The Ramsey Show - App - The Government Won't Fix Your Money Problems! (Hour 1)

Episode Date: November 23, 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. Ken Coleman, Ramsey personality, number one best-selling author and host of The Ken Coleman Show, heard on about 50 radio stations, the Sirius XM, and podcast every day. Joins me today. His show is all about your job, your career, and finding your passion, and doing it in a way that is what's called wise. And we're going to talk about your careers, your life, your money, anything you want to talk about. This is your

show. It's called The Dave Ramsey Show. Open phones at 888-825-5225. By your show, I don't mean you own it. I own it. By your show, I mean you get to choose the subject because you're going to call and we're going to talk about you. We're not going to talk about everybody else. We're going to talk about you right in front of you. 888-825-5225. Gail is going to start us off in Jacksonville, Florida. Hi, Gail. How are you? Hey, guys. I'm great, and it's an honor to speak with you. You too. What's up in your world?

I have a question. I'm on baby step four, and me and my husband are ready to invest. Unfortunately, we haven't invested up until now, and I'm 57 and he's 59. We can invest $1,100 a month, and I'm wondering, should I still invest in the four mutual funds that you suggest at my age, or should I be more conservative at my age i'm 60 and i do i invest in the four types my 401k looks exactly like i recommend i don't recommend um and let me tell you why i don't recommend this stuff for people to do that i don't do and the reason the

reason i am continuing to do it and i'm going to recommend you continue to do it, at our advanced stage. What? And so, but anyway, statistically, if you make it to 60 or 65 years old, you have a very high likelihood of making it into your 90s. The average death age of a male in America today is 72, for a female, 74. Okay? But that includes infant mortality teenage death and so on once you make it unless you've got health problems into your 60s you have a very high likelihood of another 20 25 30 years of needing to invest and so over the scope of not five years but over the scope of 25 years, what is the best investment mix? And all the data that we have indicates it's those four types of mutual funds, and that's

why I personally do it that way. And Ken, what advanced age are you? Well, Dave, I am at the mature age of 46. 46, okay. It's your advanced age. 46 is a new 36. And you're doing the four types as well. That's right.

I do it exactly the way you tell us to do it because you've got a track record. I like to look at track records. I like to see the score. Yeah. How did it work out? Yeah. How did it work out? So that's the thing, Gail. What you're running into if you've dealt with someone that's not a smart investor pro in the investment world. There's a methodology that the investment world has all decided that they all believe, like a whole bunch of people believe something about COVID, the whole bunch of people don't, that kind of thing. And it's just, they just decided that you were all going

to die at around 67. And so they move all of your investments to conservative investments in your 60s. And to me, that's stupid because you're not going to outpace inflation. But I don't do anything the way anyone else does it. I do it, I look at what works, and me following the crowd is not on my list of things to do. You know, Andy Andrews talked about that in his book, because it works with career stuff and it works with investing stuff, it works with get-out-of-debt stuff, it works with almost anything.

If you want to study the competition, his book, Deep End of the Pool, is what it's called, his latest book. And he came and talked to us about it. He's a friend of ours. And he said if you want to beat the competition, study the competition and do what their best practices are a little bit better, and you'll be 3% better. But if you want a 40% better result than the competition, you have to do perpendicular opposite of what they're doing.

Yeah, and it works in any area of life. You know, if it's parenting and your marriage, you know, your money and your work, if you're a small business owner, you know, if you're a marketer, if you're social media, you know, whatever it is, you're going to have to do your homework and then decide, okay, what's working? Why is it working? How will I do it? And I think he's absolutely right. And I think the fact that you've been courageous enough to say, all right, let's, if this is the conventional wisdom, why is it the conventional wisdom? I think you start with that. You started going, well, why is everybody saying it this way and at that point you have to have the courage to use your

