The Ramsey Show - App - You'll Never Prosper When You're Tied Down With Payments

Episode Date: October 6, 2025

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Normal is broken. is weird, so we're here to help you transform your life. From the Ramsey Network and the Fair Winds Credit Union Studio, this is The Ramsey Show. George Camel, Ramsey personality, number one best-selling author, co-host of Smart Money Happy Hour is my co-host today. Open phones at AAA 825-5-2-2-2-5. Matthew's in Lexington, Kentucky. Hey, Matthew, what's up?

How you doing, sir? I was told just to get straight to the point. So I lost my job this morning as a construction worker. I'm roughly 12 to 14 grand in debt, if you count my credit card. I'm on the hunt for a new job at the moment I'm just a little lost I was hoping to get a new house by the end of the year

and now everything is just kind of been ripped away so I was calling to kind of see about any advice I can get from you guys I've been watching for a while Wow that's a day that sucks yeah what happened how'd you get fired

so I was working in construction Yeah, you said that. Oh, okay, sorry. He said it was poor attendance, and I've had the job for about eight months, and I've only called in twice. I've never been late. So I called his boss, another foreman that's over him, and he said that it was something else, but he doesn't know what it was. So I'm not sure what specifically to do in the situation. Now I'm kind of broke. what were you what type of work were you doing on the construction site I was a laborer so just all the grunt work that they could possibly have

what were you making so I was promised 27 an hour I was only making 22 an hour how long did you work in this place roughly seven and a half eight months okay and they never kept their promise and then fired you and you really don't know why yeah

sounds like wonderful people to be rid of um wow but you still got to go get a job like instantaneously right yes sir i'm guessing you have any money in your checking account uh yeah i've got enough to cover you know whatever i have for bills coming up for you know in the next couple weeks okay good all right and you probably got another check coming from them right yes sir okay that'll help some all right so well i mean you're right it's um so it's asking a lot to emotionally bounce back in the afternoon from being fired in the morning but you like you said you don't have a lot of choices so uh you've got to go get some some work immediately um and so yeah i'm i'm going to go just start visiting construction sites in the area

Well, I also have experience in driving as well, and the construction industry is just kind of dropping down here a lot. Yeah, I may have been the actual reason you got fired. The may have been a layoff, actually, but you got a CDL? So I'm partially towards my CDO. I was in classes at my other job. What can you do today that involves driving? I can drive a non-CDO vehicle just like everybody else can, but I am one written test away from class B CDO. And that'll give you a nice raise if you choose to do that.

Yes, sir. Yeah. Well, especially if you could get somebody to hire you this week based on that one written test coming through in the next couple of weeks, and you could get started with them just moving stuff around the lot or whatever else you had to do. Yeah, I think that's a – that's not a bad option. and you probably would make more than they were going to pay you even if they had paid you what they promised they were going to pay you and all that so yeah I think the trick here is there's two two levels two ways to

think about this the first way is you got to get off of desperation onto a job and don't even care what it is as long as it's legal and moral you know as long as you're not hurting someone or yourself right and so um you know go go get a something I don't care. Driving, another construction site, Target, FedEx, you know, we're going to be in Christmas season four. You know it. You know, driving for Amazon, I don't care what you land, but land something immediately because if you have, if you know you have enough coming in to eat and to keep the lights on and the rent paid, you will interview differently for the next job. Yes, sir. So the first job is just take anything in desperation that is legal and moral. and get where you know you've got food to eat. Are you married?

I am, yes. Does she work outside the home? Yeah, she works in the medical field. What does she make? She makes about $15 to $16 an hour. Not much either, okay. No. All right, but you do have enough to eat that way, right?

And so not enough for you to sit on the couch permanently, but you don't have to panic between now and next Friday, right? No, no. Okay, so let's get out. out there and scoot around now then once you've landed that next thing where you're eating the second stage is you start figuring out okay what do i want to be in 10 years and what is the steps to get to be one of those and it needs to be something that makes more money yes and it's not just for the money but what do you want to be you know like like mom and dad used to ask when you're

growing up what do you want to be when you grow up right and uh you know what do you got some passion about what do you got some talent in and those kinds of things i'm going to send you a copy of Ken Coleman's book, Finding the Work You're Wired to Do. It has a great assessment in it. I want you to take that assessment and start planning out your long-term landing place, but your short-term landing place is anybody that will pay you and you can show up having showered and shaved and brushed your teeth and on time. Oh, why don't we make it 15 minutes early for the heck of it?

And leave 15 minutes late while you're there and make sure that you're the hardest working dude that they've ever seen during the time that you're there. and don't you pull out your phone one time during the time you're working actually be doing work and stuff and so yeah that that changes everything and there's so many you know the economy side gigs right now that you can just literally download an app and get started within an hour like what i mean i did instacart last December as a test and literally i downloaded the app made my account and i was on the road and i went you know got groceries for people another one is uber eats and door dash all of those if you showed up at somebody's door with instagram they had to be freaking out

I mean, I made sure to not actually, I left it at the doorstep, but someone on their camera. Oh, they should have done it was you. The best part was I delivered. They would have thought I didn't pay you. Well, I embarrassingly, I went to my, I didn't realize like, this is an awful street I recognized. It was my neighbor's house. And I'm like, they're probably looking at the camera going, is that George, my neighbor delivering groceries? What's going on?

That's so funny. But I thought I wanted to see how it worked. I wanted to practice what I preach. I tell people go get these side jobs. And for a week, I did it in December. And I calculated it. It was about $25 to $30 an hour. How did I not know this?

I kept it from you, Dave. I would have completely ragged on you for a whole year. Now you know why. I just shared it. And now I Instagram or Instacart George. Tragedy plus time equals comedy. So I needed to wait long enough to where it was funny. Didn't look desperate.

But man, it was, I'll tell you, it's a grind out there, Dave, getting people's groceries. I was in the bulk bins at 9 p.m. just getting one pound of rice measuring it out going, this is, this is, I remember the sacrifice. I don't want to relive this again. Literally rice and beans out there. And you're doing it for the show. I thought maybe I can make content out of it, but it was too stressful to even get my phone out and film.

I was hustling. You look stressed. I did. A year later. I'm still stressed. I'm sweating reliving this. So shout out to everyone sacrificing on their second and third and fourth side hustles. Leah is in Bangor, Maine.

Hi, Leah. How are you? Hi, Dave. I'm great. How are you? Better than I deserve. What's up? So I'm calling, seeking advice on how to best approach homeownership. My husband and I took your financial peace course back when we were engaged. We currently use the every dollar app for our budgeting, which has been incredibly helpful. So thank you for that. And now we are looking at home ownership and trying to figure out how to make

that happen. Currently, we do rent for $1,000 a month, and it's really an ideal situation, but we have one baby, and we are hoping to expand our family. And so home ownership is ultimately our goal. Good. My husband is the only one working. I'm home full time. And so that's kind of where the challenge has come in. He brings home roughly $3,000 a month, and there is potential for that to grow over time. He's kind of new still to the company. So he's starting out and learning the job. But with all that being said, he is working on picking up some extra hours on his days off. He works for 10-hour days.

And so on his two days off, he's looking at picking up some extra work because currently our monthly expenses do exceed our monthly income by a couple of $100. And so that's the challenge. We do have good savings. We have about $58,000 saved. We have about $16,000 for an emergency fund. We have no debt, and he does contribute to his 401K. But we just weren't really sure how to move towards homeowners. How have you done all that on $3,000 a month?

It started way, way before then. I've just always been a diligent saver. So from the time I started working, most of my money just went right into savings. And then when we got married, whatever he had a baby, you came home. I see. Okay, all right. so what happens long term to get his income up to double what it is now um so he does have to take some certifications he's a technician um so he needs to take classes to get certified as a master

tech that's one way that he'll increase his pay and then i think also just experience as he becomes more efficient he'll be able to work faster because he gets paid by the job and not by the hour or salary what's he working so there what uh vehicles oh he's a honda tech okay good yeah i want to you a honda tech i'd be making more than 36 000 a year so he must have just gotten started and so he's got yeah he's got he's going to have to go to all the classes as fast as he can take them and move up as fast as he can move up uh to get your own income up because what you're describing is not a situation where you buy a house the math the math doesn't work for you does it no and that's what we thought we were getting advice

from other people saying just buy a house you'll figure it out the market who's going to pay for at the house fairy i wish yeah i mean there's not one unless you all got them in main we don't have them in tennessee you know i haven't found me yet you have a deficit right now and your rent is only a thousand bucks a month yeah and so this is oh just buy house it'll all work out what are you a congressman who says that yeah how are you covering the difference now are you guys dipping into your savings yeah no he's working extra he's taking sidehouse he's picking up some extra shifts just to cover that difference family friend who's a contractor yeah well here's what I want I want a career path that leads us to more income which allows us to buy home okay and that's what

answers your question that's what answers your question and so if it's a Honda tech and he's making six or $7,000 a month because he's gotten every Honda certification and whatever other brands are at that dealership, go ahead and get all those certs as well, and let's just get certified in everything out there, and we can work on everything, and we can make a bunch of money because, you know, a really good guy turning a wrench with the proper certs ought to be making a lot more than he's making. Yes. So the hard truth is that home ownership is not going to happen in the next six or 12 months. No. It's going to need to to get your income up and maybe a bigger down payment

and maybe not the house you really wanted. You got $58,000 for the down payment, right? Yeah, that's everything we have saved. And you're debt free. Well, thank God you're living on a detailed plan because it's allowing you to make it on almost nothing while you're able to stay at home with the child, which is great. But basically what we've said is we put a house on hold

while his career develops and then the math will allow us to buy a house. And by the way, that's kind of normal. unless you know unless you grew up in a generation where when you pushed a button in your hand everything happens automatically oh wait yeah you did um so yeah it doesn't work that way it's gonna take some time it's a process and it's got to cook a while yeah well right now you can just doom scroll on zillow and look at all the things you can't afford back in your day dave not to age you but the internet didn't exist to go look at every house that's available that you can't have we had to go to open houses oh and then we would get house fever that

way we had to do it the old-fashioned way but house fever is highly contagious and it has been among us for several decades so just got easier with the digital age yeah you can um yeah well a lot of addictions or have advanced themselves but anyway yeah just take your time hon you're going to be okay you're going to get there but it the two things do work together and it sounds like you really have a wonderful handle on where you are congratulations hunter is in new york hi hunter How are you? Hi, guys. How are you doing?

