The Ramsey Show - App - Your Emergency Fund Is Murphy Repellent (Hour 1)

Episode Date: October 11, 2019

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. This is your show, America. Thank you for being here. Open phones at 888-825-5225. That's 888-825-5225. Katie is with us in Utah. Hi, Katie.

How are you? Hi, Dave. Thank you so much for taking my call. Certainly. How can I help? We're on baby steps four, five, and six. Our home is paid off. We've paid off a rental property, and we are aggressively trying to pay off our last two.

My question is, and if we keep going the way we have, those will be done in three years. My question is, I've got a daughter who is in college, and she hasn't needed any help thus far because she's been on scholarship. That ends this year. And I have another daughter who will be attending college in the fall, and she has half tuition. So my question is, do we keep going gazelle intense? We can't do both, helping our kids and finishing our goals. What do you recommend?

Is there any reason to not help the kids? Well, we've just been working towards this for so long. Once those are paid off, we would probably easily be able to help them catch low college. It will just... Yeah, but you don't have the luxury of waiting for them to go to college until the houses are paid off. No. I mean, that's like three years. You want to just say don't go to college for three years while I get these paid off?

No. No, I guess I just don't know if we put more responsibility on them. I mean, we have 529 for them, but there's only about 6,000 each in it. And then we also have two other children who are younger. So I just didn't know what our plan should be at this point. All right. So how much money do these two children, two young adults, need next year? Next year, my oldest daughter will need probably $10,000, probably about that for both.

Okay, so $20,000. And how much is owed on the rental properties? We owe right now about $180,000 total. And you're paying it off at what kind of a rate now? How much would you pay off next year if you didn't help the kids? We're paying about $3,500 a month extra. Okay, so about $45,000 a year. Yeah. Okay, so $45,000 a year is going towards these. And so that's four years you'll be done now. If you don't do that and you help the girls to the tune of $20,000,

it slows you down by almost half. So instead of four years, it puts you on an eight-year plan to have your rentals paid off. Okay. So instead of four years, it takes you eight years, but these two go through college during that four years. Well, it won't even be four years total, but you've got others coming on. So you're going to put $20,000 a year towards college for the next many, many years with four kids, give or take. So, yeah, I'm going to help the kids. I mean, you're going to get the rentals paid off.

It's just a matter of when, and all we're doing is slowing down when they're going to get paid off it's just a matter of when and all we're doing slowing down when they're going to get paid off and uh any any uh responsibility you can put on them for maintaining and getting scholarships would be awesome for working would be awesome and they're doing that yes they are doing all of that so um but anything you can do to you know keep a little bit of pressure on them. But am I going to go to the point they need to take out student loans so you can pay off rentals? No, that does seem ridiculous. It is ridiculous. Yeah, absolutely. And these are kids that you are agreeing with their work ethic.

You're agreeing with their personal character, their social habits. In other words, they're not out there doing a bunch of crap you don't agree with and still expecting you to give them money. I hear good kids here. Very good kids, yeah. This is why you work. You take care of them. Okay.

And, you know, unfortunately, no, fortunately, I guess, they both are looking for graduate degrees as well, and that's a whole other ballpark. But do you recommend continuing to help them through that? It depends on the situation. Again, do I agree? In this case, presupposing we've still got good kids, do I agree with the field of study?

Yes, definitely. Do I want to spend $80,000 getting a master's degree in social work so I can make $25,000 a year? No, thank you. But am I going to, you know, would I spend $80,000 or $50,000 or $30,000 getting an MBA? Yeah, I would. I would if that's the desire of their heart. You know, do you have to do that?

No, you don't have to get great graduate level work to win in the marketplace. You certainly don't have to get great do graduate level work to to win in the marketplace you certainly don't um but uh but if they've got a reasonable career path that there's an roi on this or return on investment on the uh on what they're willing to spend and so forth then i may participate with them there but we're gonna have to look at that i can't guarantee you know we got to look at the household you got two others coming behind them and you do have these rentals that got to be finished up at some point so you know you just play all that by ear but for the next couple of years to slow down the speed at which you pay off your rentals to help those two kids to the tune of 20 000 to me that's a no-brainer sharon and i would make that decision in about 30 seconds now are you evil if you decide not to do that?

