The Ramsey Show - App - Success Shuts People Up (Hour 1)

Episode Date: June 16, 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. I'm Dave Ramsey, your host, my co-host today on The Dave Ramsey Show, Ramsey personality Anthony O'Neill. And we will be answering your questions about your life and your money. It's what we do here. The phone number is 888-825-5225. That's 888-825-5225.

Anthony, starting this hour off is going to be Kendra in California. Hey, Kendra. Welcome to The Dave Ramsey Show. Hi, Dave and Anthony. How are you guys doing today? Great. How are you? I'm doing very well, sir. Thank you. I'm calling today to ask for some guidance and wisdom. My husband and I are in the process of considering building a new home. We've been looking for property for the last two years, and we are right now looking into getting into a development in a gated community where we would have to take

on a promissory note, and I want some guidance because I understand that there's some risk associated with that, and I wanted to have you kind of walk me through what I should be considerate of as we draft up that contract. Okay, I'm confused. A promissory note, you mean you're going to have to just borrow money to buy the lot? No, we have the money to purchase the land outright. We just closed on our home and we have the amount of cash that we need to purchase the property, but it's a development that they're going to take a 20-acre property and divide it into two-acre parcels. And to work through the development process, they're asking that we enter into a promissory note for them to develop that land, divide it, and then have septic and well and power

delivered as well as a road to go through that gated community. Very dangerous. No, I would not do that. What they're asking you to do is to promise them, is to borrow money from them, is to promise to pay them for a development for a lot that they don't have subdivided yet. Right, and that's my concern. Yeah, it's dangerous as crud. Because we are then their creditors, right?

No, you're their debtor. They're the creditor. But you're a borrower. They're the lender. And you're in debt to them. And unless the terms of this promissory note were really ironclad and you'd have to spend some money with an attorney, then even if they don't get the subdivision through, you owe them money for a lot that you can't buy

because they can't deliver it. Right. Yeah, listen, here's the deal. We will take the lot when you get it subdivided. Exactly. That makes sense. Yeah, and this one, they're asking that we provide $230,000 as an investment, and then they are in debt to us, and they provide us interest on a monthly basis until the land is delivered.

Would it be different in that case? Okay, so they're wanting you to loan them $230,000. Yes, sir. Why would you do that? You're super desperate for this piece of dirt, aren't you? Well, we've been looking for property for the last two years. Yeah, there's no way. They don't have the money to do this deal.

Yeah. Okay. So they want to use your money to do the deal and then turn and sell you a lot at a profit. Mm-hmm. Yeah. So this is dangerous, very dangerous i mean if you can take a lien on a piece of property that is worth uh but even then they dump the thing in bankruptcy because they screw up because they're broke obviously they obviously don't have the

money to do this deal they're trying to get their customer to fund it for them so if they go okay here's what you could do okay let's say the land's worth two million dollars just be crazy okay the whole piece of ground and you take a lien a mortgage against that piece of ground for two million dollars i mean you take and you loan them 230,000 bucks it's worth two million dollars you got plenty of collateral you would be safe until they decide they can't do this deal and they go into chapter 11 bankruptcy and it takes you four years to get your dadgum foreclosure through in order to end up owning the whole piece of ground.

And all this while, your $230,000 that you were going to use to build a house with is gone. Exactly. That's what I was wanting some guidance on, because I wanted to know if it's possible for me to add language into the promissory note that says that, you know, such and such a date so for example a year from today okay a promissory note implies an unsecured debt no way under the freaking sun are you loaning these broke people 230 grand's unsecured but if you took a lien against the property that starts to get a little bit smarter but they can drop it into a chapter 11 no matter what the language in your

note says and they can tie you up for five years. And that's my concern, too, because you always talk about how, you know, once they go into the group to you, you know, I would not be able to contact them. Exactly. You can't foreclose. You can't take any action until you get permission from the court. Meanwhile, they file six extensions on their Chapter 11 plan, and you never get out of there.

That's my biggest concern. Yeah, and what I do is I write all these things up as a worst-case scenario. I'm like a cancer doctor. I've seen so much cancer, okay? And so I know this kills you. Don't do this. There's a chance this is going to kill you. It might not kill you, but there's a chance this is going to kill you.

