The Ramsey Show - App - Should I Spend $90K on a Tesla? (Hour 1)

Episode Date: September 20, 2022

Ken Coleman & John Delony discuss: Renting versus purchasing a home, Buying a Tesla for a growing family, When you should upgrade your house, How to relate to friends with anxiety.   Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6   Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Девочка-пай Live from the headquarters of Ramsey Solutions, broadcasting from the Pods Moving and Storage Studios, this is The Ramsey Show. It's where America hangs out to have a conversation about life, specifically your money, your relationships, your work, everything that is connected and in between all of those heavy categories. I'm Ken Coleman, joined by my colleague, Dr. John Deloney. We're Ramsey Personalities. We host our own shows as a part of the Ramsey Network. And this hour,

we are your hosts. We are here for you. John, what are we going to talk to them about? Everything. Relationships, mental health, what's going on in their lives, what's going on in their workplace, their money, whatever's going on. We'll sit here with you and we'll walk alongside you. There you go. All right. Let's go to Noel, who joins us in the Big Apple, New York City. There you go. Noel, how can we help? Hi. Pleasure to talk to you guys. I just moved to New York City to take my dream job and doing well. The salary is decent for the city and I have no debt. But I was wondering, I don't think I can afford to buy something for a very long time. And I'm wondering if it's okay to just increase retirement or should I still put money aside to be able to buy something eventually?

How long is a long time? Well, I mean, I don't know, probably 10 years. Well, can you continue to save aggressively over a 10-year period and continue to pay the rent that you have to pay and get there in 10 years? If you really lock down and get the down payment there in 10 years, can you do that? I think so. And, you know, I probably within, I'll probably have some inheritance, but I just want to know if it's okay to do more than 15%, you know, if I think it's out of reach to buy something. Well, is it okay? It's certainly never wrong when someone invests more, but that's our rule of thumb as Dave has prescribed the baby steps. And there's a reason for that. So if you think about baby step four, so if you're new to

our program, just kind of reset real quick so you can get caught up with where Noelle is asking the question. Baby step one is we ask you to put, or we recommend you put $1,000 in your savings account just to handle any kind of rainy day pop-up emergency. Then you take on all of your debt in baby step two. That's what we call the debt snowball. And you go after your smallest debt first, moving up to the largest debt so you get momentum. And every time you pay off all the smaller debts, you roll that payment into the next largest debt and that gets you tremendous momentum. Baby step three is saving three to six months of your expenses. So now we're really juicing the emergency fund. Baby step four is to set aside 15% of your

income, what you're taking home into a matching 401k or a Roth IRA. So that's where we stand right now, all right? Baby step five is people saving for their kid's college. Now, they have a step that was kind of developed later, 3B, where people go after the three to six months of expenses into saving for a house. And essentially, that's where you would be, right? Is that you would be saving for the house, but it's going to take you quite some time. And I wonder if you're going to be in New York long term. You know, you sound like a young man. Is that true?

Is it possible that you'll be moving out of the city or you think you're there long term? Well, I'm young, but it's been my goal to get here. And I've been dreaming for 12 years to get to the right job and situation to do it. And I do think I'm going to stay here for the foreseeable future. So there's something underneath the purchasing question besides dollars and cents. What is it? Well, um, I guess since I'm, here's why you're saving for retirement someday, so you believe that you're going to accumulate X number of dollars

down the road, and you're willing to invest to make that happen. You are not willing to invest to make a home happen. Why? Because it seems like to get a substantial down payment is just going to take me a good amount of time to do that. So you're just going to, are you just going to quit on that? Um, no. Well, so right now I'm putting, so my, my salary is 90,000. I'm putting a 1200 a month to various retirement accounts and I'm putting 500 a month in my savings account. So as that slowly builds up,

which that'll take quite a long time to get a down payment for a house or a condo up here. So I'm wondering if that $500 a month in savings, should I just divert that to my retirement account? I don't know. I'm not certain. So I'm not going to make the mistake of putting a stake in the ground, whether it's causal or correlative. But in the millionaire study, the vast majority of millionaires had paid for houses. And they were able to, over time, capture the most volatile and expensive part of their life, which is fluctuating housing costs, by taking that equation off the table. That's why we tell people pay your mortgage off, even if you have a great interest rate, because it just takes that off the table.

