The Ramsey Show - App - Should I Pay Off My House or Start Investing? (Hour 3)

Episode Date: July 27, 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 the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. Ken Coleman, Ramsey personality, is my co-host today. Open phones at 888-825-5225.

That's 888-825-5225. Marie starts off this hour in Washington, D.C. Hi, Marie. How are you? I'm great. Thank you. How are you doing? Better than I deserve. What's up?

My husband and I don't know when we should buy a house. We're on baby steps four and five. We're renting right now, but my husband's company is relocating us next June, and we don't know when to buy. Our three thoughts were start looking in the fall before we move, maybe buy. So we have plenty of time and we're not pressured. And then we have a place to land once we move. The second is either moving with our in-laws for a couple of months next June and then buy. And then the third option is maybe move in June, rent for six months, and then in that six-month period, buy a house.

But we don't know what we should do. My husband doesn't really want to rent anymore because he just wants to start building equity. Why do you have to start looking in the fall to buy a house by June? That sounds fairly inefficient to me. Well, I think he just wants to see what's available because the market's so hot, and if there's something that we'd like, we would just rather buy it and then have our in-laws who live there sort of watch it and go, oh, if we have construction or things we need to do.

So you're just going to piss away six months' worth of house payments? No, we'd pay the... I know. You're just burning it. You just put $100 bills in the middle of the kitchen table and set them on fire. Okay. For what? Why can't you...

I mean, let me tell you what a normal procedure would be. If I'm going to move in June, I make a trip over in February and start looking. Okay. And close something like May. Okay. And then I move in it in June. Okay. Because you're thinking of going on a house hunting trip and seeing a few places in October.

I know. Why? If you want to go over there just for the fun of it that's fine but you don't need to buy a house in october that you're not moving into until june it doesn't make any sense at all no well we wouldn't necessarily buy right in october like just to look and maybe something comes up in january buy in may okay by in may start looking and buy in may and move in in june that way you're not paying a house payment for a house that's just sitting there because you got the itch okay and you're paying rent by the way back where you are right i know i know i guess this is also my husband thinking that's like a lot happening all at once, so if we can have a place, a land, then it's not.

Okay, you do whatever you want to do, but that's weird. All right. Yeah, and I would just say option three is a viable option. I get that your hubs doesn't want to rent, but there's a lot of things I don't want to do that I still do because they're the best thing to do. And if you're stressed out about it, go rent and get your bearings. When Stacey and I moved back here seven years ago, we rented for a year because he had kids. We wanted to make sure that it was the best school situation, the best neighborhood. So we took our time, and we had a place to land because we were renting.

And then we were able to take our time and walk really wisely through the process. In your position, I don't know why you wouldn't consider renting other than he doesn't want to but either way dave's answer is just as good so it's okay i mean you can rent for six months and buy during that time uh or you can uh just move in may yeah right that's when you're moving anyway is may. So buy a house, move in May. And then dial back out of that. That means I might start looking in March or April. And with a possession of sometime in May upon the closing.

That kind of a thing. That's a fairly normal process. Yeah, there's fear all over that. To where you said the same thing three different ways. And there's fear that's covering that up. Not picking on her, but it's fear. And part of it's going, well, the market, we've got to move now. I've got news for you.

Based on what I'm reading. You'd be better off to buy. The market is, I'm not saying it's peaking, but it's not going to keep going up, up, up the way it has been. I think it would be a really good time. Everything is calming down. It really is. It was a COVID blip, and it's calming down. It is going to

continue real estate goes up in value yes good investment that's right but it's you know the idea that it's going to double between now and may is ridiculous yeah it's not going to denver's an expensive market anyway yeah but um it's not going to double you're going to be okay marie buy a house when you need the house not six months months before. That's unwise. That was a gentler way of saying it. Gabriel is in Canada. Hi, Gabriel. How are you?

Hey, guys. You're awesome. Cool. How can we help? I have a question. So I'm looking to get married next year to my girlfriend. But her dad's very considerate with, like, making sure that I can support her. Good.