common sense and just dig critical thinking skills yeah vanessa's in atlanta georgia hi vanessa how are you hey jay before i get started i just wanted to thank you for what you do my parents were able to change our family lineage and became the first millionaires in their family because of you wow i'm proud of them they're heroes that's awesome you are very cool i have a question and please don't yell at me but um i have never been in debt i never want to be in debt um i'm thankful for that i'm a full-time college student, graduate student, and I work part-time in customer service. With Joe Biden's $10,000 student loan forgiveness and with the fact that they're not expecting payments on interest on student loans until the pandemic is over, well, currently until December 31st, I was wondering, is it financially responsible and morally ethical for me to take out $10,000

that I don't need that's going to be forgiven, and I don't have to pay interest or payment on it? Well, let me just tell you, that is not a law. That is his wish, and he's not the president yet. Yeah, I'm only 20% confident in him. Yeah, well, and he has to get that through Congress, which has in the Senate what are known as Republicans. The chances of that passing are really close to zero. So you don't take out a loan on what you might think some freaking politicians are going to do. Yeah.

And you said you want to take out ten thousand dollars you don't need did i hear you say that well my goodness well that's the problem i mean i'm gonna be real straightforward with you should you take out ten thousand dollars as a government loophole i mean this is the kind of policy stuff we're talking about it's a mirage and it's got you thinking in a way that's you would not normally think well let me take advantage of this loophole and take out ten thousand dollars i don't need i just think that this is uh yeah no the answer is no i'm i'm i'm at a loss to be honest with you yeah the answer is no well this is what this is what pollyanna policy crap it takes up but it

takes a perfectly normal person who had a plan, and then politicians promising we're going to send you money makes them think in abnormal ways. And so, yeah, this is the problem with stupid butt stuff. There are always strings attached to that stuff. Even if they got a version of that passed, there are strings always attached to it. He cannot do it by executive order. No, he cannot. He can't get it through Congress.

No. So it's one more time. It's like Oprah. You get a car, and you get a car, and you get a car. And I've gotten elected, and I'm going to give you this, and I'm going to give you that. And it's horse crap. Everything's free, except it's not. Yeah.

It's not. So, no, darling. Stay away. Reagan said it well. The most terrifying words in the english language are i'm from the government and i'm here to smart, creative entrepreneurs doing great things for our economy. GRIP6 is no exception. BJ and the great team at GRIP6 know how to truly create smart products that are unique and makes everyone's life a little easier. That's why I'm so excited to announce to you that GRIP6 is expanding their innovative product line.

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Give these products as gifts this season. To get the Dave Ramsey special, visit is my co-host today here on the air. Ken, when I was a kid growing up, they used to say if something was difficult, they would say, well, that'll take an act of Congress. Remember that? Of course, absolutely. Translation, getting something through an act of Congress is very difficult. Yes, very difficult.

Just for those of you who are sitting around thinking that the government is getting ready to give you money or that the potential new president is going to give you money, it takes an act of Congress, which is a saying that indicates something is difficult because an act of Congress is difficult. And with a Republican Senate, very doubtful, to say the least. And remember this, just a PSA, public service announcement for everybody. The government cannot thrive. It cannot grow absent of your tax dollars, your money. So we look at the Freddie May, you know, and the whole federal student loan program, when that was brought upon.

That was the idea that college education was becoming this big thing and this new way of becoming successful. And they thought, well, we'll subsidize it, but we're going to charge the American people. And it started off with grants, and then it became a big, blown-up student loan program. And they thrive with higher interest rates than private loans. And that's how that all kind of gets started. So we have to understand that when government offers something, they always want something back, because they cannot thrive. They don't produce anything.

They do not. They live off of your money. They are parasites. That's a parasite. You have to understand that relationship. They don't. There's no free gifts from the almighty government. Yeah.

And here's another clue, okay? I mean, regardless of whether that fleshed out to be exactly true, which I do believe to be true. I'm 60 years old. 100% of the people that I know who have waited on someone in government, in the White House, in the Senate to fix their lives, 100% of them their lives suck. Still waiting. Because they're still waiting on someone else to fix their life.