Good, man. How can we help? Sure. Yes, I'm not too financially savvy. I graduated college in May, so I just got my first job. Hopefully, a long-term career job. I really like it. What are you doing?

How much do you make? I'm making $60,000 a year before taxes. Way to go. What kind of job is this? I mean, it's a... It's the sales role. I'm in medical device sales. Oh, so you're just starting.

Okay, cool. What's your degree in? Yeah, just starting. Business management. Good for you. Medical device sales, I know a lot of folk making two bills with it, not their first year. That's why I really looked into it. I had to work pretty hard to get the job because they don't really hire out of college too much.

Yeah, so you're going to have to get with it. And really, the 60s just your first year. You probably truthfully should double that in almost a year. really yeah if you get with it assuming i don't know what their product line is or who it is you're talking to or working for but that that's the thing so what's your question sir you said you're not financially savvy what can we help you yeah so i i was just curious what i could be doing um to set some money aside invested properly to set myself up for the future i mean i have a raw 401k with my company um are you debt are you debt free yes yes no debt no student loan

debt. No, athletic scholarship. Good. No car debt. No car debt. No credit card debt. Good for you. I think you're more financially savvy than you think, my friend. Way to go. Just setting yourself up like that as a big win. Would you just please stay that way? If you stay that way, you'll always have some money instead of giving it all to the banks. Because your coworkers are probably going to be driving nicer cars than you and buying houses before you are, and that's going to be tempting. So don't let that stop you from living on less than you make. Do you have an emergency fund? Yeah. I have a savings account with like $7,000 in it. Good.

Way to go. So let's keep building that up a little bit to three to six months of expenses. Are you renting on your own right now? Do you got roommates? What's the situation? I'm still living with my parents at home. Okay. Maybe the next step might be getting your own place.

Yeah, definitely. And then on top of that, once you get that emergency fund. That's kind of another question I have. When to move out? I mean, right now, yeah, when to move out. Like right now I'm living rent-free, saving money on food, on all that stuff um how long you've been out of school may i got out in that yeah yeah okay yeah i i don't want you there next may yeah okay so that that's your max so you decide when and how

but um start start planning your exit and uh time time to sprout the wings and fly be the eagle that leaves the nest and of course by then we'll see what your income trajectory is and that's going to help you as well. Yeah, your Roth IRA is fine. And if you want to start saving even more than that over just in your savings account, build up that emergency fund really thick. That was not a bad idea either. The Roth 401k, it works, not a bad idea. I'll send you a graduation gift, the copy of the book, The Total Money Makeover, and it will walk you through in detail exactly what to do next and next and next and next all the way through. It will take you up through what we call the baby steps here. And we're going to keep you out of debt into investing. And that's going to

be your shortest route moving into wealth. And you've got a great career field. A lot of upside there. You're just getting started. You're asking the right questions. Keep asking lots of questions. Keep working like a crazy man. Hang on. We'll send you a copy of that book. The all new every dollar is here. And now it's way more than just a world-class budgeting app. a ton of advanced features to help you make faster progress with your money. If you take the Ramsey system, the Ramsey Way that we've taught, the baby steps, et cetera, and weave them into a app that shows you exactly what to do, you're beginning to deal with what I'm talking about here.

The average person finds thousands of dollars of margin in the first 15 minutes after they open the app and start laying it out. Every dollar is free. You can start it today, go to the app store or Google Play. Kylie is in Greenville, South Carolina. Hi, Kylie. How are you? Hi, thank you so much for taking my call.

Sure. What's up? Okay, I'm seeking wisdom on how to help my dad. I don't know what to do, and so I'm going to call you, and maybe you could guide me in the right direction. My dad is 83, coming up on 83. He has Social Security. He has no retirement, but according to our calculations,

he should have a lot more in the bank than he does, and with a recent diagnosis of onset dementia, we are finding that we can't find where his money has gone and we don't know how to either find it or figure out if he's being scammed or how to make what he has left to stretch. So how much do you think is missing? Okay.

We think that there's somewhere between $150,000 to $175,000 missing. Wow. That's from Social Security payments that have disappeared? No, he had investments. Well, he sold his house for $400,000 in 2021. He bought himself a $14,000 truck. He moved across country and bought a $195,000 house. So roughly we thought he had around $200,000. He's getting $1,500 a month on Social Security. He told us he put his money that he had remaining left over into two different banks and opened up a couple checking and savings accounts in those banks. But recently we started getting involved because his electricity would get cut off. He couldn't remember how to pay his electricity bill.

We heard that he was paying people money over the phone that he did not have an account with. People would just call and say, hey, you owe us $500 for a late fee, and he would just pay it. and then he can't answer simple questions like who's his cell phone carrier who does who does he owe bills to so we can help him straighten it out he doesn't know he doesn't know who the two banks are he doesn't he he thinks he knows where they are but his stories don't aren't they are not straight like he will tell us that he had an account with u.s bank but then he'll tell us he closed it but then he tells us it's open and then he knows he has wells fargo he goes to wells fargo every day but then he can't keep straight.

He's like, I don't have any money. Yeah. Is there a power of attorney been assigned? Not yet. No, sir. That needs to happen yesterday. I'm not even sure it'll work now. Doesn't sound like he's competent now, but I don't know.

That means you're taking over financial powers to handle his accounts. Somebody needs to. Okay. Desperately. Okay. I mean, he's not even sure what day it is and what cell phone carry. and that kind of stuff, he does not need to be handling his money. Okay, then how do we find a lost $175,000?

I really don't know is the answer. Do you have any kind of a paper trail or an electronic trail of any kind? We are digging through stacks of big notices that we have found in his house. Have you checked his email? I have not yet. That's a great idea. I'd be going through everything, digital, physical, calling banks, looking for debit cards attached to those banks.

Okay. I mean, it's possible he's been scammed out of it. It's also possible it's sitting over there in U.S. bank, but you don't have any access to it without a power of attorney. Okay. You can't walk over there and ask him if I have an account either. They won't let you. It's against federal privacy laws.

Okay. So, I mean, but if you've got a power of attorney, you can go on his behalf and do it, and you all need to do that yesterday. Okay. Like six months ago yesterday. day. But go do it today. Do not let this, I mean, 48 hours, kid, right now, go get it done. And so then you can start to inquire with these people because otherwise they're going to just

going to shut you down. I mean, just like if you called up and asked where George Bank, they're not going to tell you. Okay. Okay. So, but if you go, here's the power of attorney. There's copy of the power of attorney. He's 82. He's got on set. And I'm trying to find some money that's lost. Do you have an account there? Okay, what's the balance? What's the account number? And then you just start tracking everything down that you can. If you reach a complete dead end on all stacks of paper and all email and text and anything else you can get a hold of, if everything is run to ground and you still haven't found it, you could go to our local, our endorsed local provider for taxes, our

tax EELP, they probably can make you a recommendation of a forensic accountant. and a forensic accountant is someone who knows how to dig through those things and try to find a trail maybe that you didn't see and trace back through. If he's been scammed, I don't know where you'll be. But in the meantime, y'all are taking care of him anyway. I would think of every professional he's interacted with, CPAs, accountants, tax pros, real estate. I mean, if there was a real estate transaction, that money was wired somewhere. And maybe you can go to the title company that handled the wiring

and figure out where it went, and that might give you some clues at least. Yeah, which account did that go into? And then if you find that account, you can go from there. Where did it go from that account? Check the statements to see what was transferred. Every account, every touchpoint, do a full audit on it. And I want to see a full list of every transaction for the last seven months or since he sold the house.

And what we're trying to do is follow that 175 or that 150 around, that extra equity around because we do know he bought two things, but he should have somewhere around 150 left, give or take and yeah find out where it went that's a good thing george go to the closing and see where that money went and then do an audit there find out for where it went from there then find out where it went from there and in every case you'll see transactions and you can run them down you're going to have to have power of attorney to do all that though um and you're just going to have to run to ground but the big thing is everybody is no longer in denial we have a power of attorney and he has shut down and he's not allowed to do any more transactions at all he does

no access to any accounts because people are calling him up and he's giving people 500 bucks and then y'all are having to put 500 bucks over there to feed him so they're stealing money from you is who they're stealing money from so you've got to shut this funnel down uh for his sake and he doesn't want you to you don't want to admit that your dad is finally at that stage but here we are the longer you stay in denial the more checks are going to be written to bad people and so you guys have really got to shut this down hardcore fast just because he's getting screwed over if he hadn't already lost 150 grand yeah i think we're getting more and more calls of people getting scammed out of

hundreds of thousands of dollars because they're just you know they prey on the elderly exactly pray on people who you know who mentally can't handle this and don't know if it's a scam Colin in jacksonville florida hey Colin what's up hey david and george thanks first and foremost for everything you guys do um really helpful content. Thank you. But to be direct, and yeah, of course, my question is this. My wife and I am almost certain we're on Baby Step 7. We're totally debt-free, including the mortgage. And to your guys' point, the peace in mind is amazing with that. But with that being said, we're in a two-bed one bath currently. It's myself, my wife, and a year-and-a-half old daughter. I also work from home as

well. So things are starting to feel a little cramped. And although need is a pretty strong word, I do think that we're inching toward a need for additional space. And so I'm kind of battling or going through the pros and cons of having another mortgage and upgrading the space versus kind of remaining cramped and having that piece every month of not having a mortgage today. What do you guys make? What do you make? We make about $2.25 as a household.

So how much can you bank a year? Right now we're investing 15% and saving about $6,000 a month. month. Okay. All right. And so what's your current home worth? It's worth $250. I think what's the target. What's the target home? How much is the target home? $500. 500. 500. So you need $250, yeah. Yeah. Well, I mean, there's two ways to do it. One is take out a small mortgage. And two is we'll move in two and a half years and we're going to save $100,000 a year because we don't borrow money anymore. That would be Sharon's a my only option because we don't borrow money. for anything ever, even though that's uncomfortable, inconvenient, and all that. But if you want to go just a little bit in and kind of meet in the middle and knock off a mortgage in two or three years, you can do that.

But it's emotionally very hard to go back in debt once you finally got out. Our question of the day is sponsored by YREFI. other lenders won't help with defaulted private student loans. Y-ReFi might be right for you. They offer fixed-rate solutions that fit real life. Find out more at Y-ReFi.com. That's the letter Y-R-E-F-Y.com slash Ramsey, not in all states. Today's question comes from Mark in England.

