The Ramsey Show - App - You Can Build a Business to Work From Home (Hour 3)

Episode Date: June 18, 2018

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Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show. Where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. That's 888-825-5225. Beth starts off this hour in Fort Collins, Colorado. Hi, Beth. How are you?

Hey, Dave. I'm great. It's great to talk to you today. How are you? Better than I deserve. What's up? Good. So my husband and I have been following your plans for a while now,

and we're just finishing up with baby step three, and things are going great for us. However, I'm calling today because my mother-in-law and my brother-in-law are struggling financially, and we're trying to help them get on board with the day plan. And I'm worried that if they don't get a better handle on their finances, then my husband and I are going to have to step in and help support them. And we already have a full plate with three young kids. And so just wondering if you have any advice on how to help them help themselves.

How old is your mother-in-law? She's 71. And what does your brother-in-law have to do with her? Does he live with her? So, yes, she's allowed him to live with her in an apartment. My father-in-law passed away about 11 years ago. What's wrong with your brother-in-law? He's kind of a deadbeat.

Poor thing. He doesn't have a lot going on with him and he's kept the job for the last year but he's just you know so far in debt and he he just struggles day to day he's had some drug issues in the past as well yeah if you give red bull to a lazy person you've just got a lazy person exactly yeah so he's kind of draining my mother-in-law of what little income she has. She has nothing saved at all. Yeah. How is her health?

Her health is okay. She's still working. She's a CNA. How old is the brother-in-law, Druggie, lazy guy? He's 31. Okay. All right. small, druggy, lazy guy? He's 31. Okay. All right.

Well, number one, I think you and your husband need to have some discussions about what you are willing to do and for whom you're willing to do it. I have pretty strong opinions about that, as you might guess, and that would be a 71-year-old widow lady that is my mom. I'm going to do a lot to take care of her. I'm doing zero for this other guy. Right. He's a parasite. Uh-huh.

Okay? And really, some serious hard times might be good for him. Right. And, you know, the only way I'm doing anything for him is if he's on a whole lot better track than he's on right now. Like, you know, he's actually working whole lot better track than he's on right now like um you know he's actually working all the time he's drug free he's you know and so on um he's got he's you know whole different animal starts to evolve than has so far so i'm worried i have to take care of him later is not a statement i'm gonna make okay i might be in a position that i'm wealthy enough

that i choose to help him if he is doing some things that are taking him in a positive direction i'm not going to finance his bad behavior like his mommy did because everyone's patted his little hand his whole life and said it'll get better sweetie it ain't gonna get better okay because he's a bum until he stops bum stuff then he's gonna to be there. And I can separate the two of these as far as who I'm willing to help and what I'm willing to help. So I doubt that you're probably going to talk mom into behaving with money while she's trying to take care of and be codependent with this parasite. Okay.

I doubt you're probably going to have much issue there, you know, progress there, as long as that relationship stays in that toxic form that it's in. It's not good. It's not good. It's not good for him because he's not getting better. He's not addressing his character issues. It's not good for her because he's sucking the bone marrow out of her life, right? Yes, that's exactly what's happening. It it's just disgusting to watch it's very difficult your husband gets mad on one level and you get mad on a whole nother level watching this yes yeah i just read your mail yeah so um you need to keep your mouth shut and step back that's his family and let him deal with his family and you and him talk about it behind closed doors

and then he has to say whatever is said. You can't say anything. You're just the Wicked Witch of the West. You're not allowed to say anything. You're the daughter-in-law. And so, can you tell? Yeah. So, anyway, you can do this.

And you guys are, what, 35? Yeah, I'm 33. My husband's 36. Yeah, he's the older brother. Yeah, he's the oldest. And he's kind of taken over the father figure. The parasite's the baby. Yeah, okay. Yeah, that's the one.

