The Ramsey Show - App - What Are You Going To Do When You Have an “Oh Crap” Moment?

Episode Date: September 30, 2024

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. I'm Dave Ramsey, your host. Thank you for joining us. George Campbell, Ramsey personality, number one best-selling author, and host of The George Campbell Show on the Ramsey Network YouTube show. You want to be sure and check that out. He's my co-host today. Open phones at 888-825-5225.

You jump in. We'll talk about your life and your money. Sarah is in Seattle to start this hour. Hi, Sarah. How are you? Hi, Dave. Thanks for taking my call. Sure.

What's up? I'm looking for some investment advice. So I'm a 50-year-old homeschooling mom. I've been homeschooling for about 20 years. And we've been on a single income for a long time and budgeting and living within our means. But recently, about four or five years ago, I used to work for a major tech giant. And I had some stocks that were underwater. So I didn't think much about it and totally forgot I even had them.

And lo and behold, a couple of years ago, it just went crazy. And so now all of a sudden I have a great amount of net worth, I guess. But when I log in and see my account, I have up to about $18 million right now, but I don't know what to do with it. And it's all tied up in one stock, which makes me a little nervous. And, you know, I've never done a whole lot of online investing or anything like that. So I wanted to see if you have some advice for me. Wow, that's awesome. I hate it when I log into my account and there's $18 million in there.

Way to go. Were you shocked? Like, did you wake up one day and log in and go, oh, my gosh, are those zeros real? No, you saw it coming. You knew. Well, no, I didn't. My husband actually said, hey, did you see what happened to your company? I'm like, no, because I was homeschooling.

I was doing my normal things, and I actually didn't even know where my stock was so i had to log into a different couple of different companies and say well i hope my account is there still so yeah so i found it eventually and and it's gone crazy still okay wow at that point so you've held this for how long? 20 years. And when you got it, it was an employee benefit, so your cost basis is zero? I remember paying around $14 maybe when I left. I left when my son was, when I was pregnant. It was my first son. What's it trading for now per share?

I think it's 120-something, but it's been split four, and then it's been split 10, I guess. Oh, a lot of stock splits. But when I left, yeah, when I left, it was only three-something. I got you. So it was completely underwater, and I just followed it away somewhere, you know. You just forgot about it. Okay. Yeah, yeah, totally.

That strategy worked for you. It's not one I recommend, but I just forgot about it. Okay. Yeah, totally. That strategy worked for you. It's not one I recommend, but I'm going with it. Okay. Hey, good job. So what is your current household income? So we're still on single income, about $250-ish. Okay. So my husband also works for another tech giant.

You need, okay. 50 ish okay all right so my husband also works for another tech giant so you need okay it it if you may if your household income is over 400 your capital gains rate is 20 percent if it's under 400 it's 15 percent oh okay okay so if you were to cash out enough of this that it took you up over 400 it's going to run your rate up i think um so what you need is much better detailed advice but i want you to sit down i want you and your husband who are both smart people to learn exactly what you know what your rates do as you move this around it's very very scary and unwise to leave all of your money in one thing, regardless of what the story is of how we got there. I understand. Because this thing turned right side up, but it used to be $3, and it could be that again, hypothetically.

I doubt it, but it could be. I'm not predicting that. I don't even know what the company name is. I don't want to know. It doesn't matter. The concept of diversification gives you safety, not having all your eggs in one basket as they say and you probably heard that right right definitely yeah so common sense says we need to get some of this off the table um the the faster the better but being wise about tax rates as you do it okay okay but so let's say your husband makes

250 and if i'm right and i might not be i'm sitting here questioning i don't know if it affects the number here dave if you want i know it's i know it's gone up a little bit is it over 20 percent it is 20 but the number if it's married filing jointly it's 583 yeah but i don't know if capital gains activates that number that's based on your household income for the year. Your AGR? Okay. Yeah. So if you only cash out $150,000 a year, what's the max you can cash out?

What's the top income rate before it kicks in? $583,000 this year. They keep up with it. If you only cash out $300,000 a year, you're never going to get diversified. It would take a long time. But if you go over 300, you're probably going to go from 15% to 20% capital gains rate. Follow me? Yes, yes.

Because the rich must be punished, including homeschool moms. Just ask the bozos in Washington, okay? So anything we can do to do that but but the first 300,000 a year is a no-brainer but that's not really moving very much of 18 million exactly you got to live to be 300 years old to get it all moved around so you're probably going to take some tax hit and what your analysis is what your consideration is is am I willing to give up 20% of, say, a million dollars? Am I willing to give up 200 grand out of a million in order for it not to all be in one thing? I see.

I am if it's me, but I'm not going to be in a rush. I want to do some of it. But I sure wouldn't want this thing to turn upside down and you end up with half your money because you didn't move it over 20%, right? Right, right. Well, I think our whole mindset is just really different than maybe people who come on to your show or go on to your programs because I've never lived with this kind of money. You don't need the money. I have no need for any of this money. Yeah, but you've been given the responsibility to manage it.

True. So we want to be wise. We don't want to look back and say we were unwise. Not because you're going to go buy a Lamborghini. That's not the point. Okay? Right. Because you're not. That's not who you are. You just said that. But we also don't want to give up more in tax money than we have to give. And so some of these tax rate things are possibly moving in a different administration. So it could be next spring or next year, Congress passes with a different president, a different tax law that could happen. I wouldn't sit around and count my chickens on that one either way, but either. So I want you to sit down with a tax professional and with one of

our smart investor pros and begin to get some investment advice. If I'm you you even if it costs me some money i would rather have the safety than i would the extra 20 so what are we talking about here 3.6 million moves at all so instead of 18 you've got 15 or 14 and but it's all moved and it's diversified and it's safe and uh and you've reset your basis and everything higher. And then you can invest it in something less volatile and a little less risky. Yeah. If you did it all at once, that's probably what you're facing, max. Would you rather have 14 diversified or 18 undiversified?

I'm probably a little of both is what I'm probably somewhere in the middle of that. But I'm moving some of it and I'd learn how. So get with the SmartVestor Pro. Get with the Tax ELP, learn about the taxes, learn about the investing. Wow, congratulations. Hey, you guys, health insurance costs are only moving one way and that way isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer. And it's harder than ever to get anything approved through the bureaucracy. So if you feel like the system is working against you, try a biblically-based alternative to health insurance, Christian Healthcare Ministries. CHM is a health cost-sharing ministry that's helped hundreds of thousands of families like yours

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care costs. CHM programs start as low as $98 a month. So learn more today and join at chministries.org slash budget. That's chministries.org slash budget. including the President Trump interview that I did last week. It'll land on the Ramsey Network app tomorrow, and you can check it out. Also, you can ask questions there. You can search the show by subjects. You can say, hey, I want to see different times that George Camel has answered a question about car leasing. Boom, it'll all pop up. I want to see the time that George Camel answered a question about sell the horse. I knew it was coming.

Ah, there we go. It's going to pop up. You're trying to spike the horse search numbers, Dave. That's it. You're rigging it. There we go. It's going to pop up. You're trying to spike the horse search numbers, Dave. That's it. You're rigging it. There we go. There's a reason to do it. You can create hate.

The horse people all hate you. That's what will happen. Equestrian community. I'm trying to make amends. You can even ask questions by email, George. And today's Ramsey Network app question is from Linda. Linda asks, I'm 81 and I own eight rental houses to supplement my Social Security. The houses have

a value of approximately $75,000 each and are paid for. The insurance on them run about $10,000 a year. I'm considering canceling the insurance and putting that $10,000 in a high interest savings account annually. It would not be devastating if I lost one of the houses. However, it would lower my monthly income. What is your opinion? Well, the insurance is created there to divert the risk to the insurance company instead of you so dave she's saying well dave i can handle the risk i'll pay the extra if i need to replace this entire house here's the thing i don't think it's going to cost 75 000 to replace that house in 2024 even if that's what she paid for them well she said they have a value but do you think

to rebuild a house from scratch i don't know what how kind of house it is i can't understand why there's a ten thousand dollar insurance policy on a seventy five thousand dollar house that doesn't make sense confusing there's something wrong with that number uh unless you live in florida which would give you a reason to keep them all insured. I mean, did you notice what just happened? And so, I mean, because the thing that bothers me is if you self-insure and one of them burns, I agree. If you self-insure and Helene comes through and knocks them all down,

you are screwed. So I don't know, I mean, or if you live in Asheville, North Carolina today and the whole thing got flooded, wiped out just about the whole freaking town, if that was you, I don't know. I mean, if you're in, what, where was it a few years ago, Springfield, Missouri, and like that tornado just did a dance on the whole town. Remember that? Or a path to that gum town. Remember that? Yeah. Or half the dadgum town.

So, I mean, a singular loss, yeah, you could self-insure with those numbers. So first thing, Linda, is there's something wrong with your numbers if you're not in Florida. I think she's saying the total $10,000 a year across the eight. Oh. That would make more sense. Now, that's $750 a piece? No, I would not cancel it. Simple.

So you're talking a little over a thousand for each rentals what she's paying for insurance which tracks that makes a lot more sense that okay you're right george okay i was reading this wrong we both had ten thousand dollars a piece to insure a seventy five thousand dollar house would be nutso okay so she's gonna save a total of california you're in florida or you're on the texas coast where you've got a hurricane problem, we're seeing the property and casualty market completely go bonkers. So getting homeowners insurance is bonkers in some of those areas.

They've been dropping people. Some of you that live in Amarillo don't know what that means. But that's still, I mean, it's nuts in those towns. And we're sitting here at this moment having just experienced a hurricane as we're broadcasting this. The nation has experienced a hurricane. as we're broadcasting this the the nation has experienced a hurricane that's my reference to florida and uh ashville the flooding from the hurricane so um now dave you own a lot of property i have they're all fully insured and it's not a big part of your world as far as the rentals go i do carry a large deductible

i um on the rentals which lowers the premium premium? Probably five or ten grand. So she could do that if she wants to save some money. And that would probably cut her ten by twenty or thirty percent if she hasn't already run. I would run a large deductible, but if you're only paying ten thousand for eight properties, no, I would not drop my insurance. Not worth it. No. Hopefully the rentals pay out way more to where this is a small cost for you. Yeah, that's, I could survive if I lost any one of my properties and self-insure through it. I have not chosen to for the dollars. I'm willing to pay those dollars to transfer that risk. It does make sense to me, and I'm not going to recommend at 81 that you do that, but pretty cool question

to be sitting there at 81 with eight paid-for properties and still be asking how I can save money. That's a way to supplement your Social Security. There you go. Which is all Social Security needs is supplementing, because that's all it was designed for. It was not designed to be the thing. Katie is with us in Sacramento.

Hi, Katie. Welcome to The Ramsey Show. Hello. Thank you so much for taking my call. I appreciate it. Sure. What's up? So about nine months ago, my husband and I took in my niece and nephew.

