The Ramsey Show - App - Should I Change My Career Trajectory? (Hour 3)

Episode Date: December 24, 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 dumb, cash is king, and a paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. You jump in, we'll talk about your life and your money. My co-host today is Dr. John Deloney, Ramsey Personality bestselling author. He is host of the Dr. John Deloney Show, where he talks about life and boundaries and relationships and all kinds of issues having to do with mental health.

So hey, if you want to join him on that show, you can always do that. It's a very popular podcast and YouTube show, and you can call in at any time you want. Just call at 844-693-3291, or you can email him at askjohn at ramsaysolutions.com. Askjohn at ramsaysolutions.com. Ask John at RamseySolutions.com. So if you can't get in today to talk to him, that's what you would do. The phone number, though, today is 888-825-5225. 888-825-5225. Rob is in Atlanta, Georgia.

Hey, Rob, welcome to the Ramsey Show. Good afternoon, Dave, Dr. D. How are you guys? Great, man. What's up? Great. I am calling to see when and if I need to move from just the standard will to like a living irrevocable trust. When you got 50 million or more.

All right. Perfect. Easy peasy. Here's why, okay? These things are sold. It's about a $3,500 to a $5,000 legal bill to build that document. And then you have to shift every single thing you own that you want to transfer at your death, which is every single thing you own, into the name of that trust,

and you have to conduct all business in that trust. And so if you buy a car, it's in that trust. If you have an investment account, it's in that trust. If you own a piece of property, it's in that trust. You get ready to sell it, trustee has to sign all the documents. It's a pain in the butt to operate out of the thing. And here's what happens. Lawyers sell these things all the time as a way to avoid probate tax and as a way to ensure that your assets are passed the way that they're supposed to be passed.

And then they don't coach you on moving all your freaking assets, which means the trust is sitting there as a shell, unfunded, doesn't have anything in the name of the trust, and so it's of absolutely zero value at that point. And 78% of the trusts never get funded. People don't move their assets into the name of the trust. So the whole thing is dumber than crap. Now, when you get big money, big money like I'm talking about,

like this particular building I'm sitting in is in one of those trusts. Okay? Now, what that does then, because this building that I'm sitting in is worth about $140 million. Okay? So that building, as it goes up in in value i don't want that value in my estate i want that value to pass to the kids with no estate taxes and so placing this puppy and operating it out of a revocable trust makes sense doing that for something that's a million bucks will drive you freaking nuts right you follow me life insurance

yes life insurance beneficiaries and all that stuff and 401k stuff with life insurance beneficiaries are not taxable as an estate item anyway they're not part of your estate technically no i'm just saying if if that moves that'll move relatively quickly after my passing that oh easy someone's name beneficiary yeah they'll get that money and most of the time within a few If that moves, that'll move relatively quickly after my passing. Oh, easy. Someone's name of beneficiary. Yeah, they'll get that money most of the time within a few weeks. They'll get your, you know, and the access, if you've named a beneficiary on your 401Ks and your IRAs and that kind of stuff, that's going to be very easy to access by the heirs as well.

And so, yeah, and if you've got a decent will that's done, your family ought to have access through the executor to the cash that's in your checking account within a matter of days. Right. So the probate action will move relatively quickly as well. Assuming you have a freaking will that's done right and the judge doesn't have to blink at it. But you just go in, you know, your lawyer dance before the judge and do two twirls and walk out of there with the executors in charge of everything. It doesn't drag out for months. Now, the reason a lot of people do this, some states have a big state probate tax where they tax your estate upon your death.

Like, say you had five million bucks, okay, and if there's a three and a half percent tax on that, then, you know, that's going to be a $150,000 tax. What? Okay, on your estate. And that's a state tax. I didn't know that existed. It doesn't in Tennessee. It didn't work?

No. But a lot of states, like Florida's got a big one, which a bunch of old people there, so that makes sense. But, you know, that's what they're after. So the federal estate tax doesn't come into play much because the exemptions are large enough. But that's why people move stuff into this because you can avoid that estate tax, that probate tax, and you have instantaneous access to stuff. But the problem is the day-to-day operations while you're living are a complete pain in the butt. And people forget to move everything into the name of the trust and then operate the name of the trust.