Like, financially. Good. Can you? Well, she lives in Switzerland, so I kind of need to find a job there first. But the plan was to save up $25,000, and then with that money we could get married, move in, rent a place. So I was just wondering what you guys think about that plan. Why do you need $25,000 to go to Switzerland? Well, like for the wedding, flights, honeymoon. Okay.

Are you working? You got the money to do that? As of now, I have around $11,000, but yeah, I'm working. Okay, so you're well on your way. Then I think all you're going to need is a job that makes as much as you make now in the area of Switzerland, right? Okay. And do you think $25,000 is enough

for all those things? For a wedding and what else? Wedding, rent, like first month's rent, we want two month's expenses. We basically want to go into it debt free. Yeah, I mean, it'd be great to have your emergency fund of three to six months

of expenses. If you have those dialed in and you know where they're going to be, that would be wonderful, and pay cash for the wedding. It all matters. It's not enough if your wedding is $30,000, but it's plenty if your wedding is $10,000. It's all about the wedding budget as to whether that $25,000 works or not. I don't know how much of that you're going to spend on the wedding. I like the conversation that you're having with her dad.

That means you're a young man of honor, and her dad is stretching you and her to do this the right way. That's cool. It is. It's good to see that. And, you know, real quick thing here. I would adjust the wedding budget based on if you're going to be hustling to get to 25, let's adjust that budget. You know, I mean, you can always do great trips as we get together in marriage. We're debt-free.

We stay debt-free. We live like no one else. The cost of weddings, Dave, can get really outrageous quickly. I've heard the rumor. Yeah. This is The Ramsey Show. Registration is now open to attend our largest leadership event of the year, Entree Leadership Summit. We will be at the Hyatt Regency Orlando, in beautiful Orlando, Florida, May 22nd through the 25th, 2022.

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Use the promo code BRAMSY to get the best possible deal. Today's question comes from Alex in Alabama. He writes in, I'm single, 25 years old, in the military, and on baby step 3B with $170,000 in investments. I've always wanted to be a pilot, and I'm halfway through the process of getting my commercial license. If I stay in the military, it will take me three more years to get the license and qualifications to be a pilot. It will only take four months if I pursue it full-time. I'm

afraid the aviation industry will recover soon, and I'll miss the employment wave, so I want to get the license ASAP to de-risk my situation. Burning bridges in the military and taking a step backwards career-wise is holding me back. Should I leave the military now to pursue flying full-time? Okay, there's so much here, Dave. First of all, I'm afraid that the aviation industry will recover sooner and I'll miss the employment wave. That's not true. There's always going to be a need for pilots. That's a false narrative that's creating some unnecessary pressure.

I also have questions about burning bridges in the military. I don't know why in the world you would need to burn bridges. If you're leaving honorably and you're leaving from the military to go into the marketplace to pursue a future, you don't have to burn bridges. If you're a jerk and you leave the wrong way, that's the only way you're burning a bridge. So don't quite understand that. You have two options here. If you want to take your time and financially it's more viable for you to finish out the three years or you stay in the military and then get the license, that's fine too.

But if you're 25, you've got some good investments, and you've planned for this financially to go full-time for four months. You've got to have living expenses. You don't want to go backwards financially for the four months that you've got to go full-on to get the pilot's license. So I don't think it's a bad decision if it's me. I'm planning for this, and I'm going to go for the four-month option, and I'm not going to look back. But you can't let fear of something that's not real hold you back here dave you know what i can't tell from the email is if he has served his that's what i'm clear on his time that he has yeah promised the military yeah and if he's you know you can't just

walk out that's not and i think that's what he's alluding to that's not burning the bridge that's just not an option yeah you can't you can't just walk away you said i'm good we're gonna serve four years you're gonna serve four years that's correct you know so you know or whatever it is you signed up for what was your your tour and so now when your time is up if you're referring to burning bridges because somebody's gonna get their feelings hurt that you left the military well that's on them that's not on you you just don't be a jerk and you say i've enjoyed my time here and I've enjoyed serving my country and I'm going to move on with my career if your time is up. So if you can leave without doing something illegal or breaking a contract and be done in four months, that's what you should do. Yeah.