And so, boys and girls, ladies and gentlemen gentlemen it is your job to fix your life that's why when she said thank you for my parents becoming millionaires following your stuff i said they're heroes that it was their job i did not give them any money and i appreciate the thank you but i didn't give them any money they didn't become millionaires because of me they became millionaires because I showed them how to do something, but that's the easy part. The hard part is actually going and doing it. That's right. So when you go and do something,

that's when we call you a doer, not a victim, not a dreamer. Okay, back to breathing again. It's a good thing. Brandy is with us in Orlando, Florida. Hi, Brandy. Welcome to the Dave Ramsey Show.

Hi, thanks for taking my call. Sure. I'm a little anxious because I know you're going to tell me I did everything wrong, but I recently, my grandmother gave me financial peace university in 2012, and I'm going to be honest, I was a new mom. I was young. I didn't, I just took the gift and put it on a shelf and uh I wish back then I had actually gone through it but I recently found it

and decided to do the program and have have been and I read your total money makeover and or listen to the audiobook in a whole day um but now that I have i i think i've done something terrible um hurricane irma destroyed our house it's completely gutted i've been living in a camper in my driveway with my three kids and um we've been trying to get a loan for three years you did not have insurance we did but um there was a mold cap and and it took them a very long time to come out to remediate and um it just it took over the whole house and then anyway it's gutted right now and so for for the past three years, what the insurance did give us, we gave to a contractor, and the contractor said that it would take more to fix the rest. So we have been trying to get a loan for the past three years, and they kept denying us because of the loan devalue. So we as you and your husband?

Yes. So what do you owe on this house that's half completed? $104,000. What would it bring if you sold it at auction the way it sits today? I think probably $80,000, but I have a sentimental attachment to it. My grandmother that passed away from Alzheimer's last year. I don't have sentimental attachment to it. My grandmother that passed away from Alzheimer's last year. I don't have an attachment to it. You've been in your driveway in a camper for three years.

It's time to get rid of it. Yeah, I know that now. It's time to cut back. We just closed on a loan to fix it finally, and I was so hyper-focused on just getting it fixed, and now we've doubled the mortgage, and I don't know. Oh, baby. That's why I was anxious, because I knew you were going to tell me I did all of the wrong things.

Well, you did. I'm sorry. You're in a mess. Yeah, I know. I'm sorry. So you took out the loan. You took out an $80,000 loan to go with your $80,000 mortgage, and that still didn't complete the house?

No. The work hasn't started yet. It will complete the house. Where's the $80,000 from the loan? They haven't funded the contractor yet. But when they do, the loan will complete the house. We'll get back into our house. But you're going to owe $160,000 on a $100,000 house.

No, I'm sorry. I'm just anxious. Right now, as it sits, the house we owe is $104,000. It was appraised at $130,000 as is, and when it's fixed, it'll be worth $260,000. And you owe $104,000. I owe $104,000 right now before the loan. I did not get your numbers correct then okay so 180 when you take out this 184 yep and it's worth 260 fixed

yeah and then you're going to have to roll all of that together into a final mortgage when you're done right yes yeah you'll need to get a better interest rate. It'll be at 30 years, though. You need to get a new first mortgage as soon as you get done. Yeah, that's where you are. I think you've got to finish it out. I'm sorry. I misunderstood. I thought you had borrowed $180 on a house worth $104. I was freaking out. Oh, no. Okay.

Yeah. Well, I don't know that I would have gone about it exactly this way, but you're there. I would finish it out. You're going to have $184,000 in it. It's going to be worth $260,000 and get you a new first mortgage, and then let's get in the business of getting that paid off and get out of the dadgum camper. Do you guys know how to manage a contractor?

No. Okay. All right. So have you gotten three different bids? I'm kind of stuck with this one because we gave him the $30,000 right after we got it from the insurance company. So has he done $30,000 worth of work they said they have but there's just pretty much Tyvek all around the house

well you don't trust him is what you just told me you're not going to give a guy who you don't trust did $30,000 worth of work for $30,000 you're not going to give him $80,000 more right yeah guy who you don't trust did $30,000 worth of work for $30,000, you're not going to give him $80,000 more. Right? Yes.

