The Ramsey Show - App - This Is What Comes From Participation Trophy Culture! (Hour 1)

Episode Date: April 3, 2023

Dave Ramsey & Ken Coleman answer your questions and discuss: "Should we purchase rental property?"  "How can I budget on irregular income when I'm young?" "I have more money in the bank than FDIC covers" from the blog: Why Your Money Is Safe in a Bank: A Look at FDIC Insurance and What It Covers, Teaching kids about money, What to do with an inheritance, from the blog: What to Do With an Inheritance, Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Want a plan for your money? Take our FREE 3 minute assessment: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Live from the headquarters of Ramsey Solutions, broadcasting from the pods of Moving and Storage Studios, it's The Ramsey Show, where we help people do work they love, build wealth, and create actual amazing relationships. Thanks for joining us america the call is free 888-825-5225 as i said it's free and some say the advice is worth exactly what you pay for it ramsey personality number one best-selling author and host of the ken coleman show ken coleman is my co-host today he is the ramsey personality in charge of getting your butt to work i mean he helps you get jobs and work and uh and he will put the lash across get to work

yeah yeah that's it and so 888-825-5225 we'll help you with your career aspirations your job your money and your life it It's what we do here. 888-825-5225. Annie starts this hour in Sacramento. Hi, Annie. Welcome to the Ramsey Show. Oh, it's Ann. Hi, Ann.

Welcome to the Ramsey Show. Hi. Thank you so much for taking my call. Sure. How can we help? I just have a question. I'm in a quandary, and I would appreciate a question. I, I, I'm in a quandary and I would appreciate your advice. So I recently received, uh, about $350,000, um, of inheritance money from my sweet, hardworking, industrious parents. And, um, yeah. And I, I really don't want, I really want to maximize the potential of it.

And I'm in my mid-50s. My husband's in his late 50s. You know, it's time to for sure make sure that we have. Anyway, we would like to buy some real estate, but we're looking outside of California because California is very landlord unfriendly and also the multiples anywhere around our house, you just can't find the multiples for the maximum return on investment and for building wealth. So what do you think?

Because I know that you tend to like to have real estate cost money. Yeah, long-distance landlording generally doesn't end well. Yeah. Because it's just very hard to keep your eyes on the property, your eyes on, even if you have a property management firm, your eyes on the property management firm. You know, you need to drive by your property every so often. I drove by one of ours the other day and I went, good Lord, we need to cut those bushes. You know, and for some reason, no one else had thought that.

So no one watches it quite like you do, even if you've got a good property management team, and I do. But that's the problem, is you just never see it it's out of sight out of mind and it could be completely torn down and you would never know it unless somebody told you and that's the that's the thing that bothers me about it so i don't disagree with how you got to your question the multiples are crazy and the laws are crazy it is california after all and um so i mean it's just crazy land so what do i know but yeah i love you people in california but anyway the uh uh some of you and the um anyway that's the thing i don't know have you got any debt no none no our house is paid off.

We don't like debt. We're kind of like you that way. We just don't like it. Yeah. So if I were going to do it, and I wouldn't do it, but you have good reasons for considering it in your case, if I were going to go, I would want something that I could access and get to frequently for other reasons like have you got relatives

in a town that is got better multiples in a good real strong real estate market um I don't know reasons to go visit is what I was looking for okay no you don't then okay because like oh my sister and I go see her three times a year and she lives in Phoenix okay well let's talk about Phoenix you know then or something like that but you don't then okay because like oh my sister and i go see her three times a year and she lives in phoenix okay well let's talk about phoenix you know then or something like that but you don't so that's that but it you know an airport connection to sacramento which is there's a lot of that's not a problem uh assuming the other end works and um you know something where you're gonna pop over there and go hey we're gonna go over there twice a year and you know uh stay in a hotel and enjoy the place and we're going to san antonio enjoy the river walk hey we're going to go over there twice a year and you know uh stay in a hotel and

enjoy the place and we're going to san antonio enjoy the river walk and we're going to have a property there you know or something but you got to have a reason to go around be around it because you're putting a very precious portion of your money otherwise i would just do some mutual funds yeah dave that's that my question dave, is the return on that, on the rental property, because you've got a lot of them, you understand that, versus the return on investing the way we teach with this sum of money. Where does she come out best? Yeah, if you get a well-run rental property, it's more hassle, but you're going to make more money on a well-run rental property than you are on mutual funds, but it's a lot more hassle. And you've got extra risk here,

