The Ramsey Show - App - You Don't Get a Pass on Math When You're a Farmer! (Hour 1)

Episode Date: July 2, 2020

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. This hour is a small business entree leadership theme hour. If you have questions about business, questions about leadership, we want to talk to you. The phone number is 888-825-5225. My co-host is the Executive Vice President of Entree Leadership and all things leadership at Ramsey. Sitting on our operating board as well, Daniel Tardy.

Here to answer your questions about your business, your business life. And man, there's a lot of stuff going on. The good news is it's Independence Day, and there's nothing more independent than a small business guy. Come on. Those of us that are small business guys pretty much tell anybody in authority, kiss our butt. Well, and we talk about what drives this country. We really believe it's not a belief. It's a fact.

Small business is the backbone of this economy. Our founding fathers were small business owners. That's not a philosophical thing. It's a mathematical thing. It's how it works. And so the fabric of this nation is stitched together by really small boutique businesses all over the country, companies that are between, you know, one and 50 employees is the majority

of what people work for out there. It's the American dream. Raise the American flag, play the Star Spangled Banner, and by God, I'm firing off some fireworks. There's nothing more patriotic than that. Well, Dave, it has been a— Especially if it breaks the law. I'm going to have to step outside our subdivision for the police not— We did this one year.

The cops showed up, and we're shooting them off in the back of our house, and my daughter thought I was going to jail that night,'s still traumatized she's like daddy don't be fireworks you're gonna go to jail years later every time she hears a firecracker daddy's going to jail kind of a badge of honor for me well there is a renegade thing the independent spirit is usually what causes someone to go in business and sometimes it's toxic uh like you can't work for anybody else because you're such a butt so you open a business i mean sometimes it's that right but sometimes it's toxic uh like you can't work for anybody else because you're such a butt so you open a business i mean sometimes it's that right but sometimes it's just a fierce independence and it does line up with independence day the fourth of july weekend so if you got a small business and you got questions we love you and we're here to help you we're one of you

we're cut from the same cloth daniel grew up in a small business household. I grew up in a small business household. We were taught at the Ramseys that if you're unemployed, it's just because you haven't had an idea yet this morning. Well, the thing about small business, you talk about being rogue and renegade, and it's not to be reckless, but if you just want to be in a management... Sometimes it is. Well, if you just want to follow the rules, go work somewhere that has a bunch of rules. But if you want to write your own rules because you see something that could be and should be, and you want to make your community better, you want to make things better for your customers, you want to make the marketplace better, that's why business owners bend the rules.

We challenge status quo. We go against the grain, and it's hard work to do that because we get our— Corporate goobs don't do that stuff. I was having lunch a while ago with some of our tech guys, and they were telling me about this company who built this nice new building in the area and their hr department from another area it lives in a different country i mean a different state different country probably maybe but uh a different state has their hr department told them they can't have before people in the building and i'm like so when did h HR start running your freaking business?

Oh, wait, you're stupid corporate America. Now I get it because HR doesn't tell us what to do. We tell HR what to do at Ramsey. That's how this works. Isn't that different? That's just so different. Isn't that special? Well, the problem is these companies get so big that you've got all these layers of bureaucracy.

The bean counters the lawyers and HR still telling everybody what to do. and that's about the time your business is gonna die exactly that's about the time it's gonna die because there's no passion there's no energy there's nothing new happening and you're not gonna you're not gonna leave the cave kill something and drag it home you're not turning over rocks you're not growing you're not iterating you're not breaking the things that aren't even broken yet which is what what entrepreneurs do. So we're here to talk to you guys. This is an Entree Leadership Theme Hour. We love this space. We love the people in this space. We've been teaching you and ministering to you for years, and we're really, really excited.