Okay. So you need to get some bids from this guy and two others on what it will take to complete the house in detail. And that includes a freaking schedule as to when this work will be completed. I suspect the first contractor will not win the bid. And I also suspect it's going to take you more than $80,000

to finish the house. What's your household income? It's $42,000. That was really my main question. I've just been... Okay, listen, if you can't emotionally get on top of this and manage this with some aggression, you need to not take the loan and sell the house as is today. I think that's probably your best bet, just listening to your voice.

I'm afraid they're going to beat the snot out of you again. And you're going to call me back in three more years're going to beat the snot out of you again. And you're going to call me back in three more years and still be in the camper in the driveway. So I think you need to cut bait, kiddo, and go get you another house and not do this renovation and not take this loan. Just walk away. Sell it for $130 as is.

Put a little money in your pocket. Go get you an apartment for a little while and heal. You don't sound like you're in condition to manage this. This is the Dave Ramsey Show. Ken Coleman, Ramsey personality, number one best-selling author, is my co-host today here on the Dave Ramsey Show. Jason and Dana are with us here on the debt-free stage right here at Ramsey Solutions. Hey, guys, how are you? Better than we deserve. I love it.

Where do you guys live? Near Baton Rouge, Louisiana, a little town called, it's the city of Central. Okay, wonderful. So good to have you guys. Thank you so much for joining us. So you are here to do a debt-free scream, and how much have you paid off? $185,000. Wow, how long did that take? 30 months. Good for you. And your range of income during that two and a half years? $165,000 up to about $189,000 and then back down a little bit to $185,000. Okay. What do you guys do for a living?

I'm an engineer. I work on coastal and marine habitat restoration projects. Okay. And I'm an administrative program manager. Wonderful. Cool. Good to have you. Wow.

What kind of debt was the $185,000? Well, you're looking at weird people. You paid off your house? Yes. Awesome. Very cool. So how much is that house worth about 350 how much of the 185 was the mortgage that was it all mortgage all mortgage wow look at you so tell me your story what in the world happened two and a half years ago well uh maybe it goes back a little bit before that um co-worker of mine who's actually here with us today they're good friends of us not good friends of ours now introduced me to you in about 2013 and started listening to you on the

radio and i was hooked from then on uh but was doing a little bit of a dave ish thing for about two or three years and by 2016 uh i decided i hadn't even done FPU or anything yet. So I said, well, let's do FPU. Decided to coordinate the class. We've since coordinated seven classes. Wow. But at that time in 2016, I was dropping some hints of maybe, because we had a really big note on a big mortgage on a much bigger house. And it was really just sucking the life out of our future. So much waste on interest, taxes, and things like that. So in my mind, I was like, I want to get to Baby Step 7 fast. Because we didn't have very much Baby Step 2 stuff to take care of.

So in 2016, I was dropping hints. And that's almost like to sell the house. And that's almost like telling a guy you got to sell his bass boat or sell his motorcycle. It was a very nice house. It't buying it but after going through fpu we did decide to sell that house so it took a couple of years to get all that process done uh for us to get in the in a new house by 2018 and that's when we started paying off this 185 wow and boom done done just like that so what was the other house worth uh the other house was close to 500 okay so you moved down 150 yes sir roughly okay wow well that's a that's a big move but it's not like you moved to a third or something i mean that's very cool

the new house is still really nice yeah oh it's Yeah, $350 will buy a lot in Baton Rouge area. Good. Way to go, guys. How does it feel to be 100% debt-free? It's great. It's awesome. It's the most accomplished I've ever felt. You know, it's like you set a goal, and it was a very lofty goal when we first started. You know, sell a house, get a new house. It was a lot of process to go into it.

And, you know, we've been together for a very long time and it's the biggest thing we've ever set in front of us. And we just knocked it out the park and I just feel so accomplished. Let's stay there. I think people need to hear more about that because you two came together and said, all right, we're going to put this stretch goal out there. And it was really hard, I'm guessing. Big time sacrifices. Talk about how it is worth it to people that are sitting here on the fence right now going, should we sign up for this kind of a challenge knowing it's going to be difficult? Oh, absolutely.