They're 17 and 19 now. Wow. What happened? Okay, that. Okay. I have some dependency issues, so they were evicted. Oh, I'm so sorry. And my husband and I stepped in. So,

okay. Yeah. They've been with us since December 5th. How's it going? They're amazing kids. Oh, it's like as good as it could be, you know, like they don't even fight. It's kind of crazy, but they're amazing kids and we're happy to step in. But for us, my husband and I, um, it was quite the jump. We only have a five-year-old and an eight-year-old so I'm calling in because my question surrounds what kind of oversight we should have over their finances and um the agreement was when they moved in here because the 19 year old's in college so if he was in college and playing baseball we would support him so i kind of just wanted your guys's insight because this is a new territory for us wow what you're doing is amazing

you're neat people thank you thank you um well um when ours were teens is the only way I know to relate to it, and it's how I would recommend in this case. Three things that ran through our minds at all times. They're not fully baked yet, so we don't take them out of the oven. Okay? So you are in 100% control of the money, period. Having said that, we now have a goal of turning loose fully baked adults at some point in the near future. This particular payer has some unusual issues that are different than yours will have when they're this age because they're coming out of a dysfunctional setting.

So what does fully baked mean? How are we going to, how are we, my friend Andy Andrews always says, we're not trying to raise great kids. We're trying to raise kids who become great adults. Different goal. Yep. And that's what we're, that's what I mean by fully baked. So what you, what I'm going to do is,

even though I'm maintaining complete control, I'm going to talk through everything with them and the why behind everything as as a part of their adult training training them to become an adult okay so okay i'm the only reason i'm keeping my hand on the wheel is so you don't wreck i do want you to learn to freaking drive, though. Okay? And so we're sitting down and we're talking through choices and decisions, choices and decisions, and the why behind wisdom

and the why behind impulsive, stupid four-year-olds trapped in 17-year-old bodies. Why we're not doing that and why we are doing the other. So, you know, here's the thing. We want you to finish college and not mess up your money. And so, yeah, you're going to play baseball, and, yeah, you're going to get the grades, and all that's more important than beer drinking. Hello. Right.

And so we've got to talk about it. So, for example, he got a – okay, so it is fair to ask, it sounds like. No, it's not fair to ask it's fair to tell okay i'm gonna tell them but i'm gonna tell them the why it's not because you need anything out of this relationship or you need any of their money i'm teaching you to brush your teeth so you have some i'm teaching you to study because people who embark on a continuous journey of learning are those people we call successful.

I'm teaching you to sit down with a counselor that I'm going to pay for because anyone that comes out of a situation like you have come out of needs someone to talk some of their feelings through with. I'm teaching you how to navigate life. To the extent you do that well for your own sake, I will take my hand off the wheel.

Otherwise, expect training wheels because that's an act of love on your part. So talk to them about my job is to teach you to become an adult. Here's what an adult looks like, a successful one anyway. And adulthood is not chronological. I meet 52-year-olds who aren't fully baked. Never got there. This is The Ramsey Show. There's a time in your life and in the baby steps for renting,

but you don't want to do it forever because when you rent, you're still paying for a mortgage, just somebody else's. Plus, rent means instability in your budget because it always goes up, never down. So when you're ready to buy, make sure you work with a mortgage partner you can rely on, Churchill Mortgage. Churchill is Ramsey trusted to help you make the move from renting to home ownership wisely. Churchill understands that when you buy a home the Ramsey-trusted to help you make the move from renting to home ownership wisely. Churchill understands that when you buy a home the Ramsey way, your mortgage payment will be a consistent, manageable part of your monthly budget.

Plus, when your home is paid off, that was your largest expense. Now it's extra money in your pocket and an asset towards turning you into a baby steps millionaire. So get started on the American dream of home ownership today at churchhillmortgage.com. That's churchhillmortgage.com. This is a paid advertisement. An MLS ID 1591. An MLS consumeraccess.org. Equal housing lender. 1749 Mallory Lane, Suite 100, Brentwood, Tennessee 37027. Thank you for joining us, America. George Campbell, Ramsey Personality, number one best-selling author of the book, Breaking Free from Broke, is my co-host today. Stacey's in Houston. Hi, Stacey, how are you? Hi, Dave, how are you doing? Better than I deserve. What's up? He's good. So I just had a question. We are in Baby Step 2 right now. I just came across your website and your YouTube channel and everything. And so we are in Baby Step 2. However, I had a

huge question about my vehicle. I have my husband, he owns his work car, but we are paying on my vehicle, and we're wondering, just based off of everything that I've seen with your videos, we're wondering if we should get rid of that car, like if we should, yeah, somehow get rid of the one that I have. Well, welcome to the tribe. Hi. Yeah. So it's been tight around there, and it's not been fun lately huh no it has not been fun definitely not uh we've i feel like we've been married for five years now

going to six um and we always struggled with money and so actually uh we did download your every dollar app and through that app we have noticed that the big mistake that we're making is that we're spending more than what he makes. And so we were actually able to see how much money he actually makes in a month. And it's like, well, you know, we're broke because we want to be broke. So we're really tying everything down. We're both on board. And so I feel like this is the best way that I can. You're both on board and so um i feel like this is the best way that i can you're both on board i heard that right yes definitely yes we are you started out with i download the thing and then you went to later on in the conversation we did the app together so it does sound like you're

both on board i'm good with that okay so i'm proud of you that's a big you are making some big i mean because what happened was is you, oh, this sucks. And then you started, when he put it all on the app, the numbers started talking to you, and you went, oh, that's wrong, and that's wrong, and we've got to fix that, and that's wrong. And look at this car. No wonder we can't breathe. And so the numbers started talking to you, and here's the great news. You're listening.

So I predict amazing things for your all's next 12 months. It's going to be very, very hard, but for the first time in your lives, you're going to be on a path towards not only not being broke but being wealthy. I'm real proud of you guys. We want to help you guys any way we can. So what do you owe on the car? So right now we owe $28,355. Have you looked up what it's worth?

It is worth, no, I have not actually. Okay. Go to kellybluebookkbb.com. It's probably the most accurate. You can also look at Edmunds for car values. Those are two good places to get values. They put out two types of values on there. Trade-in, which is wholesale, what a dealer would give you for it,

which obviously they're going to make a profit on that number. And then private sale, which is if you put it in traders or something like that or Craigslist or whatever, and you sold it yourself to an individual to individual, and that's more of a closer to a retail number. The third number is retail, which you can't get because you're not a dealer. But you're probably private sale numbers, what you're looking at. What kind of car is it? What is it?

It's a 2023 Volkswagen Tiguan, small CV. Okay. All right. Nice car. All right. And what's your household income it is um well it kind of depends right now he's making um right now he's making about i mean worst case a week it's 1881 but it's looking more like 2394,394.

His hours are different. So if he gets OT, he gets a couple grand a week? Yes, he does. Okay. We're talking about six figures. So he's making $70,000, $80,000 a year depending on overtime? Yes. I mean, up to $100,000, but probably not getting $2,000 every week.

Okay. Okay. That's take-home, though, isn't it? Yes, this is take-home. Okay. That that's good news what other debt do you have so we have let's see so we have the uh we have one credit card that has 867 on it uh we have a loan our ac busted we had to redo the unit and that right now the balance is 2015. We owe my dad $10,630, the car payment and the house. Okay. That'll do it. If I woke up in your shoes like, yes, I would sell this car. Right. You're right. It's the one thing on the list that just screams at me in your numbers like it did at you when you wrote it down right yes sir that's one of the only things you can sort of undo in this mess yeah the rest of it

you're going to have to claw through and live on beans and rice rice and beans you've heard that already on the website didn't take you long to get to that number and scorched earth we don't eat out unless we're working in that restaurant we don't see the inside of it we're not going on vacation he's picking up all the ot he can you're selling so much stuff the kids think they're next and you're gonna get this mess cleaned up yeah and here's the beautiful part with the numbers you just gave me if he can get more overtime rather than less and you sell this car you're debt-free in a year yeah um actually actually, I was going down the numbers, and we went at it like a gazelle running from the hunter.

I mean, we put God above everything else as well, and that really spoke to us. And we've been, you know, studying the Proverbs scripture that you mentioned in the video with the baby steps. And so we're looking at paying two of these loans or two of these debts we're paying these off by the beginning of november yeah so yeah this is great and then the loan that we have with my dad that's and you know everything is great there with the family but we do need to pay this back obviously yeah um he says to take our time but we need to get it out i want it out

of my life it's weighing on you more than because you've already breathed in the air of what it's going to feel like to have no payments. You can already get your head around those emotions right now, and now you want it. I can hear it. You're doing great. You're going to kill it. This is awesome.

Yeah, sell the car. Yeah. Because the car, listen, you can get you another car later, whatever you want. But if you'll drive like no one else and you'll live like no one else later, you can live like no one else and you'll get to drive like no one else. That's right. Stacey, I'm going to send you a copy of my book, Breaking Free from Broke.

It comes with three months of every dollar premium, so you can connect it to your bank. You can track all of your expenses with smart tracking. It'll make it real easy for you guys to do this journey, and I hope the book's an encouragement to you. But you guys are already there. I mean, the way she's talking, this debt might as well already be paid off. It is so interesting, George, that over the 30-plus years of doing this

that I talked to somebody making $200,000 a year, and they got $40,000 worth of debt. They don't think they can do it. And I talked to somebody with $100,000 worth of debt that makes $60,000 a year, and they think they can do it. And they actually do. And they're the ones that actually do it. so she's got her numbers are excellent but what's much better than her numbers are her is her language it's the it's revealing her heart and where they are we are

doing this she's been diving in she's studying the stuff already i mean she's brand new to ramsey stuff and she's already spouting that like she knows it all well there's two pieces that were encouraging number one she looked in that financial mirror. They actually did the budget and they went, oh crap, we're spending more than we make. That makes sense. That's how we got here. We got to do something about that. And the other one was the language of just belief that it wasn't someone else's fault. It's not all their fault, but it's their responsibility to pick up the pieces and clean up this mess. And she had the willingness to go, yeah, this is on us. us you know that's a good point

george what are you going to do when you have an oh crap moment what is your first response is it to blame others to get angry to whine or do you go all right let's get the budget out let's see what we're working with here and she finally got to that point most people never get there or it takes 20 years of marriage sometimes when you have a moment like that you freeze from just fear or being stuck or whatever and other people they go into attack mode she's like i gotta find this out i gotta work this i gotta get this get it and this is what you said to do when you do this and all she wanted was one little clarification on the car but she's already game on you know and she found that like the little kernel of hope and just hung on to it