We are retired, mortgage-free, and financially stable with no debt except our credit cards. We buy what we need on a credit card that gives us points, which we use to pay for clothes, food, etc. We then take that credit card debt and put it on to a long-term interest-free credit card for a period of 12 to 34 months, only paying the minimum balance each month. At the same time as the start of the 0% deal, we put an equal amount into a savings account that pays a 7% interest. At the end of the 0% term, we pay it off from the savings and then keep the interest earned to pay for travel or a large cash purchase. We've been doing this for 10 years with no interest incurred. Cash back to us has been 6 grand plus 8 grand earned an interest from the same. savings. Why shouldn't we keep doing this? Because it's exhausting. Number one. That's how you lost

the Revolutionary War right here. Zinger. Take that, Red Coats. Unbelievable. The mental calories needed has got to be worth something. Your time is worth something. And here's what's ridiculous. We do not know the dollar amounts. But what it took to get here. I mean, what could you, what could we talk about? Fifty thousand bucks. And you're running. through all of those ringers when you get done you got enough money to buy a biscuit i mean there's no money involved here this is a it's like a math riddle for a sixth grader and you fell for every bit of it um i think you need a hobby really this is like exhausting so uh the problem with all this is is you have set up a a house of mirrors a house of

of traps and you have figured out how to, no, you know, I'm trying to remember what, what's the thing where the people, the ninja thing where they go through all the, like American Ninja Warrior? Yeah, like you're an American ninja, or the English ninja warrior for credit cards. So you've got this full obstacle course laid out and you know how to do it, but if you miss one handhold, you're in the water. If you jump just wrong, you're going to turn your ankle and be on your head. And so that's exactly what this is like a, it's like an obstacle course. It's like you did a treasure hunt with an obstacle course in your backyard and you're 12 years old.

No. And it's not worth the money. If you actually add up the actual dollars that you're benefiting from all these gyrations, it's so small, it's almost makes you want to giggle. Like really, if you just gone and done like work or something while you spend all this money, I mean, all these calories on this chasing your tail all over the place and trying to somehow beat the credit card company, you'd actually have some money.

So no, no, no. And also, Mark, let me tell you this. And we have not done a study in the U.K., but we have done the largest study of millionaires ever done in North America. We studied 10,167 of them. and 89% of them, 9 out of 10, are first generation rich, meaning they started with nothing, and they became millionaires. The number of those self-made millionaires, starting from nothing, that became a millionaire working a system that remotely looks like yours is precisely zero. out of 10,167, not one said they played the airline mile game,

the high-yield savings versus repay-old credit card and 30 days out and back-and-forth gyration game, and that's how I made my million dollars, Dave. Not one, not Uno, not one, not one, none. zero proof text that your system causes wealth building. Zero. There's zero humans we have found that your system made rich. Zero. None.

Was I unclear? I think that's as clear as mud right there, Dave. Well, the key is the fallacy is that he wouldn't be financially stable without this. You've become financially stable in spite of the credit card game. You decided that we're not going to have a mortgage anymore. Well, why would you do that when you can make a spread on that? I mean, you can, you know, reverse engineer this logic and just stay in debt the rest of your life if you think you can outsmart it. But clearly you value a debt-free life, and I think this credit card game is costing you more than you think.

And here's a good test. For one year, use your own money and see if you don't save more than you have doing this credit card churning, arbitrage, gyration. Here it is. The number's actually on here. I got tired before the end of the email, but it's on here. Cash back to us has been $6,000 plus interest earn. earned plus $8,000 from the interest earned. So $14,000.

Over 10 years. Oh, my God. Yeah, that's over a 10-year period. You made $1,400 a year doing this. It's worse than I thought. $1,400. I mean, dude, how hard is it to make $1,400 in England? You really have done, taken a lot of risk and played with a lot of bear traps,

hoping not to get your arm ripped off by a bear trap in order to make $1,400 a year. And here's the other thing, George. A guy that writes us an email that says this, the chances of him not doing it anymore or zero, he's going to keep doing it. Yeah. He just wanted to, I guess, brag about how amazing.

Well, he wanted to be the subject of the latest Ramsey meme. I don't know. But that's a bad choice, dude. But part of the entertainment value, this show is you watch other people do something so stupid that you're entertained by it. And that's sometimes why people watch this show or listen to the show. Sometimes they do it to learn from what we're teaching here. And then other times it's just human beings are entertaining.

It's entertainment value. I think you just fell in the second bucket. All right. Daniel's in New York. Hey, Daniel. How are you? Hey, Dave. How are you doing?

Better than I deserve. What's up? So, me and my wife are currently on Baby Step 2. and we're strongly considering selling our car. The thing is we have one unreliable car, and this car is kind of our, you know, put the kid in the car, make sure it's safe. Yeah, we're just wondering if we should sell it

and maybe even potentially have my stay-at-home wife go work part-time. Okay. What do you make, sir? I make about $144,000. Okay, and how much do you own a good car? 29,000. Okay. All right.

And the car that's not reliable is worth what? I'd say maybe a thousand bucks. Oh, okay. So probably somewhere between there is a reliable car, in there? Yeah. What could you sell the good one for? You owe 29 on it? I owe 29 on it.

We could probably sell it for around 30, 31, 32. Okay. And you have any money saved at all? So we have the emergency fund saved. The $1,000 starter emergency fund? That's correct. Okay, good. And what else?

Well, that's about it, and then the rest we're just paying off debt right now. Good for you. Okay. So you have a $29,000 card debt. What other debt do you have? Just student loans. We have zero credit card debt. The student loans equate to about seven.

B-ish, 75. Okay, all right. And so you've got $100,000 in debt, and you make $100,000? Yeah. And you live in New York City? Yeah, just very close, yeah. Okay.

All right. Expensive area, though? Yeah, so we're actually lucky because our parents own a house and we're actually renting with them. So we're not paying as much as we, as the normal person, would pay here okay that's good news okay well here's the thing if you guys can get out of debt

and keep the car within two years i'd be okay with you keeping it i don't think you can i think that'd be too tough that be 50,000 dollars a year on debt and somebody's going to be making some more money you or her one what could she make working part-time so she has an english degree and before she became a stay-at-home mom uh she was an english teacher yeah why does she do for 45 bucks an hour we were we were thinking about that as well yeah that's not even a part-time job you're just doing that from home i mean she can tutor 45 bucks an hour and work 10 hours a week and all of a sudden now we got some serious money coming in that's um yeah i'm going to do something like that for sure and then you pick up what you can pick up and then if you can keep

the car fine but i'm probably going to get rid of it and get me about a 10,000 dollar paid for car Welcome back to the Ramsey Show in the Fair Wins Credit Union Studio. George Campbell, number one bestselling author, and Ramsey personality is my co-host today. Rex is in Los Angeles. Hi, Rex. How are you? I'm good, thanks. All right.

How can we help? Yeah, so we're not on the steps yet. We've just, my wife and I just started reading you and listening to your stuff. We've got a bunch of debt. a lot of credit card debt, some student loans who took over for my daughter, other stuff, a car loan mortgage. We've also got a lot of money and investments. And if we're going to do this, should we just take that money and the investments and pay

that stuff off? Or should we do the work to pay that down out of my salary? Is that taking the easy way out to just pay it off? That's the gist of the question. Yeah, it's a good question. It's a fair question. How much debt do you have not counting your home? Including the car loans, everything, $167,000.

And how much in the brokerage account? 844. None of that is retirement. No, we have an additional 401K. That's about $85,000. Okay. What was this account for? the brokerage account for half of it was uh was when my dad died we got inheritance and the

other half is just investment sort of just making money for retirement okay good except it's not in a retirement account yeah yeah yeah and what do you make a year about 175 good for you And what do you owe on your home? 776. Okay. All right. Well, Rex, the thing that we teach, and you guys have to decide as a couple if you're going to buy into that in order for the answer to your question to make sense. Okay.

The thing that we teach and believe and we've proven to be true over 30 years of doing this is that when someone can get up. out of debt and stay out of debt and live on a detailed plan that both spouses are in agreement to where the money's going and you've done a great job saving money I mean you're millionaires you've done a great job saving money we got lucky on some of it yeah maybe but I mean you some of it was an inheritance but overall I mean you've not done you've not done horrible or anything like that I mean you've done a good job so now you've got to ask yourself the question of what is the shortest distance between where I am with money and where I want to be. And we have found that the people that build the most wealth are those that get out of debt,

stay out of debt, and live with a plan, okay? Because when you don't have any payments, you know, all your money is not going to stupid card loans and so forth, you can do stuff with it. Now, if you can do that and commit to that, and you're both in agreement to that, and you get out the every dollar app or something like that, and you say, okay, this is our plan, and we're not going to buy anything else ever on debt because we believe the shortest distance between where we are and wealth is no debt. And so once we pay this debt off, we will never be in debt again ever for any reason, not a big enough emergency, not a big enough need, not a big enough, I got car fever, nothing unless I pay cash for it. I'm not doing it. If you're willing and able both of you to commit to that, then yeah, writing a check and paying it all off is not cheating.

The problem is if you don't have that level of commitment, like this pinky swear, spit shake contract, right? Mm-hmm. That we're never doing it again, you'll do it again. And next time you want to be savings because you will have paid off all your other mistakes with the savings. And I don't want you going to not change your habits. So if your habits are permanently changing, you know, you can make a lot of money doing this. But if they're not permanently changing, it would be a vast mistake because you'll, you know,

the recidivism rate is crazy on this stuff. Yeah, I mean, honestly, we've already done this with a credit card. The problem is we didn't get rid of the credit card, so we just racked them back up again. Tadda. I arrest my case, counselor. Yes. Yeah, so, yeah, so that sort of leans toward trying to pay it off. You know, well, or, you know, you've, for your sake, it doesn't matter to Georgia me,

but for your sake, you two adults have to become convinced that we're never going back. Yeah, yeah. And there's going to be paying either way. To watch that money leave that brokerage account is going to be painful. To sacrifice for two, three years is going to be painful to pay it off. Yeah, and the fact that you did this thing with the credit cards tells you, you know, maybe we get on a strict budget and we aggressively attack the debt and pretend like the brokerage account is not there for five months or six months, and let's prove it to ourselves that we're through. Mm-hmm. Yeah, yeah, okay.

