The Ramsey Show - App - Should I Keep Letting My Parents Live in My House? (Hour 3)

Episode Date: October 8, 2020

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🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. Rachel Cruz, Ramsey personality, number one best-selling author, a couple times over is my co-host today here on the air. Open phones at 888-825-5225. It's 888-825-5225.

So Rachel, article came out in Inc. Magazine today. Southwest Air just made a tough decision. Is it risky or smart? Southwest is trying to do one thing. Harvard Business School, they say, to do the opposite. Well, I think I know whose side I'm going to come down on this already. I'm just guessing that Southwest Air might know more about business in their little finger than Harvard Business School does in the whole freaking campus.

But I could be wrong. Let's look and see what the article says. Both United Airlines and American Airlines warned over the summer they would start furloughing thousands of workers on October 1st if that date passed without an extension of the federal aid to airlines that the government approved in April. The October 1st deadline passed. The stimulus didn't. But at Southwest, which lost $17 million a day during the third quarter, $17 million a day during the third quarter. $17 million.

A day. It's seen revenue drop 70%. CEO Gary Kelly did something a bit different. Now, sidebar, it's fair to note, because I'm biased, Rachel's biased, we know Mr. Gary Kelly. You know him. I don't. Well, you've met him here, and I know him fairly well.

And he's spoken for us at Entrez Leadership, and is an incredible man he's wonderful he's an incredible leader and a person of character so I will go ahead and say that I know that up front and that would taint my reading of this article this week Kelly recorded a video for employees in which he said Southwest will keep its streak of not having had layoffs or furloughs for its entire history, at least until the end of the year. While Kelly would, of course, welcome federal aid, he said he's no longer counting on the government. Instead, he wants Southwest to cut its own corners. He's starting with himself. He will go without a salary until the end of the year.

Oh, until the end of 2021 2021 for a year and a half. Yeah. The other senior executives will take a 20% pay cut during that same period of time. Other non-union employees will take a pay cut of 10% so that everybody can keep their jobs. Kelly promised there would be no layoffs through the end of 2021, and their salaries will snap back, regain the 10% pay cut after one year. He said he'll also be asking unions to match the pay cuts. My goal has been, and it remains, no furloughs, no layoffs.

If we fail to reach an agreement on reasonable concessions with the unions quickly, that will be the last resort. Basically putting the ball in the union's court, both of the unions representing Southwest Air Flight Attendants poured cold water on the idea of voluntary cuts. Flight Attendants Union sent me a statement saying they had made it clear that the company in previous conversations that our members are not interested in making concessions to a contract that took decades to obtain.

Agreeing to discussions is different to agreeing to a concession. So we put the unions in the corner, and they're coming out looking like fools. Because if you're a union guy and you don't understand that when money's not there, it doesn't matter what your contract says, I can help you with that. They're going to lay your butt off. You're gone. Okay? Union contracts do not create money where there's not money. And when the entire top echelon of leadership takes a pay cut and no pay, and everybody else takes a pay cut, but you stand there with your little lip stuck out, it leaves you guys looking stupid in this union, I'll just tell you. I mean, union people would be mad at me if you want to be mad at me,

but this is a basic math problem, a company trying to survive, trying to help everybody keep their jobs, and the unions being a grouch. There's a different unions are, you know, if the company's being greedy, yeah, get after them. This is not about greed. It's about freaking survival. You doobs. It seems pay cuts might be best, but it happens to fly in the face of the advice that Harvard Business School professor Christopher Stanton and some of his colleagues give.

They say lay people off instead of cutting salaries. Otherwise, you risk your top performers moving on and you risk morale. They don't take into consideration that morale is not a problem at southwest air oh i was gonna say morale i i you almost i mean if i'm working for a company and the ceo and the top execs are cutting their salary that makes me taking no pay and he takes no pay that makes me almost more loyal to them where i'm like you're sacrificing your life to keep me thank you i mean you would think it would yes but i'm like it would i so it's just funny that the harvard guys are like oh no that's gonna like hurt morale yeah because see they think morale is based on uh money and it's not it's based on culture and one of the strongest culture

companies in america is southwest yeah yep um and uh the culture there is you can cut it with a knife. It's so thick. Hey, I would travel. I traveled all the time on commercial for so long. Southwest. I ended up, that's the only place I would fly

because they were the easiest. If stuff happens, oh, they were so accommodating. They're wonderful. Wonderful compared to other airlines. So I'm a Southwest fan. We're big fans. They're not advertisers.