Open phones at 888-825-5225. Sarah is in Iowa. Hi, Sarah. Welcome to the Dave Ramsey Show. Hi. Thanks so much for taking my call. I'm very excited to be on. Absolutely. How can we help? So my mom and I own a custom apparel business here in Des Moines, Iowa. She started it in

her house in the 80s, and I joined with her in about 2005. And we first was in her house, and then we've moved to a retail space that we rent. And she is about 70. She's getting close to retiring, but probably wants to work for about another three years. And so we both have our areas of expertise that we specialize in. She does custom bridal gowns, custom one-of-a-kind pieces, and I do custom group orders and costumes and anything that's on a bigger scale of production. So right now,

we're 50-50 owners, and we're kind of talking through the succession plan and trying to figure out what that exactly looks like and figuring out if there's like a buyout option and how I put a valuation on that when the portion of the business that she does is not something that I would continue. That part will probably fade away when she retires and I would continue on with this portion that I do. So then the valuation of it is really hard to figure out and like is it just our equipment or trying to figure out how do we, you know, pay her for the life's work that she's put in. But when it's not something that I'm going to continue what she does. So, Sarah, there's several things going on here.

And this is really cool that you're getting to work in a business with your mom, both doing something that you love. And it's exactly what we're talking about, why small business is so great. Because you see families come together around something that they're passionate about. And that's exactly what we're talking about, why small business is so great, because you see families come together around something that they're passionate about. And that's exactly what you guys are doing. Regarding the valuation, there's the mathematical side of this conversation. And we can talk about that for a second. There's also the relationship that you have with your mom. In a few years from now, when your mom is not working in the business more than anything, you guys have worked so hard to have this great relationship. The last thing we want is that the transition of the business negatively impacts your relationship with your mom.

Does she need money when she retires? No, but she would like to kind of continue working for as long as she can. But I mean, when you buy her out, she's got enough money if she got zero. I'm not suggesting that, but I'm just asking that. She would be okay. She'd be okay. All right. So the valuation.

Is there any employees other than the two of you? Yeah, we were seven employees before COVID, and now we're down to four. And that also kind of changes how everything is, since my portion of the business is kind of falling off a little bit with big groups and events not happening. Well, you're not really going to be able to do a valuation necessarily based on today. But if you look at the year 2019, a common practice in business for valuation is to use a multiple of what is called EBITDA. That's your earnings before interest, income tax, and

amortization. And it's just a fancy way of saying basically the bottom line, your net profit. After both of you have been paid a salary. So what was that number last year after you paid your salary? If both of you were paid a salary. Yeah, net last year was $17,000. Okay. After both of you were paid a salary. Correct.

Well, sorry, that was net after all expenses. Okay, so let me just be brutal for a second, okay? Mm-hmm. There's not a business. You guys just own your job. Right. You don't have any profit to amount to anything. Yeah, it kind of felt that way for quite a few years.

I mean, the business is worth $50,000 or $60,000. Okay. And so if you gave her $30,000 walking out the door, that would be generous. Very fair. Absolutely. Especially considering that her amount of money is, I mean, the amount of money she's producing is going away. You guys own your job is what it is.

And that's okay. It's not a bad thing. It's just stage one in business. And stage one is you make enough to live on out of the business. You own your job. But once the business makes money beyond your basic salaries, then that's the thing. And let her stay there and work the salary as long as she wants to work. This is the Dave Ramsey Show.

Folks, I love telling you about well-made, well-thought-out products. Today, I'm talking about Grip6 belts. I don't know about you, but I'm not a fan of traditional belts. They never fit right, and they're uncomfortable. Grip6 belts are unique. Owner BJ designed a truly modern minimalist belt made of high quality materials with no holes, no flap, and no bulk. And the buckles come in really cool designs and are interchangeable. I personally own these belts in different styles. And talk about affordability, Grip 6 belts come with a lifetime guarantee. And that means if you no longer like or fit the style of your belt, you can replace them for free.