I'm so sorry. It's so painful to watch people you love do stupid stuff that destroys their own lives. It's just hard to watch. It really is, and it's harsh. It just really is, and it's harsh. It just really is. But you need to establish ahead of time what your boundaries are and what your priorities are and under what circumstances you will participate. If you don't establish that ahead of time, you and your husband, and write it down. So the two of you have your little family constitution of how we're going to deal with mom,

how we're going to deal with brother. If you don't, it's going to get in the moment, and there'll be a lot of emotion around it, more so for him than for you, and then you're going to throw up your hands and go, well, now we're just getting sucked into this thing. And so you need to decide ahead of time what the boundaries are. Okay. And if you know ahead of time, then when, because it's not a question of when they're going to start asking you for money or if they're going to start asking you money it's just a question of

when exactly and under what circumstances yeah under what circumstances are you going to participate and really i'm going to help mom if you can and the way you do that is you can talk to her about it you can get her kind of on an idea that she might want to do a budget show her some of the stuff you're doing you can't but he can you can but but i really am not going to give you much hope she's going to do it because any progress she makes he's going to take okay he takes everything and uh and so you know until he's out of the house and on his own again she's not going to be able to really implement a plan because there's so much dysfunction in the family here is what it amounts to. But the last part of that is you guys go finish your job, which is build wealth.

Get yourself out of debt like you've done. You get your college funds in place for your kids. You go build wealth, and you're sitting there, and we're 10 years down the road, and you guys are millionaires. You're in a lot different position to answer these questions then. If mom's 81 and junior's out of the house, and now we want to take care of mom, it's kind of a no-brainer. Yeah, we'll take care of her.

Okay. Even though she was in a codependent thing, yeah, we're still going to take care of her. It's her mom. Yeah, that's fine. Nothing wrong with that. But, again, you've just got to be careful that you're not financing someone else's crazy land. And that's what you face.

And the book Boundaries will help you understand all that. This is like a Boundaries day-to-day. Wow. Half the calls. Open phones at 888-825-5225. The big thing is this. The nicest people you'll ever meet are enablers. There's no mean enablers.

Enablers are always very sweet people. But they can't say no because they're so sweet, and so they give a drunk a drink. They give broken people money that keeps them broken instead of making them face their self in the mirror and fix their brokenness and grow up

and grow out and become all that God intended for them to be. So really when you're an abler, you're really not nice because you're really making a drunk stay drunk. Yeah. Hey, this is Dave Ramsey. You know, most of us have gotten behind on our bills at one time or another.

That's nothing to be ashamed of. It happens. And many of us know the embarrassment that comes with those harassing calls from collectors. Some of these guys are just scum. But then there are the collectors that are just plain crooks. These are the guys that take it a step further and they violate the Federal Fair Debt Collection Practices Act on a daily basis. They're breaking the law and they need to be stopped.

The truth is, debt collection is the most abusive, out-of-control industry in America today. But you don't have to put up with it. If you have collectors calling you multiple times a day, calling you at work after you've asked them not to, cursing or threatening you in any way, then you need to visit CollectionBully.com. These folks will connect you with an attorney who I know can help you. These attorneys know how to stop collection agencies from bullying and threatening you anymore. CollectionBully.com. Go to CollectionBully.com today. That's CollectionBully.com. Richie is with us in Tampa, Florida. Hi, Richie. Welcome to the Dave Ramsey Show.

Hi, Dave. Thank you so much for taking my call. Sure. What's up? Okay, so I am 22 years old. I've got two years left in college, and I'm wondering if I should, if it's time to move out and go live at school. The situation is that right now I'm killing it in school. I have a really good GPA, and I was just elected vice president of my school's formula racing team. I'm currently $15,000 in student loan debt, and the classes are getting pretty hard.

I'm just a little shaky with how I'm going to go with everything moving forward. Okay. Well, I don't suggest that young people move out of their home if everything's okay at home while they're in college, if it helps them get through college debt-free. I just try to help you make sure you're gone by the time you're 28, you know? Yeah. See, one of the things is I have a leased car from my last job. It was an employee lease deal, and it's going away soon.