They didn't pay us to be sponsors or something like that. I will, Southwest, if you want to give me some free flyers. If you want to come on the radio and be an advertiser while you're broke, that'd be great. But yeah. I don't think this is happening, Rachel. I know. I'm just going to help you with that.

They just cut pay, okay? I know, I know, I know, I know. I'm putting two and two together. So this is all about saving jobs. Gary laid out a plan, the article article says to do just that save the jobs our business is in intensive care and our ceo is doing everything possible to save jobs and navigate through it now we pick on all of us in america pick on politicians and we pick on corporate greed people but when they behave in manners that is not greedy when they behave in manners that is not greedy, when they behave in a manner with character, we also need to call them out and say, well done.

Well done. Because I don't know when I've seen in an organization that size, the leadership team step up and say, we're not going to get paid so you can keep your job. We're going to survive. It's amazing. And now they make a lot more money and they've got some money in the bank and they're probably i don't guys i suspect gary's a millionaire multi-millionaire probably as he should be he's the freaking ceo of southwest i mean really but uh um you know he in other words he's probably okay at home he's probably not gonna lose his house because of this

or something i suspect that would be shocking to me. So it's not like that. But they did, you know, leaders, real leaders, put the team that they lead, the good of the team ahead of themselves. Otherwise, you shouldn't have a team. You know, if your team's not worthy of you being sacrificial to keep them in place, you shouldn't have had them there anyway. You should have already fired them because they're not worthy. And so this is the way we did it at Ramsey, but we're a little 900-person organization. We're not $17 million a day burn rate.

Goodness, it's hard to get your mind around. But, you know, there are some people out there in the middle of this COVID suppression nightmare, ridiculous mess that we're in the middle of economically that was contrived as crud. But the airlines are just, their finances are a disaster. And here's a guy standing with his face in the fire doing the right thing. Hats off to you, my friend, Gary. Hats off to you. Southwest, we love you. We hope you guys make it.

We hope you turn it around and prove one more time that we already knew that Harvard Business School is not worth the money. This is the Dave Ramsey Show. Over the years, I've seen so many families suffer by not having life insurance. It's not that they didn't care. It's just that they didn't know, so they did nothing.

That's a huge mistake. Listen, husbands and wives, moms and dads, think about it. If you died, how would your family pay the bills, the mortgage, food, and plan for a better future? This is what life insurance is all about, and term life is the only way to go. It's not expensive, and it's not complicated. Stop wasting money on cash value plans. You need 10 to 12 times your income in protection,

and I recommend 15- or 20-year-level plans. I also only recommend Zander Insurance, and I have for over 20 years. These are the only people I personally use, and they only offer the plans I recommend. Call them at 800-356-4282 or get instant quotes online at zander.com. Trust me, these simple steps will let your family know how much you care. Ramsey personality, Rachel Cruz, number one bestselling author, author of the new book coming out in January, Know Yourself, Know Your Money on pre-sale now,

is my co-host today here on the air. Dan is in Cleveland. Hi, Dan. How are you? Hi, Dave. Hi, Rachel. How are you guys today? Great.

How can we help? Cool. Well, Phil, I have a quick question for you so i know that you have talked about the rock paper scissors when it comes to investing and um i'm we're getting ready to start baby step four here good and so i have a question because i have a full-time job so i do the you know i'm going to be setting up the roth ira but i also work for my daughter as a health care provider, so I'm also self-employed and can do an SEP. So I just never hear you mention that when it comes to rock, paper, scissors. I don't know where. I think the SEP is now available in a Roth or a regular.

And all it is is a simplified employee pension plan. It works best for a solopreneur, meaning you don't have employees, which is your case. Yes. Okay, because if you have employees, you have to put the same percentage into their account that you put into yours. Right. And so if they've been with you more than two of the last five years. So I started with a SEP, but then when I started adding team members, I rolled the SEP into an IRA and started a simple. So in your case, if you can't get a regular Roth going and you can't get enough in your 401K with your match and it's a Roth over at work,

if those three things combined don't get you to 15%, you could do the SEP. I wouldn't add the extra layer to your mess. It gives you no real advantage unless you need it to get up to the 15%. Oh, gotcha. Okay. That makes sense. And so I'm a school teacher, so the Roth would be on my own because our 403Bs at school actually are all annuities.