Plus, I like the way these guys do business. Grip 6 is determined to help build and modernize american manufacturing to learn more and get this month's dave ramsey special visit grip6.com that's grip6.com It's a small business theme hour, Entree Leadership, with the Executive Vice President of Entree Leadership, Daniel Tardy, who is my co-host this hour. I'm Dave Ramsey. We will be doing the Entree Leadership Summit in Orlando in a little over a week. And that's coming up fast, isn't it?

It's going to be here right around the corner. July 13th through the 15th. And it's going to be an incredible lineup. We've got several thousand folks, of course, coming. Damon John will be speaking from Shark Tank. Mike Rowe will be there from Dirty Jobs and Deadliest Catch. Both these guys are just incredible guys. Lou Holtz, coach, is with is with us hall of fame coach and just an

incredible communicator dr benjamin zander the founder and conductor of the boston philharmonic craig groeschel senior pastor of life church and one of the largest churches in america an incredible world-class leader ian crone is going to be with us from the enneagram famous from his book on the enneagram ch Chris Hogan, Christy Wright, Ken Coleman, me. A bunch of our senior leaders will be doing all kinds of Q&As because Entrez Leadership is about how we, it's our playbook of how we've run this business, how we've grown it from a card table in my living room. You've got two options.

There are still some seats available. As you might imagine, we've had some cancellations because there's a little thing going around if you hadn't heard and um but a lot of folks are still coming and if you're hardy and you want to step up and you're you're one of the folks that's out there doing things it's a good time to get your batteries recharged uh a lot of people are that are running businesses are drained right now they've been fighting to keep keep, you know, they're having the best year of their lives and they're fighting to keep production going, or they're having the worst year of their lives and they're fighting to keep the doors open.

Well, Dave, here's how I look at this. You know, it has been a rodeo out there. This year has been nuts. And anything about rodeo, there's really three key characters. There's the bull, the cowboy, and the clown. And you've got to decide, are you going to be the clown? Are you going to be the cowboy? The bull's bucked you off. And it's time, if you're a small business owner, to get back on. You got a little blood on your chin. I got on one of those things. I don't even like that metaphor. Those things hurt. The marketplace is brutal, man. It

can be a bull. It can be a bitch. But it's the time to decide, hey, we're going to get back after this thing. I got thrown off a horse several times. You're still talking about the metaphor. I'm trying to talk about the event. The bull, the market, the bull. Come on, man. The point is, cowboys get back on the bull. And business owners are tough like cowboys and cowgirls. There you go.

So reset, refuel, get refocused, and we'll help you charge your batteries. Because, I mean, every Sunday I've got to go to church. I've got to get my tank filled back up, you know. And that's what this is. You get your tank filled back up, leaders. It's not church, but it's church for leaders. You know, it's that kind of a thing. I'm going to make fun of your metaphor.

You're talking about church. I'm talking about radio ads. All right. July 13th through the 15th coming up in Orlando. It's going to be at the Gaylord Palms, which is stellar incredible event they are so happy we're coming the people that work there get jobs because we're coming and they're happy exactly because they've been sitting at home and they're excited to have somebody that they can serve and and man it's just going to be it's going to be iconic and epic and oh by the way you can also watch it uh as live stream. We've never done a live stream with Summit ever, and we won't run out of those tickets, I don't think.

So if you're interested, you want some details, text the word Summit to 44222. That's S-U-M-M-I-T. I can never get the M's and the T's right in that word. Summit to 44222. Summit to 44222. Come join us in orlando i promise you it's going to be worth the trouble and um and yeah there you go jim is with us jim's in indiana hi jim welcome to the dave ramsey show hello how you doing great man how can we help well i just got a question um i'm looking to inquire of a small business i've got a small business now as far as concession business, but, you know, in this time, there's a lot of people selling.

Did you say construction or concession? Concession. Okay. You know, as far as going around to like festivals and fairs and stuff like that. Got it. But I got a person that's maybe interested in selling their business, which kind of falls a little bit with mine, but it's on different – because it's seasonal. So it takes up the season that I'm not busy.

