The Ramsey Show - App - The Time to Be Proactive About Your Career Is NOW (Hour 1)

Episode Date: June 8, 2020

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show. For 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. The voice of retirement, the voice of millionaires, the trusted voice of money, Mr. Chris Hogan, Ramsey Personality, is my co-host on the air today. Open phones at 888-825-5225. That's 888-825-5225. So, Hogan, were you able to keep Deloney under control, Dr. John under control while I was gone?

Dave, it was full time. Don't leave that up to me anymore. He is a wild card. No, he did a great job. We had a lot of fun. I had a taser underneath the desk to keep him in line. I kept him in line. It keeps him on target.

I'm bigger than him. Focused. Well, we know that. Yes, I am. And scary. Open phones as we talk about your life and your money today. Chris Hogan and I are here to help you do that. Open phones, 888-825-5225.

Alan starts off this hour in Kentucky. Hey, Alan. Welcome to the Dave Ramsey Show. Hi, Dave. Hi, Chris. It's an honor to get to speak to both of you all today. You too, sir. My question today, I'm 52 years old, my wife's 50, and we've got a 10-year-old son.

I was laid off in the middle of March due to lack of work at my employer because of COVID-19, and subsequently I've lost my job there since that time. And right now, money that I have coming in is my state unemployment benefits, federal unemployment benefits. I get money from a beneficiary IRA and a beneficiary annuity. My wife's income is stable and has been throughout the pandemic. When I was laid off, we started saving cash, piling up cash. And at the moment, we've been paying our minimum payments on everything.

If we were debt-free at this point, we'd have about three to four months of expenses saved up for Baby Step 3. Got a chance to maybe have like six months saved up by the end of July. But my question is, should we at this point go ahead and continue to save cash, or should we start paying on our debt? What does she make? Last year it was around $47. What did you used to make? It's $29, and then, like I said, get a minimum distribution from a beneficiary IRA and annuity.

Yeah, I know that. But your career, you were making $30,000. Yes. And you lost that job. so how's the job hunt going well because we've got a 10 year old we in kentucky we're not as far as being able to get you know day camps and daycares and stuff and i actually open them back up till next week and during the summer months that's what we would do uh with our son he would typically go to you know to different day camps and stuff throughout the summer. A lot of them are still on hold because of COVID. So you haven't even looked? Pardon?

So you haven't even looked? No. Okay. When are you going to start looking? Potentially when school starts back up in August. Why? You don't think the day camps are going to open next week? Well, out of the ones that he goes to,

I've not been able to find out any information on them. Mm-hmm. Okay. Well, I'd be concerned about getting back in the saddle if I were in your shoes. July 25th is unemployment runs out, and you're going to want to be getting back to normal before you stop piling up cash, I think. Yeah, I do too, Alan. I mean, you are aware that in July that extra $600 a week goes away, right?

Yes. Okay, and so you being proactive right now, I mean, do you guys have family members where you live? aware that in July that extra $600 a week goes away, right? Yes. Okay. And so you being proactive right now, I mean, do you guys have family members where you live? We do. Okay. Because see, that's where stepping out of the box and you start to look and you're thinking, can your kid go over there while you're working? But jumpstarting it, that's my fear, Alan, is that a lot of people are sitting back and

waiting until the end of July to start to be concerned. And the time to be concerned is now. The time to be proactive is now. So you can put yourself in a better situation before the money runs out. Otherwise, there's going to be this glut out there, Dave, of a lot of people that are trying to jump-start something that could have been an easier start earlier. We have 40 million unemployed. The ones that are on unemployment are all going to be looking for work July the 25th. Yeah. I would get a jump ahead of that line.

I don't want to be in line behind 40 million people. That's exactly right. And as you look for a job, it might not be in your area of choice. It doesn't matter. Dave, I heard you say this years ago. It's easier to find a job when you have one. And so get some money coming in because it'll just change your psyche. Yeah.