and it's starting to grow and she's seeing this light at the end of the tunnel that's the best part yeah proverb says uh when desire comes it is the tree of life yeah wow it's powerful not much stopping you there. Once you get that desire, it's powerful. It'll carry you. What are you going to do when you have an old crap moment? What's your next step? Start gathering information, fix the problem. Gather information, fix the problem. Well, I don't care what the moment, what area of your life the moment is in. It could be money. It could be something something else what are you going to do got to gather information i got to fix the problem because the information i had before brought me to this oh crap moment i got to stop using

that same information this is the ramsey show you know one of the first things i discovered working in the financial world is how absolutely devastating it is when the breadwinner of a family dies and there's too little life insurance or none at all. Grieving families are suddenly left behind scrambling to pay bills and trying to make ends meet. I also discovered that there are a lot of ripoffs in the life insurance world like that whole life crap posing as an investment opportunity. What you need is level term life insurance, usually 10 to 12 times your income, which is the smartest, most affordable way to protect your family. The key is finding an independent broker who represents a ton of

companies and works for you, not for the insurance company. This is exactly what my friend Jeff Zander and his team at Zander Insurance are all about. They shop the term life companies to find you the best options, and they've been around for over 95 years. So you know they'll be there when you need them. Zander is the real deal, and that's why they've handled all my personal insurance for over 25 years. I trust them and you can too. Visit zander.com for instant online quotes or for a more personal touch. Give them a call at 800-356-4282. If you're not keeping up with us on social and other miscellaneous things, you might not have heard this. A few weeks ago, our team reached out to Vice President Harris' camp

about doing a long-form sit-down interview and also to President Donald Trump's camp about the same thing. The Harris camp has our invitation, in quotes, under review. The Trump campaign accepted, and I flew to New York last week and on Thursday spent some time with President Trump just sitting down talking about ideas. My goal there was, I think it was accomplished, you can watch it for yourself and decide, was to have a discussion about what could happen if he got to do the things he wants to do. What are ideas?

Not about trashing the other side. We got that, okay? okay both of you we got it okay uh and not about um what you used to do i don't really care what you used to do except as it's an indicator for what you're going to do that's all i care about um and so what are the ideas because i'm kind of tired of all the the four-year-old bickering and whining i would just like to know if you're really going to do something. And I'm not confused. I know folks, and I continue to tell y'all, and I told him, that what happens in your house is more important than what happens in the White House.

But just the same, we are in a political season, so it's nice to hear from the different camps what it is you're actually going to do. What are your ideas? What are the things you believe? Because those things do matter they they things like the economy yeah there's a thing right there so we talked about the economy a lot uh we talked about taxes oil uh we talked about parenting uh we talked about leadership and um it was a good interview what about golf did that make it in there we actually

did talk about golf i worked that in so there you go We actually did talk about golf. I worked that in. So there you go. But to which he asked if I was any good. Oh, wow. How do you respond to that? I had to answer honestly. Not really. I'm a 13, and he just kind of snickered. But there you go.

Okay. Which means I'm a mid-handicapper and so on. Anyway, it's fun. It'll be out tomorrow on the Ramsey network app uh which you can download for free october the first tomorrow you can download the ramsey network app it'll be on there tomorrow i guess at midnight tonight or whatever they'll put it on there and then on wednesday october the second the episode will be on our youtube uh channel and on our podcast channel so wherever you listen to the ramsey show, wherever you listen to Ramsey Network stuff,

it's all free. We're not charging. We're not doing it. It's just, I just think it's important to have civil discussions, even arguments about ideas. I don't mind arguing about an idea, but all this other stuff, I'm just, it's out of control, and it's ridiculous.

It's just nuts as far as i'm concerned some of you love it and some of you are so mad about everything you're just mad because i'm doing this interview and you're like i'm never listening to dave ramsey again well you weren't listening to him to start with so no big deal really i mean you might have had the radio on or after 30 years the things you've said if that's what finally did it i'm impressed yeah i mean really you were really looking for something to be pissed about. Me reaching out to both camps to interview them and sit down with them, that's the thing that did it for you. Okay, well, good for you.

Because some of you people hate Trump or hate Kamala so badly that it's just, y'all are nuts. Y'all have lost it a little bit out there. Dial it back in. Seriously. You can be angry about an idea i'll fight with you about an idea but that's just y'all some of y'all have lost it your your ability to do critical thinking around this stuff is bizarre anyway enough of that so um it'll be fun uh the

opening question is about the economy and so that's the opening question in the interview and um you check it out again on the ramsey network app on tuesday october the first wednesday october the second it'll be all over everything so um and it was fun i've never done something like that before i've interviewed a couple of times but presidents or past presidents in the past in the past uh but not during an active political season i did have presidential candidates on one year during the primary season okay so i ended up with like ben carson came on that's right i remember that and uh some others and um you know vivek came on after he lost the other day but he's been a friend he's come on before nikki haley's come on before she's now gonna do a podcast and called the other day see if i would come on hers which i will she's been on here three or four times, but we

didn't even end up talking to them during the, when they were running this time we could have, but we just didn't. So, um, but, but it's interesting to talk to these people because they, they're most of them are just, they're wired a little different in order to want to do that job. There's something cool and something weird about it, you know. So, you know, it's just fun to be in a situation like that. Yeah, that's cool. Talking too much about it. Check it out.

We'd love to have you watch it. All right. Monica is with us. Monica is in Virginia Beach. Hi, Monica. How are you? Hi, Dave and George. Thank you so much for taking my call. Sure. So my question is, should I cash in my investment account to

jump to Baby Step 4? Are they in a retirement account? They're both in the S&P 500 in Fidelity. One is in a Roth IRA. That's $25,000, and then an individual account for $27,000. And my 401k has $5,000 in it. And your debt is how much? $22,000 from real estate. It's on a credit card, but it's from buying properties. I kind of overshot a little bit. Oh, boy.

What's the interest rate on that? It's pretty low. You still got the property? I do. I do. I bought two in one year. I had saved up $100,000. This was all before I found you, so I did everything a little bit backwards,

so I made some mistakes, and then I did some really good things. So I'm very grateful. My net worth now is $500,000, but it's from so much grinding and struggle, renovating these two properties by myself getting them rented so i'm thankful okay so you have let me stop you good way to go congratulations i'm glad you got here and i'm glad you're making some adjustments uh to to solidify and stabilize the situation so let me make sure i understand you have 27000 in a non-retirement account, right? Yes. And you have $22,000 on a credit card, right? Right. Okay, now if you didn't have either of these, would you go borrow

$25,000 on a credit card in order to put it into an S&P? Right, no, I would not do that. Effectively, that's what you've done, isn't it? Yeah. You didn't mean to, but accidentally that's where your balance sheet has ended up. Right, exactly. So I wouldn't touch the retirement accounts, but I would cash out this other non-retirement investment account with $27,000. You will likely have capital gains. I don't know how long you've been investing in this, but account for that. Make sure you've got the money on hand to pay that after you've got the credit card knocked out. But this is it. Yeah. getting you debt free today. I love the idea of you getting to baby step four instantly. Right. But that would only be, so if I cashed in both of those, it would be about $22,000 in taxes.

So I'd have $30,000. What do you mean both? No, no, no, no, no, no, no. We said non, you had $27,000 in S&P. The individual account has $27,000, right? That's just one account? And that's not in a retirement, right? Right, it's not. Okay. How would you have taxed on that? Oh, isn't there like 40% taxes basically? Like you're taking it out early?

No. Oh, really? No, you're not taking it out of a retirement account, right? There's no penalty here. Okay. Yeah, there's just going to be capital gains taxes in that account, which could be, depending on your income, 0, 15, or 20%. What's your household income? About 85. Okay. 15% of your gain, how much it's gone up in value since you put money into that account. How much money did you put into that $27,000 account i think all 27 okay you'll have no tax 26 right you'll have no wow i didn't realize that it'll be a few bucks yeah amazing yeah so you can build your start building your emergency fund

100 get it done up to three to six months of expenses and so the secret to holding on to a net worth that is based in a lot of real estate, which is where you are, is to build a cash position. Okay. Most people that do real estate don't have enough cash. Because they love putting it into real estate. They don't want to hang on to it. Right.

And I know. Thank you for your teachings. I love this. I'm so excited to work from cash and pay these off. It's so motivating to take the risk portion out of it. Love it. Yeah, that's what does it, getting rid of the miscellaneous debts like we're doing and then build up a big old pile of cash so when the heat and air goes out on one of the rental properties,

you don't even blink. You just keep rolling. You fix it and you keep rolling. You fix it and you keep rolling. And then we start working towards getting those all paid off eventually. And, but you've got a great net worth already way to go. You've made some really good decisions and the little bad ones that you made, you're making adjustments on. So well done. It's amazing. Proud of you. It's amazing to see someone in real estate who has their risk meter intact. So good for her.

That's rare. Well, it activated a little late, but it did activate. Better late than never. I love it. This is The Ramsey Show. Live from the headquarters of Ramsey Solutions, it's The Ramsey Show,

where we help people build wealth, do work that they love, and create actual amazing relationships. George Campbell, Ramsey personality, number one best-selling author of the book Breaking Free from Broke, and host of The George Campbell Show on the Ramsey Networks. He's my co-host today. Open phones at 888-825-5225.

Elijah is in Fort Worth, Texas. Hey, Elijah, what's up? Hello. Thank you for taking my call today. Sure. So I am looking to take over my boss's business. He is moving out of state the end of this month, and he will be handing over his clients to me. He's not selling the business to me in any way. I'm going to have to open up a new LLC, have it under a new name as my own business. And I am just wanting to get some pointers on the best way to set everything up. So I don't mess it up. It's a handyman business and he has a bunch of clients, which is why I'm taking over the phone number. Cause that's what it's tied to. And he's on track this year to profit about $120,000 from the business.

I am looking to just take over the phone number, set up the LLC, and to subcontract out the work that I'm not able to do so that I can still have income coming in for those bigger jobs that come. But I'm needing to get the LLC set up to get probably QuickBooks account, advertising, website. And I'm just wanting to know the best way to set that all up to get myself going in a good direction so I don't mess everything up that I'm being handed over. Good for you. It's a good question. How long have you been working for him? I have been working for him since I moved down here at the beginning of August.

Two months? Two months, yes, sir. Okay. That's odd. And how much of the work that is coming in is work that you are going to do what percentage are you going to do what percentage are you going to subcontract the majority of the jobs that he gets are smaller jobs that i would be able to do and um you have you have the you have the hands-on knowledge to do the job yourself

for the most part a lot of it is just basic things that i'm learning as i go and um able to it's just simple simple tasks he's got a lot of his clients are older clients who just want simple jobs done um but then there are the bigger jobs that come i got that i got that there's different categories i'm just saying i'm kind of amazed after two months you can even do all the simple jobs did you grow up with a handy father or how did did you know how to do all of these things in 60 days? I did grow up doing manual labor most of my life, and I also was a plumbing apprentice for a little over a year and a half, so I have some knowledge in this side of things. Okay, so you can hook up a dishwasher?