That's good. But how – without really equipment and stuff like that that they have, they just kind of sell stuff in bulk. So they kind of get it and repackage it and go to shows and stuff like that so how do you put a value on something like that as far as i say well i've been to the show for 15 years but this business worth and i'm just throwing a number out so what are they what is their what's the business you're thinking about buying what do they do it's more of a like a candy like a gourmet popcorn and candy bulk that they you know that they go to different shows and stuff

like that so what are you buying? Yeah, what do you buy? I mean, what's the customer list? You're mainly buying the customer list, basically, is what you're buying. I didn't know what the... Okay, so they have a series of places that, back when people did this, that used to get together for fairs or whatever else, and they had the in with all of those, and they buy these items and they resell them at each of those locations, and that's the extent of the – so there's no equipment, there's not a trailer, there's not a bunch of other stuff.

Okay. Then it's just a multiple of their net profit if you think you can duplicate the net profit. In other words, if you think in the given climate, business climate, the given mess with pandemic stuff, is that same revenue going to be there? If you think it is, then it's just a multiple of the net profit. What is it profited? Net profit after all expenses are paid. And I've not looked at their books, but it's roughly probably $150. Okay.

So do you think that's going to continue? I think, of course, this year it wouldn't. But I think once when, you know, like it picks up, I do believe it continues. So to simplify the matter, let's say they make $100,000 a year net profit. You can expect to maybe pay between four to five times that. So you're looking at $400,000 to $500,000 a year if you actually believe that what they're bringing to the table isn't something you can just go and replicate on your own. Okay. So a bank is going to look at this and say this is what they would call blue sky.

There's no collateral. There's no assets. There's no recurring revenue. And so those things play into the valuation of the business. What keeps you from just calling all the places and going and doing this? Yeah, that's right. I mean, that's something that I'm not – I'm just kind of getting a base of, okay, what would something like that be? And you're right.

I mean, that's – it ain't nothing keeping me from really doing that also. You have a list of the same places. It's hard to get in – well, but it's hard to get in some of those shows. Some of those shows your grandfather did or they only allow one vendor, and they're there for 20 years. That's worthwhile. If that's the nature of the industry you're in, that's worth something. Okay, so this business is worth $300,000 to $500,000 if you believe it's going to continue exactly like it is. I don't.

Right. I think it's going to take a hit. I'm in the live event business. Live events are taking a hit. Okay? Yeah. I mean, Nashville, country music artists are sitting at home. Not all of them, but a lot of them.

And so, you know, it's when will it, are they going to sit at home forever? I don't know. But you're not going to make that same amount of money in 2020 for sure fall of. I mean, the third quarter of 2020 is not going to look like the third quarter of 2019 in that world. Let me ask you what you're – I mean, from a strategy standpoint, five years from now, is this something you're wanting to pick up and do, or are you just trying to find something that's going to generate cashflow to offset your other business right now? I'm calling the offset of the other business as far as my other business. If that's your goal, this is a distraction.

If you're sitting on a couple hundred thousand dollars and you can steal it, and there is a legit thing of getting exclusive access to these providers, it might be a good long-term investment that you go, hey, over five to 10 years, you know, I'm picking up a bargain right now because it's on sale. But to supplement or offset the income that you're missing right now and try to turn this around short-term, it doesn't sound like the right strategy, Dave. What I would do is offer them a percentage of the net profits for the next two years and take it and run it for them and give them that percentage as your as their buyout and that way if the profits dive because

the market dries up on you uh you don't end up overpaying for something by several hundred thousand dollars and so i mean if it's netting 150, I mean, I would give them 80% of the profits for two years or something like that and run it for almost no money and, you know, learn the business from them, make the handoffs on these exclusive access vendor slots from them, and then they get, you know, they get their money out of the profits over the next two years and let's see how the let's see how the world changes this is the dave ramsey show Thank you. My co-host this hour on the Dave Ramsey Show, Entree Leadership Executive Vice President here at Ramsey and Operating Board Member Daniel Tardy. We're answering your questions about business, small business. Maybe you're trying to handle extra volume because business is booming in the pandemic for you.