Do they have a match? They do not. Okay. Then they're traditional, so you probably are going to use the SEP then not. Okay. Then they're traditional. So you probably are going to use a SEP then. You're going to do a traditional. You're going to do an individual SEP. Are you married?

I am, yes. Okay. So you both do a Roth IRA maxed out. Okay. So $6,500 each. And then does that get you to 15% if you're not doing anything in the 403B? That would get to 15%. Okay, if it gets you there, then we're done.

If it didn't, then you would do a SEP Roth before you did a 403B. Okay, and maybe I misspeak because I guess it wouldn't get me if I'm including my self-employed income. Then, no, I wouldn't be at 15%. Okay. And your wife's income? It would get me at 15% of my teaching job. No, she does not have income.

Okay. So we take all your income times.15. The first thing we do is we're going to dodge the 403B because it's not a SEP and it has no match. Yeah. It goes to the end of the line. It's to the end of the line it's to the front of the line and you're going to do an individual ira roth for you one for your wife okay and uh what is your income my income uh my teaching job is 85 000 and my part-time job for my daughter's about 3030,000. Okay, so we need like $16,000 going in, and if you do two $6,000 Roths or $6,500 Roths,

you would be at $12,000, $13,000, so you're not there. You're right. So you do need to look at doing a SEP Roth. Okay. And you can do all of those. You can do your regular Roths and your SEP Roth all with your SmartVestor Pro, and then those three things totaled up should get you to your 15% for your baby step four. I would do all of that before I did a non-matching traditional 403B,

especially when it's going into annuities. Is it common for 403Bs within teaching not to match? Yes, and it's also common for them to have crummy annuities as the investment because insurance companies got into the teaching world rather than investment companies with these government packages. And so there's a lot of teacher deals. Few of them, like in hospitals, you'll run into them too with nurses and that kind of stuff, the 403Bs, a lot of them are annuities rather than mutual fund options yeah and so even if they have mutual funds inside the annuity

it's still all watered down and commission driven and it's very inefficient so um they're generally not as good a plan some of them some school systems do a great job of putting good options in there so it's not the fact that it's a 403b it's the fact of who's been serving the 403b and what kind of products they're putting in up under it right right and that's what gets them into trouble sudu is with us in uh orange county california hi sudu how are you good thank you dave and rachel for taking my call uh all your financial advice uh god bless you guys. You too. How can we help?

Thank you. We've been using the EveryDollar budget. It's worked out really well for us. We have paid off $24,000 over the last two years, and we are 100% debt-free. Wow. Thanks to you guys. Congratulations. Thank you.

Going forward, we are in the process of refinancing our house right now. Our lender told us that Freddie Mac will give us an appraisal waiver as long as the loan-to-value is just at 80% or above that charges a PMI and give us a credit. But however, if we pay down the principal and it goes down to below 80%, then there will be an appraisal needed. And then if we were to go with the higher LTV, then the PMI would stay on for two years, even if the loan is paid out to below 80%. We were a little bit confused on what approach should take, whether to take the PMI with the credit or whether to go in for a formal appraisal

now that we know the valuation from Freddie Mac. And Freddie Mac, so you you doing a jumbo loan it's a large loan right yes so the loan is for uh seven hundred and um ten thousand dollars yeah okay all right right around 80.056 percent so uh i'm wondering whether we can use the freddie mac valuation as a yard stick and confidently go in for a formal appraisal thinking that it will come out to be at least that much or higher yeah and if you wanted to have a realtor friend of yours just run some comps that the same comps that the appraiser is going to find if he does a formal appraisal because a residential appraisal is not rocket science. They find the three closest comparable sales in date and in attributes.

And so it's really not, and they take the average of those adjusting for the differences. It's really not rocket science. It's a little bit above sixth grade math. And so, in other words, the residential good realtor can pull the same exact database that the appraiser is going to pull from and tell you very closely what that's going to be. In the real estate business, they call it a comparative market analysis, but it's an appraisal. It's the same exact process. I've got a degree in that.