And here's the thing. You simply want to buy a lot and build a house. Yeah. Exactly. Way too dead gum much trouble yeah exactly and i did have one thought as far as you know um asking for some collateral that if they are not able to produce this then we can assume the whole 20 acres and that gives us a little bit more collateral that's what i was talking about but even then they can dump the whole thing into an 11 and since we know they're broke that's a probability right okay that makes sense i completely yeah they can't they can't use a regular bank and they don't have any money because you've got to be their last

resort i mean who goes to their customer and asks to borrow money broke people really really broke people yeah so no baby baby, I'm sorry. This is just a bad deal. One of my buddies used to say on deals like this, he goes, you can work your way all the way down into it, but when in doubt, don't. Don't do it. And you're in doubt. I'm in doubt for sure. There's no possible way I'm doing this deal.

Not just to build a house, Dave. It's not. Even as a business play, if you were just an investor, I mean, I've got the extra money. I could throw it at it and kind of hope they don't pay and i end up with a two million dollar piece of ground right right but god the trap you would go through the crap you would go through to get there yeah it's just um you know i'm always looking and anthony you and i talk about this in a christian setting i always look and say okay god what is your this your money what do you how do you want me to manage it wisely and when i can't get peace about it that's one of my guidance mechanisms from a spiritual perspective yes sir if i can't be a good steward with it i don't want anyone touch

it i just want to be a good manager but part of that is do i have peace yes and if i'm the manager of the money and i don't have peace that's god telling me but you know i think she was trying to talk herself oh yeah and i do that all time she was trying to talk herself into. And I do that all the time. She was trying to talk herself into, well, we can make a lot of money here. You possibly could. Or end up with a really sweet lot. Exactly. If everything goes perfect.

Yes. Because it's evidently an attractive piece of ground. But this is the way we get ourselves into stuff. And, yeah, I appreciate you asking. I appreciate the spirit with which you're asking. Yep. But I got to tell you, Kendra, and in California, too, where you are, real estate laws are wacky. So it's even worse.

It's even harder to foreclose on someone there. Other places, you just foreclose. In California, you go through, like, three backflips and two twists and a cannonball and a jackknife. Remember doing jackknife, one-legged cannonball? No, Dave. You didn't do that? No, I'm too young for that, Dave. Oh, it's not an age thing!

It's a swimming thing, Anthony! God! This is the Dave Ramsey Show. one of the questions i get all the time is which life insurance company should i use for my term life policy a valid question since there are hundreds of companies out there with rates all over the place and riders and add-ons that are simply a waste of money. You need to get this done and make the right decision. That's why the only company I use and have recommended for over 20 years is Zander Insurance. Zander is a broker who shops the top term life companies for you and finds the best rates available from the only plans I recommend.

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in North Carolina. Hi, Anya. How are you? Hi, I'm good. How are you? Great. How can we help? I'm calling because I'm very passionate about helping people with money. I believe God's calling for my life is to be a financial coach, and I've seen how having a lack of control of your finances can affect your quality of life because my parents are in that position. How old are you? I know very clearly I'm 20 years old. Cool. Are you in college or a high school graduate or what? I'm in college right now. I'm pursuing my finance degree. Good for you. Very cool. Yeah. How can we help? So I know very clearly that I want to start my own financial coaching business, but I'm struggling to determine who my niche market should be. Ideally, I would love to work with individuals and couples that are in the same

position as my parents are. That would be living paycheck to paycheck, needing help, figuring out how to get out of debt, and setting themselves up for retirement. That's not exactly a niche market. That's like me and Jenny Craig. We've got a lot of work to do. Right. I mean, I'm just kind of the position that they're in right now, just like the specific position that they don't know what they're doing with their money. That's like everybody in America.

Yeah. Right. 78% of Americans are living paycheck to paycheck. So we need you out here. Yes. But it's not a niche. I mean, it's a pretty broad market. I mean, it's Walmart.

It's everybody. Everybody. That's good news. Yeah. For you. You've got a lot of work to do. Let me ask you, why are you so passionate about it, though, outside of your parents? Why are you so passionate about it? Because, outside of your parents? Why are you so passionate about it?