There's no risk in it. You are completely on your own at that point. And what you're choosing to do, if you think about it, you're choosing to be at the mercy of a fluctuating market over time, which we all, I think it's just going to be, I think it's going to be fine, but that you're putting yourself in that on that roller coaster. And at the same time, you're choosing to remain forever in a land of increasing rents or increasing, Hey, your building just got sold. And so we're going to sell it to somebody else who's going to jack your rent up. It may move your rent down here. You're signing up for a life of chaos. And what I hear is resignation. You're just quitting. It's going to take a long time to get this. So instead, I'm just going to put all my money over here

in retirement. And I'm just going to bet on the gap there between whatever rent escalation I have, whatever money I think I can earn in the market. And I think long term, that's not a good move. Okay. What do you think the next three to five years looks like as it relates to opportunity for your income to increase significantly? Well, I definitely want to stick with my current company. I came in at kind of low- management level. And I do see opportunities within the company. So... My point is, it would seem to me that you're going to be making 150,

200 in the next three to five years. You got a shot at that. Is that too much for me to assume? That seems reasonable, yeah. Okay. Well, so, John, this comes back to we recommend the baby steps for a reason. Right. Your life moves with you as you go down these baby steps. Do you have any other debt besides – do you have any other debt? I have no debt.

Okay. No debt at all. And you've got your three to six months expenses, yes? Yeah. I have about $20,000 as my emergency fund. Maybe it should be a little more, but what's the number you need? The down payment number? Well, so I guess 20% of, I'm not looking for anything big, so it's probably going to be like, like a four or $500,000. Drop it down to 10%. Can can you get fifty thousand dollars in the next 24 months i probably yeah i can almost guarantee you could yeah put ten percent down on

it put fifteen percent down on it and get yourself a condo get into a place where you can control the rent escalation yeah um for the next 20 30 years of your life man yeah yeah i i and again i think we're pausing. Aren't we pausing baby step four here for him to just pile up that money? At his age, I would. I would. I think you're 3B.

And I think that I would stop the 15% investment and just pile up the cash, get in, like John said, and now we begin to pay that house off and you can start reinvesting. You're going to get caught back up. You're not going to lose ground. You're staying in New York long-term. That's the play. I agree. Hey, thank you for the call, Noel. The best is yet to be. Don't move. More Ramsey show I'm Kim Coleman joined by my colleague Dr. John Deloney this hour

we are here for you 888-825- you. 888-825-5225. 888-825-5225. Taking the money questions. Taking the life questions in the area of relationships, your mental health, emotional health. How about your work? You got a toxic co-worker or co-workers or a leader who's driving you nuts with horrible bossery.

How do I get a bigger shovel to make more money to get out of debt? We're going to take all of those calls, 888-825-5225. Hey, when our team gets together at Ramsey Solutions, we talk a lot about our mission to change America's toxic culture in the area of money and mental health and work and beyond. Quite frankly, it makes us a little upset to see people get trapped by debt or a dead-end job or by their past. For the folks who work here,

this is not a J-O-B. It's a mission to meet those people where they are. So that sounds like something you could get excited about. You've got to check out all the exciting roles that we're offering at Ramsey Solutions right now. There's never been a better time to find a job doing work you love. We need developers, UX designers, and writers to help us build digital products to see what it's like to do work that matters with us before you apply. Follow us on Instagram and Facebook by searching Ramsey Careers. Apply for your dream job at ramseysolutions.com slash careers. That's ramseysolutions.com slash careers. 888-825-5225 is the number to jump in. Clarissa is up next. In Houston, Texas, that's John Deloney territory, isn't it? H-Town, go Strohs.

Come on. Clarissa, how can we help? Hi, gentlemen. Thank you for taking my call. I am expecting my fourth child here in a few months. All right. And I want to upgrade in car um right now i drive a crv which cannot physically fit all the number of children that we have plus myself and my husband and i'd

like to get a model x tesla and i'm trying to see if it all makes sense now forgive me i really don't know much about teslas our colleague george i would like that car too yeah yeah he george's got one rachel's got one they love the old tesla but will that fit the whole family uh so myself my husband and our four children yes with the six seat configuration it will fit six seats but what a few uh car seats and the luggage for when y'all travel? So for the luggage, we'll have to get creative. I found like a mobile trailer that we can attach that's super cute that can go with the whole thing.