How old are you? 53. Okay. Well, it's time. And you picked up your daughter, student loans that she took out in her name or what? Yeah, when she got married, we, yeah, we just sort of just took those over for them. Yeah. Well, I would, you know, either way, I'm going to be out of debt very, very quickly with $175,000 dollar income.

But by quickly, I mean, a matter of months. And so, you know, but you guys have to become convinced. You don't have to be in pain to never go back. You just have to be committed to never go back. It's not necessary that I've got a friend who was a heroin addict and he went through rehab and it changed his life and he met God and him and Jesus are best friends. And, man, he don't, he stays away from. But his kids don't have to go through that to learn the lessons that he's learned. They can observe someone else and go, I don't want to do what my dad did.

And the dad can look at his kids and go, I don't want you doing what I did. You know, that's, and so you don't have to go through pain to learn. It's not necessary. It's a thorough teacher if you do. But it's not like you have to, I have to go down the gauntlet and be hit with straps and whips or whatever to prove. No, you don't have to do that. We don't need to do that. But you do have to be committed to never gone back because otherwise it's pointless.

Yeah. And you're going to end up in worse condition. If you guys agree, we're going to cut up the cards and close all these accounts. We're going to freeze our credit. So it's much harder to go back into debt. Then I would say, all right, let's use these funds. You might pay some capital gains taxes on the growth, but you're going to clear the decks and be in a different place by Christmas.

And now you've freed up all of those payments to now invest and give more. and, you know, live life with a little more freedom and peace. So I think it's worth it. And I'm going to start working down that mortgage at that point, you know. And you need to start putting your excess savings when you get to Baby Step 4 in a retirement account in a Roth, not in just a brokerage account. The amount of money you're losing there in taxes is incredible. So. Yeah, that brokerage account is for, you've maxed out all retirement options and we have nowhere else to go, but not a retirement investing.

Right. But he's not got that problem with this. income. So, no, you can, you can get there. So, yeah, I'm fine. temporarily stop all investing, all saving. And for six months, we're going to go out this thing hard. We're going to open up an every dollar app. Both me and mom are going to get on it. We're going to get the credit cards out, having a plastic surgery party, light a candle. Uh, we're done. We're not doing this anymore. And, uh, we're 53 years old. We make too much money to be the stinking broke and have, I'm sitting here with car payments and I make 175 grand. That's just, God,

that's got to be disgusting. So get disgusted in a reasonable way and permanently change your behavior. And then you've got no problems. Top questions people have about wills. How do I know if I need a trust or if my estate is too complicated for an online will? If your estate is worth less than one million,

getting a will online is probably a great option for you, by the way. As a matter of fact, if your estate's worth less than $10 million, it's probably enough. You don't have any need for trust much until you get up above that unless you've got a special needs or something like that. Number two, most often question, what do I need to start my will online? Making a will online or not involves a couple of decisions. Who do you want to get your stuff? Who do you want to take care of your kids? And who do you want to make decisions for you if you're incapacitated?

Is an online will legally valid, of course? By the way, wills are state-specific. The laws that dictate estates are not federal law. They are state law. And so when you move, you need a new will because your state may have different laws than the old state where you lived. And so different levels, different kinds of notary, different numbers of witnesses, different things you can do or can't do in a will, all that kind of stuff. So why would I want an online will versus a traditional one? Less expensive, more convenient.

It takes about 20 minutes to set up if you go to mom. and bear legal forms. Go to ramsysolutions.com slash will's quiz. You can find out if an online will is right for you, and we'll work you through the whole process. Jamie's in Newark, New Jersey. Hi, Jamie, what's up? Hey, how's it going, Dave?

Pleasure to speak with you. You too. How can we help? I try to breathe as a brief as possible. I have a job on paper. It looks like the dream job. I work for a large pharmaceutical, biofarmaceutical company here in New Jersey,

one of the top pharmaceutical companies. I make good money. I make $46 an hour. There's unlimited overtime, pension in 401K. But when I started, we have a union here, and it's a big campus, so it's pretty large facilities on site. And because as a union,

I had to end up going to a department that I really didn't have a lot of experience in because I was low-downed-signiority totem pole. So I ended up in a power in a place where I don't really have a lot of experience dealing with boilers and components servicing different components that go to the boilers systems. And from day one, my manager,

he never took any initiative to make sure that I got fully trained up, pairing me with other team members. Basically, I have no manager. All he does is come in in the morning and ask everybody if they want overtime. And he goes away. And I've tried to reach out to a lot of my coworkers,

a lot of the older senior guys who've been here for years but the environment is so toxic I'm the only minority on the team and I feel like since I've been here for almost two years now I can tell that they are purposely excluding me from all of the

serious jobs. The job that I do that they lead to me that nobody else wants to do is something that I can do in my sleep you know and I can actually sleep at work the job is I have like I said everything on paper is good to have a building here with a couch on the third floor. A lot of times I'm in that building on the third floor, sleeping, I'm in different

buildings, looking at the computer. Like, I actually have time to wait two hours. Meantime, your soul is rotting. Yes, sir. Yeah. That's an expensive soul tax are paying. Yeah, so, have you been looking for something new? Yes, I have an interview tomorrow for another large pharmaceutical company here in New Jersey,

and I know what I don't want. And I guess I really answer my own question, but I know you deal with this type of thing on a daily basis, so I really want to get an expert like you, like you, your opinion, because I know it holds a lot more weight than probably even my own opinion on this topic. Very few people are actually happy doing nothing or being underutilized. most people their their your spirit your relationships everything is invigorated by reaching for the stars we are designed by our creator to create and be productive and when we're not doing that it is a soul tax it takes a tax on your soul and so that's what you're discovering and so this idea that if I got paid for doing nothing and sitting around doing nothing is somehow a wonderful thing.

It's not really wonderful at all. It's really horrible. I agree. And so I agree with you that, yeah, but I don't think you have to, you know, you don't have to run out the door. They're not burning the building down. They're nobody in danger. There's, they're not being mean to you. It could be racial.

It could just be that they're just being union jerks, you know? And I don't care. It doesn't matter to me, which one it is. I'm still getting out of there. I think there's a little bit of both. I remember one of my coworkers. Yeah, I'd say you're probably right. That's probably true.

He's made a remark about knuckle draggers. I hope they hire some more ticks. They keep hiring these knuckle draggers. Yeah, but that's not a racial thing. That's just a caveman. Knuckle dragger is just a dumb person that doesn't know anything. It's just a caveman. So, you know, but either way, it doesn't matter.

You've solved the problem. The riddle is I got to go. but what I don't have to do is go running out the door and make $20 an hour while I'm making $46 right now. So I'm going to sit here for a minute, no pun intended, and look for a job, right? Instead of sleeping on the couch, I'm going to be looking for a job. Right.

That's what I've been doing today the last couple weeks. Every day I'll update my search. Yeah, and I don't know if you felt backward into being a boiler guy or if that was what you intended to do. What is it you really want to be 10 years from now? If you could do anything you wanted to do, what would you do? Validation, equipment validation and qualification. Okay.

So you enjoy, you enjoy and you're good at working with your hands, and you can, in your mind, you can see how things work and how they're put together. Yes, sir. Very good. I like it. Well, Ken Coleman would like what you're saying. Mike Rowe would like what you're saying. I think you can make a lot of money, but you're not going to make a lot of money.

but you're not going to make a lot of money if you're dragging your knuckles, right? Exactly. And so, and you're not going to come home energized. See, I come home from doing this. I'll do about five and a half hours on the microphone today, different podcasts and different things I've got to do inside the building today, and I'm 65 freaking years old, and I come home energized because I'm doing stuff that matters, stuff that I care about, and I'm pushing the edge.

I'm having to use every ounce of everything that I am to get to make sure I, help you guys give you the right answers all that kind of crap and so yeah hang on we'll send you a copy of ken coleman's book finding the work you're wired to do but george life is just better when you're doing something that that that you have to reach for yeah it's just out of reach it's funny because it's almost worse when you're paid well to do it because you go well i'm an idiot to leave this no you're an idiot to stay because if you're not treated well you're undervalued you're bored there's no growth plan like dave said eventually your soul's going to pay the price for it. And so we believe that you can do the work you're wired to do and get paid well

to do it. And naturally, you're going to grow in that area because they're going to see your enthusiasm and your talent, your excellence. So we're rooting for you, man, to get to that next thing. It's a pretty crazy world when you just show up and care and work hard all day long, and that makes you stand out. You don't even have to be that good. You just got to care, have brushed your teeth and work hard all day long. Just showing up in good hygiene goes a long way. I mean, it's just, it's amazing. That's what I've done. world what's working for you your hair is great thank you yeah but the uh i wanted to say i wish i could say the same but it was too soon whoa all the hair jokes go all the way around the horn

before they stop huh okay i like it seriously though the the striving for excellence the striving to do to reach a level you've never reached before is what gives life to you and so So anytime someone's just sitting and, listen, things are either growing or they're dying, there's no in between. And so this job, Jamie, that you got is going to get worse. It's not going to get better. It's dying. It's going off the cliff. They made it clear.

Yeah. It's pretty ridiculous what he's describing. And I don't think he's being weird. I think he's probably got a pretty clear action of what's going on there. So, yeah, I'm, you know, I set a goal that within six months to a year, I've got a better job making $52. doing something where the people respect me, I respect them, and we have to work really, really hard while we're there, and I come home with a callous on my hands

because I've actually been turning a wrench all day, not sleeping on the third floor couch. Yikes. That scares me. That's what's happening in pharmaceutical companies in America. Well, apparently the maintenance team in the building at the farm. He's working on the boilers. The union workers.

Still, it's just the whole thing is, wow. In the lobby of Ramsey Solutions on the debt-free stage, Christopher and Brittany are with us. Hey, guys, how are you? Doing well, Dave. Welcome, welcome. Where do you all live? We're from Sacramento, California. Cool.