And so, like, we're adding some property to this campus. And I've got to make sure all that stays in that same trust. And the money used to buy it has to come out of this trust. Right. And so it's just a freaking barrel of fish hooks just to keep the government's hands off the stuff you've already paid taxes you just blew my mind by telling me that some states charge you to die oh well the federal government will too yeah like big okay so i did not know that yeah well yeah i mean the federal state tax exemption

right now just die right yeah this is this is when you get pissed off about taxes. And this is when you get pissed off about people saying, when you work your whole life and you started with nothing, and you work your whole life and you've got some money, and then people go, well, you know, the rich need to be taxed, and so when they die, they should be taxed again on money they've already paid taxes on. So the federal estate tax exemption right now, I'm trying to look at my cheat sheet here because it moves all the time.

Last year it was $11 million and some change. Okay? So anything over that's taxed at about 40% by the feds. So if you've got a $20 million, $21 million. They've already taxed it when you made it. If you've got a $21 million net worth and you die, you have a $4 million tax bill. Even if it's all in real estate. So if it's a family ranch, you got to sell off part of the ranch.

To pay the tax. To pay the feds. But what about... Because you're an evil rich person. You already bought that, so you already made that money, so they already taxed you at 40% the first time. Yeah, this is a different one. So they get 80% tax off your money? This is the death tax.

Yeah. And that's what he's trying to avoid. That's the problem here. So it's a... I did not know. You just blew my mind. It's a rare moment when I'm speechless and I am now. Wow.

Well, it just doesn't come up because it's the rich or easy target, right? You should always make fun of and steal from the rich. It's a Robin Hood thing and a very democratic thing to do. Wow. I didn't know you very democratic thing to do. Wow. I didn't know you got taxed when you died. Yeah. Most people don't because most people don't have $11 million. Yeah.

So there's no federal tax on anything under $11 million. So you're okay if that's the case. And if you're in a state where there's no probate tax, you don't. And if you don't have any money, you don't get taxed on it either. But if you work your whole life starting from nothing, your grandpa started a business and he tries to hand it to your dad, and then your dad tries to hand it to you, and every time it's gone up in value, every time somebody dies, it gets hit again, unless you use one of these trust mechanisms.

And even then, some of it's going to be exposed. I think after today, I'm going to call into my own show to process this. I don't even know what to say here. John's grieving on the air. He's grieving the American dream. Wow. You just found out how close socialism is to your back door. It's expensive.

Wow. Problem is, you run out of other people's money. This is The Ramsey Show. Most people know me as the guy who did stupid with a lot of zeros on the end. I made my first million dollars in my 20s the wrong way and then went bankrupt. That's when I set out to learn God's ways of handling money, and I developed the Ramsey Baby Steps. By following these steps, I became a millionaire again, and this time the right way. After three decades of guiding millions of others through the plan, the evidence is undeniable. If you follow the Baby Step steps, you will become a millionaire

and get to live and give like no one else. And now I'm excited to share with you that I've written a new book called Baby Steps Millionaires, and it's available for pre-order right now. You'll learn how ordinary people built extraordinary wealth and how you can too. I'll walk you through how to invest, build wealth, and bust through the barriers preventing you from becoming a millionaire. For those who are ready, it's game on. You can baby step your way to becoming a millionaire. Pre-order your copy today at ramseysolutions.com. Thanks for joining us, America.

This is The Ramsey Show. Dr. John Deloney, Ramsey Personality, is my co-host. Imagine what your income could do for you if it wasn't going out the door every month in debt payments. Credit card bills, student loans, car payments. Yeah, kind of takes your life away, doesn't it? You know what? It'd be cool to be without all that, wouldn't it? It doesn't have to be.

It doesn't have to be like this. It doesn't take as long as you think to get out of debt. People do it pretty quick once they get on a plan. It all starts with Financial Peace University. This is the class that's helped millions and millions of people learn the proven plan to get out of debt and build wealth. But it's not enough to just learn the plan. You've got to put it into action every single day. And the way you do that is by budgeting with EveryDollar, the world's best budgeting app. And you can get Financial Peace University and EveryDollar only with a Ramsey Plus membership. A lot of other stuff at Ramsey Plus as well, but that's where a lot of people get started. You can create a life where your money works for you and not against you.

