bunch in an emergency fund, and she can start investing as soon as she's in the workforce,

which is not going to be a long ways away from now. Does she have any debt? She has no debt. Okay. Yeah, I agree with George. Let's just let her pay for her half through work and some of this money. The rest of the money is left for her to kick off her life with, and that might include buying a home later.

It certainly will include having her emergency fund out there. And the whole plan is the way people get into debt is they just don't think about other ways to do it, and so they just go sign up. And so has she got a car? She does not have a car as of yet but that's also something that her grandfather and i have told we told her we would help with so part of this part of this money will most likely go toward toward helping her purchase a car at some point cash on the car cash on the cosmopolitan cosmetology school graduates with still cash in the bank,

and starts her life debt-free with a decent car and a license to practice cosmetology. And here we go. Game on, right? Game on. That all sounds very exciting to me. I like it. Do it. Execute.

George is giving good advice. James is with us in Phoenix. Hey, James, welcome to the Ramsey Show. Hi, Dave. Truly an honor to speak with you. You too. What's up? Well, my wife and I are 60 now, and so really you've been an inspiration to us in so many ways.

And so we had two cars that we got paid off, so we have no car payments. We've just refinanced our house, and we dropped it two whole points down to 1.875. Great. On a 30-year note, I did that on purpose so that if something happened, because we are older, that I'd have a cushion. So that's really helped us. But our question is, you know, the housing market has just exploded out here anyway in Phoenix. And so we now find ourselves with about $230,000 in equity. So we're wondering, you know, like, I would love to get my hands on that equity because it's not my money till it's my money. So if the market were to crash, then I'd be back to wherever we were. So our question

is, is how, in your opinion, how do we draw out that equity and not put ourselves in way more debt again you know because we're in a really good spot no credit card debt so really it's just a house and we pay 200 extra every week on the principal well you you don't draw out equity you get equity when you sell the house or you have equity in the house and you live there. But there's no way you get money out of the house without borrowing. I mean, you could go refinance your mortgage and run the mortgage all the way up, but I'm not going to tell you to do that. You knew that.

Yeah. We're just really concerned for our twilight years, and that's about the only thing that we have that we can look forward to. I have a small 401K, nothing really to brag about. Got, you know, about $25,000 as a reserve emergency fund in cash. That's good. But other than that, we don't have anything. You got your first three baby steps done. Are you all still working?

Oh, yeah. I don't think I'll ever retire. Then just let's – you're on baby step four. Let's start chunking money on that – into that retirement, 15% of your income going into there. You do that for five or ten years. You're 60. That puts you at 65 or 70. You're going to have increased your 401K substantially by then on your Roth IRAs.

Now, where do you think that the best benefit would be? Should we stop paying the $200 extra weekly in principal payments to the house and put it towards retirement or continue to pay the house down and use that as our... Dude, you got five to seven, you got five to ten years to get the house paid off and build a nest egg. Yeah, because our goal is to have the house paid off in ten years. Yeah. So baby steps, baby step four is 15% of your income going into retirement. Five's kids college, that's not in play.

Six is pay off the house early. And if you want a good, solid retirement, you have a paid-for house and an estate. And you've got 10 years to do that. So you need to aim at that. And it's not going to be $200 a month extra. It's going to be more than that. It's going to be 15%. You're going to be putting at least 15% of your income into retirement

and chunking money big time on that mortgage. Get that stinking mortgage paid off, man. And then build your nest egg up even bigger. It continues to amaze me how identity thieves keep finding ways to use our own identities against us. Not only did they commit crimes related to financial fraud, medical ID theft, and insurance benefit fraud, but now we have to deal with home title fraud. Thieves are using your own personal info to take ownership of your home so they can take out loans, and you end up with a pile of debt and foreclosure notices.

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what's up uh so basically i'm i'm 23 i've been living at home with my parents for the last six or seven months uh since i graduated college um and i've basically just been saving money because i know i knew ahead of time that my job was going to have me relocate. And I am relocating in the next week, and I've been planning for that. And I have a beefier emergency fund than $1,000. Not that much. It's only about $10,000. But I'm basically just planning on using that to move with. And the one thing my parents were helping me out with was my car insurance. And just

yesterday, they kind of dropped it on me that they want me to take over that well before expected. I was planning to pick that up a bit down the road after this policy expires and we have to renew it. But I've budgeted out my expenses with my income and I could easily do it. It's just a matter of, I feel like they're kind of dropping this on me at the last minute and it's not something I've really factored into what I'm going to be doing over the next few months.