That is happening with a lot of businesses, believe it or not. And then other businesses are just in completely up a creek and are struggling trying to figure out what to do. We went through a month over here where we were just stomach in our throat, running around trying to make sure stuff was covered. And it was a very unique time. So you want to talk, we're here. The phone number is 888-825-5225. That's 888-825-5225. As we mentioned earlier, we will be in Orlando, Florida, July 13th through the 15th for one of the world's top leadership events. It's called Entree Leadership Summit. We've done it for

several years and it gets better every year. Damon John from Shark Tank will be with us. Mike Rowe from Dirty Jobs. Lou Holtz, the coach. Dr. Benjamin Zander, the founder and conductor of the Boston Philharmonic. Craig Groeschel, senior pastor of Life Church, one of the top leaders in the world of all kinds. Incredible friend and man. Chris Hogan, Christy Wright, Ken Coleman, many others. Lots of other stuff going on.

If you'd like to come, we still have some tickets. We're sold out, but we've got some tickets now uh because some folks are freaked out more than others and um also if you uh want to do live stream we've never done this before but we're going to live stream this so check in with us the word text the word summit to 44 222 help you reset ref, refuel, get focused. Summit. Text that to 44222, and our team will work with you and help you get served in that however we can. Anna is with us in Missouri. Hi, Anna, how are you? Hi, I'm good, Dave and Daniel.

Thank you so much for taking my call. Sure, Anna. How can we help? Okay. So my question for you today is about our third generation family farm. A little background. My husband and I are 28 and 29. We've been following your plan and have knocked out everything, including the house and 13 acres. Good job. We own it ourselves.

Good. So we're ready to tackle the farm debt. And we do realize, you know, that farm debt or personal debt, business debt are the same thing. So we're ready to tackle it, but we're kind of struggling with how to manage paying off debt versus maintaining a healthy amount of retained earnings to handle the ups and downs of the industry we're in. And, you know, income and expenses, both of them just vary so greatly. There's no monthly anything. So just kind of wanted to get your thoughts and advice on balancing those things

and honoring the farm that, you know, has been passed to us, but also, you know, honoring the legacy we want to create for our kids down the road that doesn't have the burden of debt. What a cool story. Good for you. The family farm story is pretty special and it's rare these days to make it generationally like that. I'm assuming the second generation ownership is fully out of the picture at this point. You and your husband are fully on the whole thing, own everything, and it's been transferred? We are not there yet.

But over the last few years, I mean, we are definitely still in transition mode. But there are a lot more things that are our responsibility financially, and my husband is making more of the decisions. This is a pretty good-sized operation, and you seem to have your finger on the pulse. What's the profit? Taxable profit. Net income for us right now, we're looking right around $200 a year. Who's us?

My husband and I. Okay, and that's the whole operation? No, that is the part that we farm ourselves. So they do share some equipment, which I know will make you cringe that we share things, but we do financially share some of the equipment, but he does have his own pieces of land. Okay, so when you take over the pieces of land. And so when I look at it. So when you take over the rest of it, how much is involved? Probably, I don't know the answer to that question.

Because that's the debt that you're worried about, right? I think really, I mean, absolutely at the end of the day, yes. And it's a conversation that we've, you know, been saying we've got to have this conversation with Dad. Yeah, well, basically, to go back to your original thing, how much do we set aside for retained earnings? How much do we throw at the debt? I'm going to set aside the minimum of retained earnings that I think I'm going to need, and I'm going to throw the rest of it at the debt. So you ought to be able to, you guys are pretty sophisticated in how you're running this operation.