I don't think you realize how much burden you have on your shoulders until it's gone so people are bebopping around with their debt you know with a big mortgage and it's hard for them to see or feel what it's like without it because that's a normal feeling for them so that's that's kind of what i probably said is that that you don't feel that burden uh until it's gone and it's it's huge you don't even know it's there until until it's paid off and you can you can breathe and you don't feel that burden until it's gone. And it's huge. You don't even know it's there until it's paid off and you can breathe and you don't have a payment in the world. All of your check is your check. How has it changed your future thinking? Well, I never really liked payments.

I did get them. I ended up paying almost all of them off early and that was just dumb. But cash is the way to go. Future thinking. of them off early and that was just dumb but cash is the way to go um future thinking i'm thinking more in terms of family tree legacy um you know what what are we gonna leave behind so that you know our future family is different from here on out how old are you guys i'm 38 i'm 36 wow that sense of you know you're standing on top of the mountain, hands up, Rocky Music's playing. That's the accomplished feeling in it. It's like, I did this.

I did this. That's a great word. I love that. The sense of having done something very, very hard, lifted a weight that no one has ever, not very few people lift that weight. And you guys did it. You were able to pull it off. Very cool. You guys are heroes.

Excellent job. So what do you tell people the absolute key to getting out of debt is? Well, I thought about this question, Dave, because I know you asked it. And it's hard to nail it down to one thing. It's the whole package. You can't Dave-ish it. You've got to do it all. And it's three things.

It's three Ps. It's perspective, people, and process. And you've got to have your perspective, which is your reasoning. It's your why. It's your drive. It's what's behind you. It's why you're doing it. If you don't have that, it's probably not going to happen.

And you've got to be around good people. You've got to be around people who's going to lift you up. You can't hang out with the turkeys and expect to fly with the eagles, right? So you've got to surround yourself with some people who are going to share that vision with you. And then the process is the budget. You have to have a budget. You've got to live on less than you make. You've got to have the nuts and bolts of it, which is every dollar app, whatever it takes,

the mechanics of moving that money around. So it's really a complete package. That key, it's tough to nail it down to one thing because you've got to do the plan. If you have faith in the plan and just do it,'s going to work ish doesn't work yeah i got goosebumps that'll preach right there three p's to financial peace i wrote them down i'm gonna steal every one of them well you should perspective people process that's incredible it's great alliteration it'll make a baptist sermon i'm just saying i'm going crazy right now we need to do an altar call dave right now right now right now uh so dana after the house sold the other one and you moved into this one and um you guys started working on this together how many big

money fights after that we never really had big money fights It was always he was the money person and I was the free spirit. And it was just like, hey, how much money can I go spend right now? And, you know, I think I want this. Is it okay? I have no idea. And so now it's we sit down, we do the budget together. I know what's going on. Before, I had no idea how much money we had.

I had no idea how much debt we had. I had no idea how much debt we had. It was just go with the flow. You tell me what I can do, and I'll go do it. And so now we are so much closer in our marriage. That was a major change for us in our marriage is now we're just on the same page. And I understand why he's frustrated or carrying the weight yes yes it's it's i bet that caused you to feel accomplished even more than i mean you're speaking into it you're carrying your share of the weight the decision making we're

pulling this thing wagon together that probably caused that feeling of accomplishment more than not paying off the house even very likely yes 100 it's um and that's something i see you coordinate an fpu uh where you don't necessarily have both people on board very difficult it's very very difficult yeah way to go you guys thanks so proud of you so you brought the kiddos what are their names and ages let's get them in the picture sure did uh jet is 12 uh della is 10 and siriana is 8 all right very cool and have they been practicing their debt-free scream yes we have all the way up here so they absolutely know that their family tree was changed by their dad and mom who are heroes absolutely absolutely very very cool all right jason and Dana from Baton Rouge, Louisiana.

$185,000 paid off in 30 months, making $165,000 to $189,000. House and everything. These are weird people. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free. Oh, most excellent.

Most excellent. Wow. That's the sound of a family tree changing, boys and girls. Oh, man. This is The Dave Ramsey personality is my co-host today here on the air, host of the Ken Coleman show. If you have questions about career and about your life, we're here to answer them.