Because you're young, and I love that passion, and I'm right there with you. But what's your main reason why you really want to get into it? Well, through high school, I think God has really laid it on my heart, seeing how people struggle so much and just different people in my life no one in my life seems to know how to um deal with their finances and i just see how it affects their quality of life and i feel like god has really put a calling on my life good very cool sounds like it yeah definitely does go for it definitely so let me ask you this here's what i would tell you today all right i think your finance degree is a great track for you to be on uh when you come out of that you probably

ought to try to get some after uh academia training as well something like our financial coach master series training we've got a coaching training program that we do here teaching people how to do what you're talking about doing um and we don't work with rich people by and large we can but most of the people that call us are people living paycheck to paycheck like you're talking about believe me there's plenty of them we need your help so you could do after that um how i started on you was i didn't um i didn't have any credentials i mean i had a finance degree but i had been broke and so nobody really cared what I thought.

Although I can take a yellow pad and a pencil and whip you with it. I know how to do the math. But I just started as a ministry at my church. There you go, Dave. Just sitting down and just as a volunteer, just helping people. And it kind of got my legs under me where I had done some actual coaching before I tried to charge money for it because one of the problems with being under 25 years old is uh people are looking at you and you've got to prove yourself at a different level than an old guy has to prove himself like me they kind of assume an old guy's got a clue but with a very very young person that you got to

prove your chops a little bit does that make sense yeah that's well that's why i've struggled to put myself out there because i wasn't sure how adults would react to me being so young well they'll question it i mean they'll question it and then once you prove your chops you know you just have to smile and go yeah i know i get it and then you just show them how you can help and but you get used to doing that maybe in a volunteer role before you start trying to charge and you could do that while you're in a volunteer role before you start trying to charge. And you could do that while you're in school. And I'm telling you, I'm tell you where your sweet market is right now.

It's exactly what Dave said. And that's what I did. That's where I met you at day when I was a youth pastor teaching young people how to be good stewards with their money in the church. So that that should be where you start off that high school college age bracket right now to prove your track record to build a solid platform and definitely come join our program so we can teach you so that way as you're getting older the older people will respect your opinion you know i'll tell you what let's do this um you

could go like to your um some of the guidance counselors and so forth on your on your college campus that and some of the professors that people are coming to to say i'm on the what campus are you on um i go to appalachian state university perfect yes great great school okay so go in there and talk to some of the leadership team and say who do the students who have financial trouble come to for coaching and uh i'm gonna pay for you to go through our financial coach master training that's what i'm talking about dave all right you go through our training and then you start just on the college campus as a volunteer the way you pay me back is for free you help some people on that college campus and that'll give you your chops yeah you'll get your

reps in then and then you know about about two years of coaching broke college kids, you can coach anybody. Yeah. Right. Yes. Because they're desperate and dumb both. I'm kidding. No, you know, and that's a great market for you to help. It is.

So, hold on. Kelly will pick up. She'll get you in touch with our coaching team, and we'll put you through the coach training. It's an online course, and you'll breeze right through it with your heart yeah but your heart's beating for this stuff and you know but the the difference between a calling and the implementation of a calling is uh is some reps yes like i mean when you came on board here as a ramsey personality you were already an accomplished speaker yes sir you had thousand two thousand people in your youth group that you were speaking to and then you went

into doing corporate speaking and speaking to non-youth like old people in churches and stuff and have spoken thousands of times in the five years you've been here on our team and those reps yes the quality of your delivery today the quality of my delivery today is way different than it was five or 10 years ago. It was. It was. Because of reps. Because of reps.

And also because of the knowledge sitting up underneath you and growing, which is why I'm so happy, Dave, that you blessed her with that. Because not only would she get the reps, but she's going to have the proper education. Yeah. We can give her the training to do the budget stuff because you don't get that with the finance no you don't i'm glad you said that we can because finance degrees you know you don't know what a mutual fund is you don't you don't learn personal finance you know in a finance degree yeah so but but the the answer is always reps yeah especially when you're younger and you've got to prove yourself yes uh because then you got to you're

good you prove you're good at what you do, and then no one cares how old you are. Yes. You know, the thing that overcomes any kind of stereotypical roadblock, age, race, sex, no hair, whatever the stereotypical roadblock is that causes someone to prejudge you because of their ignorance, there's only one way to whip that. Yes, sir. And it's not wave your finger at them and say, don't think that way because I'm young.