But not because the whole aviation industry is going to evaporate in the next three years. If it's going to evaporate in the next three years, why are you going into it in the first place? That's a dumb plan. You know, it's like you're going to get the one job that's left, and you're never going to need another thing ever. They're going to hire everybody. And you're going to be the last one. No, that's a completely false narrative. But, again, it has to do – I can't tell from what – I don't know what burn bridges means here.

Yeah, it's hard to say. I'm assuming he realizes you just can't walk from the military. You would think. You can't just show up and ghost him, you know, like, hey, I'm out. I think I'm going to get my two-week notice. Yeah. I don't think that's the way that works. It doesn't work that way.

I don't think that's how it works. All right. Tyler's with us. Tyler is in Salt Lake City. Hi, Tyler. What's up? Hey, guys. Thanks for letting me join you today.

Sure. How can we help? Hey, so I just kind of have a unique job situation. So we're in baby step four, five, and six, and I'm a professor at a university. And so they put 15% of my income through a retirement account every paycheck. They do free tuition for my kids. And our plan is to get the house paid off in the next four years. But I wonder what's the, I guess what I should be doing in terms of that four, five, and six,

in addition to maybe doing some remodels to the house that my wife really wants. Okay. Well, baby step four is 15% of your income going into retirement, right? Okay. And that gets you going into retirement, right? Mm-hmm. Okay, and that gets you the full match, right? Well, so they do that without a match. So they just do 15%. I don't put in any. They put in 15%.

Okay, well, that's just a nice benefit. Okay, that's wonderful. But you need to be putting 15% of your income into retirement, that's baby step four. Okay. You knew that was baby step four, right? Yeah, I knew that was baby step four. I've been listening to you for five years, and a few years ago, when someone had a big retirement like that, you would say, well, maybe you do 5% or 7% and throw a little more

towards the house. But lately, I've been hearing you say you do the full 15 no matter what they do a big retirement you mean like the amount they're putting in or have you got a million dollars already in there no so i have about 150 000 dollars you know you don't have a big retirement that's a little no no yeah yeah you're talking about the amount they're putting in. I think the only time I have said that, and one of the few things I am is actually consistent. So I think the only times I have said to lower it down to that to 7% or something is not based on how much they were putting in, but mandatory placement. Like they require, there are some positions where they require you to put 12% into a program

that's like a pension plan or something, and then do I need to put 15% more on top of that? No, we back that off, or they're going to furnish this or that. So anyway, you can do whatever you want, but I would recommend you put 15% of your income in and that you take care of kids' college, and then you work to pay off your house and remodel your house out of the balance. And that's pretty consistently what we teach. So, hey, thank you. Robin is with us.

Robin is in Nashville. Hey, Robin, what's up? Hi, Dave. Thank you so much for taking my call. Sure. I really appreciate it. Sure. I've listened to you for years and years. I'm calling because I have an interesting situation. I've been married for almost 25 years, live about 10 hours away from our in-laws and the rest of my entire husband's

family. They own a, his parents being, they own a lake house and they came to us recently and asked if we'd like to buy in. Um, they own it outright, but they told us in the next couple of years, they would like us to make a monthly payment to keep it running. And then they would then turn it over to us in about the year 2023. My husband and I kind of sat down and did the math and decided to not do that. Good. His other two siblings opted in, we opted out.

Good. But there's two problems there. Number one, we're the only weirdos that left the family and left the state, and we're also weird because we follow your plan to a T and are debt-free except for our house. And you're 10 hours away from the lake house, so there's no reason to buy into it. Right. Yeah. But they see us as having a lot of money, and so why wouldn't we?

Because it's such a small amount of money. Because we don't want to, and it's our money. Correct. Yes, exactly. And now they are going around the family telling everyone that we have opted out of our inheritance. And I'm struggling how to explain to them that's not inheritance. I just wouldn't. Just let them do whatever they're going to do.