Yes, sir. Okay. How old are you? 21. Okay. All right. Well, the magic dust here is you. It's not an LLC.

It's not a website. It's not any of that crap. Okay? So the way you're asking the question makes me think that, you know, like you think there's some big thing to setting up a business. You can go to the bank today and open a sole proprietorship in your name and your Social Security. It could just simply be called Elijah's Handyman Service or Elijah so-and-so,

whatever your last name is, DBA, doing business as Elijah's Handyman Service or Elijah so-and-so, whatever your last name is, DBA, doing business as Elijah's Handyman Service. And that's all. You don't even have to have an LLC. An LLC is an extra layer that I'm not sure you need. And then you could take some of your money out of your pocket and get one of your buddies to help you throw up a website right quick, what, WordPress or something, right, George? No, there's a ton out there.

You can do them cheap or free. I mean, Squarespace. Yeah. And then you've got to get, you know, you need a bank account, and you need probably some way to accept payment. So you would set up what, again, Square? Yeah, you could do Square. I mean, my handyman, he uses Venmo and has a business Venmo.

You need both. But truly, your client list. Maybe PayPal. Sounds like your client list doesn't really use websites. mean it sounds like they're old school the way he built this business was probably word of mouth the phone number being transferred is important so all that's fine if you also want to open an llc that's fine but honestly if i'm in your shoes i wouldn't fool with it right now until i figure out out if... Until you get this thing rolling. Make sure you can actually complete these gigs and the customers are satisfied.

And then I'd consider how do we grow this thing. Because you have to let all the customers know the business is being taken over by me, right? Right, because when they start calling that phone number, it's not going to be tied to him anymore. Yeah, it's going to come to you. So, I mean, do you have a list of the customers with their phone numbers he has a whole list of contacts that he'll be sending to me when he sends that to you that day i want you to sit down and start calling i want you to call them all in two days okay and say i'm going to specialize in making your life amazing he has left the building elvis left the building and elijah

is still here okay and so um and i'm gonna be there i'm was one of the guys already doing the work and if you need anything i'm here for you just let me know but i wanted to contact you and let you know that you're gonna hear a different voice when you call this phone number and establish a relationship with them as much as possible, as quickly as possible. Don't wait until they call with a need. Okay, and then would you recommend that I get any sort of insurance for my own personal protection, or do you think I should just wait to do that until later on?

I mean, you can, but you don't have to do it immediately. I mean, call an insurance broker, okay? A broker is someone who represents many different insurance companies, and they will then represent you and shop around and get a little inexpensive business protection policy, a liability policy, just so if they ask, you can say, yes, I'm insured. But that's really the only reason, because the likelihood of them suing a 21-year year old for hooking up a dishwasher is almost zero right you're not exactly

a target right unless you unless you burn their house down you know what i'm saying and so and don't do something illegal don't do something outside of code don't do something along those lines but you know when you're hauling off some trash and doing a little weed eating and hook up a dishwasher and fix one little leaky pipe you're you're fine in freaking uh fort worth texas nobody's gonna bother you when you need an llc or when you need insurance is when you start having some money and or making some money and then the customer or someone else perceives you as a target but you're not you're not exactly target rich right now okay and then you would would you recommend that i go ahead and wait to subcontract out jobs until later on i'm fine if you do it now

as long as you can manage it but i think your primary thing is get these ones that you can do and i think you can make a hundred thousand doing by yourself and then you could have an employee and take it to two hundred thousand and never subcontract a single thing but if you get something that's out of your depth don't take it hand it off to one of the subcontractors or bring one of them in one of the two either send them the lead as a favor, and then build up a group of people that owe you favors. Or bring them in and you manage the job if you want. I don't care, but I think your primary income base is you.

Elijah, you're the secret sauce here. Not LLCs, not insurance, not subcontractors, not websites. It's you. You're going to rise and fall based on your effort. Get them. What does the future hold for business? Ask nine experts and you'll get ten different answers. Economic growth or a recession.

Business taxes will go up or down. AI will help us work or it will replace us all. But there's no such thing as a crystal ball. That's why more than 40,000 businesses have future-proofed themselves with NetSuite by Oracle, the number one cloud enterprise resource planning system. Ramsey Solutions uses NetSuite, and you should too. Whether your company's earning millions or even hundreds of millions, NetSuite helps you respond to immediate challenges and seize your biggest opportunities. With one unified business management suite, there's only one source of truth

for the visibility and control you need to make quick decisions. NetSuite's real-time insights and forecasting help you see into the future with actionable data. And when you're closing the books in days, not weeks, you can spend less time looking backward and more time focusing on what's next. And speaking of what's next, download the CFO's Guide to AI and Machine Learning at netsuite.com slash Ramsey. It's free at netsuite.com slash Ramsey. The Ramsey Show Question of the Day is brought to you by YREFI. Student loan debt is a swamp thousands of people find it hard to escape from. Don't be another statistic in the student loan swamp. For distressed private student loans, there's YRefi.

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Today's question comes from Brett in Nevada. I recently watched a video from George on no money down mortgages. My wife and I bought a house in 2021 with a $10,000 no interest down payment loan that's attached to my mortgage. The principal for that part of the loan doesn't go down every month. My payment is only applied to actual mortgage. We plan on living in this house for about the next 10 years until I retire. Should we refinance and roll the interest-only loan into our mortgage? Oof.

It's $10,000. $10,000, no interest, down payment loan that is interest-only. Yeah, but you could just pay it off. So you could pay down the loan just to nothing, $10,000, just knock it out like you would a consumer debt and be done with it. Because it is a consumer debt. Refinancing is going to cost you, and I don't think it's worth doing that with a $ thousand dollar loan to pay four or five thousand just to refinance no

no you just pay this off this is not a um all you're saying is you bought a house you couldn't afford because you had no money you're broke people and broke people shouldn't buy houses that's why they call them brokers all right because it helps you get broker and broker so you're in a mess so put this on your list of debt snowball items like it's a stinking credit card ten thousand dollars and just pay it off like it's a car loan pay it off it's ten thousand dollars and if you can't do that then you need to sell the house you bought a house you can't afford but i don't think that's the case. I think he's making it.

He would have mentioned if he was pinched. Yeah, it doesn't sound like a pinch. Sounds like they made a mistake. And this is 2021. It wasn't a long time ago they bought this house. They got a good interest rate on the first mortgage. Another reason not to refinance it. That's true.

They'd give up that 2021 rate and pick up a 6% or 7% while paying the $5,000 it would cost to refinance. Yeah, or more. I would just get the 10, you know, scrape together $10,000 and call and call them say i want to pay this off in full be done with it be done with it as fast as you can rosa's in dallas hi rosa how are you hi mr ramsey hi george how are you better than we deserve what's up in your world i'm doing just as well. I have a question today. My parents are 85 and 82, and they have a will, but my question is, is a will enough to keep probate court out, or do they need a trust? I can give you some backstory if you need to. What state are they in?

They're in Texas. What's the probate tax rate? Do you know? I do not. I have no idea because luckily I've never had to be the executor of anybody's will. They do have me as their executor. But we're trying to, if it's possible, to not pay taxes. So what they have right now is. Well, that's not possible. You're either going to pay legal fees to build a trust that looks like taxes,

or you're going to pay taxes. Either way, you're going to be out some money. So what is the size of their estate? So they don't have much. The main thing on their will that is an asset worth fighting for would be their home, which is worth right now $264,000. What will happen to it when they pass? So the way they have it written is obviously whoever supersedes the other will keep the

home, but once they're both gone, I as executor will put the house up for sale. And the idea was to split the profit amongst all the siblings, which currently they have $11,000 on the will. If there's any probate tax that can come out of the proceeds of that, it won't be substantial. Did you find it? I've been looking here. I'm not seeing it quite yet.

George is trying to look up and see what it was in Texas because I don't know off the top of my head. I don't think it's much. But in most states, it's 3% or 4%. Okay? And so we're talking about you know six or eight grand and and at most at most and the trust could cost you that just to set up well it could cost you half of that anyway and it's a pain in the butt no you don't need a trust um but if you want to if you

want to verify you can find out what the probate rate is in texas and see if it applies to personal residents it may not even apply to personal residence because Texas has a bunch of homestead laws that apply to personal residence and protect personal residence from a lot of other things. They've got a, they've got weird laws on real estate because they're not really a state. They're a Republic. Just ask them.

I'm kidding. But, but anyway, yeah. So yeah, they do have very, they have a lot of laws that protect the home and it might, it might even do that there on the estate side. I don't know. I don't know the law, but if you, you could look it up real easy or talk to an attorney, but the only

thing you could do is if you move the house into a trust, then the trust is liquidated. You might run into some capital gains there that you don't want to run into. So I think you're better off just to let it happen with the will. But I, you know, you could double check and see if my math is off. Let's pretend, okay? Let's pretend they had a 10%, which would be an unbelievably high probate tax on $250,000. That'd be $25,000. And let's pretend it costs $4,000, $5,000 to put together a trust. Well, then you might look at it, right?

Right. But if it costs $4,000, $5,000 in taxes or $4,000, $5,000 in the trust, I'm just going to pay the taxes and not screw with the trust because it adds one more layer of stupidity you've got to deal with as the executor when both of these pass. But just gather up a little bit more estate planning knowledge than Dave and George have about Texas. And are you doing good?

I can't find anything that says there's a probate tax. It sounds like you have your court fees, attorney fees, but it doesn't sound like there's a special tax. Yeah, you're going to have that everywhere. But most states have a tax on it. I truly don't know. It says inheritance are generally not subject to state or federal income taxes in texas you may be zero anything about probate maybe zero which makes this a mic drop for sure it's will only you don't need a i'm telling you there's a lot of texas has got a very tax friendly state

so to the people that live there not to the government. So it's one of the reasons that people are moving to Tennessee, to Florida, and to Texas in droves. No income tax. Because we don't have an income tax. Most of us don't have hardly any estate tax at all. Florida has none. And that's one of the reasons it's the retirement capital of the freaking world before all this stuff happened. And everybody left New York and California and went to those two other places, three other places. But that's what's going on.

You always see migration. Policy does cause migration because if you've got $20 million and you're going to get taxed on it if you don't move, and if you do move, you're not going to get taxed on it. Well, we're moving. We're loading up the truck and leaving Beverly Hills, that is. So there you go. It's the opposite movement of the old Beverly Hillbillies, right?

So anyway, that's a good question. Very cool. Anchorage is with us. Abby is calling. Hi, Abby. How are you? I'm good. How are you guys?

Better than we deserve. What's up? Good, good. So my husband and I took out a home equity line of credit earlier this year. And after we did that, we decided that our income to debt ratio was a little bit out of control. So we decided not to use any of that money and just to pay off our debts first. Good. And we have paid a lot off. We still have a bit remaining.