It's super cute, Arlan. Hey, you are – how much is this car? Oh, Clarissa, I'm trying to be nice. Yeah, how much is this car? Oh, Clarissa, I'm trying to be nice. Yeah, how much is the car? So the car, I'm looking at a used model, and so the range is about $86,000 to $90,000. Can you afford said car, meaning pay cash? Yes, I can. I just don't know if I should.

No, you shouldn't. You can hear your voice. Please break down that tone of voice change, Doc. I feel like there's something there. Yes, this is somebody who absolutely knows the answer to the question. Here's what you're wrestling with. Who you still want to see yourself as and reality. Uh-oh.

Reality is you're an awesome, cool mom of four, an awesome, cool wife, and y'all are doing life. In your fantasy, you're still super rad and cool and you're still going out to Fitzgerald's out there and I guess they tore it down. You're still going out and doing cool stuff and you're driving a Tesla to get there.

Is that fair? But I am a cool mom. You're a cool mom in a Sienna, too, is what I'm saying. What's your annual take-home household? Annual take-home is about $330,000. Okay. Do you have any debt at all? We owe $424,000 on the house.

Okay, so no debt but your house. What's the other car worth? The car maybe your hubs will drive. Well, my husband actually has a Tesla. Of course he does. He's still a cool guy. He's still cool and I'm over here in the CRP.

Boring mom while husband's off being cool plugging his car in. So you've got the cash. The car that we would get rid of would be worth $20,000. So you got the cash right now. You can go buy it right now. Right. You got the fully funded emergency fund. I'm trying to find a hole here, John. This isn't a math problem.

They got the money. Does it make sense? Yeah. Does it make sense? Well, I think it comes down to, I mean, based on the formulas. Yeah, that's what I'm saying. This isn't a math problem. You can afford the car in terms of our principles. Get it. Then go ahead and do it. In terms of are you going to be happy with

this purchase long term for your family? And are you buying a $90,000 depreciating asset for four kids who are of a certain size now and in five years are going to be double that size? All crammed into... They're going to be double that size all crammed into they're going to destroy this car mom you know this right they will be walking no there's going

to be cheerios all smashed in there gummy candies under the tape it's gonna it's gonna be a car i i wouldn't do it on that alone i didn't think about that ken i would buy a car to get me through the next five years until my kids didn't get until my kids can go to the bathroom on their own. Let's start there. And then get a Tesla. Maybe by then they'll have Tesla minivans. I mean, Clarissa, the way your intonation changed, you were like, I know. You know.

But I want to know why you called us to get our opinion, two dudes that you barely know. What are you doubting? What feels weird about it tell us um well i i know math and i know that there's a reason why i've driven this crv for this number of years i know that cars are depreciating asset it doesn't make sense but i also just like i'm spending about two times longer in my car every day than I used to. I have a newer job. So I'm like, well, if I'm in here, like, an hour and a half a day instead of, you know, 45 minutes a day, I want to enjoy that.

Well, that makes sense. But let me ask you this. Have you, because see, now, by the way, I want to be very clear, because John did a good job of saying, from a math standpoint, if you're calling this make sense financially you guys can do this so it's a non-factor it's not a bad decision but I'm actually John and I are playing off of your voice yeah and what you're feeling and I heard now you told us and thank you so here's the deal what would make you feel really awesome for 45,000 or let me let me 40 let me phrase it this way are you a less cool mom are you not who you want to be in a fifty thousand dollar sienna hybrid that can fit everybody and all the luggage and gets about 45 miles to the gallon 50 miles a gallon i don't know what that is it's a it's a

toyota minivan toyota minivan yeah that just sounds terrible for me you nailed it you nailed it that's what's going on it's but what what what sounds terrible the image of yourself in that minivan um just the idea of driving a minivan just okay but wait a second but wait a second i'm going to keep pushing because john gave you one option i'm going to give you another option what about a really awesome suv again that you can maybe get for $45,000? Maybe it's got a little bit higher miles. Maybe it's got 50,000, 60,000 miles. Well, that's nothing in this class.

Or a Tahoe Suburban, yeah. What's wrong with one of those? So I just don't like the way that they maneuver. So which one of you is from Houston? Because driving around in one of those for an hour and a half in Houston traffic is terrible. Switching lanes, finding parking. It is, but also there's rocks flying everywhere because they tear down a new highway every other weekend for no reason. So, I mean, it goes back to the $90,000 depreciating asset that's going to be destroyed on the outside and on the inside.