So we actually took that whole world apart and put it back together a couple times so but yeah what i'm going to try to do is go ahead and get this thing appraised now and get rid of it if not you're going to be very close and i would be willing to pay the appraisal later to get rid of the pmi rather than get jacked on the other side so i like i believe it was option a the first option you had there where we're going to go with the formal appraisal it's not that expensive considering you're dealing with seven hundred ten thousand dollar loan and so um the whole idea is what's the most efficient way to get rid of the pmi and the you know if you've got the valuation the most efficient way is going to be the appraisal now or shortly or do it again in a year when the values come on up and you get the thing driven down. But that PMI on $710,000. For two years, yeah.

That's a lot. That's a lot. Well, and even after two years, there's an APY, interest rate adjustment. So you're probably better off just to do a pure deal, a clean deal with real appraisal and looking at the whole thing. So to recap for those of you listening, if you don't put down 20% on a Freddie Mac, which would be for a larger loan like that, or a Fannie Mae, a more traditional sized loan, a conventional loan on a home, they charge you

PMI, private mortgage insurance. Private mortgage insurance insures the bank if they have to foreclose on you, it covers them against a loss. So you're buying foreclosure insurance for your bank that pays them if they foreclose on you. It seems kind of weird to me, but they get away with it. So that's what you're doing. And it's $75 a month, roughly per $100,000 borrowed. That's a lot of money when you're talking about $710,000. So one reason we say to put down 10 to 20% and you hit that 20%, there's no PMI. If you get rid of that 20% gets rid of that PMI. Exactly. This is the Dave Ramsey personality is my co-host today open phones at 888-825-5225 Blanca is with us or Blanca in Rockford Illinois how are you good how are you guys thanks for

taking my call sure how can we help so my question is is, I just recently started Baby Stuff No. 2, and I currently live with my parents, but the house that we live in, I actually own the mortgage on it. It's under my name. And I'm just wondering, I've been thinking about getting my own place, just a rental, but I'm not sure with me trying to pay off debt, if it's better if I just stay here. I am helping out with half of the mortgage currently.

Obviously, if I left, they would take care of it from there. Well, I mean, to start with, I need a little bit of clarification. Actually, they live with you. I guess so, yes. You don't live with them. It's your house. I bought the home for them, though, when I bought it a few years ago. Say again?

When I purchased the home, I intentionally purchased it for them. To give just as a gift? Because were they in trouble? What was the thought behind it? So, so they, so their credit isn't the best, so they couldn't go off and, you know, purchase a home, um, under their name. So I went ahead and did that for them. What's their situation now? How are they, are they making an income? Are they stable? Yeah. I mean, I mean, they mean, they're making an income. They've never been the best with money, but they'd be fine if I was to leave.

They could take care of payments and stuff. Basically, though, you have a rental house your parents are renting for the payment if you move out. It's not their house. Yeah, technically, you move out. It's not their house. Yeah, technically. You're right. I mean, there's no technical. I mean, you own the house. If I go down to the courthouse and look it up, it has not got their name anywhere on it.

It doesn't have their name on the mortgage. It doesn't have their name on the title. You own the house. And if something happens in the front yard, you're responsible. If someone gets hurt there on the property yard you're responsible if if uh someone gets hurt there on the property you are the one that's liable if there's no insurance right okay if the payment doesn't get paid nobody calls your dad right they call you so this is not technical this is factual okay. Okay. I understand emotionally that you have allocated this house to them.

I get that. But you need to grasp that this is a real impediment, this is a real problem for your future, that you have this rental property with some semi-weak renters in it. Okay. That's bothering me. I love that you love your mom and dad this like this and that's all cool but we've got to really say hey there's some real risk here for you how old are you i am 28 years old and what do you make i'm making about 48 000 a year and how much other debt do you have other

than this home that your parents live in i I have about $32,000 in debt, mostly student loans. Okay. And how much progress are you making on that? I just started Baby Stop number two, so I've only paid off about like five grand so far. Good. That's more than you've ever done. Yeah. Proud of you. Very good. Thank you. Okay.