I want you to, the answer to your question is I want you to get stabilized on the career side before you stop piling up cash because I don't want you to come up short. And I'm worried that your strategy is going to cause you to be unemployed past when you think you're going to. It sounds like you think there's going to be no problem as soon as the child care thing straightens out or he goes back to school, then there'd be no problem just picking up a job, which the good news is you make $30,000 a year, not $300,000. Those are harder to find. So $30,000 is easier to find. So, you know, that's, that's the

thing I would get after. And, um, I want to get in line in front of all these people that are going to wait. Oh, absolutely. And this is the time to dust off your resume, start reaching out to people, friends, coworkers, let people know that you are looking. Don't be so picky right now that you pick yourself out of an option. Yeah. Well, yeah. I think I'd be a little more urgent than if I were in your shoes than you've been on this so far. Hey, man, thanks for the call. All right. Up next is going to be Sheldon in Washington. Hi, Sheldon.

How are you? Doing good. How are you doing? I'm honored to speak with you guys. You too, sir. What's up? Okay. I got a question about expense ratios.

I've been doing some research. I got a little bit of money in a Roth IRA on mutual funds, and I've heard you talk about expense ratios. And basically my question is, and I've talked to some people at Vanguard, and they say that basically your expense ratios, when they show you the performance of the mutual fund, I mean, it'll tell you the expense ratio. And I don't know if the expense ratio is calculated in.

I mean, before they tell you that this mutual fund has a 12% return, is that before? No, they usually give you the total return. And if you want the average annual, you would divide it by the number of years that they give you the total return for. And then your expense ratio would come out of that. And so the trick with expense ratios is this. You need to think how long you're going to be investing and look at the expense ratio for that period of time. Typically, they've got a 1, 3, 5, and a 10-year expense ratio in a lot of the prospectuses, and maybe a little, some of them may have a 15, but you want a long-term, because you're

investing for the long-term. So when I do that, then obviously you're amateurizing any front-end costs over that period of time, and it lowers the expense ratio overall. I will tell you this. It's the thing I spend the least time worrying about i glance at it to make sure that they're not ripping me off right but uh i would rather have an expense ratio that's a tick higher and a uh a rate of return that's 15 ticks higher there you go i spent all my time on rates of return historical rates of return you don't want to nerd out in the wrong

places yeah that's exactly right chris hogan my co-host today here on 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, I do the research and make sure it's going to live up to what it claims. Recently, I got a great pair of sunglasses from a company called Shady Rays. When you're looking for sunglasses, it feels like your options are limited. Name brand sunglasses cost too much and the cheap knockoffs are ugly and really don't protect your eyes. Discovering Shady Rays is a game changer. With Shady Rays, you can count on premium sunglasses

that protect your eyes and are affordable. They give people the best overall value in sunglasses. They also replace your shades with a brand new pair if you lose or break them from day one of your purchase. And they guarantee your sunglasses for life. Plus, they offer an exclusive for Ramsey Show listeners. Go to ShadyRays.com and use the code RAMSEY for 50% off two or more pairs. That's ShadyRays.com, code RAMSEY. Chris Hogan, my co-host on the Dave Ramsey Show today.

Ramsey personality, number one best-selling author of the book Everyday Millionaires and the book Retire Inspired. So, Chris, as we interviewed millionaires in the largest study of millionaires ever done in North America, we interviewed over 10,000 of them with a research team for your book, and we ended up doing the book with 140 of the statistics in there in the book Everyday Millionaires. It's the number one bestseller. The quick read is now out of the white paper. That's a quick read if you guys want all the details. The white paper, if you're having trouble sleeping,

is the nerd-out book on all the details of the millionaires. But bottom line is, out of all of that, we did find that one of the key things that almost all of these millionaires did, it was north of 80% of them, they consistently invested in their retirement plan, Roth IRAs and or 401K, and almost every time it was mutual funds. Never, when we asked them what the key to building wealth was, not one time out of 10,000 millionaires did someone say,

I got the lowest possible expense ratio on my mutual fund. That's right. It didn't come up. Now, some of them did mention rates of return. Yes. That they were careful to manage rates of return with their advisor or on their own. Right. That they watched the mutual fund, made sure it performed,

but none of them said, you know, I didn't pay any expense. I got a great deal on all my expense ratios. What made me a millionaire? It never comes up. No, it really doesn't, Dave. And because this industry, the financial world, has so many nuances and so many acronyms and terms that it can cause people to lose sight of the real deal. It's consistently investing over time.