It'll be going away right around August. Okay. And I live 30 miles away from the school. And I usually have things going around on campus about 24-7. And you said you're a Formula One driver? No.

My school has a Formula Racing team and I just got elected Vice President for that. What does that cost? It doesn't cost me anything. Okay. Do you get a scholarship for it? I do not get a scholarship for it. Okay. So it's taking up your time, although it is an amazingly cool thing. Okay. All the guys are going,

yeah. It's really helping me make connections with General Motors, Honda Performance Research, and I'm hoping to going yeah really help yeah it's really helping me make connections with uh like general motors uh honda performance research and i'm hoping to work on a formula one team yeah i hope you do too um and it will it will be a huge help on that i'm right now i'm trying to pay your bills so that's what i'm poking around at um so and what what i was thinking was that summer's coming up and you're going to work like 90 hours a week in the summer here and earn a bunch of money and buy you a car okay for cash okay and then how are you paying for the rest of the two years of school i've been paying in cash fortunately i had a pretty good job except for that part where you borrowed $15,000.

I'm sorry? Except for that part where you borrowed $15,000. I didn't have the job at that time. Okay. You have a job now? But I thought the job was going away. I'm sorry? I thought the job was going away.

This current job that I have is going away. It's going away in December. I work for a professor right now doing research, and he's moving. So I'll have to look for a new position. Okay. The car is going away. The car is the – okay, different thing. Okay.

All right. So – Yeah. But you've got a way to earn your way through the last two years without any new debt. It'll be quite a struggle, but I think I could do it. Okay. Well, if the professor research job is not paying enough or you're not getting enough hours, work more. Okay.

Get another thing. Get another thing. I worked 40 to 60 hours a week and got through school in four years. Okay. And they did not call that child abuse back then. So you can do this, but it's just going to be very difficult. So now have I got the schedule right? The car leaves in August, but you've got the professor job through December. Did I get that right?

Yes. Okay. So you need a car in the next 60 days. Something like that. Yeah. I could probably stretch out a car in the next 60 days. Something like that. Yeah. I could probably stretch out the car for a little bit. Yeah, so you're going to have to work like an absolute crazy man doing like 16 jobs in the month of June, July, right? Yeah.

Because you need like a couple, three or $4,000 to get a car, right? I can find something. I used to work at a car dealership. Yeah, but I mean, you've got to have money. You're going to need $3,000 or $4,000. You're telling me you don't have right now, right? I have $3,000 in the bank right now. Oh, that's good.

Okay, that's new information. All right. Well, in addition to that, let's put a little more money with it, and let's get you a $3,000 or $4,000 or $5,000 car that you pay cash for because you go crazy in the next 60 days with your work schedule. Just go bizarre land, and then you've got a better car, and that'll get you through the two years, and you don't have to worry about cars the whole time. And then all we've got to do is make sure that your budget with the professor income plus or minus other jobs gets you through with no additional debt. And then I think you've got a plan. I don't think you're moving out during that because you're not picking it.

You can't afford to pick up the extra expense, can you? No, I can't really find ways to make it happen. Now, if you've got something where your income shot way up and you can afford it, but not living at home is further down the list than graduating debt-free would you agree with that yeah that's something i really want to do is graduating graduating with no more debt is job one that's job one yeah you know not living at home is down the list it would be nice but it's kind of a luxury in a sense in our discussion because effectively if you move out and have to borrow money to go to school effectively you borrowed money so you didn't live at home well

that would be dumb yeah no we don't want to do that so let's not let's not go that route but but if you can if you can pile up enough money to get through school and get the car and get yourself on through, and then you've got some more money and you want to move on out, that'd be cool. I don't mind. But you've got to have a way that you can make the economics work, and not living at home is a secondary goal,

or a primary goal is graduate and graduate debt-free or with no additional debt to the 15 you've already got. So, hey, man, thanks for the call. Sounds like you've got some pretty cool stuff going on in your life. Just W-O-R-K is the formula on a bunch of this stuff. And I'm not talking about working at Burger King where you're flopping Whoppers for minimum wage. I'm talking about making some money, like, you know, 15, 20 bucks an hour, 30 bucks an hour. And that stuff's out there, especially self-employed. And you probably, you're a car guy, obviously, through and through.