And it's just so short notice that I don't know if I should just do it to make them happy because they kind of gave me an ultimatum about it that if I don't know if I should just do it to make them happy because they kind of gave me an ultimatum about it that if I don't do it, then they're not going to drop me from the insurance or I'll have to leave the truck here at my house, which is not really feasible. So I just kind of wanted y'all's advice on that.

So what's the insurance cost? Is this like a large expense i mean it's it's gonna be like 250 to 300 a month um but basically you know i've already done my uh zero base budget on every dollar and it's just not something that i factored in and i could just pay like the the full six months some um sum up front and take the hit on my, as like a moving expense, I guess. But yeah, it just caused like unnecessary friction at the last minute. How much is your truck worth? My truck is worth about, I would say a little less than $15,000.

What do you owe on it? I owe $3,500. Okay. And you have $10,000 in savings. And how much are you making at the new job? I'm making right now. No, at the new job when you move. Right.

Well, I'm kind of working the new job right now. It's just been work from home but now that i'm relocating it's actually going to be the same pay but i'm getting a raise in april right now it's 35 and in april it'll be 45 that's good okay nice raise all right um it sounds like this is more relational i feel your frustration towards your parents more than it is the actual amount of the insurance. Yeah, that definitely played a role. We talked about it yesterday, and they just see how much stress it's all causing me to smooth. It is from where I am now to Florida, which is halfway across the country.

I don't know. I really don to Florida, which is like halfway across the country. And I don't know. I really don't know what it is. I think they feel like I'm somehow a big liability because of the far drive that I'm taking. And they just kind of like hit me with this when we've been talking for a while. No, I think they finally got you off the payroll and they looked up and went, hey, we can get rid of the insurance too i don't think they look at you as a liability i don't think they're trying to crash your little boat i think you're going to be fine uh they just they just want to cut the apron strings that's all they're doing uh and i agree i agree they're a little bit uh rough about it because they could have given you more of an

emotional on-ramp or a mathematical on-ramp to catch up. I'm not disagreeing with you on that idea, Nathan. So here's what I would do. I would go to RamseySolutions.com and click on ELP for insurance. Have one of our ELPs shop your car insurance and get the best possible deal. I think you might be overpaying at $ thousand dollars a year even at 23 for a 15 000 truck that seems a little rich to me i might be wrong but let them shop it for me okay then when they shop it you can put car insurance on a monthly as you know and if it's 250 a month put

it on the 250 a month and just tighten your little every dollar budget up and make it work and if you got to work an extra job a little bit you got to work an extra job a little bit it's just a little it's not a uh a devastating blow but it's heavy enough weight that they dropped on you suddenly that it knocked you back on your heels a little bit george is right this is more emotional than it is mathematical but it's heavy enough that you felt it right yeah exactly yeah so but you can can do it, and you're going to be glad you did it, and I don't think they're out to get you. I don't think there's any malice in this at all. I think they just didn't do a good job of cutting the apron strings.

They used a machete instead of a scalpel. Right, right. A blood instrument, you know? It's like they just didn't give you good, you know, they should have said this six months ago. Dude, you're moving out, and you're taking all of your crap with you, which includes the insurance and the soccer trophies, okay? You're out of here. We want the bedroom. I'm putting a pool table in there.

I mean, they need to tell you what's up, right? And so. Yeah. You're making the truck payments, right, on your own, or are they doing that? Well, they did for a while, and then after, I would say, a couple years ago, basically, I'm just paying them, and they're kind of, like, paying for me, and I have, like, $3,500 left. Yeah.

So when you get moved and get settled, if you've got $3,500 left, pay the truck off that day. Yeah, that's what I'm looking to do. And they kind of know that i've been um binge watching your show and then i'm like kind of laid out my debt snowball i do have some student loans so this is a three thousand dollar offset so you can use the truck and deliver uber at night or pizzas at night or you can pick up a job cutting grass on the weekends and you'll have an extra six thousand bucks in no time and it'll offset anything and then by the

time april comes around you're going to be okay. You're going to be in great shape. You're going to get the $10,000 raise. Everything's rocking on. You're going to be just fine. It just was heavy enough, and it was sudden enough that it caught you. And so it's a 20% math problem, 80% relational emotional problem. Yeah, and part of it is adulting.

Adulting just sucks. And when you're leaving your early 20s and you start going, oh, crap, I have to pay for insurance. No one told me how expensive this was. Yeah. You start to just kind of feel like you got punched in the face a little bit. So I think once you get on your feet and you get out on your own, you've got a good income. You clean up the debt.