It's time to get out of the debt fast and for good. Start your free trial of Ramsey Plus by texting TRIAL to 33789. Text TRIAL to 33789. Matthew is in Tucson, Arizona. Hi, Matthew. Welcome to the Ramsey Show. Hi. Thanks for taking my call.

Sure. What's up? I have a question for you guys. It's a kind of dock-to-boat situation. I am in the Air Force Reserves as a federal civilian doing the same job, and I'm looking at doing

transitioning into the Chaplain Corps for the Air Force. And they have a program that will help me with my master of divinity and get me experience and stuff like that. But by entering the program, I lose my civilian position because it's tied to my enlisted position in the Reserves. So I'm trying to figure out when would be the best way to kind of step over to the boat while I'm working out my finances. Okay, so you have another job other than the National Guard, right? So, yeah, I'm an Air Force Reservist, and I am an Air Reserve technician. So during the week, I'm a federal civilian, and on one week a month, two weeks out of the year, I'm enlisted, but it's the exact same job.

I'm an aircraft mechanic. Okay, so you're a civilian aircraft mechanic now. Correct. Okay. But you're wanting to drop that you're wanting to drop that which pays how much um about 79 a year yeah so you're gonna drop an eighty thousand dollar a year job to go as a full-time reservist or still be a part-time reservist so um i am it's a complicated position because it's i'm both right now but i'd be stepping off

from enlisted to commission so um by going to commission i would finish school with this program um and then after two years there's a possibility of me being able to go active duty afterwards, but it would be a two to three year. Where is it you're trying to end up? I want to be an active duty chaplain in order to provide a lot of help for individuals in the service that... Good. You don't have to have an MDiv to do that.

Okay. Chaplaincy in the military does not require an MDiv. It does. No, it doesn't. A lot of them aren't even Christians. A lot of them are chaplains, and they have a completely different belief. They're Hindu. They're Muslim.

They're everything else, and they certainly don't have an MDiv. It's a Master Divinity or equivalent is what the requirement on the site says okay i think you need to do some more investigation we work with chaplains all over the world in the military they they're the ones that run financial peace university in the military and um and i've spoken to the groups uh they're very diverse, and they're very in their faith base and everything else. And it's not a – I'm not 100% sure, but I'm pretty sure that there's a lot of those folks I've met that are not master's degreed. Right. And when it says equivalent, that could be any sort of seminary-like or denominational, whatever.

No, I guess it could be a master's seminary like or denominational whatever no i guess it could be a master's in finance for all i know if it's a master's level he's saying because i'll guarantee you they don't have a master's in theology if you're uh uh you know if you're practicing hindu i mean you know or wiccan or whatever else mean, I've met chaplains that have just about every kind of faith in the military. And so the public has this perception that the chaplaincy is all the guy on mash and it's father so-and-so, right? It's not. It's not.

Because I made the mistake. I thought I was talking to a bunch of preachers, Christian preachers, when I went in there, and they're, like, looking at me like I had one eye in the center of my head because I was Jesus this, Jesus that, right yeah and all of a sudden i found out what jesus said and what all of them are doing gosh so it was uh it was kind of a little awakening for me i kind of stepped in it what i did but um because i was because i was ignorant of the of how that how the chaplaincy in the military works it's um it's it's very interesting but it's not what i had the perception that it was i thought it it was Father whatever-his-name-is-all-mash.

I thought that's what it was, right? But anyway, it's not. So anyway, I think you need to do a little more investigation into that, and I think you could probably get into the chaplaincy program, and the military would cover your master's while you're full-time military if you enlisted. That's what i've never heard of somebody going to say hey you know what i want to stop this this part-time gig this um weekend gig and i want to go full-time enlist and then be told no right i've never heard

that it may exist but if you want to go full enlist my understanding is they'll they're well they're happy to take you yeah i think they'll take you but the question is can they plug him in and pay for the master's and plug him into the chaplaincy program straight up? I'm not positive of that. But I think that could be arranged with a recruiter. Yeah. I really do. I think they would enjoy your help big time.