You probably have some stuff around the car world that you can do that'll make you that. Detailing is an example. We'll pay that. If you build yourself a little detail business with some of these connections you've got or something like that. Good call, man. Good call. Regina's with us in Las Vegas.

Hi, Regina. How are you? Great, Dave. Thanks for taking my call. call. Regina's with us in Las Vegas. Hi, Regina. How are you? Great, Dave. Thanks for taking my call. Sure. What's up? I'm actually calling you because I am debt-free as of yesterday. Congratulations.

Thank you, sir. Now, I have a question for you. I need to know what Dave would do if he woke up in my shoes. I have the check in my hand to pay off the last loan. It is a personal loan. It goes to a very dear friend of mine. I have been looking at this check, and I've had the issue of giving the drunk a drink, and I've even heard you talk and speak to it today.

My girlfriend is a very, she has an issue, and I'm very concerned about giving her this check. I'm thinking that it may not be the right choice. How much do you owe her? $2,500, sir. Okay. Well, you obviously care a lot about her. I can hear it in your voice, and you're a kind person.

This is different than charity. This is an obligation. And that's where I'm having the dilemma. So it's not up to you. You have to give her the money. You owe her the money. You have to pay your debt. And then what she does with it as an adult is, sadly, possibly up to you.

Now, so you ask what Dave would do in this situation. I'm going to pay my bill. I'm going to pay my debt. This is not she's calling up asking for $2,000 as some help because she's in trouble. Then you might be giving a drunk a drink. But here you're not. This is not a gift to her. You're repaying a debt you legitimately owe, so you've got to pay it.

But I would pay it, and I would tell her what you just told me. I would just sit down and say, I owe you this money, so I have to pay you because you were nice enough to loan it to me, and I owe you, and I have to honor my obligation. But I got to tell you, I love you,

and I'm really concerned about you. And I almost hate to give you the money I owe you because I'm afraid it's going to do damage to you, and I don't want to participate in doing damage to you. I have to give it to you because I owe you the money I owe you because I'm afraid it's going to do damage to you. And I don't want to participate in doing damage to you. I have to give it to you because I owe you the money.

But can I come alongside you and walk with you while you walk out of this, this quote situation you're in and you know what the situation is, I don't. But I'm going to have that conversation. I can hear in your voice how much you care about her. The way you phrased it, the way it caught in your throat when you were talking about it. Face-to-face, in person, not an email, not a text. Sit down quietly in an area where nobody's around and just have a conversation with her and let her know you care about her.

This is the Dave Ramsey Show. There are few things in this world that irritate me more than when people pay too much for their mortgage. So many of you are paying way too much, and you don't even know it. I've got my good friend Mike Hardwick with Churchill Mortgage here. Mike, how do you help these folks? It's unbelievable, Dave, how much people can save if they just make a simple call. We've helped thousands of your listeners save hundreds each month or take years off their loan, helping them to save thousands of dollars in interest over time. Folks, do yourself a favor.

Make a quick call to Churchill Mortgage today. I'm telling you, if you're paying a mortgage, you're potentially throwing money away that could be piling up in your savings account. It's true, Dave. With the rates the way they are right now, if you're making any mortgage payment these days, you're probably paying too much. Call Churchill Mortgage, guys. It's well worth a few minutes of your time. This is a paid advertisement in MLS ID 1591, Equal Housing Lender 761 Old Hickory Boulevard, Brentwood, Tennessee 37027. Well, you guys know our own George Camel. He's the host of the Dave Ramsey Show video channel, our resident favorite hipster. And he launched his own video series on the Dave Ramsey Show YouTube channel. It's called Minute Money Hacks.