In a good rate of return. In a good rate of return so you can outpace inflation. Because the difference in 10 and 12 percent is not one-fifth or one-sixth. That's right. When you put it on a compound interest curve, it goes bananas. It really does. That two percent difference is a lot. So let's talk through expense ratios. Expense ratios are a disclosure in the prospectus when you buy a mutual fund that is a combination of what your commission costs are if you're paying a commission on the fund. If it's a loaded fund, it has a commission and the annual maintenance fees. That's right. The 12B1 fees are called.

And any expenses associated with operating the mutual fund that's charged to you, the investor, are included in that number. That's right. And so if you buy, for instance, what are called A shares, which is what I usually buy, where I pay an investment advisor, registered investment advisor, up front, or if you want to do it in a management contract, either one, you're going to pay a commission. Either way, you're going to pay a 1% annual on your total outstanding balance or you're going to pay five and three quarter up front which is an a share okay fifty seven dollars and fifty cents per thousand that you invest until you hit break points like fifty thousand hundred thousand million then it drops and it starts dropping what they charge you but anyway so that commission if they pay if I pay a commission up front as I buy the fund, and then I get a lower annual maintenance fee, in order for that to show up that I've got a better fee, a lower fee ongoing, you've got to look at it over a 10 or a 15-year period of time. If you look at it in one year, you would just be destroyed.

That's right. And so you're looking at the expense ratio total. All the expenses, what percentage of your money is going away to expenses over a long period of time. Now, here's the thing. So if you had a no-load mutual fund, like a Vanguard S&P 500, which is a classic that everybody talks about and everybody buys. The Bogleheads, all those guys are into the passive investing, right? Which I buy the Vanguard occasionally. I park some money there occasionally.

It's not an evil fund by any stretch. It's a great fund. It's going to do exactly what the stock market's going to do. Your expense ratio year one is going to be really, really low because there's no commission. And over time then, you look at it. Now, like years ago, I pulled up up one and i haven't looked at it in a few years so i'm not sure if this is still accurate but you can look at it there used to

be an old fund called burger 100 and i pulled up this burger 100 fund and it had an expense it's a no load fund no commission but an expense ratio the annual maintenance fees were so high you wished you'd been paying a commission because they charge it to you every year so their expense ratio was almost double what my commissioned mutual fund expense ratio was over a 10-year period of time because they were so stinking high right even though they were in quote air quotes no load right you weren't getting charged a commission but by god you wished you had when they finished with you. That's exactly right.

So you can look at that kind of stuff, but here's the thing. What people do, what you said earlier, is they cut off their nose to spite their face, and they'll go in and go, ooh, ooh, ooh, ooh, ooh, I got the lowest expense ratio, but I got a fund that is performing at 8% where other funds in that same genre are performing at 10 or 12. And so, yeah, you saved a half a percent over here, but you gave up performance of three, four, five points. That's right. And so, Dave, to me, it's a lot like in the mortgage industry where people would get so caught up in the contract rate, they didn't pay attention to

the annual percentage rate. Exactly. And that's where you would have this contract rate of 4%, but they're charging you three points on the back. Yeah. I would tell people, you've got to learn the overall math. And the beauty of it is, is now with all the nuances in the financial world, you don't have to learn it and figure it out yourself. We've got smart investor pros that will help guide you. Yeah, but again, most of them are not going to be selling you a no-load.