Don't think that way because of my skin color. Don't think that way because I'm an old white southern guy. Don't think that way because instead, just go be excellent guy you know don't think that way because instead just go be excellent yes and it shuts up a lot of people success shuts up a lot of criticism and a lot of questions and a lot of stereotypes you said that day when i joined your team here a lot of people shut up well i mean you had because you you get it done yes and you brought. And you brought it home. And so, you know what we get when Anthony goes and speaks somewhere? Raving fan letters come back because he owns a stage and an audience.

You know what we get when I go and speak somewhere? Raving fan letters because I've been doing this for 30 freaking years, and I know how to do that. It's my craft. Excellence shuts up the critics. Yes. Delivering the goods shuts up the critics, some of them. But now what keeps it going is if you're not good.

Yeah, you've got to be good. And that means you've got to constantly be working at your craft. Constantly. Whatever your craft is. And that's what we're talking about here. That's the reps for her. Yes, sir. Just do the reps, do the reps. Do the reps.

We talk about it with Ramsey personalities all the time. When it comes to speaking on the air here. When it comes to media hits. Writing. Whatever the form of communication for a thought leader is or someone delivering a message. It's reps. There's no substitute for activity, baby.

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Where do you guys live? Lexington. All right. Very nice. Beautiful town. Yes. So, here to do a debt-free scream. How much did you pay off?

About $55,000. Cool. How long did this take? About 12 months. Good. And your range of income is what? We were? About $55,000. Cool. How long did this take? About 12 months. Good. And your range of income was what? We were right around $120,000. Okay, cool.

What do you guys do for a living? I'm an insurance broker. I'm a teacher. Awesome. What grade? Fifth grade. Oh, cool. You had the hardest job.

Yes. For real. Yeah. And so what kind of debt was the $55,000? All sorts of stuff. Yeah, pretty normal. We had two cars, four credit cards, a health bill, and a lot of student loans. My student loans. Yeah, you were definitely normal. How long have you guys been married?

Eight. Eight and a half years. Okay. But 12 months ago, what happened? I got sick of living paycheck to paycheck and pulling from savings to just make it through the month. Yeah. We had two kids, and we were normal. And we watched our savings just dwindled and none of nothing.

And we were smarter than that. So you came to our lesson. You make too much money to be this broke. Right. Okay. So you reached a level of disgust, healthy disgust, before there was a real crisis. Yeah. But just an emotional point, which is a good one. I like that.

That's much better than getting the crap knocked out of you. So what happened then? So my family had talked about you before and kind of followed your program. So I got curious and thought, why not? And I read the book, Total Money Makeover. And I thought, we can absolutely do that. And then I convinced Carl to read the book. And we just kind of went from there.

Helps that I'm a fan of insurance brokers. But we had everything wrong. I mean, every wrong insurance in place. Really? I was horrible. That's why I went into brokering and not working one-on-one with clients. You know, when we read your book, I think she was apprehensive about bringing you up because of insurance. When I was bored at work, I would spin the wheel at my desk, and that's who was going to get a whole life insurance policy that day.

Wow. So when we, you know, I got about halfway done with your book and I was already canceling policies. We probably had seven to nine. I don't know exactly how many we had. You were your best customer. Absolutely. And now, I mean, we're paying a third of what we were paying and we're, you know, triple of what we were actually insured for.

Yeah. So everything's in place now. Yeah, so you got good term in place got rid of the junk and in the process went in attack mode on the debt way to go you guys okay so she's reading the book and then she got you to read it how did she do that i was ready it was you're ready to it was timing i mean it's a one-two punch okay yeah we were talking the other day and you know i was i thought i made up crying in the shower until I read your book. Found out you were there a lot sooner than me.