Welcome to Nashville. Thank you. And how much debt have you guys paid off? We paid off about $412,000. All right. How long did that take? 28 months. 28?

all right very good and your range of income during that two and a half years so we started at 215,000 we went up to 350,000 and now we've gone back down to 250,000 so I can be part-time and stay at home with our newest baby love it what do y'all do for a living I do plumbing so I work for a general contractor plumbing contractor I did HVAC 2 for about 20 years wow cool and I'm a nurse nurse educator and train new nurses gotcha what kind of debt was the 412,000 everything student loans kids braces personal loans time shares phones taxes all the things wow everything did mortgage too or no not a mortgage we're in california okay got a little while good for you that's our next now you're free though yes we feel free 12 000 worth of normal yes

wow how long y'all been married uh gosh what years is it almost few years yeah three and a half years we started just before our wedding so um we had some great day so you both brought crap in of this. Yes. And so you've been married three and a half and you say, all right, job one, we're cleaning up the mess. Yes. Yes. Not living like this. You get a fresh start. Yeah. We had a really hard time with a lot of car problems, deaths in the family, different things. And it just pushed us to a point where we were like helping to borrow our kids' cars while we had one sitting in the driveway needing a new transmission. And so we were just like trying to figure out how do we get out of this and change their life. We make too much money to be this broke. Absolutely.

What was the bulk of the 412? Student loans, probably about 100 or something. so, some old stuff we had from previous marriages, another couple hundred. So it's a lot of money. Was it just like collecting, collecting to where you just went like, I'm in denial at this point? Yeah. It was like, what's another three grand for braces on top of that? Sure. Exactly. It was zero, you know, zero percent for braces. And so we didn't, you know, pay outright. And then when we were able to pay it off, it was just, I mean, trying to call to pay it off. They don't let you call and pay it off. I don't know if you know, it takes six to seven times to call and, you know, you know, say we need to get your address. To convince them to take your money. Yeah. It was really rough the last month and a

I'll tell you. They like you owing them money. Who knew? Wow. Very cool, you guys. Very cool. So how did you get connected to the Ramsey stuff? So I learned about you back in 2009 when my youngest son was born.

He's 15. And I mean, we've heard, we did FBU. You know, I talked to you on the show before I went to nursing school to talk about should I go to the Air Force, student loans? What do I do? And then I became a single mom. And so when I did that, you know, I said, okay, I'm going to have to take student loans because I figured I knew better than you did.

You know, we were Dave-ish for a while. And then 28 months ago when we got our wedding and we both just said, enough is enough. And so we did a couple more FPUs at home, downloaded every dollar. And we have not done a month without every dollar for the last 29 months. Wow, that's incredible. So it's been, you've been aware for like 16 years, but life kept happening. Yes. And so when you guys got married, you're like, I know just the guy.

Yes, you did. We had spreadsheets of all the different debt we had, and it was a long list. Scary. No more spreadsheets. I hope you've deleted the Excel. Yes. So, Christopher, you knew when you were getting married, you were getting into this, right? Oh, yeah.

But I knew she was worth it. Correct answer. Yes. Not into this, all the debt mess, but into this, I'm going to go hardcore. We're going to do it together, yes. Yeah, she worked her butts off. She worked her butt off to get a lot of the debt done. A lot of side hustles.

Yeah, I bet. I bet. Well, congratulations, you guys. We're very proud of you. How's it feel to be free? Yeah. It's a relief. So the main thing is we're just going to focus.

on not getting back into debt. And so it's just saving and saving if we want to take a nice vacation, then either we have the cash to do it or we're not doing it. So we're definitely on the same page on that. I love it. I love it. Well, congratulations. All right.

When someone says, how do you pay off $412,000 in 28 months, that's stinking impressive. Yeah. What do you tell them the key to getting out of debt is? Budgeting. Every dollar for 29 months. Every dollar. Yeah. making sure every dollar has a name.

We logged our kids in. They have their own every dollar and make sure that you know where your money is going and make sure that you understand the principles of it so that way you don't ever do it again. Yeah, we're teaching them to go through college deffery too because of you. Two in college, working three jobs each, you know, working their way through college and one about to go

and they've all paid cash for their cars. And I'm impressed by them and how well they've done. Wow, very cool. You really have changed your family tree. Yeah, we say more is caught than taught. And they've been watching mom and dad just hug, to get rid of this debt. It's like, well, there's work ethic right there. They're catching that for sure. What was the hardest thing to cut out of the budget or the biggest thing you guys cut to make

this happen so quickly? We were talking about that last night. So I refused to give up kids sports for them because it was such a big thing for them. So we'd actually argue about golf and instead of doing like a big golf round, we do a little golf round and we, you know, the grocery budget, I hear people talk about how much they spend. We're a family of eight and my budget's $1,200. So that's pretty good. Well, some of that, that's for a great day and dog food. Well, yeah. Yes, we have the Great Dane puppies. Of course you do.

That thing can eat. We have three. Oh, my goodness. They eat more than the kids. Wow. That's incredible. Costco. Yeah, very cool, you guys.

Very cool. So the budget is the deal and eating. And you must be cooking a lot from scratch. As much as I can. As a nurse, you know how good that is, right? The nutritional value and everything else. Completely different. So, well, way to go, you guys.

Way to go. brought all of them with you to celebrate. All right. Bring them up. Let's hear all the names and ages. Come on it. We have a big celebration here. The family tree has changed. Brianna's 19. We have Peyton's 19.

Memphis is about 18. Jackson's 15. Ava's 13. And we have Noah who's eight months. Way to go, Noah. You did it, man. You joined the clan, buddy. I love it.

So cute. Beautiful family. All right. Christopher and Brittany and the gang from Sacramento, California, 400,000. $112,000 paid off in just 28 months. They were working like crazy people, living daily on a budget, eating at home, $215,000 to $350,000 income. Count it down.

Let's hear a debt-free scream. Three, two, one, we're debt-free! Yeah! Love it! And the kids are going to school debt-free, and they're paying for their cars debt-free, and family trees changed. That's impressive. And at this age, they saw the sacrifice.

So they're going, yeah, I'd like to avoid that. Yeah, I think I'll avoid that. And yet they survived the sacrifice of mom and dad for two years. A lot of people say, well, you know, I don't want to affect the kids. Like, maybe it should affect the kids, so they don't fall into the traps that we fell into. Yeah, well, they did it. I mean, they pulled it off. And here's the thing.

what you saw if you're watching them and if you go back and watch this you can pull it up on YouTube or Spotify where you can see the video either one and what you what you'll see is you see their body language and it just says I've had it not living like this anymore

they're just very resolute about that we're going to do this we're not going to go back we're never going to be there again and life's too short and they've got second marriages they're going into and they finally just said okay that's it we're pulling the plug on stupid

Let's clear the decks. Yep. That's a beautiful thing. And it's never too late. That's impressive. Yeah. And don't tell me if you got a bunch of kids, you can't do it. Don't tell me if you live in California, you can't do it.

It's just proved you wrong. All these things is like hold my beer, right? So you can do it. You can do it. But it came down to, I mean, you can just tell, looking at Brittany, Brittany put in some hours as a nurse. I mean, and look at these numbers with the income dropping off. You can see that the number of hours she was working as a nurse to cause this to happen.

And, oh, by the way, just had a baby. And, oh, by the way, you know, and there's every excuse in the world, but none of them mattered. They still went and paid off $412,000 in just 28 months. I mean, you blink in 28 months is going to go by. So the question is, do you still want to be in $400,000 of debt 28 months from now? Or do you want to just decide that today's day one of a journey of 28 months? But, I mean, the matter you get, the deeper you cut. The more resolute you are, the deeper you cut, and then the faster you get out.

And then the higher the probability is that you make it and you stay out. The faster you get out, the deeper you cut, the faster you get out, and the higher the probability is you get out to start with and then stay out. All of those things fit together and everything we've seen over the last 30 years in doing this, and they've got all of it. This family of winners right here for sure. Very impressive. Hey, if you're a business owner or a leader in small business and you've got a question about running your business, about leadership, how to lead the team, manage the money, grow without going crazy, family business questions, I'll take your call personally.

I do a top-rated podcast on small business and leadership called Entree Leadership, and you can call us. Here's the number. you'd be part of that show, 844-944-1070, 844-944-1070, or you can head over to entreleadership.com slash ask, and drop us a note there. We'll call and set you up as a caller on the Entree Leadership podcast. Ryan is with us. Ryan is in Charlotte, North Carolina. Hi, Ryan.

How are you? Good, good afternoon, Dave. Thanks for taking my call. Sure. What's up? So a question is, is I am being told by my ex-wife that I should cash out my 401K to purchase a home. And the reason being is when we divorced about eight years ago or so, she basically took half my 401K and parlayed that into purchasing a home. Five years later, sold that home for a good profit.

And so now, and then bought another one. And so she's saying, hey, you know, you need to get out of stop renting and you should really put some of that money into real estate. I'm so confused. Why would anyone ask their ex-wife for financial advice? Well, I saw what she had done with the... No, you didn't. You saw what she said she did. When she cashed out half of that 401k, she got charged the temperature.

penalty plus her tax rate. She borrowed this money at 35% interest. By the time she flipped this house and made money, she didn't even make money. She's so full of crap. She's a Christmas turkey. I see that, you know, with the house that that was purchased and sold, I mean, you didn't see all the penalties and taxes she paid on the stupid withdrawal from the 401K that negated any profit that she made on the flip. Yeah, that is true. Okay, because this one talks out of both sides of her head. That's why she's called the ex-wife. Yeah. Although she is in the house and I'm still renting. So I got to, I got to. Yeah. And what she paid for it was a dear price. Yeah. And sadly, it's probably so mathematically challenged,

she doesn't even realize it. Yeah. And it's going to take her a lifetime just to catch up on retirement now. Yeah. So how much do you have in a retirement? Me personally now, about 85. And what do you make? 1.30. And how old are you? 50. Yeah, okay. If you cash out your money, they're going to charge you a 10% penalty and plus a 25% tax rate. It's like saying, Dave, I want to borrow a 35% interest. I want to borrow money at 35% interest to buy a house. Please don't do that.

No, I agree. That does not put your face under the smart column in the dictionary. Okay, so no, don't do that. and be careful who you're listening to for financial advice in the future. You know, it's like watching some influencer on Tick-Tac and they're on there doing their thing and they look like all they're running is the highlight reel and you see a private jet that they rented and don't own. And but buy, I can teach you to buy real estate and I've got a jet, yeah, that I rented 10 minutes ago.

It's not even your own jet. Come on, dude. You know, and then you go buy a $3,400 kit from them, which is where, they actually make their money. So, no, just, no, no, be careful who you're listening to for money advice. What you want to is look at people that are understated and they're driving a Toyota and they don't have any flash or any bling and their lives are really solid and steady and predictable and sustainable and happy, high-quality relationships.