Yeah. Those payments are gone. You're going to have that income back in your life and you're going to go, OK, I can breathe a little bit. Amy is on the line. She's in Atlanta. Hi, Amy. Welcome to the Ramsey Show.

Hey, Mr. Dave. How are you? Good. What's up? Hey, Dave. My son is 22, and he bought some land before the market went up, and now he's selling some land, and he's going to end up with about $25,000. Where should I help him to put that money?

We talked about what they call the like-kind account where he just holds it to move it into another real estate in case he buys some more real estate. But I don't think right now he's going to do that because the real estate is case he buys some more real estate but i don't think right now he's going to do that because the real estate's so high right now yeah if he does a 1031 tax deferred exchange which is what you're referring to he has six months to select the real estate so if he's not going to buy a piece of real estate in six months he's just going to cash this out and pay it's going to the capital gains on it's only going to be like $3,000. Okay. If he makes $20,000, he made $20,000 profit? Yes.

Has he owned it a year? No, no, no. He made $10,000 profit. Oh, $10,000 profit. Okay. Has he owned it a year? Yes. Okay.

Then it's $1,500. It's 15% on your profit. Yeah. So just pay the tax. Don't worry about it, and do something smart with that profit. He should. He's 22. He's out there buying land. He's already got this stuff on the run.

Yeah, and as long as he's debt-free, I don't know his financial situation, but I want to make sure that he's following the baby steps and that he's doing things that are right for his financial future, not getting into investing too early in the real estate business. Yep, that's it. That's how it works. Parents, when you're going to cut them loose, and you should, gradual is good. Sudden is hard for them.

It's easy for you, but it's hard for them. This is the Ramsey Show. Dave here. We just launched a brand new listener survey. We want to know what you think about the show. You'll be entered to win a $100 Amazon gift card. No purchase necessary. Take the survey at RamseySolutions.com slash survey or text survey to 33789. In the lobby of Ramsey Solutions on the debt-free stage, Jared and Gabby are with us.

Hey, guys, how are you? Good. How are you? Welcome, welcome. Where do you guys live? Omaha, Nebraska. Bit of a haul to Nashville. Yeah.

Oh, my goodness. Well, welcome. Good to have you. And all the way here to do a debt-free scream. How much have you paid off? We paid off $94,000 in 28 months. Good for you. And your range of income during that time?

It was $110,000 to $138,000. Cool. What do you all do for a living? I'm a carpenter for a commercial construction company. And I'm a technical recruiter. Ah, very good. Very good. Cool.

Well, goodness gracious, $94,000 in 28 months. How long have you two been married? We've been married for a little over two years. High school sweetheart. So we've been together for over 10 years. Okay, cool. So even before marriage, you guys started looking at this going, we've got to clean this up. And then first order of business in marriage is finish up the debt snowball.

Yep, absolutely. So tell us the story. How did this all happen? Yeah, so we were taking our pre-marriage counseling at our church. And we were getting involved in a couple of different life groups. And our pastor recommended Financial Peace University. We knew the name but didn't really have anybody close to us that was following. So we were like, let's go ahead first.

We had another couple that was getting married at the same time as us go in with us. So we dove right in. There we go. Just like that. Yeah. So you kind of in. There we go. Just like that. Yep. So you kind of wander in not knowing what to expect. Yeah. So after the first lesson, what was happening?

People were cutting out credit cards. We were like, okay, what are we doing? What have we gotten into? Are they going to hand out snakes? What's up here? Is it a cult? What are we doing? So after the second lesson, what were you doing?

Cutting them up. You too. You too. We were on board. Just like that. We were on board. Assimilate to the cult. It's easier that way.

Wow. Careful, George. Come on. All right. I'll go with you, George. What kind of debt was this? It was car loans, student loans, and credit cards. How old are you two?

I'm 27. 27. All right. Wow. So you're just kind of normal. We're normal. Normal single people with car loans, student loans, and credit cards. Yep.

And enter pre-marriage counseling, and then you go in and go, I don't know, and they turn on the videos, and you're going, these people just cut up all their credit, and then the second time you cut up all your credit cards. Oh, my gosh. Wow. Kind of a slam, wasn't it? Yep. A little bit of a fire hose when you went up to Water Fountain to get a drink?