because now we've got it in this mythical city that I just made up so we'll call it san antonio and so you know you're going to be bumping over there and uh or what would be closer boise you could jump over to boise right uh that's not a bad jump from sacramento uh that kind of a thing and uh you know you might you could do that but you need to go you know uh we, we're going to buy it in Jackson Hole because we go skiing twice a year, you know, or whatever. I don't know. But just think about where you're doing that. Otherwise, I would keep it real simple and just go to mutual funds. You're going to make a little less return, but you're going to have a lot less risk because of your situation being out of state and that kind of a thing.

I do not buy properties out of state except for toys that i live in and play in but not for rental and so i've got properties but they're they're stuff that we go hang out at you know it's not we don't we don't rent them and so um and that's a pain in the butt because i got to get people to work on them yeah right because the more stuff you own the more repairmen you have to know. It's a rule. So you're telling me when you drove by that house the other day and saw the bushes, you didn't pull the truck over and pull out your little trimmer and just take care of it?

I didn't get my chainsaw out of my truck. You're telling me you didn't do that? I was close. I almost went back to the barn and got a chainsaw. But no, I'll let somebody else do it. And man, it looks better, too. It looks like it got a haircut and it needed one. Yeah.

You know those old ugly bagworm bushes that grow up and take over the whole corner of the house? Yes. it and man it looks better too it looks like it got a haircut and it needed one yeah yeah you know those old ugly bagworm bushes that grow up and take over the whole corner of the house yes cute when you put them out they are they're not cute when they grow up they get gnarly beasties that's right so yeah just destroyed the whole curb appeal it was awful so yeah real estate is a wonderful place to put money folks especially right now it's a good time to buy real estate whether you're doing it as an investment whether you're buying a home even with the rates where they are even with the rates where their rates go back down just refinance if you're borrowing but you're not going to borrow to invest if you're around here anyway but the the point is you can

make more money on real estate it's good yeah but you've got to choose it carefully, and it needs to be something that's a predictable outcome. Don't try to get these unique properties. Unique property means very limited market. Yeah, right. That's what that means. And that means it's going to have very limited resale value because you have limited customers when you get ready to resell it. So its increase in value is very limited. So do those tend to be more risky?

We call them white elephants. Yeah, of course they're, you know, it's a very unique, it's a cool property, but, you know, you buy a, you know, a highly contemporary piece of architecture in a town that's a Civil War town and it's full of antebellums you know right you just you just bought a white elephant bubba i mean or vice versa you put up an antebellum in the middle of a dead gum you know modern town full of contemporaries same situation you just built yourself a white elephant and uh it's a problem you're gonna get yourself in a mess that's but it's a good question thank you for calling in we'll help you anytime you jump in here.

That's what we're for. This is The Ramsey Show. Ken Coleman, Ramsey personality, number one bestselling author of the book, Paycheck to Purpose, is my co-host today. Today's question of the day sponsored by neighborly your hub for home services as the weather warms up neighborly can help you find local service pros like the grounds guys five star painting and mosquito joe which you would need in nashville uh to turn your yeah we've got mosquitoes the size of eagles here and uh to turn your outdoor space into your

favorite space and help you find all the help you need at neighborly.com. We're so honored to have them as a sponsor now. And April is National Financial Literacy Month. All month long, teachers and students in classrooms across America are taking the time to talk about the importance of learning money skills. Today's question comes from Alex in Minnesota. How do you create a budget that works when you are young and your income is inconsistent and unpredictable? So on this one, Dave, we've got a young person, presumably a student, who doesn't have a lot of household expenses. He's living at home, potentially. And what we want to focus on there is, what are your

expenses? What are mom and dad requiring of you? Are you doing gas money, helping out with some of your insurance, whatever that is? What are your spending habits, things you're saving for? And I think the budget there, Dave, is kind of created around that when you don't have a livelihood or the four walls that we teach. Exactly. Exactly. And that's what we teach kids, students, in the high school curriculum, foundations and personal finance. It's taught in 48% of the high schools in America now, our high school curriculum, Foundations in Personal Finance. It's taught in 48% of the high schools in America now, our high school curriculum is. And what we teach folks there, Alex, is exactly what Ken said.