This is not something you're doing out of your back pocket. You know your numbers. I can tell you know what's going on. Well, and I think, I mean, you need to be setting aside enough in retained earnings that you guys can, it sounds like you're going to be buying them out completely at some point. Yeah, so you set your goals of what you need for retained earnings and the rest of it goes to debt. So what does it take?

What does it take? You know, because you got the cycle the calendar cycle and you got some some months where there's no money and you got to cover that right right so what does it take to hold the thing together retained earnings in a year not what you wish you had not what's. What's the actual dollars that it takes? And if you had $1 less, you got a problem. If you had $1 more, you got a surplus. To operate the farm.

Over a year, you take it all at the end of the year and say, to operate the farm this year, this is what it costs. Okay. So here, you need to go back and study these numbers, okay? You need to know over the course of a year what it costs to operate the farm. You can't pay off debt. That's not what't pay off debt that's not what i'm saying that's not what i'm saying what i'm saying is you ask about how much goes to retained earnings retained earnings simply a savings account right and you need a savings account to cover the dry times so that you don't go broke before the next crop comes in correct sure well we've got three different things going we've got beef cattle poultry and the crop well whatever it is but i'm saying different cash flows but all in all

all in all you've got times that the thing doesn't cash flow in a given month yes and i need retained earnings to cover the cash flow fluctuations and so chart your cash flow fluctuations and chart your low points and your high points and and figure out what your low point is and that's all you need retain earnings is a mathematical thing for that purpose you're your own line of credit to cover downturns in cash that's all it is okay then our emergency fund or well no that's not an emergency fund that's just covering... That's just your own line of credit to cover cash flow fluctuations. Then above that, I would keep a little bit of an emergency fund.

Some percentage of your net profits, you can continue to build your emergency fund as a separate account in your retained earnings. But I don't want you to have hundreds of thousands of dollars of return earnings when you need $50,000 to cover cash flow fluctuations and you're sitting on $80,000 worth of debt on some combine. Yeah. You see what I'm doing? Because what happens is you get emotionally attached to the comfort of that big nest egg like we do in personal finance. You get emotionally attached to, oh, I've got the comfort of this $20,000 in my savings account, and so I don't want to pay off my $5,000 car.

And I don't want you doing that here either. So I want enough to cover the cash flow fluctuations and a little bit more for emergencies as a sidebar. Past that, we're throwing everything at debt. Does that make sense? It does make sense. And you're nail on the head that we're trying to stay very cash comfortable and just figure those numbers out so what happens

is you you know farming is so volatile and you know some some bumper crop or a bad crop right and and so you you live you feel like you're living on the edge emotionally all the time and you can over fund your retained earnings while you've got other goals of buying out mom and dad and other goals of paying off debt. Well, and again, as soon as the debt's paid off, then you aggressively start savings. You're going to have to buy out mom and dad. You don't want to do that with debt. You don't want them to do seller financing because now you're in debt to mom and dad. No.

You want to stroke a check. And so as soon as all of your equipment's paid off, don't increase lifestyle because whoa we got all this extra money now right you got to put that over here for the time that you're going to have the transition take place from one generation to the next exactly and there's this whole line of crap on twitter that dave ramsey doesn't understand farming and the truth is i don't understand farming but i do understand business and farming is a business and you don't get like you know there's a nobility to farming but that doesn't mean you get a pass on math that's true just because we love farmers you know you feed america yes there's a nobility to it there's a nobility to a third generation family farm like this is

super emotional and super special for america but you still have to do math that's right and you still can't just run up debt to your eyeballs just because you're a farmer and go, oh, but I'm a farmer. Oh, but I live in California. Well, who gives a crap? You still have to do math. This is the Dave Ramsey Show. Thanks for joining us, America.

It's a free call at 888-825-5225 as we talk with businesses. Daniel Tardy is my co-host this hour. He's the Executive Vice President of Entree Leadership and sits on our operating board. Andrew is next in Nevada. Hi, Andrew. How are you? Hi. How's it going? Better than I deserve. What's up?