No. You can do whatever you want to do. It's your money. But, you know, with the information you gave me, what would I do if I were in your shoes? Well, that's what I would do. Hey, thank you for the call. Open phones at 888-825-5225. Glenn is on Facebook.

My company is offering a pension buyout. If I have 15 years left of work, would rolling it over to an IRA make sense? Yes. If you put it into good growth stock mutual funds, you'll make a better rate of return than the pension would be paying. And when you die with a pension, it dies with you. When you die with an IRAa it goes to your family so whatever that big lump sum is from all these years i would definitely roll it over there now then the question is what are they going to pay you while you are still working there i'll pension buy out

15 years left to work i guess you're not staying at the company probably you're probably going into a different company um and then you know you would you continue to save for retirement with a new career? Yes, I would. But now, if the pension buyout involves buying you out of your job as well and you're going to get a different job, then there's other parts of this equation. But just looking at the pension part alone, it almost always makes sense to take it when you can take it in a lump sum and roll it to an IRA.

Don't touch it. Put it in good growth stock mutual funds. And, you know, we spread our investments. I personally spread my investments. I recommend you spread across four types of mutual funds, growth, growth and income, aggressive growth, and international. And if you need help doing that, I'm not in the investment business, but we've got folks we recommend.

You can go to DaveRamsey.com. Over on the right-hand side of the webpage, just a little bit down, you'll see SmartVestor. Click on SmartVestor and you'll find an opportunity to put in your name and address or your name and your phone number, your email, that kind of stuff. And you'll get a list of SmartVestor pros, people we recommend in your name and address or your name and your phone number, your email, that kind of stuff, and you'll get a list of SmartVestor pros, people we recommend in your area. And then they'll get in touch with you, you can get in touch with them, and you can get some advice that way and get some help with this.

This is the Dave Ramsey Show. Business leaders, if you're not using LinkedIn jobs, you are missing out. Our Ramsey Solutions Company page on LinkedIn has over 100,000 followers. That's over 100,000 potential like-minded people our team communicates our current openings to. We also post on LinkedIn Jobs because we know the right person will have an impact on our company for years to come. And LinkedIn Jobs matches the right person with the right job. It's no wonder a hire is made every eight seconds on LinkedIn and over 600 million members visit LinkedIn to make connections, learn and grow as professionals, and discover new job opportunities. In fact, LinkedIn members add 15 new skills to their profiles

and apply to 35 job posts every two seconds. Get started today with linkedin jobs and get 50 off your first job post visit linkedin.com slash ramsey terms and conditions apply Thank you for joining us, America. Shelly is with us in Charlotte, North Carolina. Hi, Shelly. How are you? I'm doing better than I deserve. What about you, Dave? Just the same. How can I help? So I have been listening to your show.

I've been binging on it nonstop for about the last month, and I'm finally ready to get started on my path to financial freedom. I have quite a bit of student loans, and I'm trying to figure out the best way to approach them. I have two that are currently not in good standing, and I have an offer to settle them for a lower amount than what I actually owe on them. I'm wondering if I should take a look. Let me get the whole picture for a second. The two that are not in good standing, how much owed on them and what is the offer so um the with the

interest and everything that's capitalized over time it's around 95 000 and i've been being offered to sell them for 30 000 wow okay that's a great offer. And do you have $30,000? I do. I have about $40,000 put away. Okay. Wow. And how much other student loan debt do you have? About $45,000. Okay. And what other debt other than that do you have? That's it. And what is your income?

My income is about $125,000. Good for you. What do you do for a living? I'm in human resources and hospitality. Good for you. Okay, excellent. All right. So why were you behind on the student loans with this kind of income?