But, no, I'm not going to walk out of an $80,000 position down to part-time or no time. To go to grad school full-time for two years. In order to end up in the chaplaincy in the military that's you know there's there's got to be another route another path to get there that is going to be much more palatable on your checkbook yeah but he did bring up something that i think is important sometimes when you're looking at these job requirements you spend a lot of time a A, on your head, and B, on the Internet. And it's like what Ken Coleman says, you've got to go sit down with somebody who's doing this job and say, give me the path. What is my point from A to B? And they can help you.

They may tell you Dave Ramsey's a nut and doesn't know what he's talking about. It does require a master's. They may tell you that. But my experience with them does not indicate that. And I've actually had lots and lots and lots of conversations with lots and lots of chaplains over the last 20 years. Yeah. I mean, they're in here every week just about, somebody stopping in. And I've been to their gatherings and everything else. I don't even know what to call it.

But, you know, but so. I don't know. We love military chaplains. Absolutely, man. We love you know, but so we love military chaplains. Absolutely, man. We love the military, and we really love military chaplains. They've got a special job, special calling. So very interesting. All right, open phones at 888-825-5225.

You guys jump in. Dr. John Deloney is my co-host today, and we'd love to have you participate with us here. Why does counseling have such a negative connotation, Reed wants to know? Oh, man. I think it's probably a holdover from the old days that only crazy people needed to go see somebody. You see a shrink, right? Which comes from which doctor shrinking heads, right? That's where that comes from.

Yeah. Head shrinker. I think our parents grew up in a world where you only went if you were, quote, unquote, nuts, right? Or someone was crazy. I look at counseling now, it's a set of skills, a set of tools I don't have, right? It's a teacher. And you sit down and someone can hold up a mirror and reflect you back to you and be an external solution. If you call it Life Coach, it becomes okay.

That's right. Or if you call it a hardware store, I've got to go to some different tools, it becomes really okay. Yeah. I'm not sure why it has a negative connotation unless it's a holdover from that, though. That's all I can think of. Yeah. This is The Ramsey Show. We'll be right back. Dr. John Deloney, Ramsey Personality, best-selling author, is my co-host today as we answer your questions about your life and your money.

In the lobby of Ramsey Solutions on the debt-free stage, Ryan is with us, winning the Best Dressed Debt-Free Scream Award. Ever. Yes. Ever. Ever. Ever. That is exactly what I was going for.

Never had a full-on suit. It is usually people in their bathing suits. You look like you're ready to break out in a Frank Sinatra song right now, man. I'm just saying. I mean, I figured if you're coming to do your debt-free scream one, that'll look like a million bucks, right? Thank you. Everybody, yes.

Dress for success. I'm just saying. Look at you, man. Where are you from? Pittsburgh, Pennsylvania. Awesomeness. How much have you paid off? I paid off $120,000.

That'll work. And how long did this take you? 17 months. Wow. And your income during that time? I went from $45,000 all the way to $140,000. Whoa. What do you do for a living?

So I DJ weddings on the weekends. I work for a nonprofit. I'm an IT consultant. So I have a full-time salary with them and hustle. I hustled like none other this last year. So is this the DJ look? It is. You got the voice.

You got a great set of pipes. Thank you. You got the look. I'm just saying, man. I bet you're making some money doing that. Yeah. So I go by DJ007. So this is kind of like my beautiful.

Oh, that's even better. Well played, man. Well done. That's awesomeness. Well, very cool. Well, thanks for dressing up for us, man. Yeah, I appreciate it. It's an honor to be here.

Very cool. What kind of debt was the $120,000? $20,000 to the IRS and $100,000 to Saturday, May, student loans. That simple. How'd you get $20,000 into the KGB? How did 007 end up owing the IRS? Oh, your small business that you didn't pay taxes on. Exactly.

Yeah. Yeah. Okay. So, yeah, I started out, you know, I was one of the borrowed future casualties, right? I went to University of Michigan right out of high school, out of state. And, yeah, that was the thing to do, right? Just go to the best school you get accepted to. What's your degree in?