So let, here's what we need to do. Let's pan back. Okay. Five years from today, you'll be 33. Where do you want this situation to be with the house and with the debt five years from today? I mean, for sure my debt paid off. Eventually, I would like to purchase another home, so I guess I would have to see about the possibility of either transferring that mortgage to them. Yeah, they would need to be able to, if we give them five years and say you need to get your credit in condition so you can refinance this loan into your name and i'll deed you the house okay right we've got there needs to be an end to this that's positive and the only way that happens is if we hit create careful steps to get there so you're about to put mom and dad on a budget and walk with them to make sure they now get good with money so they can get a loan because let's pretend you're 38 and

you get married and daddy quits paying the bill yeah your new husband's not going to be real thrilled with this bill laying over here associated with your parents yeah and so this doesn't my point is this doesn't scale well it doesn't it doesn't project into the future well today it's all okay right you're safe they're safe everybody's happy nobody's mad at anybody we're not trying to rock the boat but i i just want you to think about okay long term and then what are the steps to get to where i want to be long term yeah and i think having an out of the house bunka is going to be really wise and i think because it's something as large of a purchase like a home like we're not talking about a car or anything like that like it is a home so giving them a few years out i think is really is really smart because i think you're going to look up eventually and what was intended to be such a gift and so kind on your end and really trying to help

in turn may not be a great decision for you. And there's a point as an adult that you kind of have to create those boundaries and say, okay, this is my life and you're not being unkind to your parents by any means, but what is smart for me to do in this moment? So that way you get your stuff cleaned up so that you can help them later if you need to, but you is smart for me to do in this moment. So that way you get your stuff cleaned up so that you, you can help them later if you need to, but you just weren't in a great position to do it in the first place. You didn't know it at the time. Um, and again, out of the kindness and goodness of you really, really thought that you were helping. And I think that the smoothest transition out, um, is that communication and having a timeline for them to take over,

take over the mortgage. Probably sounds like this mom and Dad, we're about to have a little meeting here. Love you guys. Did this out of the goodness of my heart. We have to have an end game. We have to have an exit strategy. So I'm going to stay here for two more years and continue to help pay part of the bills while I get out of debt. During that time, you're going to get on a real tight budget.

We're going to get your credit cleaned up because we've got a five-year plan for you to refinance, and let's get the house into your name. I want you to have the pride of ownership. I want you to not be living in a house your daughter owns. I want you to be living in a house you own, and that's going to be great for you, and it's going to get it out of my name so that I can move on with the next step of my adult life. And I love you, and we're going to work together to accomplish these things. I'm staying for two more years nobody's mad at anybody but we are not going to just kind

of wander off into oblivion and pray this all works out because it ain't it ain't gonna work out okay and what that does is i think that puts pressure on the parents in a good way though for them to to get their dignity this may be a time where you're like hey maybe under the surface you've been enabling some bad financial moves on there and they're able to be maybe a little lazy. So they're not great with money. And they've kind of had the safety net of you for the past few years with this home. And when you put that pressure on to make them actually behave and get on a budget and get on a plan and they start to win if they if they choose those steps and become financially healthy. I mean, for them, like that's, that's,

that's helping them, you know, in the long run, like that, that's a beautiful story to say. There's a lot more dignity owning your own place as you go into retirement than living in a place your daughter bought. I mean, there's just dignity to that. And that's a good thing for him. A good thing for her. So I'll tell you what, hang on, Blanca, we're going to have a Kelly pick up. I'm going to sign all three of you up for Ramsey Plus. We're going to walk with you and show you how to do this. Okay, we'll put you through Financial Peace University, get you on the every dollar budget, get mom and dad on that.

We're all going to work this plan together. You're going to live there, so you can all do it together. It's awesome, and you can cheer each other on some wins and be able to head towards some positive goals but uh there needs to be a a catalyst a little shock that changes the direction of what's been going on here you've changed your direction let's change their direction with it so that it doesn't hold you back and so they get their dignity of home ownership as they go forward so that's that let's work together on all that.

Hang on. Kelly will pick up. We'll get you signed up for all of that. Good rule of thumb. When you're making a decision like this, where you're helping out somebody, don't look at it in the moment only. Ask yourself, how's this going to be working 10 years from now? Because most of the time, it's not.