I mean, they're just being butts. You can't make somebody not be a butt. So, hurts your feelings, though. But you didn't opt out of anything you opted out of a dumb plan good for you and if they're not gonna leave you something because of that oh well that's okay i'll move on with your life i mean it's hard sad people trying to control people In the lobby of Ramsey Solutions on the debt-free stage, Adam and Erin are with us. Hey, guys, how are you?

Good. Great. Welcome. So good to have you. Where do you guys live? Mount Vernon, Iowa. All right. Welcome to Nashville.

So good to have you. And here to do a debt-free scream. That's right. How much have you paid off? I paid off paid off 266 thousand dollars how long did this take took about 13 years okay and your range of income during that time we started out about uh 85 000 and went up to about 195 wow nice what do y'all do for a living i'm a manager release engineering team at a software company.

I'm in my wife. I teach second grade. Good. Very cool. 266,013 years. That must mean you paid off your house. We did pay off. Whoop, whoop, whoop, whoop, whoop.

Looking at weird people. I love that. How old are you two? I'm 46. I'm 45. And you did it before 50 years old. That is so weird. I love it.

What's this house worth? I think right now it's probably worth at least $350,000, but it's hard to say. Very nice. Good for you. How does it feel to not have a payment in the world? So happy. Yeah, it feels good. That's amazing.

Well done. $266,000 paid off, 13 years. So you've just been working it the way you're supposed to work it, just living life, living on a plan and knocking it out. Slow and steady, yep. So what's the story behind this? What got you started 13 years ago? So 13 years ago, I was on a business trip in about 2008, coming back, and I wasn't in control of the radio. And your show came on. And I had never heard you before at all, but a lot of it was kind of speaking to me and listening to that for probably a solid hour on the way back. And I got home and did the searches on the Internet and found what your baby steps were, and I kind of followed that for a little bit.

But we probably didn't kick it in for another two or three years, but certainly we were headed that direction anyway. Both of our parents are very conservative. I think the only thing that would have been acceptable was a car and a house payment, but we wanted to get out of all that. We have four kids. They're age 22 down to 13 now. And so it was just kind of slow and steady, and it was hard for us particularly because I think you get into that medium income, and we didn't have a lot to cut out that a lot of other families might.

We didn't have a lot of traditional consumer debt to take out the corporation. So, yeah, it was a lot slow and steady. I did FPU. I facilitated that for you guys a number of times over the years that we did it ourselves that gives you a boost yeah it helped it's harder it's harder it's hard to not do the things we teach when you are the freaking teacher yeah yeah you have to do it it's like it's like hypocritical weird yeah if you don't i'm i don't really do all i know that that wouldn't work yeah yeah that very good i gotta ask you about your the promotion over that 13 year period I don't really do all that. No, that wouldn't work. Very good.

I've got to ask you about the promotion. Over that 13-year period, you go from 85 to 165. 95. Oh, I'm sorry. It couldn't be my own writing. 195. So what happened there? What was that journey?

Yeah, I stayed home with our kids when they were little, and then I did open my own preschool, and I did that for a few years. And I've done in-home daycare along the way too to always earn us some extra money. But then I did start teaching full-time about nine years ago. So that was part of that jump. So that added a big chunk of that. And just, you know, good, yeah.

Oh, yeah. No, certainly I've moved up. I've been at the same company for 24 years. I worked for Pearson Education. And I've had a very successful career there. I'm very happy for it. But she's the workhorse, right? Even when she was home with the kids, she was kicking butt.