Because there was a whole lot of stupid involved before the story I just gave you. Okay, that's fair. I'll go with that. All right, so here's the thing. If you can get in writing, only if you can get in writing the $30,000 offer to settle the $95,000 in full, can you get that in writing? If you can get that in writing, I'd write him a check tomorrow okay all right that's that i'm i'm pretty sure i can get it get it um get it in writing and that's what's known as a deal

actually it's tripled over the last three years so initially i wasn't making nearly as much and just kind of felt overwhelmed with it and didn't really see any hope for it and i've been listening to you and i I know that now it's definitely possible. But here's the cool thing. I mean, you do that, you've got $10,000 left. You have $45,000 in student loan debt and $125,000 income. You should be done in a year. You should be.

Fair enough, yes. Yeah, you hear people. You've been listening to debt-free calls. You've been binging. Right, I know, I know. And I can't wait to call back and do my debt-free calls. You've been binging. Right. I know. I know. And I can't wait to call back and do my debt-free screen.

Yeah, but I mean, you've heard people pay $45,000 off in a year that make less than $125,000. Yes, you're right. You're right. And that's what really motivated me to go ahead and get the ball rolling. Yeah, this is very cool. I'm proud of you. How old are you? I'm 30.

Yeah, you're going to change your whole family tree. Yes, yeah, and that's what's really been really important to me is making a difference in my family tree. Yeah, you're doing good stuff. Congratulations. Definitely make sure you have it in writing. It doesn't count if it's not in writing. And keep a copy of the check that you send them,

certified check or whatever you send them, stapled to that letter saying the $30,000 settles those accounts in full, and you keep that hard copy in your files the rest of your life because it's going to come up again. They're going to forget. They're going to go, our records show. I don't give a crap what your records show. I have this right here, and you're prepared for a court case if you need one, because that is an incredible offer, $30,000 on a student loan debt of 95. And so my guess is these are private student loans. They're not Sally Mae's, because Sally Mae doesn't give you that kind of an offer.

The federally insured ones, you won't get that kind of an offer. So I'd take that deal in a heartbeat. Allison is with us in Allentown, Pennsylvania. Hi, Allison. How are you? Good, Dave. How are you? Better than I deserve.

What's up? So I'm 18, and I'm going to college next year, and I have not yet decided on a school because I'm waiting to hear back from all of them yet. But I'm considering a state school so I can get out debt-free because my parents will help me. Good. But I also plan on going to medical school after that, and I want to get out with as little loans as possible.

And I plan to follow the Baby Steps through that program through getting my medical degree. Good. But I was wondering if it is possible to go through medical school without any loans and how you would get through okay uh there are three or four things that come into play uh just like your undergraduate uh the most important part of the formula is how much it costs and how much it costs depends on where you go now what normally happens to people that are going to postgraduate work like that law school med school dental school that kind of a thing they're just happy to get accepted

anywhere because it's so tough to get in you know and so it's like woohoo i got accepted to med school they don't even think about what it costs or where they're going and they're just happy i got accepted i mean and they're finally there right and they don't do they don't go past that and so i don't want you to think that way i want you to think uh i'm the customer because by the way when you're paying somebody 200 000 bucks for something you're the customer um and so i'm going to shop around and i'm going to try to get approved at some schools that are less expensive. Because I've got to tell you, I've been to the doctor a bunch.

I'm old. And I've never asked a doc where he went to school. Okay. I never asked. They got their medical degree. They passed their boards. They're legal in the U.S. And I didn't ask where they went to school.