This is The Dave Ramsey Show. Thank you. Our scripture of the day, Titus 3.5, He saved us not because of righteous things we had done, but because of His mercy. He saved us through the washing of rebirth and renewal by the Holy Spirit. Ray Goforth says there are two types of people who will tell you you cannot make a difference in this world, those who are afraid to try and those who are afraid you will succeed. It's good. Ouch.

Well, a couple of things going on around Ramsey right now, especially with our lady personalities you need to know about. Christy Wright's Business Boutique Academy is in open enrollment through today. At 8 p.m. tonight, enrollment closes. You will not be able to get in. There's only a few hundred, few thousand people in this, and it's basically personal coaching, hundreds of videos on how to start, how to run a business.

Business Boutique is all about equipping women to make money doing what they love. It's Christy's baby. She rocks it. She does a great job with it, and check it out at christywright.com. You've got until 8 o'clock tonight, and enrollment will close for about six months on this because we keep this thing at a certain size and we want these ladies going through these processes at the same pace uh we don't want newbies joining every day and it works really it's really strong it's great yeah i mean this this whole process of i even had a friend just texting me she was like i kind of want to start

this business i think i want to just get in the academy and i was like do it do it do it do it because it helps you whether you have an idea, whether your idea is functioning and it's kind of small, or you want to grow something that is full on in gear. So, yeah, all the videos, and Christy does a phenomenal job for sure. ChristyWright.com is where you can find all of that. The other thing that's happening is we launched today the Know Yourself, Know Your Money live stream event that is now available. Rachel is going to be doing this on October the

28th with Dr. John Deloney, Dr. Henry Cloud, and Ian Cron from the Enneagram, and they're going to talk about how important it is to know thyself. The unexamined life, Socrates said, is not worth living. You only get better when you look in the mirror and say, oh, you're the problem. And when you do that, you will move forward with your money faster than if you just use a money technique. And Rachel's written about that in the new book know yourself know your money this unbelievable deal is only 15 to watch these world-class teachers all four of them best sellers all four of them some of the best teachers and speakers on knowing yourself october the 28th only 15 and if you want to buy the book as a part of it, you can get the book for only $10 more. So $25 gets you the book and the live stream.

And so be sure and go to rachelcruz.com, daveramsey.com, and get signed up for this. This is a lineup. Oh, yeah. The event is going to be so fun. Some of my favorite people, honestly, and in this space and in this world of diving in and understanding yourself more, it really gives you the knowledge and the power to say, okay, what are my strengths? What are my weaknesses? This is why I do the things I do. And having kind of that awakening, if you will, that awareness, it helps you in so many areas of your life, but including your money. So much of the money problems that I see, oh gosh,, people think, oh, yeah, they're just money problems.

I'm like, no, there's actually a lot of life problems underneath that. And when you can understand how you tick, how you're wired, your tendencies, how you grew up, all of that wrapped in is in the new book, Know Yourself, Know Your Money. And really, to gain that knowledge, it helps not only within your relationships, but it helps you win with money faster. It's going to cause you to smooth out the journey. And people get from point A to point B faster once they realize, hey, I'm a nerd, and I'm going to use the strengths from that, but I'm going to use the bad parts of that. Or I'm a saver, or I'm a spender, and I'm going to use the strengths from that. I'm not going to, or I'm an abundance.

Yeah, or scarcity. Because the problem with abundance is you believe everything's going to work. Oh, yeah. Absolutely. Absolutely. Yeah. That's me. I've The problem with abundance is you believe everything's going to work. Oh, yeah. Absolutely. Absolutely. Yeah. That's me. I've got a huge abundance mentality.

I think it's always going to work out. The seven money tendencies is part of the book and what we'll talk about in the event as well. But even just naming those, seeing those, putting yourself on a spectrum, which sounds clinical, but it's just true. It's this awakening and this awareness of like, oh, wow. Okay. That is, I value that part of

money or maybe my spouse doesn't and maybe that's why we're budgeting they get frustrated that i want to go out to eat more and have the experience of going out to eat where i would rather buy something i like to buy things and you can just kind of pinpoint this conversation and like you said especially you could figure out why you don't like dave ramsey i should have had it i should have had a bonus chapter in the book for that one. Henry Clow can help you with that one. I love it. All right, so go to DaveRamsey.com and sign up for 15 whole dollars for this incredible. I mean, you would pay $150 to any one of these people.