But, yeah, it was just time. We were sick of it. It was horrible. There's a sense of desperation when you're ratting a wheel. And you just go, no. And then you just 12 months, only 12 months, and you just whipped it. I mean, did you sell some stuff? We sold some company stock. But we screwed up with that check that came in we bought a patio um we just we were in our own way so you know but it did it

taught us i mean to knock out the 55 making 120 in one year that's either serious beans and rice or you move some stuff yeah was there some cash value in some of those policies? Yeah. Yeah, I think. Some of that stock went towards our debt snowball and just being smart with our money and choosing better insurance plans. Okay. So you just really got down on the budget and did it. Yeah. I mean, we were paying over $900 a month in insurance.

Wow. And now we're paying a little over 200 bucks. Yeah. That's a big. That's like getting rid of two car payments. You know, I'm curious. What would you say throughout those 12 months, what was the hardest part of that journey? Getting started.

I mean, just going for it. And not talking about it all the time. You know, we saw the leaps and gains that we were making, and I wanted to talk to everybody about it, and they didn't want to hear it. And hopefully it hit home with the right people, and it has. We've seen people come over and start asking us questions, but that was the hardest thing for me. I mean, doing it was easy.

Rachel always talks about the budget frees you up to actually spend and stuff like that, and she's not lying. It really helped us get on track and do what we wanted to do. But we're also both college athletes, and I think it was fun for us to try to get to our goal. We had to have a goal. We were going to hit it no matter what, and we did it. Competitive. You've got to kick its butt. I love it.

Way to go, you guys. Who were your biggest cheerleaders? My family and then our friends here with us who mentored us through the FPU class. Oh, neat. So you went through financial peace, too, then? We did. We got Shane and Erica Tucker. They were the coordinators for us.

But I have a buddy at work. Him and his wife got on a little after us. They're now on four, five, and six. All right. Buddy in Cleveland, he's on four, five, and six. And her sister is a single mother and now on four, and six all right buddy in cleveland he's on four five and six and her sister is um single mother and now on four five and six so surrounded ourselves with some pretty good people yeah well you got some of them going yourself so way to go guys love it very cool we're very proud of you excellent excellent job what's your advice to someone

who's where you were 12 months ago what are the secret things you need to do to get out of debt? You said get started. Get started. Yeah. Read your book. Talk about it. Don't be afraid. Okay.

I had credit cards that she didn't even know the balance on. And you don't sleep well at night. You're a school teacher, and I do a lot with young people. I know fifth grade is a young age but how do you feel about high schoolers do you believe that all high schoolers should know this before they graduate this should be a high school course what about middle school thing uh I think middle schoolers could start learning how to handle money yeah budgeting uh checkbook um but high schoolers definitely need to know how to how to look for scholarships, how to budget themselves, what insurance policies.

Like, we're just kind of thrown out there, and we don't really know how to be an adult. And some guidance from you would be fantastic. Yeah. Cool. So you brought the kiddos to do the debt-free screen with you. What are their names and ages? Let's get them into the shot. Brielle is eight, and Broxton is four.

All right. Very cool. So have they been practicing? Are they ready to do a debt-free screen? and ages let's get them into the shot brielle is eight and broxton is four all right very cool so have they been practicing are they ready to do a debt-free screen we'll see you here in a second okay very cool well you guys have changed your family tree we got a copy of chris hogan's book for you retire inspired i know it's not it's called everyday millionaires man that's a throwback from three years ago my brain yeah anyway uh too many years of this and anyway we're going to give you a gift and your next chapter is to be millionaires and your story and we're looking forward to hearing from you when you do that as well and dave let's go ahead and give them debt-free degree for those two young ones all right cool thank you extra added bonus there. All right. Carl and Beth Bray-Allen Broxton from Lexington, Kentucky.

$55,000 paid off in 12 months, making $120,000. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! They jumped in. I love it great job you guys great job you know there are so many people in the financial services business

um in that have finance degrees that are bankers mortgage people uh insurance people real estate people whatever and when we're in one of those businesses and i've been in several of them i've been licensed and just about all the things i just mentioned uh at one time or another in my long life shut up and uh but i mean it's it's amazing how we learn the nuances of that business and don't apply them to our own lives. Yes, sir. And you end up with a different thing where he's sitting there with $900 in insurance premiums. Now he's doing it for $200 and has more coverage because he switched a term.