Minute Money Hacks. In the latest video released today, he explains in one minute how to save money on your costly summer electric bill. You mean George found the light switch? Just turn it off. Drop that electric bill. Right, George? Yeah. Yeah.

Okay. Seriously. All kinds of practical ideas here. You're going to like George's stuff. These things are always fun, and they're always informative, so it's kind of cool. Minute Money Hacks playlist on our YouTube channel. Just go to the Dave Ramsey Show YouTube channel. You can subscribe there, and every time we post a video,

including all the debt-free screams are posted there, it'll drop you an email into your inbox, and then you can look and go, I want to listen to that one. I want to look at that. I want to see what they did. Or, nah, I'm just going to hit the old um trash can here and dump it um i i subscribe to our channel and i don't watch all of them i want to watch myself and um i subscribe to rachel's channel of course and watch everything she does but um very good stuff so check it out

george camel minute money hacks that seems. I can't say it right. Minute Money Hacks on the YouTube channel. Got it, George. All right. Gave you your plug. You owe me now. You owe me. You got your plug right here. 15 million people just heard about you.

Did you see that? Yeah. All right. Emily. Emily's with us in Pensacola. Hi, Emily. How are you? And a knot.

All right. Tracy's with us in Colorado Springs. Hi, Tracy. How are you? Good. How are you? And a knot. All right. Tracy's with us in Colorado Springs. Hi, Tracy. How are you? Good. How are you? Better than I deserve. What's up?

So I'm trying to figure out. My husband and I just went through financial peace. My sister gave it to us as a gift after my husband lost his job. Um, and so we kind of have, uh, been working the plan for almost three months now and he's looking for a job, but I'm trying to figure out what we should do after he gets a job. Um, and so we just had our son around the same time he lost his job. And so, um, when he gets a job, either we'll have to put him in daycare, um, or I've been wanting to be a stay at home mom for a while. And we've kind of been, you know, pre-Dave Ramsey. It was like a pipe dream.

But now looking at our finances, it would be possible for... Depending on what he makes with the new job. Yeah. So we're both graphic designers, so it should be fairly comparable. What was he making before? He was making $42 a year. Okay. And why can you not freelance your butt off from home with a baby?

Yeah, so that's kind of what I'm trying to figure out. I don't have a whole lot of freelance clients built up, but that's not an impossibility. And I've kind of found a niche market that I really love. Let's build you a business. Okay. Let's build you a freelance business, and you can control your time at home. I mean, you put the baby to bed and go to work, right? Right. I mean, that's what I'm bed and go to work, right? Right.

I mean, that's what I'm doing now. Baby gets up, you stop work. It would just be more of that. Exactly. Exactly. Let's get you a real stable full of freelance clients so you're ready to rock and roll. And I bet you can make almost as much as you're making now. Yeah.

And then it becomes a no-brainer to stay at home. But we need to get that built up right now. Let's start working on it aggressively. Let me send you a copy of Christy Wright's book, Business Boutique, Equipping Women to Make Money Doing What They Love. It's all about ladies setting up and running their own businesses and or just running their own businesses, whichever. And Christy's got a real voice in that space, and she can guide you with that.

You can jump on businessboutique.com and learn more about it too and uh really help you get going on that but i think you build your base of business up and oh by the way while he's not got a job that needs to be what he's doing too yeah he's been doing freelance and uber and all the other side gigs so we're both working it now that way you can eat yeah that's a good a good thing. Okay, good. Good, very cool. Until he lands the full-time gig then. Yeah, good. Yeah, that's exactly what I would do. But hold on, I'll have Laura pick up.