Your purpose of doing a budget when you're in high school or junior high school, either one, is not to become wealthy. It's not to become a master budget person. It's to start to build the muscle of telling your money what to do instead of wondering where it went. Which, by the way, is all a budget is. Adults devise a plan and follow it. Children, regardless of their age, do what feels good. And so if you're 52 and you do what feels good, you are by definition emotionally a child. You're immature.

I deserve it. Oh, shut up. You don't deserve anything you haven't earned. That's when you deserve it. You're not entitled to a new car. I work so hard. Oh, really? You're the only one.

You whiner. Okay, so that's a child, regardless of if they're 12 or they're 52. And we hear them all the time saying stuff like that. Well, you don't know. Yes, I do know. I've done it all. I'm old, okay? And so I've seen it all, heard it all.

The thing is, so the whole thing here, Alex, is to get you to the other side of that and say, okay say okay as an adult because we're training young people to be good adults and training young people to be good adults involves telling your money what to do instead of wondering where it went and so all you got to do is go this month or i want to buy a car by september okay how are we going to do that yeah and. And so you begin to go, okay, if it's a $5,000 car, my mom and dad are going to match whatever I come up with. So let's say they're going to match your 2,500. And you begin to say, all right, how much money do I need to make? Got five months. I need 500 bucks. So I got to get after it. And this is interesting, Dave,

what I love about financial literacy and something that you just said, I want to add to the reason we have movements right now among a lot of young people on social media that's called the anti-work movement is because they've never been taught real financial literacy. Because this young man, you take this question right here, and he begins to understand what we just said to him. He begins to tell his money what to do, the budget, as Dave just laid out. And here's what happens. Individual responsibility flourishes when you get taught that you can have enough money. But this anti-work movement, all this junk that's out there is coming from young people who've never been taught how to manage their money, and thus they don't have enough. And then they begin

to say, I work too hard. I don't have enough money. I want the government to supply me the money. And I'm not trying to make this political because it's not. It's actually sociological. When you understand how to handle money as a young person with what we teach in Financial Literacy Month and everything we're doing. You control your destiny. If you'll get off your little butt. And then they become hard workers because they go, I like what money allows me to do. I can be generous. I can be generous. I can be helpful. That's right.

I can be calm. I don't have to be pissed off all the time. That's true. I'm not broke. Yeah, right. You know, it's just, this all goes together. See, I thought the anti-work movement was because college professors were students of Karl Marx and had passed that along to college students and reinforced the fact that they got a participation trophy instead of keeping score when they were playing soccer and they were sick.

Well, you just nailed the two other reasons, right? But the reasons those messages stick is because when you don't have any money and you're broke, those messages make more sense. Yeah. But to somebody who's got money, you go, what are you talking about? That's a pay cut. If you're five years old, you know it's more fun to score. There's that. You just do. Right. I mean, you don't's more fun to score. There's that. You just do. Right.

I mean, you don't have to be a psychologist to figure this one out. You smile more when you score than when you don't score. So go score. That's what work is. It's score. Go score. It's what it is. Just go score.

Yeah. Go put the ball in the hoop, man. That's what you do. Right. And you're going to have more joy and more dignity and more choices when you do that now alex has not got that problem he's a guy asking a question on this show he's ready to be a man he's a great young man and so i mean we got a lot of great young people out there that's right but uh we do have a group of participation trophy graduates

that's exactly our intent on making mediocrity their goal. And it's a problem. It is. And by the way, this is what leads to credit card debt at an all-time high, student loans all-time high. I've got to rely on somebody else to give me money so that I can get the life I want. And that is counterintuitive. Well, and it leads to record numbers of 28-year-olds living in their mother's basement. Seven million men not working because they don't like their job status. And as the lady on CBS News said the other day, that's highly unattractive.

That's right. Hard to get a date. Yeah, it's true. It's true. You don't feel real eligible because you're not. Right. He's a dreamer, daddy. Yeah, that's right.

He is. That's all he does. That's right. It means you're going to live in my basement. You're dating a dreamer. God help me. Yeah. I'd love. He is. That's all he does. That's right. It means you're going to live in my basement. You're dating a dreamer. Oh, God help me. I'd love for you to say he's a doer. Please tell me he's a doer.