Figuratively. In some cases, literally. Good. Very good, you guys. What do you tell people the key to getting out of debt is um i would really like like adam said you know we always spent conservatively so um we probably jumped into our home um a little bit um ahead of schedule, but it was where we wanted to be and where we knew we wanted to raise our family. So that kind of pushed us back a little bit, but it was just a slow, steady race. But I am excited because we did say some no's, you know, when, you know, other people were

doing vacations or, you know, spending a little more frivolously. So I am our youngest, our oldest, I'm sorry, just got married a couple of weeks ago. And I'm excited for the next chapter of our lives and be able to say a few more yeses to some of the fun things. Yeah, that's fun. Yeah. You're in really good shape to do that. You don't have any payments. Right. I love it. Yeah. yeah me too that's so fun i know you're a car guy dave i uh i've driven a

prius for over 10 years now and uh i have four younger brothers i would say that was not the manliest car on the planet but uh um so we've and i've wanted a truck forever forever forever. And I've told her about it forever. I have a young nephew that that would always ask me, Uncle Adam, when you get in the truck, when you get in your truck? And I for a while I told him Aaron said I can't get it. And then I had to take that back because she said because it wasn't true. But but finally, last year with COVID and with a wedding on the horizon, another graduation on the horizon. I did flip the script and I wanted to wait until after the mortgage was paid off to get it. And I know that's really not your principles

and I've heard you speak that a number of times and we decided to get the truck last year and finish off the mortgage this year. Cool. Good. Good for you. That's a normal thing. That's good. That's the way it should go. I like this. You guys are heroes. Well done. You're free. That's good. That's the way it should go. I like this. You guys are heroes. Well done.

Thank you. You're free. You set yourself free. I'm so proud of you. Excellent. Excellent job. Well, we've got a copy of the Legacy Journey for you. That's the next chapter in your story.

You're leaving a legacy to these kids. These weddings are starting to happen. Next thing you know, grandbabies will be coming along. Life is good, man. Yes. And I'll go visit Papa in his truck. There you go. I like it. It's good stuff. Good stuff.

Also, a copy of the Total Money Makeover for you to give away and pay it forward. Get somebody started on their journey as well. So, really good job, you guys. Excellent work. And thanks again for being coordinators as well. Adam and Aaron from the Cedar Rapids, Iowa area.

$266,000. House and everything. Paid off in 13 years, making $85,000 to $195,000. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! Yeah!

Excellent job. Absolutely incredible incredible that is fabulous that's how it's done so what we're seeing ken over and over and over again are these what i'm now starting to call baby steps millionaires the people that have followed the baby steps, and there they sit with a $350,000 paid-for home. We didn't ask about their retirement accounts, but we know that during that 13 years that they've also been investing in the 401K because they were following our steps precisely. So we know there's a chunk there. And so they might not be millionaires right there today. We didn't quiz them on that, but they're very close.

At mid-40s. Yeah, by their mid-40s they will be. Or they're them on that, but they're very close. At mid-40s. Yeah, and by their mid-40s, they will be. Or they're in their mid-40s. They're in their mid-40s. By the time they hit. Actually, the millionaire study that we did, the average millionaire that we studied out of 10,000 was 52. Wow. So they're going to be right on that.

Yeah. They're going to be right on that. And they're going to get their first million-dollar net worth with a paid-for home and with a pile of money in your 401K following the baby steps. And so we see a lot of times it's about a third, like you've got about a million-and-a-half-dollar net worth, you've got about a $500,000 paid-for house, and you've got about a million in your 401Ks and your Roth IRAs. We see that pop up all the time with these baby steps millionaires. But it's really not billionaires.

No. If you want to be a billionaire, you really shouldn't use the baby steps because you're not going to get there ever. Oh, that's right. Because a billion is 1,000 million. So if you have $10,000 mathematically on a ratio basis, you are closer to being a millionaire than a millionaire is to being a billionaire. Ha! Yeah. But everybody thinks of millionaires as being like the same kind of rich as billionaires.

Millionaires don't have private jets. Millionaires don't drive $250,000 Lamborghinis. Millionaires don't have four extra vacation homes. Those are things that billionaires do. Now, if you want to be a billionaire, you need to use a different formula. The Baby Steps won't get you there in this lifetime. But if you want one to $10 million, and that's your target, Baby Steps will get you there. We heard over and over, slow and steady. Slow and steady. 13 years they did it. They stayed with the baby steps.