I didn't get a degree. So I was there for four years, just signing papers, taking whatever classes I could to stay enrolled. Had no idea what I wanted to be when I grew up. Four years went by like that and burned out, dropped out, never went back. And left with 80K in debt and 20K accrued in interest over the years. So, yeah, I just started to fly under the radar over the years, just being self-employed and just letting that interest accrue and just taxes on taxes on my you know unpaid taxes on income so yeah i discovered you in 2006 started listening to your radio show you know i got choked up anytime i would hear a debt-free scream and i was like man that'll be me someday once i get the get the right job but

you know i'll wait on it um even tried to you know throw 200 bucks a month at my at my loans at the time but that was barely covering interest. I got discouraged, jumped off the wagon. Fast forward to 2015, got a good job. I was like, okay, I'm back on the wagon. Took Financial Peace University, bought my next car in cash, started Ubering, got excited, lost the job about six months later or so, got discouraged, jumped off the wagon again. Finally, 2020 rolls around. I've been DJing for about four years or so, making good money.

And I'm just like, all right, this is good, but I can do more. I can finally hit some goals this year. So I was like, all right, let me get a full-time job. So I got a salary job on top of my weddings. And I was ready to rock and roll. Boom, COVID hits. No more weddings. All of my hustles stopped yeah you know no more no more ubering no more weddings no more dancing dance instruction

it was just all came to a halt so i got kind of discouraged but um you know what covid was the wake-up call i never knew i needed and i suddenly became really aware of my mortality. And I was like, wow, what would I regret if I were to bite the bullet this year? And I was ready to commit to a three-year plan prior to COVID. But at that point, I was like, you know what? I want to do this as fast as humanly possible. And I just waited patiently for the opportunity to hustle again. And sure enough, end of the summer, wedding started to pick up again. And deliveries absolutely exploded.

I did every app you can think of. Uber, DoorDash, Grubhub. Just working all the time. Yes. Waking up 7 a.m., driving before work, driving during my lunch break, driving when I get off, on the weekends when I'm not doing weddings. So just hustling as much as humanly possible. That drove your income way up, and then you just thumped it. Yeah.

And I got so excited by the momentum that I was having, that I was having, that, yeah, I just got on fire, man. So when people hear this story, and I love that it's so real. Fell off the wagon, jumped off the wagon, you said. I like that better than fell off. I jumped off twice. I intentionally quit two times. And then I come back around, and then finally a little bit of existential stuff hits and you go oh i don't really want to be remembered for this right so we got to get this

knocked out it's time to do this and the mortality of covid it woke a lot of people up to have some meaning to stuff they're doing that's good that's a good wake-up call and it's game on so now people hearing the story what do you tell them the the net key is to getting out of debt? Once you decided to do it, what was it? It's having the big picture, writing it down, absolutely, and seeing your progress, like paying attention to your money you know whether you're using every dollar or another another app i mean one one thing i've found helped me because we live in such a digital age with you know um debit cards and such is just keeping a digital register of every dollar that you're spending you know just like you advise people to to do so yeah no matter what i spent like i'd immediately would record it in my phone, like, as I spent it.

So that I could feel it, even though we can't feel it with the exchange, like you always say. But I could feel something every time. I could see the number go down. Like, so that's important. So what was the difference this time? Because your income shot up after your resolve kicked in. Yeah. Not the other way around.

The other two times when the income dropped, you gave up. What's the difference? The difference this time, I think, was just the wake-up call to mortality and just a bigger why. A bigger why. Absolutely. The why. Rather than I need to do this, I became I've got to do this.

Right. And I always thought it was just so far out of reach even planning i was just like oh this is going to take me three to five years and it always seemed like you know too far ahead in advance to plan but i guess one thing about djang weddings is i started having to plan my life like years in advance like people are booking you like one to two years in advance so i'm like all right well if i know i'm going to be making this kind of money for the next two or three years like why don't i just buckle down and sacrifice and you know uh just get it out of my life how does it feel to be free it feels amazing like i cannot describe it like when i finally paid off that lump sum like i was just in tears for like 20 to 30 minutes.

It's like I'm going to roll into a building on a Tuesday in a tuxedo, baby. That's how I feel, a free-out feel. It's incredible, man. Well done. Very proud of you, sir. You're a hero. You took control of your life. Very well done.