Of course, about your money, 888-825- 5225. Ken, you know what is interesting is that someone feels accomplished only when they've accomplished something. Strange how that works. We want

to build people's self-esteem by giving them a grade that they didn't earn or giving them money that they didn't earn and call that success. But they don't feel accomplished because they didn't accomplish anything. Yeah. Dana, on the other hand, feels accomplished because she has transformed the way she looks at and handles money. She was now participating in the adult decisions of the household and also was half of the people that paid off the $185,000. That's pretty cool.

Yeah. Our question of the day comes from Blinds.com. Find out for yourself why Blinds.com is the number one online retailer of custom window coverings. You get free samples, free shipping, and with the new promos they run every month, you'll save even more. Use the promo code RAMSY to get the best possible deal. Today's question comes from Connie in Pennsylvania. I've been at my job now for three years.

It's a job I enjoy, but every time I try to get a promotion, I keep getting passed up. I'm at a loss, and it feels as if my job doesn't care how hard I work. Many years ago, I went to school for massage therapy, but I never pursued it. I'm not sure if I'm even interested in pursuing it because it's been so long. Do you have any suggestions on next steps for me? Well, we've got two questions here within the question. The first question is, if I had you on the air, I'd want to know if you sat down with leadership and asked them for some real good 360-degree feedback from your peers, from them, as to why you're not moving up the ladder. What can you do better?

And really dive in and find out, is it a healthy culture like Ramsey Solutions, where if you do a good job, you know your role, and you accept your role, and you maximize it, you're going to get an opportunity to move up here. And if you're not, we're going to tell you. That's right. And then you have something to do. So you need to get, I'd like to know more about what you do know and then what you're doing about it.

Now, the second half of the question. You could be doing the wrong thing and working real hard at it. That's exactly right. We've talked about hard work. Hard work is a good thing, but it's not the only thing. That's exactly right. Hard, effective work that creates results and doesn't piss everybody in the proximity off in the process.

That's right. That's a promotable event. That's exactly right. If you're making everybody mad in the process, or you're working hard on the wrong thing, or you're working really hard but there's no results from it because you're doing it poorly, even though you've got a lot of sweat, there's nothing happening here.

You can sweat and not score touchdowns. That's right. Now here's the other thing. You could also be working really hard. They can notice and appreciate the hard work, but you might be putting yourself up for a promotion that you don't have the talent to actually pull off. Sometimes our eyes can be bigger than our belly. You know, the idea of going for something that you may not be a good fit for.

And so that's why we teach on the Ken Coleman Show, the sweet spot where you use what you do best, talent, to do work that you love to do to produce a result that matters. So we don't know here what's... I think talking through with leadership is the big issue. That's where you got to start. Yeah. You got to know where you stand and why you stand. Now, the second half of the question is, I pursued massage therapy, but excuse me, I went to massage therapy school. I did not pursue it. How do I know, Ken, if it's something I should do? And this is why I wrote the book, The Proximity Principle, which says in order to do what you want to do, get around people that are doing it and in places where it is happening. Now, in this case, you use the proximity principle to validate whether or not you really want to do it.

I call it clarify and verify. So you're going to be talking to successful. What I mean by that is they've been employed a while and they enjoy massage therapy. You've got to talk to those people. And it's like doing a college or high school term paper. Ask everything about the day, favorite parts of the day, the part of the day they don't like, how they got there, what do they do to stay active and thrive in the role. And when you get that information, Dave, that's the clarify your brain processes it. And then your heart's either going to go ding, ding, ding ding ding or and that's what you have to

do you've got to really talk to somebody multiple people uh and and learn about the work and your heart and head will combine in that situation and you're going to know whether or not you should pursue that i'll give you an example i have a friend that um hears me i mean always when i get a call someone in the nursing field i'm always bragging on them because it's a wonderful field in terms of opportunity. You can work as much as you want to work. You make good money. There's always a shortage. And so it's a wonderful field to go into in terms of that.