Yep, absolutely. Oh, all right. Cool. But you did it. I mean, you stuck with it for 28 months, pure, huh? We did it, yeah. We were, at the beginning, yeah, I mean yeah i mean like this is crazy what are we doing the pandemic hit it kind of helped with i mean we couldn't do anything right like oh yeah our

income was kind of affected i picked up a second job he was you know working side projects to get the get the thing done we wanted to come out of the pandemic and be able to travel you know we're thankful we're here we haven't taken a vacation since the pandemic. Oh, wow. Well, welcome to Nashville. First vacation, Jeffrey. Thank you. I'm afraid you and everybody else is on lower broad down there at the Honky Tonks. Oh, my God. I never saw so many people in my life.

This town is exploding. Two days of that was enough for us. One minute of that is enough. But, yeah. Oh, my gosh. Wow. Well, congratulations, you guys. Okay.

So, you're 27 years old. You've been married 22 months. What advice do you have to somebody out there that you two years ago, three years ago, and they go, I don't know, man, this stuff is weird sounding. But everybody seems to be excited. So what's the key to getting out of debt? I think the key is just stick to your budget, stay consistent. Yeah, I mean, it's going to be tough for sure. You're going to have to, you know, decline going to dinner with friends and doing all these things. But

now looking back, it's just like the financial freedom is important to us. Like we wanted to go into marriage, you know, work hard. And when we start having a family, it was important to us before we have kids, we want to get out of debt. So that's kind of the goal. Wow. Yeah. A lot of young couples that are your age are going, well, Dave, I don't want to miss out on life.

I'm in my 20s. This is my prime. You want me to make all these sacrifices? But you guys are saying, hey, we're going to sacrifice for a short period of time, 28 months, so that we can live the next 20, 30, 40 with no payments. Exactly. Totally. That's a huge paradigm shift.

Was it worth it? So worth it. Very worth it. All right. You going to go back in debt? No. Never. Never.

So you got the whole rest of your life with no debt. That's a long time. That's cool. That's pretty cool. Because you're in your prime, according to George. What? According. 27.

Well, for you, it's 60. Yeah. That's when you're at your best. That's it. Yeah, come on. But these guys, they're, look, young, bright-eyed, bushy-tailed. They're ready to face the world, and they don't have any payments to show for it, and they have a great income.

27 years old. Yeah, really. This is pretty cool. And, more than anything else, you've learned to work together, right? Oh, yeah. So, tell me about the big fight. What was the big fight? I don't know. They're looking at each other. big fight who's gonna tell us if we have one i don't yeah i don't think we had there wasn't one no oh so you thought i knew something i didn't

know something they're just nicer in nebraska they don't fight over there ah that's what it is they're midwesterners they're not hillbillies yeah i get it okay day one you guys just decided hey we're on the same page let's go do thing. So you really didn't have a big fight. You never argued about it. Not really. I mean, we were really both kind of on the same page. I mean, we took the first class and we were just like sucked in and we were like, we want to do this.

And I mean, we would have little fights like, you know, my Amazon packages and he's like, knock it off. And, you know, maybe those little things. There we go. It's front porch litter this is a problem yeah the problem knock it off oh my gosh i like that i can only hide them so many times when i work from home the rain catches on the show well she's got the delivery guys deliver to the backyard he needs a t-shirt that says knock it off. Prime. Yeah. Speaking of living in prime. Oh, yeah.

All right. I love it. That's good. I like that. Thank you for being real. You guys are fun. Really proud of you. Who were your biggest cheerleaders?

I'd have to say each other. And then who? Friends and family were super supportive. Your moms and dads, were they good with money? And so this is like natural for you or this is like change this is change like i think we both kind of just thought like you always live with debt you know you always have a car payment or you always have these things so i mean our family's been super supportive and we've been you know helping friends kind of get

on board and you know we have people reach out to us once we announced that we'd paid off our debt they're like what the heck heck? How did you do that? So it's kind of fun to just share and get people on board. Yeah, testify. I like it. Very good. Good for you guys. Well done.

Well, we're proud of you. I can tell you that. Touchdown. What a great young couple. What a great way to start. Absolute heroes. Yeah. People can take control of their own lives at any age are heroes.

Very well done. Thank you. Very well done. We've got a copy of The Legacy Journey for you, because that is the next chapter in your story for sure. You'll be Baby Steps millionaires before you know it and change your whole legacy. And we're going to give you an extra copy of the Total Money Makeover to give away to one of those friends that is saying, what the heck? Yeah, I want to know what this is.