Yes. He has big dreams, and he's doing things to make those dreams come true. That I like. I like that a lot. You see, this is highly attractive. It turns out mediocrity is really kind of smelly. Well, it's miserable. They can try to put another label on it, but a person who's leading a mediocre life.

You act like you're cool. You act like you're happy. I'm beating the man by being a communist. Yeah, well, you'll notice that anybody who says these kind of things on social media is always angry. I tell you what you never see. An angry capitalist. An angry person with a lot of money and options. You see anger where I feel limited, and they start by being limited financially,

because we don't teach financial literacy. Ramsey Solutions does. That's why we're in schools. But if we don't teach this, then what happens is they come through the system, Dave, and the system tells them, you need a credit card so that you have a backup plan. You need to get a student loan so you can get $200,000 in debt to get a degree degree in left-handed puppetry so you can be successful and you can be a barista right oh by the way the only people winning in that system are the people giving the loans and the credit cards interestingly enough they're the ones that are winning big credit cards at an all-time high i'm gonna stick it to the man i'm gonna make sure he gets really rich right and they're upset against rich people the people

ought to be upset against are the are the financial purveyors of all of the mediocrity and frustration in your life see that's the game you want to be mad at somebody is the people who make really awesome commercials selling your credit card they're the best commercials on tv here's the thing if your job sucks mean, you're not in Russia. No. Just go get another one. That's right. That's right.

If your boss sucks, get you another one. That's exactly right. Why is this hard? Yeah, well, the gig economy is exploding right now, Dave. Freelance work, people can get out of debt faster. We've had nurses call in on this program. I don't like what Walmart pays. That's right.

Don't work for Walmart. Then go work somewhere else. We've got an unbelievable job economy right now. 3.6% unemployment. My goal was never to work at McDonald's. It was never a goal of mine. Unless it's the one I own

in St. Thomas, but no thank you. And that's no one's goal, but see, we live in a world now where you don't have to go work at McDonald's. You can go start your own business online today. I never had to. That's the point. I know.

I used to cut grass. And my buddies, this was 1,000 years ago when dinosaurs roamed the earth. My buddies were making $1.65 minimum wage. Wow. This is how long ago it was. True story. I was 12 years old. And I cut grass for $3 for a yard,

and I figured out I could cut the grass in one hour, so I was making double what my buddies were making as whopper floppers. So I've never been held to the standard of I am forced to do something. Yes. And you aren't either. You can choose to go do anything you want to do, boys and girls. This is still America. That's right. It's weirder America, boys and girls. This is still America. That's right.

It's weirder America than ever before, but it's still America. This is The Ramsey Show. Ken Coleman, Ramsey personality, is my co-host today. Thank you for joining us. This is common sense for your life. Common Sense for your dollars and cents. It's called The Ramsey Show, 888-825-5225.

If you are a new listener, and based on the ratings and the rankings that we get frequently, we have a whole bunch of new listeners. Thank you very, very much. We're in the top 15 podcasts in the entire world of any kind wow i need to call my mom real quick you know you should you should call her right now she should have called you should have called her earlier but

now you can call her but and um now you've got something to tell her yes finally and uh yeah so i mean really that's out of millions of podcasts, literally, without exaggeration. We're in the top 15. And we know all of these things. So we know there's a bunch of you new out there. Thank you. And if you're new and you don't know what we're talking about around here, when we say code words like Ramsey code words, like baby steps or debt snowballs or stuff like that,

then it's pretty simple. Just go to the RamseySolutions.com website. It's free. Click on Get Started. It's free, and we'll help you figure out where you are and what your next steps are, and it's free. Did I mention it's free? So RamseySolutions.com, click Get Started, and we'll walk you through this process. Pam's in Flagstaff, Arizona. Hi, Pam, how are you? I'm doing good, thank you. I'll try to make this quick. I'm 69, my husband is 70, and he's still working, but I want him to retire, and I have been putting money away and money away, and my bank told me that part of our money is not covered by fdic i think i got that right correct and i don't know

what to do with over that okay we've got 250 000 and coverage each so 500 000 if it's got both of your names on it um in a typical bank so you're sitting on over a half million dollars cash no they told i know we've only got like 350 okay but they told me that it only covers the way you've got it set up okay you can just move the other uh if you want to keep it all in cash just move it to a different bank under what a savings or yeah just put it in i mean what's it under now savings okay i mean hopefully. I mean, hopefully, okay, there's two issues here. The question you asked and the question you didn't ask. Okay. The question you asked was, how do I get FDIC insurance?