We'll send you a business boutique book, and that will get you rolling. Derek's with us in New York City. Hi, Derek. Welcome to the Dave Ramsey Show. Hey, thank you, Dave, for taking my call. Sure, what's up? Nothing much. So, Dave, I'm really calling on behalf of my parents. They are about 69 years old. They live here in New York,

fully paid for house is worth about $450. They have five different checks coming in, three pension checks between the both of them, and then two social security checks. So they make about $110 a year um they have obviously you know pay for house they don't really have any bills no totally debt free um what are some investment options that i can tell them to kind of do that way they can generate more income my concern is that god forbid something happened to one of them um they would lose either three or two checks depending on which parent passed and then they wouldn't really have any income. Do you have any recommendations? They have no nest egg. No nest egg in regards to like 401Ks or anything like that,

just the paid for house, and then the five checks coming in. That's it. Okay. But all the checks are pension and Social Security checks. That is correct. My dad has two pension checks. My mom has one pension check, and then they obviously both collect Social Security. Yeah, I agree with you.

This leaves them vulnerable when one of them passes. The math on that's not good. Okay. So, yeah, I would really start to build up some kind of an estate. And I think I'd probably just use something very simple, just some mutual funds. You can't put it into a retirement account because it's not an earned income. It's all investment or pension income. So you can't do a 401K Roth IRA with that money.

So what I would do is just go to DaveRamsey.com, click on SmartVestor, and have them put in their information. It will drop down a list of the SmartVestor pros, the investment advisors in your area, that we recommend. They don't work for me, but we endorse them. They have the heart of a teacher, and they can sit down, and you can say we're going to have this much a month drafted out of our checking account straight into a mutual fund or funds,

whichever you choose to do, and let them begin to build up a nest egg of some kind. I don't know how much they can build or how much they can throw at it, but it sure would be good to have $100,000, $200,000 built up before something happens to one of them and give them a whole lot of options that they don't have right now, something to consider. So good question.

Thank you for joining us. Open phones at 888-825-5225. Kate is on Facebook. Dave, I have an increasing term life policy with a waiver of premium which allows me to convert to a whole life policy if I'm disabled my agent advises

against converting to level term 30 and dropping the waiver of premium what's your opinion I think you have a whole life agent of course they advise you to keep their whole life crap or increasing term that converts to whole life with. Of course they advise you to keep their whole life crap, or increasing term that converts to whole life with a waiver premium and everything else on it. So what I would tell you, Kate, is if you'll just go to ZanderInsurance.com and just say put in an amount that's similar to what you've got now

and just look at what 15- or 20-year level term life insurance costs, you're going to be amazed at how much you're being overcharged. Because I can tell by the way your agent is acting that the price of this term is probably double the market. You don't have a good policy. I can just smell it. I've been doing this a long time. I could be wrong, but I'm not.

So check it out. And you're going to find the term life insurance on a 15 to 20-year level term for the same amount of coverage you've got now with no waiver of premium is there. Waiver of premium just says that your policy is paid by the insurance company if you become disabled. If you have long-term disability insurance, you shouldn't need that. And if you have an emergency fund, you shouldn't need that. You keep it in place, and you pay the premium if something happens to you, and you become disabled.

It's a very expensive add-on, and I don't recommend waiver of premium. I don't buy it. So the insurance business is full of gimmicks. Most of the time, if you just buy the base thing, you get what you need. You don't need return of premium. You don't need waiver of premium. You don't need all these gimmicks. You just need term life insurance.

And when you go to somebody like Xander that shops it around and gets you the best deal, you won't get a better deal, number one. But number two, you're not getting advice from somebody who's trying to get you to keep their crap. This is the Dave Ramsey Show. You know, people often struggle when they're starting their financial plan. It's not easy breaking bad habits, and I always recommend that you keep it simple and take care of your family. That's why term life insurance is one of the most important steps to take when you're getting started. If you have a family, then it is crucial that you have the right amount and the right kind of life insurance.

Stay away from cash value and stay away from return of premium plans. That's why I send you to Zander Insurance, and I have for over 20 years. Zander only offers the term plans I recommend, and they shop among the top companies to find you the lowest rates anywhere. Zander keeps it simple and inexpensive, and that's why I use them. Get a quick, easy quote online at zander.com or call 800-356-4282. For the cost of a couple of pizzas each month, you can easily knock out one of the most important steps to protecting your family. That's zander.com or call them at 800-356-4282. Our scripture of the day, Psalm 103, 13. As a father has compassion on his children, so the Lord has compassion on those who fear him.