These are called mature individuals. They're not doing anything to impress others. They're living a life of quality. And if someone happens to notice, they probably wouldn't even notice. And these are called millionaires. And if you can find one of those and actually get them to admit it and then talk to you, they'll teach you the real stuff about money. It's hard stuff like live on less than you make.

Save and invest. Be generous. Live on a plan. Don't rob your 401K to get into a house. That kind of stuff. Yeah, all that's on the, don't listen to your ex-wife for financial advice. Alexi is with us in Sacramento. Lexi, how are you?

Hi, I'm good. How are you doing? Better than I deserve. What's up? So I recently discovered your podcast. I'm a new listener. And I recently started my career. I graduated college last year.

So I've officially created like a monthly budget, paying off my student loans and all of that. Good for you. But I was wondering, thank you. So on the best approach and recommendations for all the extra money that I have, I recently learned about high-yield savings accounts, so I was just wondering if that's the way to go or where to put my emergency funds or cash that I need, like, easy access to. I love it. You are thinking perfectly.

A high-yield savings account is what we recommend for any short-term savings goals like that are happening in the next one to three, four years and your emergency fund. And that'll help it at least kind of keep us. up with inflation because right now the rates are about you know three and a half percent and if you want a great one uh we got a great partner with fair wins and so if you go to fair wins dot org slash ramsey they have a smart bundle just for our fans that has a checking account and a savings account with a great rate yeah so high yield savings is where you would start for something like george said for your emergency fund which should be three to six months of expenses and of course

you're staying out of debt completely so we're saving up and paying cash for things and then beyond your emergency fund, anything you're wanting to do with money in the short term. Now, when you start thinking long term for retirement, then we're going to move towards mutual funds and some other things. But, yeah, George is right. This new partner of ours, they've been with us for about a year and a half, and they just became the studio sponsor just about a month ago. And we've spent a lot of time with the people behind the scenes.

They're solid people, and the product is solid. It's a good high-yield savings account at Fairwinds Credit Union. so just look them up fair wins like the wins are fair all right here we go Riley's in Houston hey Riley what's up hi Dave I appreciate you taking my call sure how can we help yeah so I have a question in regards to paying off student loan debt currently I have about 68,000 in total student loan debt I do have quite a bit of savings and I'm just curious on how to tackle this. Pay it in bulk, which I sort of have a feeling that you're going to say,

or reinvest the savings to use the interest to make payments, just kind of don't know what route to go. We would recommend the debt snowball method, which means you're going to knock out the smallest balance first. So how much do you have in savings? I have about $95,000. Dude, pay it all off today. Why have you waited?

What's holding you back? Honestly, it's just that mental aspect of not having that much in savings. You don't. You have $68,000 in debt that you owe. So mentally, I would detach and go, I don't actually have $90-something,000. I have $29,000 because I owe, I sign on the dotted line saying, I'll give you this money back. And, dude, you can be done today and not pay another diamond interest and be free. Riley, where did the 95 come from?

Just saving some work? And if you have 29 tomorrow and no debt, you can save even more. And that is recommended rather than trying to invest that. A hundred percent. A hundred percent. The number of millionaires that we've interviewed in all of our research that said, I borrowed money on my student loans and made the spread and caused me to be a millionaire is precisely zero.

No one actually does what you're talking about to build wealth in the real world. It's all theory on TicTac. Okay, and this money came at a great time because I was trying to do an application and income-driven application online, and prior to submitting, I was hoping that I could get into this call and try and just figure out the route because I know what my monthly payment would be at, but obviously it'd be in that payment for X amount of years. I wouldn't do income-driven anything.

I'd get rid of the debt. All you're doing is kicking the can down the road, dragging this thing out longer. You've worked hard to save, and that's going to be painful to let go of that. But, man, it's going to set you free when you have those payments back in your life, back in your bank account. Well, and you've got this monkey off your back, and it's, in this case, a gorilla on your back. Get him off. And you're going to feel funny. You feel like you lost 300 pounds.

It'll be weird. And you'll stack up that savings again real quick with no payments. Welcome back to the Ramsey Show in the Fair Wins Credit Union Studio. I'm Dave Ramsey, your host. George Camel Ramsey Personality, number one bestselling author, is my co-host today. Catherine is with us in Phoenix, Arizona. Hi, Catherine. How are you?

Good. I have a question on a, we have a variable life insurance, which we know now we should have never had. But probably eight years ago, we took out to try to save my husband's business that we ended up having to sell off to somebody else. And so there's really nothing left in there. The cash value that's left is like $4,800. I just didn't know, like, because we've kind of just been hesitating when then the people that have had it, they've kind of just said leave it there. Oh, I bet. But I don't know.

Who sold this to you? Who hates you that much? Actually, it was a close friend that when we first had our first baby that she told us. And, of course, because she sold it. So we just kind of. Of course, she's out of the business now, right? Yes. They usually last about two years and then they're gone.

Right. Yeah. So we have like some term life also. Okay. So what does your husband make a year? What, 275? And how much term life does he have? The term life is about 800,000.

Okay. Is he healthy? And then I have like, I have like 250. Yes, no, he's 60, but he has had diabetes and has some issues. Diabetes is a big one when it comes to life insurance. He, all right, and you guys have no money. It sounds like you've been through hard times. Yes

Okay Yes And you don't have any children left at home Well I have a one 16 year old Okay I do have a 16 year old So the concern today is if the 60 year old dies

He leaves a wife And he makes What's your household income? You said About 275 He makes 275 Yes And do you work outside the home

No No And so you lose a 275 $5,000 income if he dies today, and he leaves you $800,000 bucks. Right. Okay. Which is just over, you know, two and a half years of income. If that was invested at 10%, it would make you $80,000.

So you're going to be short about $200,000 based on the way you're currently living. Right. So if he was young and in good shape, I would tell him to get, you know, $2.5 million on him. including the 800s, so we back that out. So, you know, one and a half or so, give or take. But he's not any, if I suspect at 60 with the diabetes, it's going to be pretty expensive to get some term insurance. But the variable life insurance is, it's not much in coverage, is it?

It's not very big policy, right? No, it was, when we first got it, it was like he had 500,000. And mine was, but where we took out, it was probably, like I said, like, eight years ago, it was like $70,000 we had in there. And we took all that out to try to save the business. But we put in, it's like $275 a month. I'm like. Yeah, but I'm talking about the death benefit.

If he dies, what do they write a check for? Oh, that's only $350. Yeah, yeah. And $275 a month for $350 even. For a diabetic 60-year-old is ridiculous. So what I want to. And that's where we're like, we're just throwing that money away, I feel like. Yeah.

So you can cancel that if you can afford to live on 800 grand if he dies tomorrow. Okay. If you instead, another route you could go before you could cancel it, you could go to Sander Insurance, talk to them and see if they can make a market, meaning if they can get a company to cover him, and how expensive it will be. And try to buy a million. Okay. Try to buy a million on how.

him if you can. I had some when I was in my late 50s and 60s and around 60 years old, just because SWI, Sharon wants it. I didn't need it, but my wife wanted that instead of another diamond. And so I did that. And I, but I'm in really good shape and don't have a single, single medical issue. And so, and I don't, I don't, I could lose some weight, but I don't meet the obesity markers.

So I can get the, I can get the insurance. And so that's, that's the things that'll fight you at that age. Now, so go to Xander, Xanderinsurance.com or call them and tell them you talk to us on the air. So that's what I wondered about that. See if you can get insurance to make you more comfortable. And then if you can, it's an instantaneous yes to cancel this. If not, do you want to keep the very, very, very expensive insurance? I probably don't.

Okay. I'm probably going to take some of that $275,000 income and start banking it aggressively knowing that I don't have enough insurance. Okay. That's what I wanted to know. what to do about that. What were you going to do with the money you cashed out? Well, I was wanted to know, like, I mean,

because you hear all this stuff about putting stuff into gold, so I didn't know if that was something or put it, where should we put it? It's only like $4,800. Yeah, well, number one, I'd make sure you're out of debt. But number two, we don't buy any gold. Gold has not got a good track record long term as a return on investment. Instead, I would just buy good growth stock mutual funds with my investing.

But y'all need to be doing a lot more than that, making $275, $4,800 ain't going to save you, you know, not in this situation. So it's just, you know, it's a smart thing to do is not gold and go to some mutual funds. But, you know, you need to be laying out a game plan where you're saving like $100,000 a year. And you do that for five years. Now you've got a half million dollars on top of that $800. Now we're starting to get there without insurance, without any more insurance. Starting to become self-insured. Than the original $800, yeah.

But you've got to rebuild after the business failure, rebuild. some net worth and some wealth for survival for you and the 16-year-old. And those are the routes to go. So, guys, just to recap, the life insurance world is polluted with bad products. There's really only one, all the people that are not in the insurance business, all of us that are financial people that run numbers and are math people, all the financial people say to buy term life insurance the best deal on term life insurance is 15 to 20 year level term it's a level premium and you should have 10 to 12 times your

income on you if you have a family counting on you for your income so if you make a hundred thousand you need somewhere around a million dollars million two something like that and then if that 34 year old wife of yours with three little kids is left behind and you don't have that 100,000 coming home, she could take that million invested, it'll create 100,000 in income perpetually until the kids are grown and gone and you can invest in, you know, we have replaced you. So if you don't want to get too much, you have sleep with one eye open. But if you're 34 and in good shape, term life insurance is like a cost of a pizza. It's ridiculously inexpensive to make sure your family's taking

care of. Ridiculously. And I just read a letter to our staff meeting this morning, a 52-year-old that had life insurance on her. And they had just paid off a million dollars in debt four years ago. And they were on vacation. She had an aneurysm and was gone in six minutes and left another million behind in life insurance now because they'd done the stuff that we teach over and over. So it's just not very expensive if you go and do it right. But this investing inside of a life insurance policy like these stupid variable life and whole life policies are an absolute rip-off never do that well as you've heard the Fed has cut rates for the first time all year 15 year fixed rate mortgages have dropped to the lowest we've seen in 11 months if you're

financially ready now is a great time to buy or sell buying an affordable home you love is possible if you work with a Ramsey trusted real estate agent we have vetted agents to be high-octane high-protein get-or-done people and you can find one of these trusted Ramsey trusted local pros for free at Ramsey Solutions.com slash agents time to do a real estate deal boys and girls I love it Caleb's in Dallas hey Caleb what's up all right thanks Dave for taking my call. Sure. George. Hey.