And you didn't give up. You didn't give up, man. That's it.'s it kept going copy of uh the legacy journey that's the next chapter in your story to be a baby steps millionaire you're on your way and a copy of the total money makeover coming to you as well for you to give away and light somebody else's world up so absolutely you got a lot of style man it's an honor to have you very well done to be here very well done ryan dj 007 in the tux to do the debt-free scream i love this guy you're getting married in pittsburgh we got so fun yeah apparently we got apparently we got the best dj on the planet here this is awesome 120 000 paid off in 17 months, make it $45,000 to $140,000. Count it down, Ryan. Let's hear a debt-free scream.

Three, two, one. I'm debt-free! Woo! There you go. There you go, baby. Woo! This is the Ramsey Show. We'll be right back. Our scripture of the day, Psalm 20, verse 7. Some trust in chariots and some in horses, but we trust in the name of the Lord our God.

Bill Bradley said, ambition is the path to success. Persistence is the vehicle you arrive in. Oh, that's no doubt about it. No doubt about it. Perseverance is the thing. Dr. John Deloney, Ramsey Personality, is my co-host today. Hershey,sylvania up next jacob is calling hi jacob how are you hey guys how are you doing better than we deserve what's up

so my fiance and i are getting married in may of 2022 and we are going to be paying for the majority of our wedding ourselves and i was just wondering whether you would recommend one person paying for the wedding uh maybe me and my fiance splitting it half and half i know you probably don't suggest opening a bank account for the wedding i was just wondering what your opinion was on that i don't mind opening a bank account for the wedding and both of you and both of you fund it and both of you have access to it this This is a venture that we are doing together prior to being married, and so we can fund it. I just wouldn't share all your finances prior to the wedding,

meaning I would share the knowledge of them but not the transactions. Don't act like you're married legally before you are. It gets yourself in a pinch. So I don't care who pays for the wedding i don't know that there's a moral thing here i mean you know if you want to go old-fashioned uh the bride's parents pay for it right that's old-fashioned obviously that's not what's going down here so uh why would one of you or the other bear more of the cost is there a reason reason? No, there's no reason. I was just wondering whether it makes more sense to take it out of one person

specifically or just to keep it half and half. Seems like there's something else underneath this question. Because, I mean, if the wedding goes off, then... Doesn't matter. Yeah, it doesn't matter the following afternoon. Yeah.

I was just looking for your guys' opinion. Do both of y'all have the cash to fund this wedding? Yes. Okay. What do you make? I make about $42,000. What does she make? About $35,000.

Okay. Do both of you have about the same amount of debt uh we neither of us have debt okay sounds like everything's pretty equal yeah we're pretty much on the same territory as far as baby steps go i mean i guess you know it would like if you call me up and you said uh i make 30 and my fiance makes 200 um and she wants to pay for more of the wedding i would go well that mathematically kind of makes sense uh but it's not like a moral obligation or something wrong and john's right as soon as you come home from the uh from the ceremony the honeymoon it doesn't matter anyway because it's all combined at that point and

the net the net effect is exactly the same after the wedding. Part of me likes the idea of you all two going to get a checking account wherever you're going to bank as your joint account, and she puts $5,000 in, you put $5,000 in, whatever you're paying for this wedding, and you all work from there, and then that's your account, and you close your two separate accounts when you're married. Part of me likes that, and part of me thinks, man, weddings are so stressful.

Just somebody pay for this thing, Let's get it over with. Sounds like six and a half dozen or another, but I don't know. It'd be okay if you fund it together. I'll go ahead and give you the other piece of advice, and that is weddings are like anything else. They're a project, and you should do some planning on them and set a budget, set a boundary, and say, okay, we're going to spend X. And here's how much of X we're going to spend on the photographer. Here's how much we're going to spend on the reception.