Billy Graham said, A good father is one of the most unsung, unpraised, unnoticed, and yet one of the most valuable assets in our society. Well, that is very true. And given that we're coming out of Father's Day weekend, it's a proper sentiment. Donald is with us in North Carolina. Hey, Donald, how are you? Hi, Mr. Ramsey. I'm doing great. How are you? Better than I deserve. What's up in your world?

Well, currently I'm living in a house that I'm going to be moving out of in the next few months. I owe $190,000 on it, and the majority of the houses around it are selling between $260,000 and $270,000. I've had a couple of realtors come out and give me an estimate. I'm going to be selling the house. I'm completely debt-free with everything besides the house. I'm on Babysit 4, and I have three children under 4 years old. One of them is 4 months, and I have a 2-year-old and a 4-year-old. Where are you moving?

I'm going to be moving to Virginia Beach. I'm going to be getting out of the Coast Guard, and my wife and I are both going to be using our GI bills to get a further education. So we're going to be moving to Virginia Beach and going to school. But I don't think it would be, and based on a lot of the information I've heard you say, I don't think it would be wise to buy a house when we'll only be there for three to four years. Agreed. And so I'm wondering what I should do with that money.

I should probably walk away with at least $50,000 from the sale of the house. And you don't have any debt? I don't have any debt, no, sir. Very good. Good for you. Well, thank you for your service, by the way. Thanks for your support. And so I assume you guys can live on the stipend that you'll be getting for education

as well as they're paying for the education, right? Yes, sir, and we're going to be working, too. Cool. What are you going to study? Wait a minute, you just dropped your phone. What are you going to study? I'm going to be studying business with a major in entrepreneurship management. And my wife is going to be studying culinary. And then from there, we both kind of hope to open up our own businesses.

Right. Well, I'm assuming you're leaving this money alone three to five years, it sounds like. If you're going to leave it alone five years or longer, I probably would use a mutual fund. If you're going to leave it alone less than five years, you'd stand a chance of losing money if the market cycles up or down, or in this case, down. If you put money in and it goes down, you would lose money. And so if the market lost 10% while you had the money in there, you would have lost $7,000 of your 70. And is that a risk you want to take to try to make some more money? Because you would, on average, make more money in good mutual funds.

So given that you have three or four years, not really five, what would I do if I were in your shoes? I probably would put a portion of it in mutual funds and leave a portion of it in cash, meaning that you're going to get almost no return but no risk, 1% or whatever on your savings account in cash for $30,000, and I might invest $40,000. Then if it goes down 10%, you've only lost $4,000.

If it goes up 10%, you're only making $4,000. But I think you probably still have a pretty good chance of making some money in the next three to four years if you do that. And if you did lose, you likely won't lose anything substantial by spreading out the idea between the two, because you're kind of on the fence in terms of the amount of time that you're going to be leaving it alone. Michael's with us in West Palm Beach.

Hey, Michael, welcome to the Dave Ramsey Show. Mr. Ramsey, thank you. It's an honor to be on the show. Certainly. Good to have you. How can I help? I have an issue with a used car that we purchased a couple of years ago, and it's at a significant interest rate.

It's 23.5%. Oh! Yeah, so you can see what our situation was when we bought it. So the issue is I've been watching your show on YouTube. I got connected via the suggestions, and I'm trying to, you know, we're trying to save up a thousand bucks, and we're trying to work on tightening up the budget a little bit at the same time. What do you owe on the car? We owe 96 and a half, so about almost 9,700. Okay. On a car that's worth, I think, $5,500. Gotcha. And what is your household income?

Combined, it's almost $59,000. $59,000. My wife's varies, but it depends on how much she works. She works part-time. And what other debts do you have? Just some medical bills. It totals about $14,000 between the both of us. Okay.