This live stream world is incredible. So Know Yourself, Know Your Money event, October the 28th. In the meantime, if you want to take a free money quiz, type the word or text the word money quiz to 33-789. It'll do the same thing. It'll start to help you get your hands around what you are, how you come at this money thing. There's not really on most of these things a right or a wrong. The right or the wrong comes when you become a toxic version of one of them. And you're holding everybody back or you're, you know, like if you're a spender and you just go spend like you're in Congress, that's a toxic version, right? And you can't out earn your stupidity then. So that, you know, that's me.

That's how I started. And I thought, well, I got to, I got to, okay, I'm a spender. But I thought you had, I thought you went, I thought they checked the receipt when you're going out of Costco to make sure you spend at least $200. I thought it's federal law. And so I didn't know they were checking to see if you just got the right stuff. I thought you were required to spend money when you went in there. So I had to fix that part of me, and now I enjoy my spending because it's with a plan.

And you, too, for that matter. It's all that. Oh, yeah. I'm a spender for sure. You, too. Same exact thing. with a plan and um you too for that matter it's all that oh yeah you're just saying the exact thing so rachelcruz.com and again money quiz text that one word to 33789 know yourself know your money and you can pre-order the book it comes out in january and of course you'll have

the audio book the e-book the video lessons all these things 150 dollars worth of stuff that comes with the pre-order as well so you don't want to miss out on any of that. Taylor is with us in Minneapolis. Hi, Taylor. Welcome to the Dave Ramsey Show. Hey, Dave and Rachel. Thanks so much for taking my call. I listen to you guys like every day. Thanks. How can we help? So I haven't heard you talk a lot about this subject, but my family has a lot of wealth in it, and I'm doing pretty well myself, but I just wanted to get your take on what I should be doing for my retirement. I mean, I don't want to be like a trust fund baby, but I want to have stuff for myself. Good.

I think that's great, Taylor. How old are you? Yeah, I'm 20.'m 20 cool you in school no i'm not i actually i have a couple business things that i'm doing cool so what kind of money you making i make about 80 000 a year and you're 20 years old dude you're stud. That's pretty incredible. Yeah, thanks. Well done. Yeah, and I just bought and sold some properties in the past since I turned 18. And I bought a house, and I fixed it up, and I'm going to stay here long term. Before I run out of time, let's get right to it. You're an impressive young guy. What is your key question?

We can help you with right quick. Um, so basically, um, all said and done, my parents have a stay worth about probably $5 million. Um, my grandparents have about probably three to 4 million. I haven't, I'm not sure on that, but I guess how much should I be focusing more on saving for retirement or can I, you know, enjoy some more of my money that I'm making right now? I think I would work the baby steps. That's what I was going to say. I think the more independent you are emotionally and financially from that money, knowing that it

probably will be handed down to you at some point, but walking through life, not even worrying about that, it gives you a sense of dignity. And there's an element of that I feel with you, like Winston and I, my husband, we were like, you know what, no matter what happens and nothing, we don't get handed down a penny of anything. Winston and Rachel Cruz are still going to do really well because we've been smart over a decade with our own money. And there's just something freeing and independent about that, that we have our own family unit and we're good. We are good.

And anything on top of that that we have to manage later in life is a blessing and a responsibility. But there's something about the independence, Taylor, that I would want for you because I think it's really healthy and really good. Yeah. Just walk the baby steps as if you had no money coming. Run your life as if you had no money coming. And be wise.

And you're way beyond your years already, sir. Yeah, you're doing it so great. Great job. Great job. So thanks to Ben Hill filling in for James Childs this week, Kelly Daniel, our associate producer and phone screener, Rachel Cruz as our co-host. 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. This is James Childs, producer of The Dave Ramsey Show. You can listen to Dave, Rachel Cruz, Chris Hogan, or the rest of the Ramsey Network anywhere with the Ramsey Network app on your smartphone.

Catch all of our full shows, browse by topic, or send clips to your friends. Head to the App Store and download the Ramsey Network app today.