They can if they put an unmanaged fund uh portfolio you can do that they can roll it in there and then turn the a shares into b or c shares and roll them into that that's all cool uh and a lot of them are doing that a lot of the ras are going that way a lot of our smart investor pros are going that way either way is fine um but the bottom line is i spend about five percent of my time when I'm analyzing a mutual fund looking at the expense ratio. I glance at it. Right. And if it's over two, I got some kind of issue. Right.

Over a 10-year. If it's over two, that's high. I mean, that's a lot. And I'm going to really look and go, what the crap's going on here? But if it's north of one but south of two, I'm just going to move on because then i'm starting to look at comparing annual rates of return over a period of time the historical how the historical performance of the fund and that's how i personally pick my funds because if you save a quarter of a percent but you lose out on two percent of performance you performance, you didn't win.

That's exactly right. It's like I'm being a cheapskate, but I bought something so cheap it breaks. It's the same kind of thing. No, no, you're absolutely right. But again, for people out there whose eyes just glazed over as we were talking about expense ratios, just understand you've got a SmartVestor Pro. We caused a car wreck. We really did, absolutely. But you can have that conversation and ask the question and have a dialogue please don't ever

be that intimidated that you won't ask them i promise they will talk with you not at you yeah heart of a teacher is what you're looking for you need to learn these kinds of things yes but i i mean when i first got into this because i'm such a nerd when i first got my securities license i was in my 20s a thousand years ago. That was what I did. I spent all my time down in all this stuff, and then I came to realize it just doesn't matter. Yeah.

It's such a small percentage of the decision-making that you should be doing that if you'll look at a good rate of return on a historical performance, pick your mutual fund that way, and be steady. Yep. Over time, you'll be a millionaire. And I'm telling you, that's what these millionaires were doing. They invested 15% of their income over time. And I'm telling you, it works. The recipe works.

Our question of the day comes from Blinds.com. They have a 100% satisfaction guarantee. Means even if you mismeasure, you pick the wrong color, they'll remake your window blinds for free. You get free samples, free shipping. And with the new promos they run every month you'll save even more use the promo code ramsey and get the best possible deal our question chris yep so today the question is i make six this is from will in kentucky says i make 60 000 a year and i'm 23 years old he's doing pretty good i'm starting on baby step four and want to know which Roth option to utilize. The $6,000 maximum into the Roth IRA will only be 10% of my income,

but should I always put the max into that and the rest into my Roth 401k or put all 15% into the Roth 401k? Well, Will, first and foremost, whenever you hear Roth, I want you to get tingly because I do, because that means after-tax growth. So I would go to tax-free growth. And so it's going to grow and grow, and the government can't touch it. Go with the Roth 401k, my friend. You're going to have a great opportunity to be able to put 15% there and stay focused. The only way I would not do that is if the mutual funds inside your Roth offering suck.

Yeah, well. Then I might do 10% in my Roth, personal, and then do the rest in the 401k. In the 401k. But if you've got decent options inside the 401k, I'd go with exactly what Chris said. Do it. This is the Dave Ramsey Show. We're all going through challenges, and our lives have been impacted in ways we've never anticipated. If we learned anything, it's that change is constant, and having a plan is crucial to our family's livelihood. This is why I talk about term life insurance every day. And for those of you that haven't taken care of this for your family,

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We see real human beings out here. It's amazing and awesome. Things are getting back to the way they used to be in terms of just social interaction. Thank goodness. We're so happy to have people here. And, Dave, there are good-looking people out there, too, now. Yes, there are. I mean.

Except that one guy. Quit talking about me, Dave. Quit talking about me in that way. Speaking of people on the debt-free stage right here doing their debt-free scream, Jason and Cheryl are with us. Hey, guys. How are you? Hey, Dave.

How's it going? We're so excited to be here. Oh, yeah. We're honored to have you guys. Where do you live? Tampa, Florida. Oh, cool. So you made the trip up from Florida to Tennessee. Things are pretty normal in Florida these days, aren't they?