Here's how much we're going to spend on the dress. Here's how much we're going to spend on the preacher. Here's how much we're going to spend on the honeymoon. And the total is the amount that we're going to have in the account. Not more, not less. We're going to have spent the money. And then if you get in there and you go, well, the reception is, you know, the reception, they want to put these flowers out, and the flowers are,

they're not in our budget. Well, they're not in the budget, so we don't put them out. And so, you know, you have to have some guidelines ahead of time because you're going to bump up against a no, and if the no is not brought to you by your plan, then it sounds like one of you is deciding over the other one what's going on. And you go, hey, you can't do an $8,000 address. We had $800 budgeted for the address. And that's what I don't like because then it's, well, I'm paying for the address then,

and you pay for this, and then I'll pay. And then now we're talking division. Right. Yeah. You need an overall budget that you agree to for the project. It's how you build a the project it's how you build a house it's how you do a wedding it's how you do anything that's project-based is you start with the line item to budget and then you know you may have to make a few adjustments along the way

but we've got an agreed to value system of what this wedding is going to be we care more about the reception than we do about the flowers so we're going to put this more money on it you know or we care more about the flowers than we do about the reception so we're going to put this money on it and you decide that up front and then when you get down in the emotion of bridezilla or whatever picking stuff out then it doesn't all blow up on in your face or it shouldn't if it does you got other issues josh is with us in Seattle. Hey, Josh, welcome to The Ramsey Show. Thanks, Dave. Thanks for having me.

I'm excited to be on with you. We're honored to have you. How can we help? Yeah, so I am actually a second generation following your principles, Dave, of financial success. And I'm currently in a spot where I am really wanting to buy a new car. I'm a natural spender, and I've saved up for it. And with the craziness of the market, normally I would buy used. But at the price of the car and based on my financial situation, I'm wondering if it's okay if I celebrate and move forward in that way.

Are you a millionaire? I'm not a millionaire yet. Then I wouldn't buy a new car. Okay. Does the price of the car and the rest of my financial situation matter, though? No, because you don't have enough net worth to absorb the loss of a brand new vehicle. Okay. You can buy it if you want to buy it, but I wouldn't.

What's the value? What car are you talking about? Yeah, so it's Ford's new little pickup truck. It's like $22,000. Okay. And I've got the cash saved up for it, plus rolling in my current car's value, and yeah. Okay. And your income is what?

My income is about $100,000 a year. Okay. And how old are you? I'm 31. Okay. So, Josh, I can tell you what I did. My wife, we need a new car. And Dave takes care of my family pretty well.

And I went and bought a used car. And I did that about three weeks ago. And I walked on and wrote a check for a car on the car lot down the street here and then i drove home and so that that's what i'm doing in my house man just and even if it was five thousand bucks difference between a 2018 and a 2021 whatever the thing was 2019 i don't remember what year was even if it is three thousand five thousand i'm not gonna give them that money not on a car like that okay Okay, here's the thing. The way you're structuring your sentences and the way you've asked the question tells me you have a really bad case of car fever. You are really sucked in and in love with this little truck.

You have bought it. You have driven it. You've fantasized over it. And now you're rationalizing the purchase of it. It's going to give you muscles. Your hair is going to grow back. All the things. It's going to make you sexy.

It's going to do all this. And it's just none of this is true. It's a stupid little truck. And they all go down in value. And you can do whatever you want to do, Josh. You're a grown man, okay? But you called and asked me. The rule of thumb that I've used for 30 years and it's

served me well is don't buy a brand new vehicle because vehicles go down in value unless you have a huge net worth and the ability to accept the loss of value well with covid and the crazy car market, and I know, but they're going to go down in value. They're not going up. Five years from now, things are going to be worth nothing. And 10 years from now, it's going to be worth double nothing. And that's what they do. That's what all of them do. And so you just decide how much of that you want to absorb,

and it's probably not going to cause you to go bankrupt. It's probably not going to hold you back that much. But it is a good rule of thumb to not buy the largest thing we all buy that goes down in value, to buy the worst possible scenario of it going down in value, which is brand new, unless you've got a large net worth to absorb it. It's that simple. It's not a principle.

It's just arithmetic. I just did it. It's that simple. It's not a principle. I just did it. I just did it. It's just arithmetic. But you can do whatever you want, son. It's okay. I mean, we'll still be friends, but I wouldn't advise it. John, good show today. I agree.

And also with you. Very well done. And Austin's on the phones, and James is running the booth in there. I'm Dave Ramsey, your host. 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. Have a friend or family member that needs a daily dose of Ramsey advice in their life? Let them know about the Ramsey Call of the Day podcast.

It's a quick hit of advice about life and money in under 10 minutes. Check out the Ramsey Call of the Day podcast wherever you listen to podcasts.