So my question is... How much? Do we have remaining or have we paid off? How much do we have remaining? About $27,000, a little under $27,000. And your question is what, hon? My question is, should we continue what we're doing with the debt snowball and pay off this debt that we have with every extra penny that we have? Or should we start putting some money aside as well so that we don't have to use the home equity line of credit and go further into debt?

I'm sorry. Why would you have to use the home equity line of credit if go further into debt. I'm sorry. Why would you have to use the home equity line of credit if you pay off your debt? Well, we are building a shop. Is it under construction? Everything that we've done so far, we've paid out of pocket. Do that or don't do it and no more debt. The secret to getting out of debt is quit borrowing more. Hello. That's your first step. I'd shut down that HELOC, do it at the speed of cash.

Yes, definitely. Good, good question. Good answer, George. This is The Ramsey Show. This show is sponsored by BetterHelp. All right, so I was born and raised in Texas, and I love the myth of the lone cowboy. You know, the guy who doesn't need anyone or anything. It's a fun story, and it's a lie. In our self-obsessed society, we're obsessed about our own diets, our own workout routines, our own jobs, our own social media feeds, everything. It's easy to forget that no one can do life alone. And I don't care if you're an introvert, an extrovert, or whatever you want to call yourself, we all have to have a community and a support system to do life with. It's time

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Tomorrow, Ben Shapiro is going to drop by. We're going to do a long-form interview. Last week, I interviewed Dr. Donald, Dr. President Donald Trump. Today, I'm interviewing not a doctor either, but my friend Will Gadara, New York Times bestselling author of the book Unreasonable Hospitality.

He's the former co-owner of 11 Madison Park, which under his leadership was voted several times the number one restaurant in the world. The book is Unreasonable Hospitality. Welcome back, my friend. Thank you so much, man. I'm happy to be back here.

So we got to hang out with Will. I met Will at a think tank in Aspen, which is something I'm not usually associated with. Dave in a think tank or in Aspen, but with our friend Simon Sinek. Yeah. And I met through, but well through him and we become fast friends there. We've had several adventures together since then. Yeah, we have. All kinds of weird stuff.

I still remember when we were going around the room and in Aspen, everyone was introducing themselves. I'll never forget what you said. He goes, I kind of feel like a wiener in a steakhouse right now. Well, I mean, there was like the president of Four Seasons Hotel. There was a woman who's a multi-billionaire that has coach stores and all this stuff. And there's all these other people in there. I'm listening to these guys and I'm going, what am I doing in this room?

But it was fun. Yeah. It was fun to hang out. It really was. So then you did the book and it came out. We were blessed to have you on the air here and talk about it when it first came out. Yeah. Unreasonable Hospitality. It keeps getting more and more life, blessed to have you on the air here and talk about it when it first came out. Yeah. Unreasonable Hospitality.

It keeps getting more and more life, especially now that you're the producer and one of the stars on The Bear. My favorite actor on The Bear. If you're watching The Bear, Will is one of the producers. And a lot of this information in The Bear came from you. Yeah. And then they invited you to join. And then eventually I got invited to join the show. Here's the thing.

I was watching that episode. It's after I had met you. And I see Cousin holding the book as he's in this personal growth journey. And you said you had no idea this was even happening. I didn't know that they were using the book and the stories from the book in season two. It looked like paid product placement. It was that front and center. But you know, so what was so cool about that is the book, it's about leadership and service

through the lens of hospitality. And one of the feelings I try to like really convey is this idea that hospitality is a selfish pleasure. It's an amazing feeling when you get to make someone else feel good. And it's also perhaps the best business competitive advantage you can have but in the show in that episode they showed firsthand how someone can find purpose through hospitality in their job and be that much more engaged in pursuit of it in a way that you could never convey in the written word they used everything that tv has to get the powerful episode and

really i mean it's almost a a healing tool when you look at generosity through that lens. And Dave's been talking about outrageous generosity for years. And there's so much in common that you guys have in that realm of you have to live a life that is generous, that is open-handed. So you and your partner took 11 in Madison Park, for those that don't know, to the number one restaurant in the world. What does unreasonable hospitality look like in a restaurant? Yeah. So I believe that if you look across disciplines, right, anyone that's been successful has done so by being unreasonable in pursuit of whatever product they're selling. They do whatever it takes to make it its most fully realized form. And yet,

one of the problems is when we want to make it its most fully realized form. And yet, one of the problems is when we want to make a product better, we invest in it. We put resources behind it. We invest energy and time into it. And yet, so many companies out there want to have better customer service or more hospitality and yet are reticent to make the requisite investments in it. Unreasonable hospitality, it means just doing whatever it takes to make someone feel seen to give them that sense of belonging yeah it's unreasonable to do this yeah yeah and yet we're going to do it anyway exactly because it's mind-blowing yeah because we're in a meeting the other day here and someone said you need to be reasonable i'm like never yeah reasonable do not get me here don't ask me to be reasonable. It's not a chance.

And that's about other issues. But still, same idea. If you want unreasonable results, you have to be unreasonable. And everyone that's been successful can relate to what you just said. Like, no, I'm not going to start being reasonable right now. I'm not going to stop being the very thing that allowed me to be where I am now. And if we devote that same maniacal energy and relentlessness in pursuit of making people just feel awesome.

There's this Maya Angelou quote, which I love. People will forget what you say. They will forget what you do, but they'll never forget how you made them feel. And I believe that to be true. And yet people invest on what we say and what we do, but not in how we make people feel. Yeah.

And you can have that when you walk into the lobby at Ramsey. Yeah. We've got this idea. We cook homemade chocolate chip cookies every morning. So when you walk in here, you smell mama's kitchen, not corporate America. Yeah. And you come in to watch the show, you get homemade chocolate chip cookies. You've got sweet, wonderful people waiting on you, giving you everything free while you

sit and watch the show on the glass. And that's part of the experience you have when you walk onto this campus. I mean, I, I, I believe it doesn't matter what you do for a living. You can make the choice to be in the hospitality industry simply by doing things like that, simply by working a little bit harder to look at what you're serving through the lens of the people you're serving and try to make it just a little bit more awesome for them. So we got to hang out at a fundraiser with our wives the other night and they finally got to meet after hearing all of our adventures and things we've gotten or gotten into trouble with together. But then I open up my Instagram this morning and at lunch today when we were all just sitting around having lunch because you've been in the building doing the deloney show and others today um and you really got to live out the whole dream weaving

chapter in true form today so i want you to talk about what a dream weaver is talk about that chapter and talk about what happened today yeah so one of the things we did a lot at the restaurant was we tried to just be super present with the people we were serving and pick up on these little cues that we could use to make their experiences more special. We overheard a family from Spain, parents and their children. We had these big windows that started snowing. We learned that the kids had never seen real snow until that night. And so we had a position called the Dreamweaver. They were just there to help everyone else in the team

bring ideas to life. Dreamweaver somehow found a store still open at eight o'clock on a Friday night selling sleds. And when that family left the restaurant at the end of the meal, we had an Uber SUV parked out front with sleds in the back, a big thermos of hot chocolate in the front

to take them sledding in Central Park. We were serving some of the best food in the world. When people went to a restaurant like that years later, they wouldn't remember anything they ate, but they would never forget how we made them feel when we did stuff like that. And by the way, you want to take it to the bottom line. Every time we did something like that, it ultimately yielded higher profits because you give people stories like that to tell what do you think they're gonna do they're gonna tell them over and over and over again because while this is a very expensive meal it doesn't cover uber and sledge no no no those are investments

although you lost money on the whole transaction top to bottom on that one but every dollar was an investment but every dollar ever spent on that was far more impactful than any dollar I ever spent on traditional marketing. Because people can do your marketing better than you can ever do it yourself. Forget the Facebook. So why did you name it Dreamweaver? After the iconic song by Gary Wright and the story. Because you are a child of the 80s.

I am a child of the 80s. And so today. Guilty pleasure chapter. Well, today I did a talk this morning at the Grand Ole Opry. And I was doing this talk. I was speaking to a company there and I was standing on the sacred circle and I was talking about the Dreamweaver and I

could not help but sing that song a little bit because I wanted to make sure it was very clear when I got off that stage I made my Grand Ole Opry debut. Yes! You can finally say it. I don't know if I've heard your singing voice. It scares me just a little. We'll leave it for the Grand Ole Opry. It scares me a little.

But a great picture of you standing in the circle at the Grand Ole Opry. You've got a lot of accolades now. And the Bear now Emmy. I mean, it was just sweeping the Emmys. It was all anyone could talk about. And it's got to be cool to now be producing the show that your book was featured in. And I go, hey, you're going to be producing this next season. And now you're an actor. I mean, you were in the final episode. I was so excited to see you in there.

Sitting next to my wife, actually. Wow. That's special. No, man. You know what's so cool is being a part of that show, what I saw was them not only sharing the stories of the book in the show itself but them living the ideas of the book and how the show was run and produced and it showed me that if a television set can embrace these ideas and be more impactful as a result then truly anyone in any industry can and in the last two years since the book has come out i've spent spent time with everyone from the Dallas Cowboys to JP Morgan to Sotheby's Real Estate and literally everyone in between, all people who recognize that if they are as unreasonable in pursuit of people as they are

in their product, pretty cool things happen. Wow. The book is Unreasonable Hospitality by my friend Will Godera. Number one, one of our top speakers at Entree Summit a couple years ago. Thank you, man. Fun stuff. Be sure and check it out. It is a number one bestseller, and there's a reason. Thanks for stopping by, my friend. Thank you, guys.

I appreciate it. Guys, time is running out to book your cabin on the Live Like No One Else cruise. If you are baby step four and beyond we invite you to join us this is a premium caribbean cruise turks and caicos puerto rico saint thomas bahamas on holland america's uh one of their newest ships it uh is premium and i don't i don't go on the other kind i i'm kind of spoiled these days so if you want to come out hang out with ramsey personalities including me and sharon all week long plus many others dina carter steven curse chapman comedian trey kennedy uh world-class chef manit shohan and more you can book your cabin today at ramsey solutions.com

slash cruise we're 90 something percent sold out uh and so if you don't get your cabin booked very soon, you will have FOMO. You will not only have fear of missing out, you will just be missing out. I can't believe you didn't say don't miss the boat. God, it was right there. It's a soft toss. So don't miss the boat. There we go. There it is.

We'll edit that in post. I like that. That's good. Except there is no post. All right. Cassie is in Fort Worth. Hi, Cassie, how are you? Hi, Dave. Thank you for taking my call. Sure, what's up?