And, you know, they could have gone to Harvard or they could have gone to whatever, you know. And so the point is that, you know, if you can pass the boards coming out of it, then you went to a good med school. So where you go is a big part of the equation. The second, third, fourth things you can do, obviously, joining the military is an option, and they pay for it uh obviously um there's another program that's not as well known called the md phd program and you may want to look into that for instance duke has one of those they're very difficult to get into but if you can get in essentially what happens is while you're in med school you are an employee of the university

and so you go so you go to med school free, but you're working like a crazy person. I mean, it's nuts, okay, and all the way up through residency and everything. I mean, it's hard in terms of the hours. But, you know, so is being $200,000 in debt. That's hard, too. And the third one or the last one is very hard to do and very even more unusual, but I always mention it because it can happen. There are two groups of people that really like for new doctors to be birthed every year,

and that is the drug companies and the hospital corporations. And so talking to hospitals about a, I always laughingly call it an indentured servant program, where you promise to work for them, kind of like the servant program where you promise to work for them, kind of like the military, where you promise to work for them so many years after you get out, and in return they pay for your education. Some of them are so desperate to get a doc in their hospital in a rural setting or in an urban setting that they will do stuff like that as a recruitment tool for docs. And so you start talking to both of those.

Now, the drug companies aren't trying to recruit you in their case they're trying to um trying to make you into a customer for life and they just have some scholarships but the scholarships are very rare they're there though there's actual drug company med student scholarships so check into those things and again much harder to do and it's going to require a lot of extra work on your part but there those are some ways that i have talked to people other than having rich parents that went to med school without any debt. And, you know, just be cognizant of it. I talked to a lady the other day that was $500,000 in debt from med school.

And just, I mean, just take your breath away. And I talked to her right here on the air. I think it was like two weeks ago. And so, you know, you just got to really, you are, because you're asking me the question at 18 years old, so that tells me you are paying attention. But just pay attention to that. And, again, school selection, whether it's postgraduate work or whether it's undergrad work, school selection, people, is the number one thing you can do to go to school debt-free.

Choose where you go to school, something that's affordable, that fits your budget. Now, if you've got a big, fat, juicy budget, I don't care where you go to school. But this idea you're going to pay $50,000, $60,000 a year for undergrad tuition because you like the oak trees on the campus, somebody will smack you and your mama. This is The Dave Ramsey Show. Folks, let's cut through the bull. Interest rates are exceptionally low, so you're missing out if you have not called Churchill Mortgage to see if you can save money on your home loan. Lots of other companies are out there claiming great deals, but don't get lured by slick advertisements. No-cost refinance offers do not mean they're free. Churchill Mortgage has a no-bull refinance. This means there are no hidden fees. They will shoot straight with you.

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NMLSconsumeraccess.org. Equal housing lender. 761 Old Hickory Boulevard, Brentwood, Tennessee 37027. In the lobby of Ramsey Solutions on the debt-free stage, Spencer and Casey are with us. Hey, guys, how are you? Great. How are you? Doing great, Dave. Thanks for having us. Absolutely. Where do you guys live? We're near Jacksonville, Florida. Very cool. Well, congratulations. Welcome to Nashville and here to do a debt-free scream. Yes. How much have you paid off? $73,783. Very cool. And how long did

this take? 16 months. Whoa. And your range of income during that time? I started off by myself. We were not married at the time when I started, so my salary starting off was about $55,000. And it increased through the process to about $75,000. And then when we were married, we ended at $135,000. Very cool. How long have you been married? We got married in December, so it'll be our one-year anniversary. Okay.

All right. So about half of the journey was married, about half wasn't, right? Only two months was married, actually. We paid off our debt in February, and so only two months was married, actually. We paid off our debt in February. Oh, okay. And so only two months was married. Most of it was me. Okay.

So you pushed through. I did. Very cool. Well, congratulations. Thank you. What kind of debt was the $74,000? $7,000 was a car lease, and the rest was my student loans. Okay.

Cool. Cool. What do you do for a living? I am a speech-language pathologist, and I specialize in augmentative alternative communication. Cool. And I work IT. Oh, good. All right.