Yes, they're getting around. Kind of opening back up? Yeah. Yeah, good. Well, I'm glad. Well, welcome. So good to have you guys. So how much debt have you paid off? $235,574.68. Wow. And how long did this take? 37 months.

Man, you kicked it. Okay. Your range of income during that time? Started at $118,000, ended at $142,000. Cool. What do you guys do for a living? I'm an office manager. And I work for the county.

I help parents who are addicted to drugs hopefully get their kids back after they've lost them. Oh, wow. Okay. Hey, what did you guys pay off? Tell me the kind of debt you got rid of with this $235,000. Well, first we paid off our car. Okay. Then we paid off our rental house, and then we paid off our house.

Wow. Wow. So you cash flowed all of this? We paid off two houses and a car, and we also cash flowed a pool during that time also. And nothing out of savings? Nope. Who's the saver in this couple? I am.

Look, when Jason put his head down, he wouldn't even look at you. Yeah. That's fantastic. He knows. Yeah, I mean, this is a beans and rice budget. It is, definitely. Very serious. And you paid off the house and everything.

Yes, we paid off two houses. We're looking at weird people! You're officially weird. Got the t-shirts to prove it. Yes, I looking at weird people you're officially weird got the t-shirts to prove yes i'm with weird i'm with weird great t-shirts i love it very cool so tell me the story what happened three years ago well i started a side hustle i do social media marketing and one year i was sitting with one of my friends outside of work and i said to her how i'd made 25 000 that year on my side hustle and she said to her how I'd made $25,000 that year on my side hustle. And she said to me, Cheryl, what did you spend that on? And I was totally clueless. I couldn't think of one thing I'd spent that $25,000 on. And I came home to Jason and I said, what did we spend that money on? And he had no clue. And I just said, after that point, my side hustle was a blessing for us. It could go away tomorrow. And I didn't want to look back

five years from now and wonder what we had spent that money on, where it had went. So I wanted to put it towards something and be able to have, you know, accountability for it. Yeah, very cool. Want to know where it went. Well, it's disgusting to feel like where'd it go. Yeah. I have nothing to show for it.

Nothing. Yeah. So how'd you get in touch with us? Well, he had followed your program before. And so I said, you know, how do we, what are we going to do? We need to be accountable for this money. So he said, why don't we do Dave Ramsey? I'd kind of been Davish before in the past.

So we sat down. I bought your Total Money Makeover book. We read it. I listened to your podcast 24-7 when I was in the car for three years straight. My friends would get in the car and they'd get so annoyed that I had Dave Ramsey on again. And we went to a couple live events, one that you had in Orlando. So it just kept us focused. I had to stay focused.

So, Jason, you opened up a can of worms when you said go do that Dave Ramsey thing. She went all in. Just a little, yes. Man. Yeah. Drink the Kool-Aid. Yes. Wow.

I'm all or nothing. I love it. All or nothing type of girl. Very cool. So, Jason, after this is done, how does it feel? It's incredible. Was it worth it? Oh, yes.

Will you guys ever go back in debt? Never. Never. Never. Definitely, Dave. And I do want to put out there also, 17 years ago, I was homeless and addicted to drugs. So, here I am 17 years later I own two homes and I'm just so grateful for your program because through my recovery and through your program I

am like a success story and I just want people who out there who are suffering from addiction know that they can get sober suffering from financial stress that they can get through it and that if you're dedicated you can you can be successful how long y'all been married uh 12 years okay how long you've been dry 17 years 17 17 years ago you got dry yep and um what kind of drugs were you doing uh cocaine wow yeah good for you yeah it's a hard one to kick it is so and now i help people who are addicted hopefully like i said get their kids back and you know oh yeah your job has got real meaning now. It definitely does. So I've been working in the substance abuse field for many years. You're a walking poster child and this can be done, too.