I would like your non-partial advice on if I should hold my spouse financially responsible for our kids, even though I make more income than he does, I just don't want to put him in a financial hardship. I'm confused. Why would he not pay? Are you getting a divorce? Is that what you're saying? It is. Yes, it is about to be filed. We haven't filed yet. He moved out two months ago. Okay. I'm kind of a dinosaur. I'm an old guy.

And so I'm from the generation that believes that men ought to take care of their kids. Moms and dads are both responsible for their kids. I know that's kind of weird in a culture where everybody's lost their dadgum minds, but yeah, if it causes him financial hardship, well, work more. You brought these kids into the world, you help pay for them, period. You signed up for the trip, Bubba. You get to take the trip. So that's why every state in the United States has child support laws.

Yes. Because that is the moral and ethical thing to do. So what do you make? Yes, exactly. I am a military veteran, and between my pension and VA benefits, I bring home $7,500 a month. Thank you for your service. What does he make? He brings home $2,800 a month.

Okay. Well, child support is based on a percentage of his income. It is not based on just take all of his money and he has to be homeless. Yes, sir. It's 25% for two kids. But he's saying that he cannot afford that and he will end up in jail. I'm so sorry. I'm so sorry. I'm so sorry.

I don't care. It's the law. It's not you being greedy. 25%. It's not going to do anything with you. What is this guy? How long have you all been married? How long have you been married to this guilt trip agent?

11 years. Yeah, he's been doing this a long time, hasn't he? Yes, sir. I have been enabling a lot of um irresponsible he's a mama's boy from now on mommy always took care of him and he doesn't like it when things are hard bless his little heart i'm sorry i got no sympathy at all. Can you tell? Has nothing to do with greed. It has to do with babies. Two babies. Dude, you pay for the babies.

That's how it works. Simple. You take care of your children. It's called ethics. It's called morality. It's called manhood, for God's sakes. You take care of your children. So that's simple.

And if you don't like what is left over after 25 percent comes out of your pay go make more money go work more go get more jobs and 25 percent will come out of all of it and that's what the state of texas says apparently i didn't know that but that's okay with me it costs more than 25 percent of 2800 bucks to raise two kids agreed yes sir yeah so good glad you got good on you you got some money you're not being greedy you're saying you should do a what the law says and b any man ought to be willing to take care of his children that's not you it's not you're not you're not collecting the money and buying a Lamborghini with 25% of $2,800. Exactly.

That's what I told him. I'm not going on a vacation. You don't need to negotiate with him anymore on this. You just say, see my lawyer, see my lawyer. It's hard to negotiate with a scumbag. That's kind of part of the problem here. We were going to not have lawyers. Yeah, you need a lawyer.

You need a lawyer. You need a lawyer. All right a lawyer. You need a lawyer. All right. Yeah, because Junior needs to sign up and pay for his kids, and you need a lawyer. Is he going to be in their lives at all? What does this look like? He's wanting to say that he is going to see them 50-50. That way he doesn't have to pay child support.

That's a real man right there. I'm going to pay just enough. Listen, if he's going to take care of half of them and the law says he doesn't have to do it, that's fine. But that means he needs to take care of half of them, not 25%. Oh, there's a different number. You got them 50% of the time, you got 50% of their expenses. I think it's more than 25%. I don't think math is his strong suit. I might be wrong, but yeah. I just can't imagine thinking I'm going to hang out with my kids for financial benefit

so I can save some money. I guess I'll hang out with them. That's disgusting. Well, I think here's the core problem is you're trying to have an argument with someone who left and you don't need to have an argument with them. You just need to have an attorney that says, this is what we're going to do. And you guys need to lay it down. And this is what the law says. And if you want 50% visitation, that's fine. You got 50% of the expenses of everything associated with them. It goes with the territory and that's going to be a lot more than 25 of 2800 so if his only motivation is seeing them 50 as he thinks he's going to get out light then he's going to

figure out hopefully start doing that sixth grade math thing it'll catch up he'll start to figure out it's more than that but if he is actually wanting to be in their lives 50 then i'll call him less of a scumburger than i did a few minutes ago. That's fine. And that, but that does mean, dude, you got 50% of the expenses. That's how that number works. So yeah, you do need legal representation, hon, because you're trying to negotiate with someone that doesn't have any knowledge base in this law. And you don't either. So you got a little bit, you got the 25% number, but I, cause I didn't know that off the top of my head but morally it doesn't make the wife greedy if the husband pays child support it's the husband's job to take care of his children just like it's the wife's job to take care of her children that is not a greed issue so don't let that drop on you wow you're

so old school dave i'm telling you but that's like common sense right there you create a child maybe take care of it but it's sad i mean we've seen this that divorce turns marriage into a business transaction and for that it's wise to have counsel saying no i'm not going to let you get hosed on this one just because he his feelings were involved but what he thinks he should or shouldn't pay it's not not how it works. Yeah, his life's going to be rough. He left. I remember that part, and left you with two kids. Yeah, but his life's going to be hard. And he says he's saying that he wants to be involved. It didn't give me a lot of confidence there. She didn't believe it. I could tell she didn't believe it. That's unfortunate.

Yeah. Yeah, that's the... Ah, enough. Open phones at 888-825-5225. Boys and girls, if you want to hear the rest of this show, it's always on the Ramsey Network app every day. That's a free download. And by the way, overnight, that's where we will be downloading the Donald Trump interview that we did last week in New York City in Trump Tower.

So you can finish this episode for free in the Ramsey Network app. It's completely free. Go download it right now. And, of course, you can also hear everything else that we do. All the things on Ramsey Network are on there, video, audio, everything, a lot of behind-the-scenes things. You can answer questions there, send in emails there. There's a lot of stuff happening on the Ramsey Network app.

Again, 100% free. There is no paid function on the thing at all, and that includes if you want the one-day early access to the Donald Trump interview. On Wednesday, October 2nd, that interview will be on all of our podcast and YouTube channels, and you can get it there too. But if you want it early, Ramsey Network app, including the next episode of this show. This is The Ramsey Show. Live from the headquarters of Ramsey Solutions, it's the Ramsey Show,

where we help people build wealth, do work that they love, and create actual, amazing relationships. George Campbell, Ramsey personality, is my co-host today. He's the number one bestseller and host of the George Campbell Show on YouTube and co-host of Smart Money Happy Hour in the afternoons, yeah, with Rachel Cruz. You can get all of that on the Ramsey Network. We love having you. We appreciate you.

He's my co-host today. Irene is in Phoenix. Hi, Irene. Welcome to the Ramsey Show. Hi, Dave. I'm hoping you could help me today. I'll try. So my sister and mother live in Florida,

and their home that they rent was devastated in the storm. It was basically washed away. Oh, no. And, yeah, yeah, it's been difficult. They've been very careful with what they tell me regarding what they've lost, so I don't really have an idea. And I don't know if that's from the shock or if they just don't want to tell us, but they have called and requested help. Now, my family has not been fiscally responsible ever, and my husband and I have chosen not to

go down that way, and we've always been very frugal and very, very careful with our money. We don't have any debt. Everything that you say, we are your sharp pupils. And everything that we say, they are the opposite. Exactly. It doesn't matter. They lost their house. How can you help them?

It doesn't matter. And so I don't know how far to help them. They did not have a plan A or a plan B on what would happen. And so I want to get my plan A and my plan B in order of how I can help them be prepared for when they come. Where are they staying? That's the thing. They said they were staying in an Airbnb in Florida somewhere. How's that being paid for?

I don't know. They won't tell me. I know they don't have any savings. When I mean any savings, I would say under $1,000 in their savings between the two of them. What kind of income are they both living on? Probably under $20,000. Is it fair to say that your relationship with them is fairly distant? Yes, it is, and that's by choice. They've been very critical in the way my husband and I have chosen to live, physically.

And now you're the little pig in the brick house, and they need a place to stay because their house got blown in. Did they have renter's insurance? Excuse me, sir? Did they have renter's insurance? I asked them if they had renter's insurance, and they couldn't give me an answer. So I'm assuming that's a no. Yeah, I think so.

Okay, here's the way I'd look at it. I think you're being wise in saying I need a, there's two things that we can do. Okay, one is immediate help for food and shelter and clothing. That's a no-brainer. Put a number on that and do it. You've got the money, okay? And no expectation, no information required. Long-term help is going to require that I'm helping you get back to sustainability. I'm helping you get back up on your feet and then you're going to stand on them, not on mine.

And so I, I've got to have more information and i've got to be more involved for long term longer term help but short term if they need ten thousand bucks you've got it don't you yes i do yeah and that helps them get a you know some dry clothes get some get some shoes you know uh get the airbnb settled in for a month uh or whatever and start to lay out a game plan and then I and I would say look we love you we want to help you we're going to do this no strings attached end of the no strings attached mom after this for us to be further involved in helping you we're going to have to be further involved in seeing where what you're doing and how you're doing it and be and be helping you get back up on your own but this first lick i'm just

going to do it just because i love you and it's done there's two different things it's triage and then there's um physical therapy yeah you see the difference first we stop the bleeding of the patient we they're surviving now they have to be engaged in the physical therapy and the physical therapist both have to be engaged in order to for the patient to have full recovery but first is triage and survival okay i've given them money in the past and the the way I've given it, and we're talking $5,000, $6,000, $7,000, $8,000, $15,000. It's always been with the intent of it will be repaid. This is not to be repaid. I gambled it in Vegas.

This is not to be repaid. This is a gift. Is there a way you can do it that doesn't enable them to make bad decisions? For example, a gift card, or you ship things to the house. What are the specific things you need? Can you get a hold of the landlord and pay the Airbnb bill for a month? Yeah, that maybe would be better. You know, a few things like that that help you know that there's some wisdom even with this triage money, but I'm not going to be too pushy on that. And no, we don't expect this money back. Okay. You guys, I can tell you guys have a large net worth, don't you? We do. Yeah, you just don't want to be unwise, and you don't want to give a drunk a drink.

That's not what's going on here. And it sounds like you've been burned in the past. This is not the first time you've been down the road. Yeah, we were called the sucker savers. Yeah, you are. You've been called a lot of things that you shouldn't have been called, but none of that has to do with a hurricane. Exactly.

Hurricane is different than irresponsible. So just go help them. Hey, Dave. So that's what I would do if I were you, and I'm the least likely person to be an enabler you'll run into because I I believe enabling is actually hurting people long term because they become dependent on something that is not sustainable and if you can help people get to to give them a fish and teach them to fish both now we've got a plan I'm hungry now but I also need to figure out how to feed

myself yeah in the long run. Some people are all on the teach them to fish side, and some people are all on the give them a fish side. Do both. Do both. Both are acts of generosity. But sustaining people's misbehavior is not being helpful, and that's what you're afraid of,

and you're not going to suffer from that in this first go-round. So what we're going to do is we're going to, you know, we're willing to help you guys right now. Get back on your feet. The first $10,000 right this second. No questions asked. If you, I'd like to send it directly to the Airbnb and I'd like to send you what you need. Tell me what you need. I'll order it on Amazon.