Hey, so I'm calling because I'm a 24-year-old business owner. I started about three businesses in the past year now, and unfortunately, one of them was an e-commerce business that failed. The second one is one that is en route to break even by hopefully this month and next month. And the third business is a YouTube channel that I have actually started that is profiting about $300 a month. That is hopefully growing, well, not hopefully, but that is growing about 1.5 times a month that is hopefully growing. Well, not hopefully, but that is going about 1.5 times a month. Now the first field business, I did go $20,000 in debt in credit cards. So, um, that really brought a massive load on me because of that. But luckily, like I said, the second e-commerce

business is now in route to break even, um, this month. And so I guess my question is, do I still focus on the e-commerce and the YouTube, although it's still very volatile because of coronavirus and everything like that? You work at a day job? Yeah, that's what I was about to ask you. Should I try to go out and try to get a full-time job? Yeah, because you're starving to death. Do you have another income besides this? $300 a month and break even won't feed you.

Yeah. No, unfortunately, I don't have any other income. All right, look, here's the thing. First of all, I'm not going to rip you because you're 24 years old and you're trying things and you're experimenting and you're clearly got an entrepreneur spirit. I want you to get a day job where you can pay the bills and I want you to keep failing and learning because what you've been doing is failing and learning. I don't want you to do it with credit card debt. You don't have to do that. But look, you got a little $300 a month thing going on YouTube. You may have something there. It may scale up into a big deal, or you may learn that you need to pivot the message that you're putting out and go where the marketplace is. But you're in such a cool season of life. You're learning things, you're

making some mistakes, and you're going to take these lessons with you for the rest of your life. So I want you to keep doing this stuff. I just want you to not have to have it be your primary income right now. Yeah, that's what's scaring me is I don't want you to starve out because I love your spirit. And you're going to starve out if you don't have some income. That's right. You know, you have to survive the failures for them to be profitable. I know I did it, dude.

I did it wrong. I didn't survive my failures they took me out so bumper sticker yeah but i mean you do you got because you're you're learning something from all this i mean you learned i don't use credit cards anymore that was dumb you learn some things on this other thing that you know and so you're gathering all these learnings from the bumps on your head and those are all very very valuable they're going to turn into money if you survive long enough for them to do that by that i mean your business excitement about being a serial entrepreneur the way you are so i think you just keep hustling and grinding but get you a day job

to get the wolf away from the door so that you can you can eat and you don't have to think about then all these things are just monopoly money i'm just playing a game here to try to win. And one of them is going to catch. So get a day job making whatever you need, $24,000 a year. Then get one of these businesses or one you hadn't started yet to where it's paying you $24,000 to $30,000 a year.

And then you can go, okay, now I own a job. It's my full-time job. And then you turn that job you own into a business and you hire people and out of the profits, you scale it up from there. But you're going to find a winner. keep at it you're headed the right direction yeah and um the last thing is with the serial entrepreneur um especially when i'm young uh i the mistake i made was i i too often, oh, there's money over there.

And I'd run everything that glittered. I was like a bass. I went after everything that sparkled. And so I was chasing a coin. And if you chase a coin, you'll never catch it. Instead, you need to chase an idea and something that you're passionate about and a method of helping someone. And if you can find a way to really help someone money is the byproduct

and i i'm i made the mistake in my early uh i'm thinking 24 year old dave you know chasing shiny stuff wired the same way i'm just another part of what you're talking about there is that you know the power of focus and so oftentimes your early years one or two years into a business you are breaking even or you're making just a little bit of money. And then you get distracted, and another idea comes along. You go, I'm going to jump over there, and you lose the momentum. And we talk around here all the time about this idea of what it takes to build momentum. In fact, we have a formula for it, and that is that it's focused intensity over time. And it's hard at 24 years old to take enough time. It's hard at any age. Three years, five years you're if you're it's hard in eight years five

years to invest in this thing and focus but you got to keep drilling to get to pay dirt you can't just go start another well just because you're tired and you've been drilling for 30 seconds ann is in california hey ann welcome to the dave ramsey show good morning i listen to you anytime i'm in the car which is the only place i can get radio reception well thanks i am at the other end of your normal request i am closing a business okay i've been a real estate broker for 57 years wow and we have a corporation that we just sent the papers to the state to say, no more corporation. But I'm still licensed, and I will, you know, if the opportunity is right and I need it, I will use it. And I still help people I know that I like.