Do this right here. Don't do anything else. Do this right here. That's it. And Financial Peace University, that's the thing. Very cool. All right. right here don't do anything else do this right here that's it and financial peace university that's the thing very cool all right jared and gabby omaha nebraska 94 000 paid off in 28 months making 110 to 138 count it down let's hear a debt-free scream three two one We're debt free. Well done.

Well done. Well done. Love it. Congratulations, you guys. Great work. Great work. All right. You guys want to do that?

So here's the deal. Today is the last day of the $30 off special we've been running on a Ramsey Plus membership for a year. Now, why does that matter? Well, Financial Peace University is one of the many things you get in a Ramsey Plus membership. It's like if you want to see Tiger King, you've got to sign up for Netflix, right? It's where it is. That's the deal. So if you want to go through Financial Peace University, do what they just did.

You do it at ramsey plus and that also includes the premium version of our world-class budgeting tool every dollar to help you put that plan into action take control of your money and it's 30 off a 12-month membership or if you don't really know what you want to do today that's okay you can even do a free trial if you want to do that you can do that that. So text TRIAL to 33789. And learn all about Ramsey Plus. Learn all about Financial Fees University. Do what they just did. Text TRIAL to 33789. This is The Ramsey Show. We'll be right back. George Campbell Ramsey personality is my co-host today.

He is the host of the podcast that had millions of listeners called Borrowed Future. And then we launched a new one that is at even better success it's going crazy called the fine print and uh well you know the old saying you need to read the fine print well george is helping you where different industries are pretty much putting the screws to you and uh where you are exposing that that's the goal i mean a lot of hidden truths out there keeping people broke and you get calls about this stuff all the time where people go, Dave, I didn't know. No one told me that I was going to get screwed on this. And so every other week we're covering new topics.

We just released one yesterday on buy now, pay later. Remember the old school installment plans? Well, now it's all real modern. And right below the add to cart button, they've got this thing that says, hey, what if you paid a fourth of that today and pay the rest later? And Affirm just struck up a partnership with Amazon. No. And so that $1.7 trillion company is about to be a gazillion dollar company thanks to Affirm.

Because guess what? When you see the payment is actually a quarter of what it would have been in the cart, you go, oh, I can add some more. And I can add some more. But when you add it all up, it's pretty much like rent to own. Yeah. What's the effective interest rate on that crap? They've all got different ones, different interest, different fees.

A firm's got simple interest. So that's what they're real proud of that. They don't have compounding interest. And it can be from 0% to 30%. I'm betting closer to 30%. Yeah. So you can get absolutely screwed. It's pretty simple.

If you can't pay for it, don't buy it. I won't affirm you using get absolutely screwed. It's pretty simple. If you can't pay for it, don't buy it. I won't affirm you using this. Yeah, so we talked to Nathan Hamilton from The Ascend who did a survey on this, 1,800 people. We talked to someone who spent $10,000 on Buy Now Pay Later, this girl Peyton, who went into a lot of debt for Lululemon. She's a big Lululemon fan. And, of course, we talked to Rachel Cruz. $10,000 worth of Lululemon. She's a big Lululemon fan. And of course we talked to Rachel Cruz. $10,000 worth of Lululemon?

For clothes. $2,200 of her $3,200 income went to debt. Unbelievable. Yeah. So we're talking to people who got screwed. We're talking to experts like Rachel Cruz who really help us unpack why these services are not in your best interest. These companies are not

your friend and you should not use it. We want you to pay cash. We want you to buy things you can afford. So there's 10 episodes of the fine print. How many have come out as of today? We've got, this is the fourth one. Fourth one that came out today. Okay. So season one is 10 episodes, all kinds of different subjects, but all about areas where you are getting messed over, and pretty much explains it all to you in detail. Alana is with us in Chicago. Hi, Alana. How are you?

Hey, I'm good. How are you? Better than I deserve. What's up? So I just graduated college in May, and I worked multiple jobs throughout college, so I'm actually in a position where I can pay off all of my student loans, but I'm just kind of stuck because the loans are in deferment through January. So I would like to get into investing, but obviously that's borrowed money that's

allocated for my loans. But I'm just kind of curious what you think I should do in the meantime between now and January while I have this money. So you're saying you have the money in cash to pay off all of your student loans today? Yes. Well, that's a great place to be. I like that a lot. And you're saying should I hold off in order to start investing? Well, I'm wondering if I should put, I don't know,

if it's smart to put a portion of that where I have cash into investing or pay off my debt and then consider investing. Yeah. Well, we teach the baby steps, and this is the plan that works, and a lot of people want to do them out of order. And I think you're wanting to make the right decision here with your money, and I know January is going to come and you're like, should I just wait and pay it off then? But here's the thing. If you follow the baby steps, we teach that you pay off all of your debt in baby step two using the debt snowball. And is this all your debt, just the student loans? Okay. So you could be done with Baby Step 2 today, which then you'd move on to Baby Step 3, building your fully funded emergency fund, which I like as you head out into your adult life now that you've graduated. And so I want you to pay off that debt as soon as possible. And if you have the cash to do that today, well, you're going to have plenty of time to invest.