And, you know, she was thinking of going to nursing school in her 30s. And I said, well, you know, Ken Coleman says go shadow for the day. Just go be like a college intern and go hang out with a nurse all day long. Now, this was pre-pandemic. But she goes and hang out. She goes, it's gross. I said, I didn't want to do that. But all the idea of being a nurse and being helpful and kind and, you know, a healer and all that kind of thing was very appealing.

But when she saw what it actually the day-to-day job involved, was gross yeah that's gross i don't do that that's right and i was like well it was a one day well spent rather than going to nursing school and then discovering that so true one day clarify and verify and for those people who who want to kind of kick the tires on that talent passion mission those three gifts from your creator that'll help you find your sweet spot. Dave, we have a free resource at KenColeman.com called the Career Clarity Guide, and it's free, and it'll walk them through step-by-step what I just kind of quickly went through, and you get a lot of clarity as to some potential jobs in your sweet spot, because there are multiple, multiple career paths, and then you do what we just described, and you'd be surprised how quickly you can get clear and then you're confident to

step out you you could be real clear on what your mother wants you to do but that's not helpful boy and that's the truth you could be real clear on what makes a lot of money but that's not helpful what you need to be clear on is what you're designed to do when you're here. KenColeman.com, it's a free resource, and it's called, again, what? The Career Clarity Guide. Career Clarity Guide. Those of you on YouTube are looking right at it. Okay. Peter is with us.

He is in New York City. Hi, Peter. Welcome to the Dave Ramsey Show. Hi, Dave. Thanks for taking my call. Sure. What's up? So I'm finishing Baby Step 2 this month.

I'm paying off $28,000 in eight and a half months. Way to go. Thank you. So part of the Baby Step 2 was a leased vehicle. I'm also within days about to receive an injury settlement of $13,000. Do I take this $13,000 and buy the leased vehicle outright so it's mine, or do I fund my baby step three? Well, you need to pay it off if you're going to keep it.

Well, it is paid off. That's the whole thing. I've satisfied all the monthly payments. Oh, you've paid it off through the end of the lease, but you don't own the car. No. So that's what I'm asking. Yeah, that's what I'm saying. You need to pay it off if you're going to keep it.

Now, what is the final balance on the car? Well, they said the purchase price right now would be $14,500. And what is the car worth? The car is worth private $16,000. Well, that's a pretty good buy on a $16,000 car, and you're going to have the money to pay cash for it, right? Yes, sir. Okay.

Do you like the car? I love the car. I was just wondering. Well, I mean, let's pretend you didn't own it, and you had $15,000 in your checking account, and you walked up to that car, and you said, hmm, nice car. What's it worth? $16,000. But I'll sell it to you for $14,000.

You go, I'll do that, right? Right. So if you weren't in the middle of all this crappy lease stuff that's the way your brain would work and that's the exact same series of questions you're going to ask before you make this decision yes buy the car okay i just wanted to make sure you didn't want me to put that towards my emergency fund and then no you're not debt free until this car is paid off understood so once you're debt free then we start working towards the emergency fund that's baby step three at that point barry's in baltimore maryland hi barry

welcome to the day for mc show how you doing sir thank you for taking my call sure what's up we just came into some money after selling a townhouse and we're thinking about paying the house our our mortgage off at our house uh just want to know if that you think that's the right idea how long you've been listening to me about three weeks okay and i i already know i already kind of know the answer yeah but i why would you not pay it off why would you not pay it off? Why would you not pay it off? And like I said, I already know the answer. It's only going to leave us with about an emergency fund of about $26,000. That's okay. That's a decent emergency fund.

That should represent three to six months, shouldn't it? It does. It does. And we were thinking we were heading in the right direction. We are getting close to retirement. Both of us are 56 years old. If your credit is good, here's my challenge to you. I'd pay it off tomorrow.

And if you hate being debt-free, you can go get you a mortgage next year. That's a new challenge. He's literally going, Dave, did you just say that? Well, I mean, no one ever does. No one ever does, right? No one ever does. Oh, that puts this hour of The Dave Ramsey Show in the books. This is James Childs, producer of The Dave Ramsey Show.

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