Isn't that the dream to get to where in life you only have to help the people you like? After 57 years, you earned that right. I like it. That's great. Well, I'll be 83 next Tuesday. Amazing. Wow, good for you. How can we best serve you today, Ann?

Well, what do I need to do? You know, it isn't like a grocery store. You just close the door at 5 o'clock and say, I'm done. What do I need to do? Can I go back to just using my own name, real estate broker, and cards say that? Is there anything else I have to do to kind of shut this down? It sounds like you're just asking what are the loose ends to tie up from a legal and formal standpoint. I need to know are there loose ends that I'm missing.

Okay. Well, there's two things. One is the excess clients that you don't want to fool with. I would hand to a younger broker that you do like and say, here's some excess leads that I don't want to fool with. And so those customers are getting served because you built that relationship over a long period of time, and I don't want to fool with. And so those customers are getting served, because you built that relationship over a long period of time, and you're not going to fool with them. The second thing is then just get with the state of California.

In most states, and I assume you know all this, there's a principal broker and an affiliate broker. You have to be a principal broker to own or manage a real estate office in most states that's me for years yeah so you can you can remain a principal broker and ask the state of california what's required do you need a commercial address to do that or do you want to park your license at one of these other companies where some friend you have that is a principal broker that will allow you to park your license there so you don't have to deal with all this. And in most states, there is a required.

I know in Tennessee, I'm a principal broker. I have been since I was 20 years old. And so for 40 years. I'm not up with you, but I'm there. Dave, I'm just curious. What are the implications of not shutting it down? I mean, do you have. Well, you're not technically shutting it down if you're doing what I'm talking about.

You have to keep it active. If you're going to keep your license active, if you're doing what I'm talking about. You have to keep it active. If you're going to keep your license active, if you're going to help the people you like, as she said. So if you're probably going to keep a one-man office operation open, and if you can do that with a residential address in California, and in Tennessee they require us to buy E&O, you buy it through the state, errors and emissions insurance as a part of your licensing. But it doesn't cost a lot to maintain that unless you're in the Board of Realtors and want to pay the fees for that and MLS and all that.

That starts to get expensive. But just to keep your license active, and in most states with E&O and in most states a lot of times a commercial address, those are the only costs just to keep it active. You just have some nominal dues annually that keeps that up. And if you don't want to do that, you could park it with another broker somewhere under their heading and you're still active and it's you know you know 100 bucks or 200 bucks a year or whatever it's not a lot to keep it going and you ought to keep it active because you've got too you won't be able to

completely quit because those people you like you're going to want to help them do a deal and uh old real estate dogs like us we we sniff a a deal, and we can't help but chase that squirrel up a tree and do something with it. We can't stop ourselves. So I've gotten rid of all of my licenses, security, insurance, all the stuff I was licensed in except my real estate license. And I've kept it active, and I technically a uh principal broker uh in tennessee still um so there you go i check into that legal part with your state california may have something weird they do about everything else so it might be that way there too so daniel tardy thanks for hanging out thanks for having me i'm gonna go shoot off some fireworks. Good. Now put your

daughter to bed first so she doesn't think you're getting hauled away in the paddy wagon. This is the Dave Ramsey Show. This is James Childs, producer of the Dave Ramsey Show. Once again, you made the Dave Ramsey Show one of the top four most popular podcasts last year. To get your

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