13 years. And now look at them. The best is yet to be for this couple. our scripture of the day second corinthians 5 17 therefore if anyone is in christ the new creation has come the old is gone the new is here our Our friend John Maxwell says, Talent is a gift, but character is a choice. There you go. I mean, you guys are stressed out or hurting because you've been worried about this stock market going one direction or the other. Maybe 2020 scared you to death.

Maybe you need to get somebody in your corner like a conscientious investment pro to teach you. These are called SmartVestor pros around our place. They're people that we have vetted. They have the heart of a teacher. They'll walk with you as you learn to build your confidence. And so you can ride the wave of something like a 2020 or the different things that happen in the market. And you just think long-term and think long-term and think long-term. Go to RamseySolutions.com slash SmartVestor, and you can find a list of the pros in your area, the SmartVestor pros, and you can choose one and pick out who you're going to work with

to put yourself on that track for Baby Steps Millionaire. All right, Sam's with us. Sam is in Shreveport. Hi, Sam. Welcome to the Ramsey Show. Thank you for taking my call. Sure. What's up?

I had a question on baby steps four, five, and six. And my question is about concerning the investing of 15% of my income. My employer does not offer any 401K of any kind. And so I was wondering what should I invest in after I max out the Roth IRA? Are you married? No, I'm not. Okay. Do you have any self-employment income?

No, I do not. Okay. All right. Yeah, your Roth is all you've got available to you then. You max that out, and then if you want to do something else, you just buy some mutual funds, get with your SmartVestor Pro like we were just talking about, and what you're looking for there is a low turnover mutual fund. A low turnover ratio on the mutual fund,

like a 4% or 5% or less turnover ratio. An easy way to find that is an S&P 500 index fund. Most of those are low turnover what low turnover means is they don't sell the stocks mutual funds a group of stocks and they never sell or almost never sell 95 of the time the stocks in there and so as those stocks go up in value as a group you do not pay taxes on the gain until you cash it out. This is a capital gain is what we're dealing with here. If the mutual fund sells the stocks inside of there, all of the gains are activated each year and you have to pay taxes on it. So when you're buying a low turnover mutual fund, it's kind of like buying a rental property where if it goes from $200,000 to $300,000 in value,

you don't pay taxes on that $100,000 increase in value until you sell it. And so that gives you the same effect of that in a low turnover mutual fund, and that's the best option you've got left to you at this point. And then over time, you'll probably end up in a different employment situation. Maybe you'll add some self-employment income, which you could then do a SEP, a Simplified Employee Pension Plan, additionally, if you had a little bit of extra income. Nathan Zanamarello.

Hi, Nathan. Welcome to the Ramsey Show. Hey, Dave. Hey, Ken. How are y'all? Great, man. What's up? Good.

Hey, so I am a 21-year-old. I've got one year left in college. I'm about to be a senior, and I've got about $12,000 sitting in my savings. I'm wondering if I should do something else with it because I feel like it's not... I mean, it's just sitting in my savings. I'm not making any money off of it. What are you studying?

I'm studying energy finance and management. Good for you. Excellent. Thank you. Well, I mean, Nathan, you're're gonna need that money to either finish school debt-free or make the transition after school the transition being a move to maybe a different city maybe some travel to do some interviews so that money is best used to invest in nathan rather than worrying about some kind of mutual fund investment at this point you You are a better investment than a mutual fund is. You're going to make more return

on it by using it to ensure that you graduate debt-free, ensure that you're able to make your transitions without any... It just gives you a little grease in the wheel, right, Ken? Yeah, absolutely. What do you want to do? You have a good idea specifically? I know the industry that you're headed to, but what would be that great job right out of college? So that's the thing. I've been thinking a lot about that. I'm not entirely sure. I have an insurance sales job that has been asking me to work for them down in college, but I'm thinking about learning a trade and hoping to become some type of owner-operator of a certain trade. Fascinating. Well, let me tell you something.