Each bank can give you $250,000. So as long as you don't have more than $250,000 in any bank, you have coverage. Total of all of your accounts in that bank. Okay. So if you have 10 accounts at the bank they total cannot total up more than 250 if you want fdic coverage now number two you there's three questions two um you didn't ask number two i don't think your bank's in danger i think your bank's fine okay svb bank is was an anomaly it is a weird it was a weird bank of a bunch of players a bunch of venture capitalist goobs in tech ville called

silicon valley and they were a bunch of high-tech high-risk companies dumped a whole bunch of cash in there and the bank was out of control your bank in flagstaff arizona is very likely not out of control i have more than the fdic limit in my bank and i am zero nervous about it okay that's question number two no question number three is why are you sitting on three hundred fifty thousand dollars in cash why don't we invest some of it because i didn't think stupidity on my part i didn't think at our age investing money would be a good idea. Are either one of you ill? That depends on which one you ask. I didn't ask if you were a hypochondriac.

I asked if you were really ill. That's a great answer. You're awesome. You're amazing, Pam. You're my favorite call of the day. I love it. Well, I did have cancer, and I had surgery, and I have to go back every three months to get checked.

Okay, but you're currently in remission? Yeah. Okay. And is your husband ill, seriously? Not mentally, physically. Okay. Okay. Specify your question, mister.

Be clear, radio man. You let her into that, Dave. You let her into that one. Be clear, radio man. Okay. All right. So here's the thing. There's a high likelihood.

Let's pretend that you're 69 and you live 10 years. Okay. Let's pretend that you're 69 and you live 10 years. Okay? If you have $350,000 and it makes you 1%, that is $3,500. If you have $350,000 and it makes you 10%, that's $35,000. $30,000 difference for 10 years is $300 more thousand dollars that not investing the money could be costing you okay you're losing about 30 grand a year dang twenty five hundred dollars all right okay so now that i put it in a cd no no no no what i would tell you to do is i want you to sit down. I want you to go slow, okay? But I want to activate you to not leave it all in a bank making no money, okay? You basically buried it in a coffee can in the backyard is basically what you've done.

You didn't mean to, but you did. And so I want you to make more on it. So I want you to click on SmartVestor at Ramsey Solutions. Sit down with an investment professional. Let them begin to teach you. Do not do this because I said do it. Do not do it because they said do it. see solutions sit down with an investment professional let them begin to teach you do not do this because i said do it do not do it because they said do it do it because after learning over a series of two or three meetings that you learn about a type of mutual fund that

you can put this in that you feel safe you have peace about investing okay okay yeah and if you have peace about investing then you can do the numbers that i was talking about i'm not that much younger than you i'm 62 going on three and all of my investments are in mutual funds and in real estate none of it is sitting in the bank or the i've got money sitting in the bank but it's business money for the operations of this company not money that I'm counting on for retirement and so all of my long-term money that I'm going to be eating with is invested because I don't want to make three thousand per three hundred I want to make thirty five thousand per three hundred for per three hundred that's that's what I want you to learn about but I want you to do that with peace and your husband to have peace about it now if both of you are going to be gone in a year it doesn't matter but if you make it 10 years or 15 years then it matters a lot yeah and i think

the key here is with dave tolling you telling you to sit down with somebody and they explain it to you you can see the numbers you can see the historic percentages, and stop paying attention to the headlines. I would sit with a pro and get your head out of the news, and then once you understand it and you're not gripped by fear, you're going to be in a much better position. I think that's good advice for all of us as it relates to investing. Stop paying attention to the news and sit down with real pros

who know what they're doing and look at the history of the stock market. Look at the history of the returns based on the investment strategy that we teach. When you look at it, it's mind-blowing about how effective it is. Yep, absolutely. Now, Amy is with us in Dallas, Texas. Hi, Amy. Welcome to The Ramsey Show. Hi, Mr. Ramsey, Mr. Coleman. How are you guys? Great. How can we help? I think just, you know, in a nutshell, I'm kind of a little scared on how to manage the balance between giving my kids every advantage in the world because I can versus also making sure they learn the value of, you know, how hard we work for the money that we have. And, I don't know, just that balance. Well, I protected my kids from harm by protecting them from harm and by teaching them to work.