I am. You can be homeless and living on the streets and now we own two houses. The sky's the limit. Got a great marriage, great kids, everything. Life can turn around. So blessed. I'm so proud of you. This is very cool. One thing we did with the kids was when we started this journey we made them make construction paper rings for every mortgage payment a thousand dollars for every ring and they drew our house and we hung it across our kitchen and we had 143 rings hanging across the kitchen and every month when we paid off extra payments we'd make the kids cut off each ring

and tell us what we were doing and what our goal was and to own our house and what that meant to them. And these are the final six rings that they cut. How old are they? They're 10 and 8. They'll never forget that. They'll never forget that. They'll be telling their grandkids, I remember when my mama put construction paper across the kitchen and we paid off our house. Yeah, and the changes kept getting

smaller and smaller and smaller every month you changed your family tree we did so the magnitude of what you've done young lady uh i am very proud of you thank you um in that journey you had people telling you what you could and couldn't do and i'm really, what got you to the point where you started to take control? What got you through that dark period to get you to this light? Well, actually, I got arrested. And I looked back at my life and said, what am I doing with my life? I went to college. My parents didn't raise me this way. I don't want to be this person. And I need to make some serious changes. And I know that anything in life, you have to put in 100%. If you only put in 99%,

you're not going to be successful. It's that 1% will get you every time. So I said, you know what, I'm putting 100% into my recovery, changing my life, becoming a better person and giving back what was given to me. Yeah. So paying off $236,000 is a big chore, but not after you've climbed some other mountains. No, definitely not. Pretty amazing, you guys. Thanks. You're heroes. I'm proud of you. Very well done. All right, Jason, what's the secret to getting out of debt? For me, it's working on the budget.

All right. You have to stick to it and just keep it going. It works if you work it. So you're a systems guy. Yes. You like the system and having a plan. Yep, I'm the geek. Okay, and she's the cheerleader.

Yes. Yeah, okay. Very cool. What do you tell people the secret is, Cheryl? Well, I think it geek. Okay, and she's the cheerleader? Yes. Yeah, okay. Very cool. What do you tell people the secret is, Cheryl? Well, I think it's a couple things. My mom told me right when I got into recovery that commitment is making a decision that doesn't have an exit plan. So you have to make a commitment that does not have an exit plan. Second, you've got to really assess what is a need and a want.

We can always say, I need this, I need clothes. Clothes are a need. But you've got to be very frugal we um shopped at goodwill we used coupons we bought generic we cut everything like i need clothes but i don't need to go to jc pennies i don't need to go to kohl's i don't even need to go to walmart i could live off goodwill if i want to be successful so what's a need and what's a want be super frugal. People make fun of you making 142,000 and thinking like that? No, not really. I mean, I keep trying to get my friends to drink the Kool-Aid. Maybe they will, maybe they won't, but. But you got two paid for houses. I do. Hey, sometimes the best example is living it. Yes, yeah, definitely. It's just living it. And

my company is actually offering smart dollar now. They sent out an email last week, so I was like, go figure. Yeah, so I'm hoping I can help give back to the people in the county on our success story. Let's get the kids in the shot for the debt-free scream. Their names again? This is Joshua. He's 10. And this is Cameron. He's 8.

All right. Good-looking boys. Yeah, they are. Very cool. And we're all weird. All right, you are for sure. Got the t-shirts to prove it and two paid for houses. Yes.

We got a copy of Chris's book for you, Everyday Millionaire, signed by him. That's where you're going next. That's the next chapter in your story for sure. Thanks. Proud of you, hero. Way to go, guys. Thank you. Well done.

Jason and Cheryl, Tampa, Florida. Joshua and Cameron, hope you practiced this. We did. Count it down. $236,000 paid off in 37 months, making $118,000 to $142,000 did count it down 236 000 paid off in 37 months making 118 to 142 count it down let's hear a debt-free scream ready three two one and construction paper links everywhere. 140 of them.