Why would you not use your degree? That's true. That's very true. I'm just wondering. No, no, no. What's the actual answer? I don't know. That's the thing is I really don't know what I want to do. And I just know that I do want to do something with my degree to where I'm talking to other people and helping other people. I don't want to sit behind a desk and not talk to anyone. Well, but when you say energy finance, I've never heard of that degree. Does that mean that you're specializing in financing in the energy industry?

Sure. So oil and gas, you know, renewable energy, stuff like that. Are you interested in? Financial industry? Sure. So, uh, oil and gas, uh, you know, renewable energy, stuff like that. Are you interested in, are you interested in finance? Sure. Yeah, absolutely. Um, I mean, I mainly picked it up because I, uh, had enough time to pick up another major. And, uh, but I, I think that I, I like finance, don't get me wrong, but I would like to do something more in the management aspect. Yeah, so play that out. What trade, and I'm not holding you to this, but what trade are you thinking about?

And then eventually working your way through the trade, maybe owning your own business. What are we talking about? So honestly, it could be anything. I've had HVAC stand out to me just because I've had a million problems with HVAC, and the companies that I'm using and talking to are terrible at their job, and I'm sitting here thinking that I could run that, something like an HVAC business, tremendously better than the people I'm talking to.

Well, it sounds like you've still got a lot of searching to do, but if you really love the trades yourself, meaning you enjoy solving problems with your head and your hands, and then you work your way up and eventually own your own business, you know, and that finance background, that's not going to hurt you. But either way, Dave's advice is absolutely right. Let's say you pursue the trades coming out of college. You're going to need some of that money to potentially do some trade certification.

You need to quit picking your career based on convenience and what's just in front of you. You need to start thinking about what's in your heart. Because you picked up this major just because it dropped in front of you, and you didn't really give it a lot of thought. And now you're picking up an HVAC because you once had an HVAC guy that didn't show up on time. That's not the way you need to analyze this. I mean, if you want to find businesses that suck and get into one of those industries,

the entire world's open to you. Because there's always, in any industry, there's businesses that suck. But into one of those industries the entire world's open to you because there's always in any industry there's businesses that suck but let me ask you a question you are intrigued by the trades yes or no or is this a fancy no i'm sorry i mean go ahead no i'm out are you intrigued by the trades or do you really like the idea of working in the trades as something that personal interaction with people, solving a problem? Is that what's drawing you, or is it just a fancy? So, Ken, it's not necessarily the trade itself. It's owning my own business and doing something better than my competitors and helping people out along the way. Okay.

All right. So you have an entrepreneurial drive. So you better do your homework on this because here's what happens. Dave's exactly right. You just, well, I've had a bad experience with some HVAC companies, and I'm going to start an HVAC company. You're going to wake up six months into that, and you're going to be miserable because it's not what you thought it was.

You better figure out what problem you're trying to solve. So here's a three-part question for you. For an entrepreneur to start something, what problem do i want to solve all right not one and it's not one that makes money it's not an industry that needs your help yeah it's like i have a burning desire to solve this problem on behalf of people so who are the people and the problem that i'm helping i'm solving a problem i'm helping people and then what's the solution you get most excited about in solving that problem? If you can figure that out, now you've got something that it's not just a business that allows you to work for yourself and not work for the man. And if you don't do that, you're going to be a typical entrepreneur who's jumping from idea to idea every 20 seconds.

Because you have zero juice for the actual business itself. And so you run to one thing, abandon it run to another abandon it and it's just add in the marketplace thing i know because i'm an entrepreneur too and so we all haven't we all have 27 ideas in a minute it's just part of our the way we're wired so be careful with that it's very important to figure out what's burning inside of you and then go do that not go look for something of convenience bad plan good. Good hour, Ken. Thank you, sir. Good hour, James Childs and Kelly Daniel in the booth.

I am 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. Did you know you can listen to The Ramsey Show on your smart speaker? Just tell Alexa, Google Assistant, or Siri to play The Ramsey Show podcast. Check out all Ramsey Network shows on your smart speaker today.