I'll ship it to you right now. Exactly. I think they'd feel better about it on the giving side, knowing that it can't be mismanaged at that point. Yeah. Well, I don't hear anybody doing drugs. I hear people just not. And the other thing is they've been making fun of her. That's insult to injury here. But they're in the middle of trauma, and so they're not thinking clearly. And Dr. John Deloney says when you're in a traumatic situation, when trauma is involved,

you have to stop what you're doing and say emotions are one thing. They're valid, but facts are our friends. What helps you when you're in the middle of a hurricane, whether it's a personal hurricane of some kind or a literal hurricane, a flood, like we've got people around the nation facing those two things right now. First thing you stop, you say facts are our friends. Okay. Hey, we're all alive. Good fact. The dog is alive. Good fact.

Right? What are our facts? Oh, we got a place to live. That's a fact. We need a mattress to sleep on. Okay, that's a fact. So what happens is you begin to check off the things

and go, oh, it's kind of counting your blessings in a sense, but facts are your friends. This is The Ramsey Show. Thanks for joining us, America. I'm Dave Ramsey, your host, George Campbell. Ramsey Personality is my co-host.

Tara is with us in Louisville. Hi, Tara. How are you? Hi. Good. Good. What's up? How can we help?

Yes. I'm questioning just whether we're on the right track. My son is actually taking a Dave Ramsey course in school currently, which is he had to interview us and it brought our attention to our retirement. We have been saving for retirement for a long time. I've always put 10% into my income as long as I've been working in, into my 401k as long as I've been working. Right. And we've always saved for our kids since the moment they were born, but we don't have a large savings of readily available cash. Mm-hmm. So we have, um, in retirement about 400000, and we're 40 years old. We have approximately $20,000 to $25,000 saved up for our children,

and we have about $15,000 in a mutual fund for ourselves if we wished to use it before retirement. But we don't have a large... What's your household income? Approximately $160,000 to $165,000 a year. Okay, you're doing really well there. Congratulations. And how old are you guys? He's in high school. Well, my son is actually taking it in seventh grade, a high school course.

Oh, wow. Neat. Yeah, so somebody sponsored your course there. That's awesome. Foundations in personal finance. Yes. So this is your only exposure to us, and then you called us just because he's the one who brought this up. Well, a couple of friends kind of mentioned things before, but we've always been pretty diligent about things. Yeah, done a great job you've done a great job interview us for that class yeah so what we what we have taught and more importantly than what we've taught is why we've taught it

is this idea that if you don't have any cash and an emergency comes up, in your case, you would tap the mutual fund. Right. If you had a $12,000 emergency and you don't have any cash, you'd go to that emergency fund. If you went through that, you would be down to your $400,000 retirement would start to be at risk. If you needed $25,000 fast, you'd be in trouble and you make 165. And so not having that quote unquote emergency fund that financial planners have always talked about of three to six months of expenses means you're leaving your investment, your mutual fund, and worse than that, your

retirement at risk of being a bad emergency fund because you start taking those things out at the wrong time it becomes a bad emergency fund so right you need an insurance policy high risk yeah you need an insurance policy uh between uh ugly stuff in life and your retirement so your retirement doesn't become cashed out to save the day. Does that make sense? Yes. So do I stop putting into retirement? If you have to, but I don't think you have to. I think you've got a lot of money coming in. I think you guys are very wise with money. And I think when you sit down and do a detailed monthly game plan called a budget, I think you'll be able to take

that $15,000 from your mutual fund, move it into a money, a high yield savings, and add some to it and call that your three to six months of expenses. And then, you know, then you can start adding to retirement and adding to kids college. And if you want to save more for something else, you would do that also, but a separate account. So my wife Sharon and I have an account that we never touch for anything except emergencies. And that's the I Sleep Better at Night account. We don't have that. Okay, that's why we recommend it.

That's why we recommend it. We call that Baby Step 3. And we usually have people complete that before they start saving for retirement. If you absolutely cannot complete that, and I think you can, making $165,000, if you absolutely cannot complete that, then you do need to stop retirement temporarily until you get that in place. It might be for six months or something you stop it. But I think with the kind of money you make and take that 15 out and put that over in a high yield and put another 10 with it, we'll call 25 your emergency fund.

I think that's your sleep. I sleep it. I don't know how much. Yeah, I'm making it up. It should be three to six months of expenses. So what does it take you to live a month? We normally keep about three to five thousand dollars a month. If you could live on $8,000 a month, I think you could in an emergency. Yeah.

Then three times that is 24, so 25 is fine. Okay. And my retirement is in a unique situation that my employer does profit sharing. So it's not that if I stop totally for, let's say, six months or a year, they will still provide that. Yeah, but again, I think if I'm you, as a matter of pride, I'm going to watch my budget, make it dance. You know, we're going to just be intentional with the money and find $ thousand dollars real fast okay i think you guys make great money pill to swallow it's a hard pill to swallow to stop yeah i don't i really don't want you to stop but if you if the only way you can find ten thousand dollars is to stop i think you failed on the budget part but yeah but if you can't then yeah

before i would keep going i don't want your retirement at risk of becoming your emergency fund. Yeah. And George, too many times we've seen this where people cash out a 401k plan early. Heartbreak. On a hardship. Loan or withdrawals. On a hardship or take a loan on it because they got no money.

And that's, you know, it's like taking a loan at 35% when you do that with the penalties and income tax. Yeah. That can be brutal. I was talking to a lady one time and she was kind of old school, you know, like, like everything's a coupon, old school, that kind of stuff. And she said, I call it the GOK fund, the God only knows fund. Oh, I like that. Yeah. It's the, I sleep better at night fund. It's the emergency fund.

Yeah. When things go perfectly, you're like, well, I don't need that. And then one thing happens and you go, oh crap. But we know one thing we're sure of. They don't go perfectly. That's right. That's this entire show. You should be positive. I'm positive. They're not going to go perfectly. You've been doing this for over 30 years. Yeah. So it's something that's going to happen. And I don't know what it is, but something's going to happen. And what it does, folks, and for Tara as well, but what it does is I remember the first time I touched an emergency fund. And i've hardly ever touched it actually but i remember actually i didn't touch it for this i cash floated but i

had the money so the heating and air went out on the house and i got sent the guy over and he's like well you know i can fix it for this but you really need another one and it was like i don't know is it many many years ago it's probably five thousand bucks or something fifty six hundred dollars and he goes it's gonna be fifty six hundred bucks and i went dad god that sucks wasn't looking for that today okay do it and you moved on you kind of just yawned and went not fun but what we always say is having an emergency fund turns a crisis, no heat and air, into an inconvenience. When you've got the money, you can do it. It still sucks, but it just turns it into an inconvenience rather than drama, drama, drama, drama, drama, drama, drama, drama. And then you pay for it because you swipe the card at 22% APR for that emergency.

And so you're reminded of it every single month as you deal with that so the emergency fund it changed everything for me once you hit that moment you're starting to build for the future instead of pay for the past yeah and just to keep camping on that for a minute not for Tara's sake because I think Tara got it she's asking really good questions I think she'll do it you can tell what the callers y'all listening know that if they're going to do this stuff or not it's like they're reacting at home that one's going to do it that one's not that one's going to do it that one's not yeah and so but she's gonna do it so we're not worried about her but the thing is i it was hard for me as a math nerd who was broke to say i'm gonna set the

first emergency fund i ever had was ten thousand dollars i'm gonna set ten thousand dollars aside in a savings account and it's really making no money and it's the only ten thousand i got i need some money making money i need some investments baby i need some of those mutual funds i need that 401k i need that s&p all these letters and numbers i need all this stuff to go up up up and this stupid savings accounts just sitting here looking at me doing nothing. And I got $10,000, which is only $10,000 I'd had in a long time. To me, it was the whole freaking world was sitting in this one account. This money was lazy. Just dying away.

It was pissing me off. Because I'm a math nerd, and I wanted the money to work hard. And then I learned that the emergency fund is not an investment. Everybody say, not an investment. Not an investment. It's an insurance policy to ensure that the things that are going up in value don't get destroyed when, not if, you have an emergency. So insurance costs you money. That $10,000 was costing me money by sitting there.

But it was protecting the things that later on made me a multimillionaire again. This is The Ramsey Show. George Campbell Ramsey personality is my co-host today. If you want your money to behave, you have to make it behave. Y'all remember the old cartoons with the lion tamer or is actually in the, actually in the circus, a real person. But then later on, we saw it as cartoons, as kids growing up and the lion tamer had a whip and a chair and he hold the chair out towards the line, make the lion behave, make them dance, make them jump up on the thing and all that stuff. That's what you are with your

budget. You're making that money. You're making it jump around, do what it's supposed to do because, uh, you're either going to tell your money what to do, or you're going to wonder where it went. And most people are broke, but most people don't have a budget most people don't know where their money's going they have no clue and they spend like they're in congress and and so when most people sit down and start doing things on purpose george we see dramatic results it's amazing and it's dangerous to have a lion on the loose so you want to make sure you got that thing tamed and contained so that's kind of part of the money management side. But you're right. I mean, we heard it earlier in the show.

They said, Dave, we finally just did the every dollar budget, and it showed us reality, and it showed us that we were spending more than we made, and it finally convinced us that we needed to make a change. So that's part one. That was part of the day-to-day? Yeah, it sure was. So you've got to make a plan.

You've got to stick to it. So every dollar needs a name. That's why we named our budgeting app that we built many years ago called EveryDollar. However, the budgeting app that we built many years ago no longer exists because we iterate and work on it every day. We have a whole floor full of nerds called software engineers that work on and add features, they tell me they're called, to the EveryDollar budgeting app every day.

And it is full of features. It helps you work the baby steps, helps you do everything. It's completely free. You can download it on the App Store or Google Play. We want you to check it out. EveryDollar. Listen, tens of millions of people are using this. Tens with an S.

S. Tens of millions. This is no small deal here. Every dollar. Check it out for free. Download it. Give it a try. Madison's in Cleveland, Ohio.

Hi, Madison. How are you? I'm good, Mr. Ramsey. How are you? Better than I deserve. What's up? I was wondering if I could have your input on how to handle a 10-year parent plus loan financially and biblically sound. Okay.

Who is the parent? You? No, sir. My father. Oh, your father took out a parent plus loan for you to go to school. Okay. So he has a debt. When he took out that loan, did you and he have a conversation about this?

No, sir. I was under the understanding that it was explained to me that a Parent PLUS loan was just him signing it under my loan, and i couldn't pay it he would be held responsible and i didn't realize that he has his own loan for me i didn't realize that until march of this year okay but so if you thought it was your loan all along did you have an understanding with your dad as a handshake that you thought you were going to pay it and he thought you were going to pay it? There was no handshake. He just told me I have to pay it off, and I was paying my own loan off at the time.