I think of all the things I've heard as we're thinking this out loud, it's what Ken said about what these four kids crammed into this beautiful, wonderful car. And if you call me and said, hey, I got one kid or I'm single, we'd tell you, dude, buy it right now. I'd be jealous of you because I'd love to have that car. But this is just us telling our friend or our sister, dude, kids destroy everything. You know that nuclear scientists have found that goldfish will survive. Those little treats, those little cheesy treats will survive a nuclear blast.

Yes, and you know what else? They're definitely going to live in those crevices that even your vacuum cleaner can't get to. You know the long neck one you try to get? Can't get it. It's there forever. The world's greatest adhesive, melted gummy bear that sits under a melted organic fruit snack.

That's all you can eat in a Tesla, by the way. And no matter what they tell you about that awesome chemical you can buy at your favorite store, big box store. Your kid's going to drop a smoothie and it's going to stain that carpet inside of six months. And guess what? It ain't coming out. Nope. Nope. Hey, buy what you want to buy.

Yeah, you can do it. I'm more worried about you not liking yourself in a vehicle. That tells me you got deeper things going on there. That's where I would start. But if you do buy it, would you please email the Ramsey Show the picture of you and your cute little Tesla wagon on the way to the beach? With four kids crammed in there. That's right. I want to see that.

Woo-hoo! We're going to the beach, everybody, in our electric car. We have space for one towel. That's it. All right, folks, don't move. More of that kind of genius wisdom coming up. This is The Ramsey Show. I'm Kent Coleman, joined by Dr. John Deloney,

and we are here for you taking your phone calls. 888-825-5225. That. 888-825-5225. That is 888-825-5225. It's a free call. Folks, give us a shot. It is a free call, and we care deeply about you. You may be just one phone call away from breakthrough. If you've got something that's a little bit sensitive, know that we're going to protect you and take good care of you.

We'll change your name, your location, everything. If you feel like you need to talk to somebody today, we are here for you. So give us a shout. Bradley's going to start us off this segment in Charlotte, North Carolina. Bradley, how can we help? Hey, how you guys doing? We are having a blast. What's up? So I'm going to give you a little background. I'm 24. My wife's 23. We've been married since the middle of last year. We just had a new son. He's about three months old. And we currently have been living in our house right now. We have a mortgage on it for a little over three years. And we now, because of our son, we're wanting to move close to the family and, you know and different school districts and stuff like that.

And we want to do that within three to five years, give or take. And so I didn't know if it'd be best to keep throwing additional money into the mortgage, try to pay it down as quickly as I can, or if I need to draw back on that and instead use that money towards anything past my emergency fund to put down towards the next house, that kind of stuff. Three to five years. Let me say it this way. You're going to get your money back out of your house more than likely. So I personally, what I do is I dump all that money into my house.

If I was going to move, I dump all that money into my house. If I was going to move, I'd dump all that money into my house. Let me get it back when I sell it. It feels like a pseudo, like a warm blankie to feel like I've got a checking account over here with some other money in it. But it's going to end up in the same pot. Three to five years, you're right on the cusp on one end and you're right at the beginning of, of a cusp on the other end. Right? So if you told me, Hey, in three years, we're out of here, two and a half years, we can put our house on the market. We're gonna start looking to get out of here. I'd probably tell you to sock some money away and try to sell that house. If you tell me I'd be there five years, that's a, I'd try to pay that house off as fast as I could. Right? So

you're right square in the middle. did you pick that time range like what is magical about three to five years well uh the actual the limit would be you know five because that's when our son would be roughly starting school so that's why i kind of mentioned like the school district thing so let me let me rephrase it why not move right now why not move this summer uh mainly well i mean we're just kind of saving up money right now because i mean you know obviously our minds you know the more money put down the better we want to finance as least as possible so we're kind of building you know that nest egg up at the moment okay yeah but here's the deal john is absolutely right bradley the reason he's right and uh how old did you say you were 24 24 taken from dudes who are twice as old as you, and it's certainly me. I don't know about John.