Fun. Cool. So tell me the story. How did you get started on this? Thanks to Hurricane Irma, we were out of electricity in Florida, and I had this book on our bookshelf that Spencer was gifted for graduation, and it was the Total Money Makeover. And I was like, I've heard about this Dave Ramsey guy. I don't know what I think, but there's this book and I have no electricity. So let me read while we're waiting for the power to come back on. And I finished your book, I think,

in two days. I was just so blown away that people could pay off loans and I had all this debt from school and I was just felt really hopeless. And reading that book really helped me see that it was possible. And so I was like, Spencer, we're doing this. And he was book really helped me see that it was possible. And so I was like, Spencer, we're doing this. And he was like, great, I've been telling you this whole time to pay off your student loans. I'm great, you're going to do that. I'm like, okay, great. Very cool, cool.

And so you got a good running start on it and finished off, put the icing on the cake after you were married. Yeah, exactly. Very cool. Congratulations. Thank you. How does it feel? It's amazing.

That's so freeing. I was petrified before we got married, and I kept on wanting to push our wedding back. And she kept on saying, no, Dave tells you to get married and then work on it together. And we ended up doing Financial Peace University before we got married. Oh, good. And that really helped us get on the same page. And then I said, okay, yeah, we should get married. And then we finished it off real quick after that.

Very cool. So that's pretty good pre-marriage counseling yeah absolutely yep yeah very cool now we run our own fpu class oh thank you that's fun yeah well you got a great story to lead it out with right exactly been there done that got the t-shirt yeah i love it very good very cool so when someone asks how do you do this well i worked three jobs. I worked all the time. I had a day job where I was at a school all day. And then I would go after school, I would go to the nursing home and I would work more. And on the weekends, I would work at the nursing home. And I also picked up jobs at a private practice. So then I would work the summer, I would cover

vacations. And between those three jobs is how I raised my income so much. And I would say that was the key to me paying off my loans so quickly. Good. So lots and lots of work. Yes. Cool. Spencer, what do you think the keys are? Well, I'm going to give a shout out to my mom who always told me I needed a budget, and I was just too young and hardheaded to listen to her. So for me having the plan, I did not work as much as she did because she had a much more

lucrative opportunity. So I would have to say that it's just having the plan and the determination. Those are the two things that you need and then you can get through it. Yeah, absolutely. Very cool, you guys. Well done. How old are you two? I'm 28. And I'm 30. Okay, very cool. So when you read articles or hear people say millennials are stuck and can't get out of debt, and yet you did it, what does that make you do? Chuckle like you just did? Yeah, exactly. I chuckle. I roll my eyes.

And, you know, the conversation comes up all the time at work, in our church and stuff. It can be done. Don't let other people limit you. Believe in yourself. Yeah, you don't have to get a permission slip. You're an adult. Yes. I love it.

Well done, you guys. We're proud of you. Thank you. Good job. Very good job. All right, Spencer and Casey, mainly Casey. $74,000 paid off in 16 months, and I've been married two of those months. Congratulations, you guys.

We've got a copy of Chris Hogan's book for you, Everyday Millionaires. That's the next chapter in your story. Keep going. Thank you. Keep playing the baby steps. You're going to be there. You're right on track. Very, very proud of y'all.

All right, count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! Woo! Yeah! Oh, yeah! three two one we're dead free love it love it love it and the crowd goes wild well well done you guys very very well done you know it doesn't matter if you are a boomer, an Xer, a Zer, a millennial, whatever initial or group you want to be lumped into in terms of your age demographic. I can guarantee you people of your generation, no matter who's listening to this right now,

have done stupid stuff with money. And I can guarantee you people of your generation have done smart things with money. The interesting thing is it's a choice. You're not a victim of your circumstances. You're a victim of your choices. Me too. We all make choices. One set of choices says I'm stuck, I can't get out, I'm a victim

And so I choose to sit here and I choose as a result of my lack of hope My victim mentality to do nothing But then along comes someone like Casey Who reads a book by candlelight Because the electricity is out And hope kicks in See the only difference in her situation was nothing changed from before she read the book to after she read the book.

She had the same amount of income. She had the same amount of debt both times. The only thing that changed was she believed she could do it. That was the only thing that changed. That's called hope. When you believe you can do something, it changes the equation. Henry Ford said, if you think you can or you think you can't, you're right. Oh, people like me can't.