Yeah. Both. And I don't know, am I giving them a better advantage by paying for their school or college? Paying for their college doesn't ruin them if you've taught them to work. I paid for my kids' college, but all of them have a really strong work ethic as adults. But when you're four years old, by God, you clean your room. And let me add to this, also let them fail. Teaching them to work is one thing put them in situations

to learn and try new things whether it be an instrument or a sport and let them learn how to fail we have removed the pain of failure from these kids and therefore they grow up with no grit so they can't work hard because they have nothing to give yeah but we're not sending them to the salt mines no we're protecting please don't do that we love them we're not sending them to the salt mines. No. We're protecting them. Please don't do that. We love them. We're gentle with them. But when you're four, you clean up your room. When you're 14, by God, you clean up your room.

You know what I mean? This is it. This is The Ramsey Show. Ken Coleman, Ramsey personality, number one bestselling author, is my co-host today. Let's do a little mental exercise. Look ahead 90 days from now. It's July. You've got $1,000 sitting in the bank that you didn't have today.

Two of your credit card payments are gone. And you check out at the grocery store without having a panic attack. You know how that would feel? We call it financial peace. It's the first steps towards real wealth building and getting free from the debt monster. Some of you have never had that in your entire life, but today's the day. You can take control of your money. It starts with financial peace

university fpu is our nine-week course that's helped millions of people beat debt build wealth and become outrageously generous we're going to teach you everything about how to handle your money step by step so you don't have to worry about it anymore the average fpu graduate has an eight thousand dollar turnaround in just 90 days they They save $2,300 and pay off $5,700 in 90 days. $8,000. Richer in three months. On your way to being Baby Steps Millionaires. That means before summer break is over, you're going to feel completely different about your money.

Financial Peace University. Start it today at RamseySolutions.com slash FPU. RamseySolutions.com slash fpu ramsey solutions.com slash fpu kyler's in salt lake city hi kyler how are you good how are you doing dave better than i deserve what's up hey so i uh i recently found out my uh my grandpa passed away about eight months ago nine months ago um. Um, and, uh, found out through my dad that he had wanted to give, um, the remaining amount of his money, his house, his cars, um, the total sum of that money to his grandkids. Um, and so looking at what that would be, um, it's looking like it's going to be about $125,000 per grandkid.

To give you a little back sense of where we're at, I'm married. I'm 22. My wife's 20. We just bought a house. We moved in about two days ago. We got married about eight months ago. Stayed with my dad in his basement for those eight months. Saved up money. Was able to put it down on down payment, got a house with the ability to rent. Um, and so that's covering about 70, 75% of our mortgage right now. Cause we do have a renter in there. Um, so we have no debt. I have no school debt, no car debt. Um, my wife doesn't have any school debt as well. And so we're kind of in this, you know,

what should we do with that much money? You know, how does that, how can we use that to set us up? So just kind of wanted to see what you guys had to think about that, how to say about that. It's a very good question. And you're very wise to ask that question. A lot of people don't, they just get the money. then two years later they wonder what happened to it it just leaves and we have no idea where it went um happens to a lot of people uh so good for you you're way ahead of the curve i'm sorry about your granddad that's okay i appreciate that thank you were you close to him i i wasn't super close. It kind of got muffled two months prior to that. My mom had passed, and so it was kind of just this whole time of we didn't really know how to cope with any of it

because things just happened so fast. And so it kind of got buried along with the rest of the way life was going, but we're doing really good now. Married, got a house, lost mom, lost grandpa all in one year. Yeah. It's been a big year. It's been a big year off the back end of this little thing called COVID. Yeah. Wow. Yeah. You guys are, you guys are strong. Good for you. Proud of you. Thank you. Um, okay. So what is, how much is your balance on your mortgage? mortgage so the the house we bought was for five hundred and thirty thousand and we did we did it through an FHA loan we did it through a 30-year mortgage and our mortgage payment right now what is the balance on your mortgage it would be about five hundred thousand okay that's all they thought and what do you make

what's your household income? Yeah, so between my wife and I, I work in sales. She works in kind of the medical field. We pull in about 120,000, the two of us. Good for you. Okay. The shortest distance between where you are and wealth is to be debt-free and begin your long-term investing. Okay? And so you are debt-free except the your long-term investing. Okay?