You're close. Close. Close to twice. A lot can change in one year. Your life can look unrecognizable in three to five. And I like John's advice because investing in the current house, there's no negative. You keep paying that house down. He's right. You're going to get that money

back most likely. And you've got yourself so much more net worth, so much more equity. You've got options. Life can change. And I love the plan. And I'm not in any way trying to poo-poo or scare you. I just want you to understand life can change. And I think John's advice is right. I would pile everything into the house. That effectively becomes your down payment, that equity. Ken, I hadn't thought about that, but Bradley. I've just been through it. You and I have been married a long time. Well, let me back it out.

Three years ago, I was in my dream job at one of the top universities in the country. And then two years before that, I was in another state in a really great job. So, man, to forecast five years in my life and i ran into somebody and now i have i'm a youtuber as my as my son says so man you have no idea what happens in five years whether a boss comes and taps you on the shoulder you get fired your wife gets promoted who knows right so it's important to plan it's important to have dreams and it's important

to be very specific about those dreams and it's also important to live with principles in the present, right? Here's who I'm going to be every single day in route to wherever it is we're going. Yeah. I love the advice, John. Uh, Bradley, I couldn't, couldn't agree more. Just pile it into the current house. And then when we get there, when there shows up, uh, you're going to be in great shape. Thank you for the call. Paul is up next in cincinnati ohio paul how can we help hey ken and john i'm actually really glad that you two are on hosting the show today because uh perfect combination for this question hey nobody ever says that paul thanks man yeah can we record that guys in the booth it'd be great if you could send that home

to our wives and kids that'd be wonderful what's, Paul? So my best friend suffers from debilitating anxiety, and it has had him out of work for about the past year and a half. And I'm wondering what I can do or what I can encourage him with that might help him move back into the work field since he's been making some progress with his anxiety. That's awesome. So I would reframe that statement a little bit and say something about his life has set off his body's alarm systems and the noise is real loud. So putting anxiety to the side, what is it about his ecosystem or his environment that has begun is suffocating him is it his marriage did he lose somebody is he have childhood trauma he's dealing with like what what is it so i'd say it's mostly from his childhood trauma okay okay and so he's found himself in an

adult world and his body is struggling to live in a world that we've all created for ourselves that none of us can live in. Right. Yeah. Okay. Hey, by the way, he's lucky to have you. It's pretty awesome. Here's what I will tell you.

Two, two, two important things. Number one, you can't fix him. And the more you try to help him by fixing him as though he's a puzzle and you've got the missing pieces, the more he becomes a project and not somebody you love. He becomes an engine to fix, not a friend. And as somebody who's been

where he is, just debilitated by anxiety. The greatest thing, my friends, and there's a couple of them, John, a friend named Todd, a friend named Randall, a friend name John, like guys who leaned into my life. They were very clear about you're with us. We're inviting you over, even though you come over and you're annoying, or you want to talk about all the end of the monetary policies coming, like all these crazy, anxious things I had all the time. They always invited me over and a couple of my buddies called me on my nonsense. And here's something important for you to understand. That debilitating anxiety is a context. It's his body getting his attention,

and he sounds like he's on the path to healing. It is an excuse to show up in your life. So I had a friend who one time came. I had, you know, you may have heard my story. I thought I was seeing cracks. I thought my house was falling apart. He came over to my house. He looked at it.

His dad was an architect. He grew up on construction sites, and he walked around, and he took me out. We're outside. I was like, look at this, look at this. And he took a breath, as a good Texan would do, and he exhaled, and he said, your house is strong. Your house is fine. This conversation is over, and I don't ever want to hear you mention this again.

And here's what he gave me in that moment. That was the first time someone had said, stop with this nonsense. And it allowed me to walk away and think, huh, maybe the issue lies with inside of me, not projecting out all over the place. You see what I'm saying? But he wasn't ugly.

He showed up. He came into the, I invited him into my life, and he showed up, and he loved me enough to hold me accountable. Are you taking care of yourself? You see what I'm saying? So you can't fix him. You can't love him,

and that's real frustrating for a good friend like you, right? Well, you can also do a couple other things, Paul. John's absolutely right. You've got to love him, but you know what you can do? You can encourage him. Be very, very positive. Just a voice of positivity and consistent positivity. That's the encouragement.