They're going to get the kitchen back, Dave. I love it. Wow. This is the Dave Ramsey Show. so hey folks father's day is just around the corner if you're looking for the perfect Hey, folks. Father's Day is just around the corner. If you're looking for the perfect, unique gift to give dad, I've got it. Grip 6 belts. If dad's like me, he's not a fan of traditional belts.

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and source their materials in the u.s so show dad you love him and get a grip six belt to get the dave ramsey special visit grip6.com hello everyone you are listening to the dave ramsey show i'm chris hogan in here with dave and we are having an absolute blast we just finished doing a debt-free screen with jason Cheryl, and I have to tell you, absolutely blew us away. Paid off over $236,000, and Dave, I'm telling you

something, this story touches my heart. It does. Our whole family tree changed. My gosh. Those kids getting that, clipping those construction paper links. I'm telling you. And she said, I was torn whether to share that part of my story about the drug abuse and the history. And I said, you know what?

That took courage. Yeah. Because somebody else, life happens, people. You get knocked down. You knock yourself down. But you can always get back up because your Lord and Savior believes in you. And it's a matter of what you choose to do from that point forward determines your destiny. Yeah, don't ever be ashamed to tell a story about victory.

Boy, oh boy. I mean, you don't like hearing a victory story? Something wrong with you? That's true. That is so true. I've never faced addiction of that type um of any type for that matter but uh i i've worked with folks that struggle with the just the habits on money not to the addictive level because i'm we're not counselors we're not licensed people in those areas but we work with people who just struggle

so hard with changing behaviors yeah and so when you can conquer the person in your mirror, you're a hero, man. You can do some stuff. You're a hero. Yeah. And not wait around on something, you know, the White House to fix your problems, the Congress, the Island of Misfit Toys is not going to fix your problems. You know, you just say, I got it. I know who the problem is and I know who the solution is.

When you do that, you can do just about anything you set your mind to. Dave, the statement she made about commitment, I'm going to steal it, so Cheryl, look for me to tweet this at some point. Commitment is a decision that doesn't have an exit plan. Yep. Boy, that's powerful right there. Cortez burning the ships.

It is. I'm telling you. Burn the ships. Listen, if you're out there and you just heard that debt-free scream, and if you're smart enough, you're watching it on YouTube, because I'm going to tell you something. When you see one of these happen, you can see and feel the emotional chains falling off of people and celebrating that journey. This is a journey that you can take as well.

And it's an invitation that you have to grab for you and your family. When you get in the end zone in the super bowl you need to celebrate yes you do yes you do you need to celebrate it's amazing all right uh andrew's with us in california hey andrew welcome to the dave ramsey show hey dave hey chris um i have a question for you guys so i recently got a new job as a man of a department, and I did the entire interview and everything over the phone because of the COVID pandemic. When I got there, everyone was pretty much stunned silence because I'm only 28 years old, and the only other person that's younger than me there is the intern in the department. So I was wondering, how do I manage people that are significantly my elder and still be able to, you know, command authority and to not have them say, well, you just don't understand because you're too young.

Andrew, listen to me. It is like you were tailored to call in to ask me that question. I was in the exact same situation you were coming out of college, going to be a full-time coach. I was coaching people that were older than me. I was working with people that were 10, 15 years older than me and eventually went off into the business world only to have the same situation. Let me encourage you to do a couple of things. Number one, remain authentically yourself. Don't try to become anyone else. Don't pretend to be anyone else. And talk to people, not at them. The title doesn't give

you the authority. The title gives you the title. How you treat people, how you interact, and how you listen and talk with them and not at them that will gain the relationship that you need with them to be able to properly lead them yeah that's good andrew and what you know the fact that you ask the question uh means that you're exactly where you need to be you're scared out of your freaking mind and that's a good place to start because that means you're not an arrogant young twerp who hadn't got you know you're you're born on third base, think you hit a triple. You're not that guy. Okay.