And so you are debt-free except the house. Did I understand that correctly? Correct. Good. Good. And do you have any money in savings at all? We have about $5,000, $6,000 right now. We put down our down payment about a week ago.

Yeah. Okay. So you need a fully funded emergency fund. You don't have one. That is three to six months of your household expenses. Okay? In your case, that's probably $20,000. So we're going to use some of that money to round that out.

And then I want you to be resetting your budget and paying your 30-year mortgage like it's a 15. Okay. And then I want you to start putting 15% of your income into retirement in 401ks, Roth IRAs, Roth 401ks, whatever you got available to you in good growth stock mutual funds. That's baby steps one, two, three, and four. You don't have have kids yet or you would have already told me and um so baby step five is kids college we don't have to deal with that today you will in the future uh and then baby step six and if you follow these baby steps it's the shortest distance to

wealth that's why i'm always going to take you there okay and this is and where the money comes from doesn't change it it It's still the shortest distance. If you've got a bonus at work of $120, it's the same thing as getting an inheritance of $120. It's just got different emotions around it. But the application of it mathematically to cause you to become wealthy goes in exactly the same place. And so we're going to lead you towards paying off your house next.

And so we're going to set aside towards paying off your house next. And so we're going to set aside about $20,000 of this for your emergency fund and some small miscellaneous spending around the house that you pay cash for. If you need to move up in a car or anything like that, you pay cash for it. And then the remaining amount, roughly $100,000, is going to go towards this mortgage and reduce your mortgage. And then I want you to pay that mortgage off in about the next four or five years. Pay it off. Translation, you'll be 27 with a paid-for, by then, house worth $700,000.

Translation, you're going to be a millionaire before you're 30 if you do what I freaking tell you to do. Okay? But if you go screwing around with what your broke friends tell you to do, you're going to end up with none of this yeah but you're not because you're the guy you're this kid's sharp oh yeah it's the right question but he's on the he's a game on man that's right and what you've laid out in the baby steps for everybody who's new to the program and you're hearing these things this is

just a clear path as dave has talked about it for years it It's I can see this step, then the next step, then the next step. And that's the huge breakthrough for folks when they realize, wait a second, I can walk this through and I'm going to get there. But you start taking advice and strategies from other people who are broke, you get thrown off the path. This path, those baby steps work no matter what life throws at you. And that's the key. And he's going to be a millionaire.

Oh. If he does this. And by the way, if you're a millionaire when you're 30, do you know what you're worth when you're 50? 10. Do you know what you're worth when you're 70? 25. That's right.

Million dollars. That's right. Because they're at the beginning of their earning potential. Well,'re they're 22 and they make 120 grand they're going to keep making more money believe fabulous fabulous and you know so let's get the house paid off and use all of those house payments for building wealth keep your income going up during that time always be managing your money always be enjoying your money always be giving your money and always be investing your money and And by the way, we've talked a lot about kids in this hour. So always be teaching them to work, age appropriately, gently when they're four, not so gently when they're 14.

That's right. Teach them to work. Teach them to save. Teach them to give, to be of service to the community, to be a giver, to be unbelievably generous, and teach them to spend and enjoy their money. Most people in America know how to do one of those four things. Spend. And they're called congressmen.

They don't work. No. You're right about that. If've paid if you paid attention to the congressional schedule it would blow your mind it would make a lot of voters angry if they saw how much people that work for them oh yeah staffers are doing the work they show up for the vote and i actually have several good friends that are congressmen except for dave's friends yeah they're like dave would you please stop wearing us out i I'm like, hey, you ran for office. You joined the club.

You got elected. Right. I mean, I can't. How do I get the crosshairs off of you? I can't help you with that. Guilt by association. You signed up for this trip, man. All the Congress jokes work.

We have to keep using them. This is the Ramsey Show. Hey, it's Ken. If you love the show and want a deeper dive on your money journey, we have a weekly newsletter that gives you trending and helpful articles and tips on following the Ramsey way. Go to RamseySolutions.com today to sign up for our newsletter. Again, that's RamseySolutions.com to sign up for our weekly newsletter.