So I'm on babysept 2. I've got roughly $65,000 in debt. I make somewhere between $80,000 and $85,000 a year and my wife. She's in college at the moment. I'm going to get

her nursing degree. When will she be finished? She will be finished this time next year. Oh, good. Okay. So she actually, it's a good thing. She was very blessed to be able to take advantage of her dad's GII bill. And we also have, I believe it's called Chapter 132 maybe. Since we live in Texas, she's able to get money every month that's income on top of.

Wow, so she's going to school debt free and getting paid. Right. Yes, sir. So my question is I've got a thrift incentive plan at work. It's not a traditional retirement plan, but it is after tax. I am required to put in a minimum of 2% in order to receive profit sharing historically. The last three years, first year that I was able to receive it, it was, 10%, the next year was 12, and then last year was 15% of employee salary.

I'm just wondering, should I continue to contribute that 2% in order to get that profit sharing? Because we're on track this year to get 15% again. Normally I wouldn't. Those numbers are a bit ridiculous, so I probably would. Right. As a matter of fact, the most ridiculous numbers I think I've ever heard. in a good way right um i'm very blessed to be where i work and i thought i was astounded by the i've never seen a retirement plan that that works as well as this one does i haven't either and i've

been doing this a long time but that's i mean you put in two you get 15 that's kind of crazy uh crazy good and so um mean if you put in two and you're going to get three i just passed for now. But I mean, and all you people that get matched 3% on your 401k, I wouldn't do it. I would stop your 401k temporarily and work your baby step two. I always have said that for decades and it's work to get people out of debt. But that 2% is not enough to bother with one way or another. And the two for 15 trades probably a pretty good trade. What do you thinking, George? Yeah. I mean, how am I missing? Are you aggressively looking to get out of this debt, making 80 and 85? How much can you throw at this thing per year or per month?

So I am the first thing is I'm on track right now to get out of debt now and since this past month has passed a year and eight months. That's what I've calculated. That's without a nurse's income. Right, exactly. That'll speed up a year from now. that'll, it'll just, you know, really inject some life into your plan. So you ought to be done a little over a year pretty quick, or, you know,

as soon as she gets that going. Now, what is she making income-wise from this program? So, chapter 32, the VA benefits, I think, it depends on, you know, how often she's in class. But when she is in class full-time, she's, it's like 12 to 1,500 a month. So why would she not be in class full-time? Well, some of this program doesn't, like the summertime, for instance, she doesn't have classes all day. She only has classes, you know, two to four hours out of the day,

versus right now since she's full-fledged in the program, she is getting full-time student hours. Gotcha, gotcha. okay so you've got another 15,000 or so coming in income from her while she's in school right yes sir yeah so you're making about 100 and you got 65 in debt yeah you need to be debt free yeah the year and eight months sounds really good and if you she passes her boards right quick and lands in a payment in a paying position right quick then yeah i think you're going to be in really good shape and it'll be sooner than a year and eight months i like everything you're

doing caleb sounds like you got it dialed in keep it up keep it up i'm glad you're paying attention And, George, you know, it keeps coming back to, if you pay attention, you win. Yeah, if you know your numbers, you're actually looking at it. Those stupid interview questions we get sometimes, it's like, what's the largest problem Americans have with money? They want us to say student loans or credit card debt. And my answer is always not paying attention. Living in a lava land in denial.

They're just wandering along like Gomer Pile on Valium, you know, and they just wake up at retirement. Shazam, I'm broke, you know, so my God. None of you people know what that is. it up on YouTube. Okay. Anyway, Kristiana is with us in Chicago. Hi, Christina. Hi, guys. Thanks for taking my call. Sure. So I have a question about baby steps six and seven. So my husband and I are fortunately there. Yay. Yeah, it's exciting. So my question is about the order of step six and seven. So why do you recommend paying off the mortgage when the mortgage rate is like, let's say, 6.3 percent, but the market returns your money at 10 percent, and then with compound

interest, you know, by retirement. Because your math formula is very naive. Okay. You left out risk. Okay. And you left out the fact that you're psychologically, relationally, and spiritually carrying around dead around your shoulders and it affects your health your relationships your career choices and everything else and so what we have found is is that the people that build wealth the fastest are the ones with a paid off house okay because they're free okay and nobody making them do anything and so suddenly they start making better choices instead of trying to maximize their wealth building off the back of a mortgage spread you left off risk 100 percent of the foreclosures occur on a home of the mortgage.

We did research. It was easy to do that research. It didn't take a big research team. Fairly, fairly quick. But, George, it's, you know, it took me a while, Christina, to get to where, as a math nerd, I understood that the math formula that you're using, and I back then was using the same math formula, I couldn't figure out what was wrong with it. And I finally figured out that the more debt you carry, the more risk you carry.

And the more risk you carry, you have to mathematically adjust for risk if you're going to use a sophisticated mathematical formula on something. And so I figured out that my math formula, and Kristiana, your math formula that you're using now is the same one, leaves out risk. And when you math adjust for risk, you're perceived, what you perceive to be a spread that you're making is neutralized. Yeah. Well, and what we find is, you know, someone loses a job tomorrow, there's risk there. Because now you still got to make that mortgage payment. And so it just opens you up. And on top of that, you know, it's not apples to apples when you look at a mortgage payment with 6% versus what you could make in the market.

And by the way, if it's outside of retirement, you're paying taxes on that versus the mortgage. There's a fixed savings plan right there. You know, you're paying down that interest. Stress-related health problems are the number one killer in America. Hypertension, heart attack, so on. it's the number one killer and uh and they've gone up as the debt load in america has gone up and and so the statistics keep getting worse and so people say well nutrition's worse and there's more obesity very true but also there's more stress and it's just strange you know when

we say financial peace two words that don't go together like airline service what it feel like to have your house paid off. It goes beyond the math. It's hard to quantify on paper. But no one regrets it. Breathe that in. Man, I wish I had a mortgage again. That was fun.

I'll do that to make a spread. Kyle and Ann Marie are on the debt-free stage in the lobby of Ramsey Solutions. Hey, guys, what's up? Hey, Dave. Good to have you all. Welcome. Where do you all live? Making Georgia.

All right. Just down the road. Well, welcome to Nashville. And how much debt have you two paid off? About $140,000. Way to go, guys. And how long did that take? 18 months.

Whoa, quick. And the range of income during that year and a half? About 150 to 160. Cool. What do y'all do for a living? So I'm a software developer for a local credit union. And I'm a pre-k teacher. Awesome.

Some. Very cool. What kind of debt was this $140,000? I mean, a little bit of everything. We had two cars. We had a HELOC, some credit cards, student loans. What was the most of it? Student loans. Yeah. How much of the 140 was student loans? About 90. Okay. How old are you two? 36 and 35. So the student loans have been around a while? Mine have been around for about three years, hers, maybe a little longer. Yeah, mine about 10.

okay all right yeah they've been around a while how long y'all been married four years okay okay so you brought them into the marriage then yes we did now i'm getting a picture and then 18 months yeah i had a four years so after you've been married a little while you look up and went something's got to give we yeah we we just kind of got to the end of a month and realize where is it all at like we have all this money and we don't know where it's at we have good bang jobs why do we why are we not building our savings account it doesn't make any why are we broke it just comes in and goes out comes in goes out this is not a fun life yeah then how'd you get connected to ramscy so i just started looking up just different you know financial what's the best way to you know help paste himself

off and ramsie came up and i just got plugged in immediately and got every dollar set up and just started going at it and we sat down it took us about three months to get the budget really intact it takes it about three that's about right as soon as we did we uh we were just rolling rolling rolling what did you figure out once you what once you got that budget dialed in where was the problem. So the, I mean, it was definitely just the amount of payments that we had in every different category. I mean, we had, what, $1,000, $2,000 in payments of just stuff that we needed a strategy and definitely eating out too. Yeah. It was like, we don't need to be going out this much. We can just eat at home and parties with parents and stuff and going out to eat with family was really big

for me and we just had to tell them, hey, let's just do it at the house and have a potluck just until we're done with this journey, and they supported us in it. So it was definitely worth it. Very good. Very cool. So, I mean, you guys leaned in hard. We did. Did you sell something?

This is crazy. So, yeah, so July 23, no, 24, no, it was 23. July 23, we bought a van and put it on payments because we were like, we can afford this. It's payments. It's not a big deal. And then in October, when we finally started sticking in, we were like, man, this is crazy. you know, we actually need to figure something out. And so actually July 24, so one year later, exactly,

we ended up selling the van for break-even. Oh, wow. And we actually lost about $15,000 in that, which we called our stupid tax. Oh, wow. Yeah. Because that's what the insurance paid out before we bought the van, and we should have just bought a car in cash,

but we weren't that deep in with y'all yet. Gotcha, got you. See, why, this will be a great down payment. We could get a nice car now. Oh, my goodness. That's the American way. Yeah, yeah. Wow.

Well, good for you guys. what do you tell people the key to getting out of debt paying off 140 grand and 18 months making 150 definitely being on the same page yes being on the same page with each other and making sure that that budget is key above all else what was the biggest budget fight like i said wanting to give presents you presents and going out to eat with family and so you're on my team you're the spender yeah okay i'm definitely the nerd okay well software engineer of course what am I thinking? Yeah, no question. Man, amazing, amazing, amazing. Well done, you guys. So, um, wow, what do you tell people the key to getting out of debt is then?

I mean, just sticking to the budget, really. The budget, the budget and being on the same team. That's what I just have. Yeah. We don't, and we don't live out of the bank account. We live out of the budget. So even if there's $2,000 in the bank account, we don't have $2,000. We have whatever's left on that line item. And that's what we've explained to people. We're like, that budget keeps you on track. So you're not looking at, what you have in that account at all. You're looking at this is what I'm allowed to spend. This is what I'm free to spend.

That I chose, that I was going to spend. I'm the boss of me. Yes, and I'm the boss of that money, and it doesn't need to direct me. Amazon Prime is not my boss. Oh, yes. Wow. What's next for you guys? You're in your mid-30s, no debt.