You can also connect him to people that you know to say, hey, let me tell you about my buddy. He's had a rough life, but I know he's a good dude, and I want you to give him a shot. You can connect him to opportunities through your relationships. And then the third thing is you can endorse him. Endorse him to as many people as possible. That's what a friend can do. Your question was, how can I help my friend find a job? Well, you can look a little bit for him, but at the end of the day, you got to connect him because I think he feels wounded, John. Oh yeah. I think he's a little bit maybe shameful, embarrassed, whatever. Finding a job is exposing. Leading him to a situation is one of the best things a friend can do.

That's exactly right. And just showing up, being there. So connect him, man. Open up your Rolodex. Put yourself out there for him. But in doing so, tell him, hey, dude, this guy stopped. Yeah, yeah. Because I believe in you.

I put my name on it. You're going to show up. You've got to show up, and you've got to deliver. And I believe you can show up. That's it. I think that's the right thing to do. And then, as John said, Paul, you've just got to be his friend and love him. You can't do it all for him.

But great call. Thanks for calling. This is the Ramsey Show. I'm Ken Coleman. Dr. John Delaney joins me this hour. We are here for you, America. The phone number to jump in is 888-825-5225. 888-825-5225.

I got to tell the folks this really quick. I just showed John an old video on YouTube of the guy in Australia who is trying to rescue his dog from the kangaroo and they square up out in the bush of Australia and the right lead, the guy, if you haven't seen this video, James is going, what is Ken doing? I just need to share the goodness. It made your day, did it not?

It was fantastic. Guy punches the kangaroo and rescues his dog from the grasp of the kangaroo and this kangaroo just spreads up. It looked like two high school kids. Yeah. But then that guy crosses his feet and boom. Yeah, catches him off guard.

And the kangaroo obviously has no idea what has just happened, but he takes it right to the jaw. It was beautiful. And they both kind of look at each other, and then we should separate. Yeah. So there's a little bonus content if you've never seen it. John had never seen the video, and it made his day. So go check it out. Guy Punches

Kangaroo on YouTube. Change your life. It's that good. Oh, there it is right there. There it is. They're putting it up on the screen for YouTube. Look at that! Just a right lead! And they just stare at each other. And the kangaroo's like, watch this. Look, he squares up. This guy's, boom! Right there! Pow! And then he just, and then the guy turns his back to the kangaroo's like what is watch this look he squares up this guy's boom right

there pow and then he just and then the guy turns his back to the kangaroo and goes get in the truck dogs yep walks away if i could ever meet this guy and interview him uh-huh it would be it would be a delight james gonna set that up yeah there it is set that up all right folks uh see you never know what we might talk about here on the ramsey Show. Let's go to Chris in Sacramento, California. Chris, how can we help? Hi, Kurt. Hi, how's it going? Thank you.

I have a car buying question I'd like to run by you guys. Okay. So I'm currently considering trading into a newer vehicle, a bigger vehicle, a SUV, and I just wanted to know if it would be a smart move. I'm currently driving a 2020 Kia Forte, and I was looking to trade into a 2022 Kia Sorento. All right, run the numbers for us. Do you owe on the first car?

No, sir, I do not owe anything. I own it um it's appraised approximately between 16 000 to 18 000 at the most all right what's the other car the other car i'm probably realistically looking at 40 to 45 000 when it's all said and done and i'm assuming you've got cash to be able to do this? Negative, sir. I'll be taking out A. Well, I don't know how new you are to the show,

and I don't want to presume, right? But we are never going to say that it is a good move or smart move, however you just put it, to go into debt for a car. Please don't borrow money on a depreciating asset, Chris. Please, please, please, please. Just not good sense. You're worth more than that. Do you understand where we're coming from on that? We're not going to debate you, but we want you to understand

why we say that. Do you understand why we're saying that and what John means by you're going to go into debt on a asset that is depreciating every day? Okay. Do you understand what we're saying? Yes, sir. I do. Is there anything wrong with your Kia?

Or is that what you said it was? Yes, sir. Yes, 2020 Kia Sorento. Is there anything wrong with it? Yeah, it's a perfectly good car and it's paid for, correct? Yes, sir. No, there's nothing wrong with it. How much do you make?

What's your annual income? Gross or net, sir. Take home. Take home, excuse me. Take home 43,000, home 43 probably 43 000 sir okay and that's that's the other part is just as a general rule of thumb again this is us talking to thousands and thousands and thousands of people over 30 years right is when you get your ratios out of whack you find yourself in a, whether you meant to or not. And you're thinking about buying a car on credit that's about as much as you bring home on an annual basis.