You just graduated. You're going to be a multimillionaire if you follow these steps. So I'm not as worried about investing as I am about this debt that's hanging over your life right now. And I don't want you to wait on the government. I don't want you to wait on anyone when you can take control and you have the cash in your bank today. Alana, how old are you? 22. Excellent.

What's your degree in? Packaging science. Say again? Packaging science. Wow? Packaging science. Wow. Packaging science. Did I hear that right? Fascinating.

Okay, so have you landed a job? Yeah, I started in June, so I've been working for a few months now. Great. What do you make? Uh, 70. Well done. Amazing. Good job.

That's a great job coming out at 22. You really got a really good start. Okay, here's the trick. Inside of every one of us, it is human nature to want a shortcut. With money, you need to fight that beast that says you can do a shortcut. There is no good shortcuts with money. It's common sense. It's a slog.

It's a grind. And you become wealthy. If you try to do shortcuts, you get setbacks. Shortcuts equals setbacks. And that beast that looks for shortcuts, that's the one that's asking the question down inside of you. And that's just normal. You're not doing anything wrong.

Okay? It's just normal to ask that question. Is there something, some way I should try to move these shells and hide the pee? But no matter how many times you move those shells, that stinking student loan is still laying there unless you just write a check and pay it off. You got it? So the cleanliness of your life, the risk lowered, you make $70,000, you don't have a debt in the world, now you can really be a rock star investor. You can really start filling up that 401K, that Roth IRA,

start saving for a house, start doing some other stuff because you've got no black cloud hanging over your head. So here's the instruction. Listen carefully. Pay the student loan off today before the close of business. When you hang up the phone, pay off the student loan, okay? Absolutely. Can I ask a follow-up question really quick?

You can. Is it wise to then, after that's paid off, to max out my retirement? I would put it at 15% of your income, and then I would start saving for a house above that, and make sure you have an emergency fund of three to six months of expenses. You're going to have some money left over after you pay off the student loan? Yeah. Okay. How much? about five grand good okay before you start your retirement let's build that up to a full rainy day fund three to six months of expenses so probably want that to be about 15 grand so if you have 15 000 cash that you never touch for

anything except big time emergencies and you have no debt you are in the driver's seat to rock and roll. Then you start putting 15% of your income into retirement, and I'm thinking you're probably a millionaire by 35. No. That's if you do this, okay? That's where I think you're headed. So you hold on. I want to help you do it because I want to hear your story when you're 35. I'm still going to be here doing this. So I'm going to send you a copy of the book, The Total Money Makeover, and show you exactly what George is talking about, those baby steps things, and exactly how to do them and exactly why to do them. Because I think you're actually going to do this.

It sounds like in your voice you're actually going to do it. Sometimes we give people advice and they're like, yeah, yeah, yeah, yeah. And we can tell they're not going to do it. But you're actually going to go do this. And then if you follow all the way through, you really are going to be a millionaire. You really are. Because if you're making 70 at 22, you're going to be making 150 at 27. This is where you're headed because people that think as clearly as you think, that's what they do. You've done a very good job setting your life up. I'm so proud of you. Hold on kelly will pick up and we're going to give you a copy of the total money makeover there's

hope george there's 22 year olds out there like her there is hope for our future america i love it i'm just shocked they're everywhere and she has the money we get to talk to them all the time they're everywhere god if we just had people that smart in Congress. I mean, what would we do? If you just had people that could take instruction like she did. Yeah. Because there's nobody in Congress can take instruction. You never got a call from

a congressman or woman yet, dude? I'd pay good money to hear that call. We'll make it happen. Only if they were trying to get me to endorse them. But that was all. Oh, geez. Keep dreaming. She's awesome.

What a great young lady. Inspiring. Man, I'm telling you, I get to talk to these 20-somethings all the time like this. Gives me a lot of hope. No wonder you've got a positive outlook. That's it. That's it, man. This is the Ramsey Show.

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