And he's in the business. In the business. Lack of knowledge. And that is just not that unusual yeah it's not that unusual at all pretty pretty incredible stuff what a neat couple it's changed the family tree i'm looking at the kids right now like their future is 10 times better oh easy easy 10 times better well done you guys very very well done. This is The Dave Ramsey Show. Most people's money problems come from not paying attention. That's why before I spend a dime of my money on something,

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Just the same. What's up? Good. Okay, Dave, so I think my husband and I kind of wanted to get your opinion. Basically, last January, we started our debt-free journey. We started at about $99,000 and now we have got $29,000 left. Right now, we've been going real hard. We want to get out of this as fast as we can. But in August, I took a step back from teaching. I was a high school teacher here in Norman. And I'm taking a step back to go back to grad school, which is fully paid for. And basically, we're going to have an income drop. And my husband is wanting to kind of go into storm mode and kind of pile up money just to see without that income what it will look like. And I, on the other hand, I'm like, but I think Dave would say just keep going. And so I think we just kind of wanted to get your opinion on what we should do.

I assume you've run the numbers that you're going to be okay or you wouldn't have made this move. We have. We have. So why is it a storm? I don't know. And that was kind of the thing that I posed to my husband. I was like, you talked about, because my husband works in, like, new home sales. So he gets a base pay plus commission.

And so my thought process is, why don't we just take, like, your commissions and put that to. No, storm mode, there's no sort of doing it. Storm mode is your family is in jeopardy potentially financially, and so you stop and pile up cash. If you're putting your family in jeopardy by working on your master's, you shouldn't do it. Yes, bottom line. Okay.

Well, I'm not. Before I even applied, I was like, if I were to stop teaching, what would that look like? And we sat and ran the numbers. It means you slow down your debt reduction is all it means because you don't have as much money yeah right but that's not storm mode yeah it's not storm mode okay okay because i was like because we kind of wouldn't i think we'd heard storm mode during the pandemic and well that's true and that was only true during the pandemic as if your family was in peril if your family because of the pandemic was getting true during the pandemic is if your family was in peril. If your family, because of the pandemic, was getting smashed in the face financially, then we were telling everybody to put things on hold.

And Dave, it's really not a storm, though. Like you said, it's really like we need to adapt to this season. So maybe we do slow down babysit number two because we're taking away some income. But then also we may not have to slow down babysit number two. We can go back and look at the budget and see where else we can cut from. But like during COVID, we said, okay, there's people that are in peril. They've lost their jobs or they're about to lose their jobs. Well, you stop your baby steps.

Yes, sir. That's storm mode. That's storm mode. And you pile up cash. But you're in peril then. Yeah. You didn't put yourself there. Yes, sir.

COVID did. Yeah. And now you're back to work most cases around America didn't put yourself there. Yes, sir. COVID did. Yeah. And now you're back to work most cases around America. Not everybody, but a lot of people are or have the potential to go back to work. Things are opening up. Yeah. And so you're starting to come back, you know, out of our caves after the nuclear winter and all that kind of stuff.

And, you know, get back to normal. But, like, you know, if your family's income was not affected during COVID, we were not even telling you then. Yep. Just because there was a cultural shutdown, did that mean the thing? So that's just a, you know, no, I wouldn't do it in this case. Absolutely. Pretty simple. You know, the thing is this. It does kind of go back to some of the language we used at COVID.

If you're out there thinking about this any time, facts are your friends. Yes, sir. You do not stop working your financial plan because you're worried. Yeah. That's not a fact. Yeah. Because you want to have children someday. It's not a fact.