Just thinking about that. I bought a depreciating asset for all the money I'm going to make in the calendar year. Um, so our rule of thumb is everything in your home with engines and wheels should not, um, should not exceed half of your annual income. And I personally think actually think that's high, but that's where we've landed. So you're looking in the $20,000, $21,000 range. And it sounds like you've got that perfectly right now are you can you be content with where you are can i be content yes sir how come you want to trade up because you know sir the the vehicle i have is kind of like a a bad relic of a bad um a bad emergency i had a couple years ago. Tell me about that. So, unfortunately, two years ago, I was

the victim of one of those Social Security FBI gift card scams. You know, these guys scared me, and so, long story short, they scammed me out of $4,500. And

I had other plans to do with that money. So the only way I came up with to get it back was to trade down from the vehicle I was driving at the time. So that's what I did. So it just reminds you every day of that season, huh? Yes, sir. Yeah. Another thing is that it's a little kind of tiny

for the amount of driving I do. It's kind of tiny. Well, then, hey, I get that. Yeah, absolutely. I would just be patient. Like, let's do this. Let's be patient and let's be smart.

Let's not buy a car that is worth as much as John said you're going to make in a year. So I would be patient, save up the money, and be smart about this. Don't be in a rush to make this change.

I understand why you want to make the change, and I think you should make the change. We just want you to do it cash, no debt. Do you owe any other money? I owe about $19,000 on a small personal loan. Okay. I've got an even crazier idea for you. What if you sold this,

you said it's $18,000 trade-in, which means you get $20,000 for it on the private market. What if you sold it for $20,000, bought a $10,000 Camry, and then took that other $10,000 and threw it towards your debt? Now you're out of this car that reminds you of a $10,000 Camry, and then took that other $10,000 and threw it towards your debt. Now you're out of this car that reminds you of a dark moment.

You're in a car that's not sexy, it's not cool, but it's going to run until the apocalypse is over, and you can make some headway on cleaning your debt up so that you can, for the first time in your adult life,

breathe. I actually hadn't considered that option. How does that feel? I think it sounds great, but I'm biased. He's my friend and it actually makes good financial sense. By the end of this weekend, you could only owe $8,000 on a personal loan.

How does that feel? Chris, how does that feel as you were processing that? You know, like you said the it would it would remove the kind of reminder like i kind of would like to do with kind of the the the uh the circumstances and cut your debt and cut your debt in half yeah it feels pretty good. That's the answer I'm looking for, because I know that felt good as you started to process that, right? And then you've got $8,000 left that you owe somebody.

I want you to spend the next calendar year putting every penny you got to pay that stuff off. And then by the end of 2023, I want you to be completely and 100% a free man. Yes, and I'm going to challenge you a little bit more. Six months. Go work an extra job, right? I want you to be completely 100% a free man. Yes, and I'm going to challenge you a little bit more. Six months, go work an extra job, right? Go get a part-time job, making $20 an hour. Six months or less, you're completely debt-free with John's plan.

Then we start saving towards the nicer car and moving on with your life. What do you do for a living? I'm in the Army, sir. I'm an Army officer, sir. That's why you keep calling me sir. I was wondering. How much longer do you got? Currently, I only have three more years active duty that I have to do.

I'm looking to do six more years active duty. Great. Man, I'd love to see you hammer this out and figure it out and be completely 100% debt free even if that meant you got to move back on base for a season and get control of the number of veterans that we talk to or active duty folks that we talk to who have been either scammed or have found themselves

Hey, at least you got a Kia, man You didn't get yourself the Jeep with the jacked up, all the stuff on it, right? But, man, I would love to see you look up in 24, 36 months and you owe nobody anything. And you're driving the car that you want, that you paid for in cash because you're a free man. I would love, love, love that, man.

You deserve that life. Thanks for your service, Chris. And you've got this. Hopefully you'll take our advice. I think the best is yet to be for you. Thank you so much for your service chris and you've got this hopefully you'll take our advice i think the best is yet to be for you thank you so much for your call i want to thank john deloney and james and the crew behind the class thank you guys for keeping us afloat but mostly thank you america this is the ramsey show hey folks ken coleman here did you know the Ramsey Show is one of the most popular podcasts in the world?

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