Yes. So we actually, we just listed our house this weekend. Whoa. And we actually are going to be selling it and moving up because we have a child on the way which is number three and um so we're just trying to move up into our next house and after that it's just figuring out where we want to go on vacation we want to go relax a little bit too yeah that's a good new problem to have yeah we're going to go on vacation but how we're going to pay off this debt yeah i'm really proud of you guys way to go very good work very good work so who was

bragging on you who was cheering you on so both of our parents were very helpful in the entire process and understanding of it all there were times where we had to tell them no to go out and stuff but they were very understanding and helpful in the entire thing and they are here my my handyman dad it was like oh we can pay you in grandchildren kisses if you'll do this for us versus us having to bring somebody yeah that worked out very well I have not been bribed with that yeah I hope my kids are not listening now so that's good though I love it oh congratulations you guys very very very well done um Were there people telling you you were weird?

Well, everyone at his job, of course. Oh, yeah. Because I work at a bank. Well, I work at the credit union. But, I mean, yeah, there's, I mean, there's always talk going around of, oh, we have this new credit card offering. And I'm just like, I'm good. I'm right.

I'm right. I think I'm set on that. Yeah. Had enough of that. I'm pretty sure we're done with those things. Yeah. Well, congratulations, you guys. Very, very well done.

And, yeah, onward and upward. The third baby on the way. The house goes on the market. Here we go. on. How's it feel to be completely free $140,000 off your back? It's a blessing. Yeah, it is, it was it was it was all God guiding us the entire way but it is it is such a freeing feeling for sure. What was the hardest thing about the whole process? I mean for me it was it was just really just making sure that you know every every time we sat down to budget that we were on the same page that was

really the biggest one. Towards the end, actually, I was the one that was like, come on, let's just cut those last subscriptions just for a month. He hates ads. And I was like, dude, we got to let let this go. We can do it for that last month and then celebrate. So we watch ads for a few months. Brutal. To think the car was easier than the ads. We watched ads. Like when we were kids. You'll tell your kids one day, these are the sacrifices we made. That we made. We watched ads for three months. Yeah, that's great. Very cool.

Well, congratulations, you guys. We're very proud of. Did you bring the kiddos with you? We did. Bring them up here and here. Introduce them. Ages and names. So Daniel is three.

24 hours ago, he decided to jump off of a playground and fracture his shin. Oh, why not? No, Daniel. Yeah, he was being super brave. And we got Bella. She's won. All right, sweet Bella. So cute.

All right. Fun, yeah. All right, you guys. Kyle and Ann Marie, these kids don't even know what their parents have done to change their whole family tree. 140,000 paid off in 18 months, making 150 to 160. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free. Yeah. That's how we're. That's how we're. We're. We're. We're. We're. That's how we. That's how we. it's done. Daniel yelled from his little stroller down there because he couldn't get up because of his bum leg, but he was yelling, we're dead free! Oh, good time to be debt free when you have an emergency like that and you just cash flow it. Changes an emergency into an inconvenience.

Wow, pretty cool. Hey, that's a powerful couple right there, what they pulled off in that short period of time in, right after getting married, too. Yeah. I mean, they sat down, pushed through all the relational stuff, made it all happen. Very cool. Very cool. Proud of you, guys our scripture of the day proverbs 22 one a good name is to be chosen rather than great riches and favor is better than silver or gold philip fisher said the stock market is filled with individuals who know the price of everything and the value of nothing oohie ryan is in Minneapolis. Hey, Ryan, how are you? I'm good. How are you? Better than I

deserve. What's up? Thank you for taking my call. Sure. My wife and I are currently in Baby Step 3 and will be finished with that by the end of the year. We receive an annual bonus in March. It'll be roughly $15,000 take home. Would it be better for us to take that

15 to fully fund our Roth IRA or to spread our contributions out throughout the year and use the bonus between Steps 4, 5, and 6. It doesn't matter much. Either one will be fine. The difference mathematically is what you might earn. If you do the 15 all in a lump sum in March,

what would you have earned in March versus 112th of the month all the way around? And so, you know, like say, the average might be what you would earn on 8 or 10,000 of that 15. So it might be a $1,000 difference. It might be $800 difference on a 10 or 12% year. Unless we had a crystal ball, we won't know for sure what the math is on that. But in general, the sooner you get money into the market, the better off you're going to be long term. Right. But it's not, I mean, the difference, it's not like you're going to have millions of dollars more

because you did 15 lump sum versus 15, 112th of the time all the way around the horn, right? right but but basically for instance in my case okay i fully fund my 401k for the whole year in january okay i dump the whole thing in there okay because i can i own the company and i can just bonus myself whatever i need to and make sure i got enough to do that right so i just load the thing stinking thing up and then i've got that i don't know let's call it 20 000 bucks or 30 000 bucks or whatever it is it's working the entire year year rather than one 12th working the entire year, two 12th working part of the year, three 12th working part of the year, four 12th working part of the year, and so on. You follow me? So the difference

is what I would make on 30 grand, 27 grand, 28 grand, 24 grand, 23 grand, 22, and so on all the way around the horn. And so it's, George is right, a lump sum up on the front end is going to average more than doing it monthly. The second thing to enter into the conversation, because it's a good question, is you want to be sure if the steady monthly thing keeps you doing it because you're on autopilot versus jumping on and off the wagon with lump sums, and you're not as predictable with it, sustainable with it that way, you'd be better off sticking with the one that keeps you doing it. And so I set up stuff, I set up stuff early in my life once I started understanding

these principles to trick myself into having discipline, like automatic 401ks or automatic draft on my checking account for Roth IRAs or those kinds of things back in the old days. So I automatically had debt. I went so far as I, in the old days, when I started this stuff, there was no internet, of course. And so there was no auto, there was very little auto draft on utilities. And that kind of stuff. You used to have to write a check and send your electric bill through the mail. And as soon as they set it up where they would take auto draft, I put all my utilities on auto draft so that I never missed a discount. And that's been, God, that's 25 or 30 years I've been doing that. So anything I can do to have autopilot, automatic discipline. Yeah, I like that mentality

because if you're investing 15% of your income forever, you've got to learn to live on 15% less than you would have. And so it's sort of like that money was never there. And that's a good way to live because it keeps you in check. So I think that long-term discipline is key. But for this year, if you just wanted to fund them and be done with them and move on, that's cool. If you've, you know, for 10 years, you've always gotten a bonus in March of 15 grand, and you want to just label that.

That's going to go towards our retirement, and we're going to do less through the rest of the year. Fine. I don't know. You know, but whatever you do, trick yourself into being consistent. And when given the opportunity, a lump sum early in the year will outperform a steady monthly investment because it's been in there longer.

There's a fancy name for that number. Dollar cost averaging. Well, that's what you're not doing is dollar cost averaging when you put it all in there. Yeah, you're missing out on that. RJ is with us in Fort Worth. Hey, RJ, how are you? Hey, Dave, how's it going?

Better than I deserve. How can we help? Hey, so my question is, see, honestly, I'm in babysat too, and I have like $12,000 in debt. CDL school is $3,000. I don't know if I should go ahead and go back and some more debt. What school?

CDL school. To get your CDL, okay. There's $3,000 to do that. CDL. I currently have my CDL B, but in order to increase my income, I need a CDL A. So should I go into more debt and like $3 and more to go, like, to make more money or should I pay off my debt completely? And then once I'm done a baby step two, should I go ahead and like, you know,

cash flow at $3,000. Where are you working? I'm currently a super driver, a Sweden Corporation of America. So you're not driving now? Yeah, yeah. I'm currently using my CDLB. I'm currently making money with my CDLB. Okay, what are you making doing that?

About 54, a year. Would you stay with the same company or change jobs? No, I definitely change jobs. I go to a higher paying company, I probably make at least $70,000, maybe like $80,000 to $100,000 to $100,000. There's no limit. How quickly could you save up $3,000 making what you make now? Maybe like three or four months, maybe, if I really put my line to it. Yeah.

And what I do is work six extra jobs and sell so much stuff the kids think they're next and scrape up $3,000 in cash in about a month. But no, I'm not going to borrow money to go do it. The secret to getting out of debt is to stop borrowing. That's the first step. You've got to quit looking to debt to be your answer, to be your savior every time you want to go do something. You got to say, that's not an option anymore. I'm going to take debt off the table.

It's not an option. Now, how am I going to do this? Well, it's a good thing to do. I mean, if you can spend $3,000 and up your income $25,000, I think you ought to do that. That sounds pretty good. And so what that means is I'm going to be working my tail end off, man. I'm going to be working like all the time and go get me three grand because I mean that's where money comes from is work and so go get you some that's what I would do and I'd be busting it man and at the workplace I'd be asking for overtime I'd be asking workplace to pay for it and let them you know maybe they keep you on at 70 grand with a CDL right and so yeah there's nothing wrong with that but that's and there is a shortage of drivers right now So that's not a bad thing at all to go get that, you know, get that license to be able to move some stuff around.

Yeah, I'm definitely going to go get the money, but no, RJ, I'm not going to, I've never told someone in 30 years to go into debt on this show. Guess we're not starting today. Yeah. And, but if I were in your shoes, I'd be wanting that three grand. I'd be wanting it really, really bad. Yeah, some good ROI on there. I'd go get some. I mean, what have we got we can sell?

what about that motorcycle that four-wheeler that's out in the backyard oh why don't yeah we'll go sell it get your three grand you're getting ready to borrow money you know you're sitting on some junk back there somewhere probably that'll pay this thing so just figure out what what you can do and once i took debt off the table george i started seeing all kinds of creative options your imagination runs wild when it doesn't involve a lender yeah when i can stay you know once i do anything to stay away from a bank or I can't do the thing. Well, I want to do the thing. So I'm going to go find a way, but it's not going to be with the bank. Yeah. I just crunch some numbers here. I'm like, if you can go make 25 an hour driving for Amazon Flex, just drive packages after work, that's

120 hours. Okay. Now I know what it's going to take to go get that license. 120 hours of extra side hustling. So that just... Five hours a day for 20 days. There you go. Ding. So there's the math on it. I might be tired. Oh, well, you might be. He sounds like a young guy. I know, not him. He's got energy. He wasn't a whiner, but, I mean, I've talked to a few people that whine.

It's okay. You might miss the next series on Netflix. You're not going to die from hard work. Right before you die from hard work, you pass out. It's okay. That's how the Lord intended it. That puts us our 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 the Walk Daily with the Prince of Peace. Christ Jesus.