Right. I'm pregnant is a fact okay then you would stop and pile up cash until the baby comes that's one of the things we teach right i've lost my job or they told us there's a 90 chance we're gonna lose our job this month is a fact yes sir a lot of people got laid off two months ago and i worry all the time is not a fact yeah that's worry there is one little fact in that but i mean you you know you have to distinguish between because what happens is our mind is every one of us have a little baby drama queen that lives inside of our brain and that drama queen causes

everything to blow up and be bigger than it really is when it comes to worry yeah and so you got to stop and just calm down and say what are we really facing here and what she's really facing is a reduction in income because she's going to get her master's and she made that decision yeah but but it's not a that that's a fact yes and so that family is not in peril right and so that's not storm mode that's a fact yes and so that family is not in peril right and so that's not storm mode that's not that's what we teach okay open phones at 888-825-5225 burt burt burto burto is with us in indiana hi burto how are you hey dave how you doing better than i deserve how can i help so i just want to let you know that last year, about sometime last year, around this time,

I called you, and you kind of whipped me into shape. And since then, my fiance and I have been able to pay about $50,000 worth of debt. And it's all thanks to you, and I really appreciate you. Wow. Well, thank you. I didn't do it. You did it. I'm proud of you.

Yes. thanks to you and I really appreciate you. Wow. Well, thank you. I didn't do it. You did it. I'm proud of you. Yeah. So my question is, um, you're always, um, pretty much I follow the baby steps and in the baby steps, I don't see where I would start saving at for like real estate. I know you talk about saving for a mortgage, but what I apply that same step as far as like when I'm ready to invest in real estate to the same as investing or saving as a down payment for a house? No. Investing in real estate is done with cash if you're following us. It's what I do. And that's your wealth building process, and that's maybe step seven. Okay. So you don't, because you always talk about only having three to six months worth of expenses so how do you do you just accumulate that wealth throughout your entire life until you have enough money for for a home to buy cash yeah it wouldn't be your

entire life basically you walk through the baby steps and you're debt free now when you don't have a mortgage and you don't have any bills and you're funding retirement funding your kids college you're having money coming out your ears yes and so you real quickly pile up cash and you pay cash for your first rental property but that's at baby step seven that is an additional wealth building step leveraging into real estate borrowing money to get into rental or flips is a really good way to end up broke. Yeah. Don't do it, man. I'm not doing it.

I'm not on baby step seven yet. Once I pay off my home mortgage. And you really do want to do some real estate, don't you? I really do, Dave. I really do. Like, I really do. That's why I'm so connected to you. Because, I mean, that's where a lot of your wealth is.

And so I'm learning from you, and I'm doing it the right way. Yeah. So, listen, the thing is this. It's a little slower than maybe what you had in mind when you called. Yeah. A lot of people want to run out and go into debt. But the guys that buy real estate, the gals that buy real estate with a bunch of debt, 10 years later i don't

know any of them that aren't broke because one cycle comes through and it'll take you out yeah and there's always a cycle within a 10-year period of time of some kind or another i mean um what if a bunch of your tenants didn't pay for the last two months because of covid and you had mortgages you would realize the fallacy and the idea of borrowing to have rental property then. You know, there's two things right now with that, because he sounds like he's a young guy, Dave, and there's two things that's really going on in this generation, single stocks, you know, and then flipping. Those are the two big things that I'm constantly being asked by these 20, 30-year-olds.

Like, hey, I'm going to get into single-stops, I'm going to do day trading, and then I'm going to go take out this loan and flip. And I haven't found one person who has really built true wealth from that. Yeah. I mean, if you found somebody that started doing that when they're 30, and at 50 they're still doing it and they're not broke, you found a unicorn. Very much so. They don't unicorn. You're very much so. They don't exist out there. Very much so. And, you know, it's really not this generation.

I've seen it for 30 years. It's everybody who's trying to get ahead. Yes. We're trying to figure out what's the shortcut, what's the shortest path to wealth. And real estate's one. Stocks is another. They're good places to invest and build wealth. They're not good places to borrow money

to get into because it'll burn your butt. It's that simple. Anthony O'Neill, my co-host this hour here on the Dave Ramsey Show. That puts this hour in the books. Our thanks to Zach Bennett filling in for James Childs this week and of course Kelly Daniel, our associate producer and phone

screener. I am Dave Ramsey, your host and we'll be back. Hey, guys, it's George Campbell, host of the Dave Ramsey Show video channel. You can now listen to the show on your smart speaker. Just tell your Alexa or Google device to play the Dave Ramsey Show or find out all the ways you can benefit at DaveRamsey.com slash smart speaker.