All right. thousand between the both of us okay all right and so how far into this process of learning all this stuff that we talk about here are you are you ready to go like crazy scorched earth and get this paid off really really fast i'm becoming a little bit more serious as it goes along because i work nights and i'm going to school and i'm trying to move us you know up the income bracket and out of the uh you know, up the class ladder here. Well, you're getting knowledge, and that will help you do that. Good for you. Assuming you're studying something that's usable, and I'm sure you are.

Nursing, yes. So, yeah. But here's the thing. The 23% makes everybody gag, including you and me, right? And it's the biggest debt, and you're upside down so far in it, it doesn't do you much benefit to sell it. And so what I would do if I woke up in your shoes, which is how I answer questions here, is I'd want to be debt-free in a year. Yes, sir.

So that's $1,200 a month in addition to the payments you're already paying on your debts. That might mean like some really crazy budget cutting in order to squeeze that out of your written budget, and you and your wife sit down and look at that. But I think you can clear all of this debt on $59,000. I think you can clear $14,000 in 12 months. Well, another issue with the car is I've been thinking this isn't necessarily a car that I would want to keep once it's paid off. Yeah, well, then once you get it paid off, sell it.

That's fine. But today you're not in a position to do a transaction on it because you're $4,000 in the hole. No, but the next few months we'll be in a position to purchase a car cash. And the way my credit's set up, I'm not sure if I should just turn the car in and pay myself $300 a month and then purchase a car cash. No, you can't turn it in. That's called a voluntary repossession. And they're going to sue you for that other balance.

You don't get to just turn it in and not worry about the balance. You're in the hole here. So you need to get the – if you want to sell it, sell it, but you're going to owe the $4,000 difference. Gotcha. And you've going to owe the $4,000 difference. Gotcha. And you've got to buy a car. And that's going to be hard with what I thought you were describing to me. You've not even got your $1,000 yet.

Correct. So what I would do is knock those medical bills out right quick, and then I would start beating on this car. And once you get it beat down a little bit, if you want to make a transaction, fine, but you need to get it beat down so that you can afford to buy another car. I don't want you moving from the frying pan to the fire kind of thing. So you're just getting started, but if you just lean into this really, really hard,

in 12 months it'll be over. And you have a paid-for car sitting there that you don't like, and you can easily sell it and get a car that you do like, add a little cash to it, that kind of thing. You'll be in a lot better position to make those decisions at that point. But it's all about the intensity because the intensity increases the speed at which you pay off the debt because the intensity increases the depth at which you sacrifice. If you just go completely nuts or your broke friends are all thinking you joined a cult for a short period of

time that's what turns it around where you just go game on extremo crazy land you know we don't do anything anymore what we're doing is getting rid of 23 freaking percent because it makes me gag every time i walk out there and put a key in this thing and i you know when you get like really really pissed off that's when you get rid of your debt because you cut so deeply on everything else it's like i want rid of this thing i'm sick of this i'm not living like this anymore i've had it and when you say i've had it that's when that's how it happens so that's the that's the kind of thing because the more the more get emotional about this, the deeper you'll cut, because you can see it's only one year. Only one year. It's like, why are you going back to school?

Because I'm trying to give up some of my time and my energy and my money right now to have more time and money later by having an education. You're living like no one else, so later you can live and give like no one else. And that's what I'm talking about here. You can do this, Michael. You can do this. Hold on. I'm going to have Laura Zinja copy the book, The Total Money Makeover. It'll show you exactly what to do. That puts us out of the Dave Ramsey Show and the books.

Our thanks to Laura Johnson filling in for Kelly Daniel today and James Child, of course, our producer. I am Dave Ramsey, your host. 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. Hey guys, it's Blake Thompson, Chief Production Officer for The Dave Ramsey Show. This hour's up, but you'll find more on our YouTube channel, where we have over six million YouTube views each month. You can find debt-free screens, millionaire hour clips, day grants, and so much more. Go check it out.

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