No, no, no, no, no, no, no. I said when you take it out. You weren't paying off any loan when you took this out. You were in school when he took out this loan was there a conversation or did he just take it out he just took it out okay and then later on he comes back and says you have to pay it yes sir but you didn't agree to that no sir because i didn't i thought i already well you didn't agree to it when he took it out when he took it out you did not say he did not come to you because sometimes parents

madison say to their kids i'm going to take this loan out but you and i are agreeing you're going to pay it and the kid says okay in that case morally not legally but morally the kid would owe the money and would want to pay it but it sounds like your dad took this out without even talking to you and later on he came back and said oh by the way you owe this am i understanding correctly you had no idea he took out this loan at the time i had i had no idea he took out the loan i thought he was I had no idea he took out the loan. I thought he was just saying if she doesn't pay the loan that she has, I'll pay. How long ago was this?

Was it 10 years ago or is it? Yes, sir. It was 10 years ago. Okay. And you're now in your late 20s? I'm 29, yeah. Did you pay off the other loan that you took out under your name? I'm currently working on it.

Okay. I've been paying a collection of loans for the past 10 years. Okay. What do you make, hon? Oh, about $35,000. I work on a dairy farm. Okay. What was your degree in um it was in uh veterinary medicine but i realized i didn't like school and it was it was a lot of money so i so you did not complete no sir okay does he own the dairy farm you work on no sir okay did you grow up on a dairy farm no sir okay i grew up around horses but yeah okay because the only

thing i know about dairy farms is it's constant hard work all the time that's the only thing i know about it for sure i have a friend that grew up on a dairy farm and her dad convinced them that labor day was the day you work the hardest so that's the only thing i know about celebratingry celebrating hard so madison you owe how much in student loans um according to my account it's a little bit under 12 000 and what does how much is the parent plus loan that your father owes i am not aware of the principal he wouldn't that were as of the past five years estranged, so I don't have access to it. But the total, he sent me a picture of the bill, is $25,000.

When did he send that picture? In March of this year. Which always helps when you're estranged. I just send you a vague picture of $25,000. Yeah. Okay. All right. You said biblically.

Yes, sir. Biblically, your yes should be yes, your no should be no. If you made an agreement, you should make the agreement. You did not make an agreement here is what you've described to me. If I go borrow money at the bank and then I call you up and say hey you owe some money to me you don't owe me any money biblically okay you got it but if you come to me and you say hey dave i i'm gonna pay you but i can't get the money to go to school would you go borrow money at the bank?

And I say, yes, Madison, I'll do that, but you've got to pay it. Then you do owe me biblically, morally, ethically, because you made a promise. Does that make sense? But if I'm understanding your situation properly, you're telling me you did not make your father the promise, but he came along afterward and tried to force this upon you. Yes, sir. Okay. Then you don't owe a dime, kid.

May I add a caveat? Sure. At the time of me applying for the loan and while I was in school, he was on disability, and we were told later that if that was the case he can go to social security and get I don't know if it was the total but he could get loans expunged yeah that's true and he has not and I did pressure him is he on disability now he currently is not the past five or six years then he doesn't qualify it doesn't qualify okay back then back then if you are on permanent ssi disability social security disability and the

government has accepted you as permanently disabled or if you die your student loans are forgiven and you have to go through a process like you called it a sponge but it's just a process of forgiveness and that's the case but not i used to be on disability or i was on disability when i took the loan out doesn't count okay it's where you are today so here's the bottom line your dad owes 25 000 bucks you're estranged whether you pay it or not it's probably not going to make your relationship any different because you you know you're not happy with him he's with you. Um, and that's not going to change. So if I'm you, I'm going to make $35,000, work my butt off and get my 12,000 paid off someday. If you're worth $10 million and you want to circle back

around and pay this, you can just as a generosity act. But you asked me morally, ethically, I don't think you do legally. I'm a hundred% sure you don't owe this money. This is The Ramsey Show. Our scripture of the day, Proverbs 16, 32. Better to be patient than powerful. Better to have self-control than to conquer a city. Eleanor Roosevelt said, never allow a person to tell you no who doesn't have the power to say yes. Ooh.

It's interesting. I'm going to chew on that one for a little. The first lady in charge of the New Deal creating bureaucracies. Who says no that doesn't have the power to say yes better than a bureaucrat i can't think of nailed it uh ellie rosado uh she does have some good quotes though i like that that's good uh spencer is with us in reno nevada hi spencer how are you hey we're going pretty good how are you better than we deserve what's up um so i me and my wife are having our first son in the next month yay we have about 26 000 in debt and i am exiting school

so i will be having to pay my school payments of a totaling of $15,700 at this moment, and we cannot seem to build our savings and pay it off. If you're exiting school, are you not getting a much better job? So my current job is an IT manager, and I'm going to school for cybersecurity. So if you're exiting school and you have a degree in cyber security why are you not getting a better pay i'm i'm not exiting school because i'm graduating i'm exiting two years early uh so i'm not finishing you're quitting school yes oh that's different than exiting okay i'm back with okay sorry i'm misunderstood is it

because of the baby or are you going going a different direction? What happened? Baby and financials. I was getting school loans while also having to pay a monthly fee, typically around $300 extra on our expenses. So what do you make? I am salaried at $71,400, and my monthly take-home is about $4,400. And what does your wife make? She is not working.

She's had a very symptomatic pregnancy and has not really been able to work. Okay. And how much debt do you have? I have a car loan for $23,700, a credit card with $1,700, and then when the school loans come to be paid is $15,000. Okay. And what do you do exactly in IT? So my job is I resolve computer issues, make accounts for new employees, term accounts, and manage projects and implement new features. I work at a hotel.

Do they have any kind of continuing education program there that they'll pay for any of your certs? They do not, no. What's your car worth? Kelly Blue Book has it valued at about 16 000 is that trade in or private party um trade that's private party and you owe 23 so you're pretty far underwater on this do you roll negative equity into it what happened um i purchased the car in 2021 during the height of the used car market and was just dumb and bad purchase.

Okay. Got it at original price was $38,000, so I've paid off about $15,000 already. Okay. All right, Spencer, so here's the thing. You guys have kind of been coasting along through life, trying this, trying that, doing this, doing that, and what's going to get you straightened out, and the baby coming on the way is a good thing

because it gave you a wake-up call, is you're going to have to get on a stone-cold plan that you don't deviate from. We're going to give you that plan. It's called Financial Peace University. We're going to walk you through the seven baby steps and make you a millionaire if you do exactly what i teach you to do in 15 years you'll be a millionaire okay okay so you're going to start living on nothing you're not going out to eat you're not going on vacation and you're selling

this car if you can if you can figure out a way to get out of it because you guys got a mess and you got to clean it up and you got to get your income back. Secondly, you got to do things to get your income up. And in the short term, that's some IT work on the side as a side hustle. On the long term, you start thinking about how I can get not necessarily a four-year degree in information systems. That's not required to learn to move up. In the IT world, we have about 450 IT folks working on our team here. And in the IT world, when we're hiring, we look much more for expertise than we do degree. And in that world, a certificate, a Microsoft cert or a certificate from someone else showing

that you are competent in a language or competent in some kind of a process, whether it's security or something else, is more valuable than a four-year degree because it's actual hands-on tactical training. And we know you'll be able to step into the seat and do it day one. That will accentuate your career because in the IT world, you can go to 100 and then to 200,000 income if you can go to 100 and then to 200,000 income if you keep studying and learning and growing. You don't have a bad career field, but you're going to have to kick it in the butt and get it going. And you just discovered school

was not going to work for being the shortest way to get there. But I want you to start thinking about how you can long-term get your income up and how short-term you can get your income up. And then we're going to put you on a tight budget and selling everything in sight and help you get control and show you exactly what to do. And if you're investing right now at all, if you've got a 401k or something through work, you need to pause all investing. Everything needs to be pointed at this debt. And right now, saving up for baby, because baby's going to be here in 30 days.

I would just stack up some cash make minimum payments cover your four walls stack up cash yes as pile pile cash as big as you can and then after baby comes and mama comes home and everybody's safe and good then we're going to kick this whole thing into gear hard and i want the next 36 months of your life to be tough not not unbelievable, but you can do it. You can do things that your broke friends don't do, and you'll get results that your broke friends don't get. And that's the kind of stuff I want you to do. And if the new baby coming on the scene is motivation enough,

and my experience is for most people, it calls on you to be a more noble version of your old self. And I think that's what I'm hearing in you. So I'm going to bet on you to be a more noble version of your old self. And I think that's what I'm hearing in you. So I'm going to bet on you. I'm going to give you Financial Peace University and Every Dollar Premium and George's book. And all of that is our gift for you as a new dad to get this thing out of the ditch and get it moving. But we've got to further your career short term with side hustle

and long term with certifications and whatever else you got to do you may have to jump to a different job where they'll actually pay while you're working it somewhere else they'll actually pay for you to work on your skills we do at ramsey because we don't want you to be the same person two years from now you are you are when we hired you i want you to be the same person two years from now you are when we hired you. We want you to be getting better. Because one thing we know about tech is it changes every 20 minutes. And you better be studying to stay up with it, or you'll be left out there and not know how to spell podcast. It's a problem. You got to stay up to date with that. And when you get the book, Breaking Free from Broke Spencer, check out the Margin is Breathing Room chapter. I lay out very practical ways to spend less and save more

because right now you're you're feeling underwater and that car payment's a big part of it i mean that's over half the debt right there yeah and if you can um either sign a note with a if you got that loan with a credit union sign a note for the difference and get the thing sold or uh even if you borrowed the seven thousand dollar hole you're in i'd rather have a seven thousand dollar loan than a twenty three thousand dollar loan and if it leaves you with one car for a while, sounds like mama's going to be home and you'll be all right. We'll work it out for a little while and then we'll save up and get us a little $2,000 car. Pay cash for it.

Pay cash, pay cash, pay cash, pay cash. No borrowing money. Get the credit cards out. Have plastic surgery tonight. Chop them up. A plasectomy is in order at your house. And so that this stuff doesn't sneak back up on you. That is the process.

You can do this, sir. And the great news is you have a real reason to push you. Nothing more motivating than a mouth to feed. Is there nothing you wouldn't do for that baby? Absolutely. Including sell the car, drive something you don't want to be driving. And not go out to eat for a while. So we have a future.

Yeah, that's the plan. Hey, thank you for calling in. Hold on. Christian will pick up and we'll get you settled in brother call us back if you need more help because we're here for guys just like you that puts us out of the ramsey show in the books we'll be back with you before you know it in the meantime remember there's ultimately only one way to financial peace and that's to walk daily with the prince of peace christ jesus one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. I'll see you next time.