And so that's good news. So if I were in your shoes, number one, you can't command authority. You have to earn it. They can give you a position, but that just makes you a boss. It doesn't make you a leader. Bosses push, leaders pull. John Maxwell says that leadership is influence. And so how do you gain influence?

Well, flip it over. How do people gain influence with you? If somebody wanted to influence you, how would they influence you? First, you would have to know that they actually care about you. You'd actually know that they care about Andrew, the person who's 28 years old, who's got a new position he's a little bit freaked out about. They've got to know that about you. If I want to influence you, I've got to know that about you

and have to care enough to hear about your story and let you talk. And then I figure out how I can serve you because leadership is service. And how can I help you get your job done better and so the way that might sound in a sentence or two if you're dealing with a 50 year old who's been doing his job and he knows how to do his job uh better than you know how to do his job probably because he's been doing it a long time you might just say that and just go you know bob you've been doing this since before i was born man you know what you're doing my department is doing working longer than i've been born yeah yeah yeah and so just you know just say that and go you've been doing this

longer than that and so help me understand how i can help you because my job is the leaders not to boss you around my job is to help you get better and the only way i can do that is if you teach me a little bit show me what you've been doing and um an example in my situation i'm not younger but i'm inept is when i walk into one of our technology meetings i have i think they're speaking german in there i have no idea what they're talking about and and they're using all these initials like they're in the military or something and i have no idea what all these initials mean and so i have to just stop them and go guys i don't know what you're talking about teach me about this i want to learn about this because i know how to sell i know how to run a business but i don't know how to do that part

in technology digital marketing is different and so you got to teach me about it and then i can learn how i can serve you and help you and get blocks and get roadblocks out of your way so you can do your job better and easier that's my job is the leaders to clear the road for you and i gotta know a little bit i gotta learn a little bit and i gotta care a lot and uh the last thing is don't be afraid uh to actually get to be uh to get very very personal with people to the extent that they will allow you to and that means just ask about their wife ask about their dog ask about their kids ask about their mama that's sick um and check in on them send a send a grandma or two some flowers when she's in the hospital from you out of your own pocket and uh just note from you and tell them

tell grandma that uh george over here bob over here does a great job and you enjoy working with him and he you heard about her illness and just just love people yeah and serve them and you do all of that and start reading leadership books everything you can get your hands on by john maxwell everything you can get your hands on by uh uh i don't know jim collins simon cynic lynch yoni pat lynch yoni for sure yeah and then when you do have to hold someone accountable always in private and always with low tones and no profanity well and uh just just be have some class and you can almost do that from a humble perspective.

It's like, I can't seem to get you there, and it's worrying me, because you're going to have to get there in order to stay. And help me get you there. And that can be your reprimand. It doesn't have to be all bossy, but you really can't command authority. The only place that really happens is in the military. That's exactly right. And, Andrew, I'm going to tell you this. I'm going to play Santa Claus here, and I'm going to send you Dave's book, Entree Leadership.

Madison will get your information and send that to you. That's what I wish I would have had coming out of grad school. I was not properly prepared for leadership having been in those roles. And so I made mistakes as we go, but this book will help you. Communicate, care, and have connection with the people on your team, and watch how high you help them go. Because if you can help them understand you're there to help them, as Dave said, serve them, it will change the spirit of things. Instead, Dave, I was a young idiot that kicked down the door like Wyatt Earp and came in

trying to boss everybody around, and that didn't work. I did that. It got me fired after about two weeks after my promotion. Ugh. I was an idiot. Yeah. Well, welcome to the Former Idiots Club. This is called the Dave Ramsey Show. show.

Hey, it's Kelly, associate producer and phone screener for The Dave Ramsey Show. This episode is over, but if you've heard about an event, product, or service and didn't have a chance to write it down, don't worry. We list everything you've heard about during this episode in the podcast show notes or head to DaveRamsey.com. Thanks for listening.