See, when you start going people like me, I just want to smack you. Because I got to tell you, there's always a people like me. Whoever people like me is, there's always one or two of them that went and won anyway. They went and became victorious anyway they they did it anyway they danced anyway they got up and worked hard anyway they went and did things that other people wouldn't do anyway they did what it took anyway in spite of being people like me oh give me a break you whiner call the wambulance people like me you bless your little heart you're just stuck you don't understand there's always a

people just like you that went and won anyway they became became victorious anyway. They paid off their debts anyway. They finished their four-year degree without debt anyway. They went and made something of their lives anyway. You get to choose this stuff. God gives you the dignity of choice. The problem is you can choose to do nothing. You can choose to be a whiner. You can choose to have Eeyore as your spirit animal.

Oh, well, you just can't get ahead. It's just life is bad. Oh, man, you don't understand. All that is is choice. It's a choice. It's a decision. I've been knocked down. I know how it feels.

I've had the breath knocked out of me. I know how it feels. I've got scars all over my psyche knocked down i know how it feels i've had the breath knocked out of me i know how it feels i got scars all over my psyche i know exactly how it feels i've been cheated and lied about and betrayed i know exactly how it feels i've had people write entire series of articles that were full of lies about me i know how it feels i get it. I understand. But you got to go win anyway. You got to suck it up, buckle up, throw your shoulders back, take a deep breath, and charge anyway. You got to knock stuff down, make things happen anyway. So don't call me up because I'm just going to go, you got to do it anyway. Been doing this 30 years.

Lots of people paid off debt because we made them believe they could. We've never paid a dime of your debt. Never paid a dime of a single caller's debt. And yet they did because suddenly they started believing they could. So when are you going to start? Yeah, I'm talking to you. It's time for you to win. Anyway. Mark is with us. Mark's in Florida.

Hey, Mark, how are you? I don't know what happened. Something screwed up with that phone just then. These lines look like they're set up wrong, guys. Open phones at 888-825-5225. You jump in. We'll talk about your life and your money. Robin is in the Ramsey Baby Steps community. I'm just now starting the Baby Steps, and I heard you talk about gazelle intensity. I've never had any major emergencies, so

is it okay for me to skip Baby Step 1 and just start paying off my debt? No. No. When you have absolutely no money in savings, you know what you're doing? You're sending out a beacon light that says, come attack me, break all my stuff.

You're asking for it. Life is going to come kick you in the knee and then kick you in the teeth. No. Your emergency fund is Murphy repellent. Murphy repellent. And that is how it works. No, no, no, no, no. You do your baby step one

all right let me now i got it working okay mark is with me in florida hey mark how are you hi uh dave oh my god i'm such a huge fan thank you for taking my call my honor sir how can i help uh yes um so i am in thirty thousand dollar credit card debt and I'm a, I'm a flight attendant. I have a plan, which is to be debt free before I turn 30. And that's going to be in one year and two months from now. And I feel like my financial situation for the longest time has really affected my social life, my life in general, dating, my relationships with other people. And stuff like I work for the aviation industry and have great benefits. I can travel for free and stuff. But I couldn't even do that because I'm so broke.

Yeah. But like I really can't. i so you're gonna roll up your sleeves and knock this in the head in this coming year that's good i i will and i have been like what's your question videos yeah um so basically i'm trying to like mentally and emotionally prepare myself for this my question is since i know that this is going to be very, it's not going to be easy, and I feel like I'm in like midlife crisis right now, being that I'm almost 30.

I just feel like I'm so alone in this journey, and I see all the people around me. And like most of your, like a lot of your callers are like couples, and they have a support system. Why don't you jump into Financial Peace University? That puts you in the communities as well. And I know you travel, and you may not be able to hit the classes exactly online. I'll give it to you.

We'll give you the one-year membership and the nine-week class, too. And that'll help you get this going. Because the beauty of Financial Peace University, whether you go to the local class, and you should do that if you can if you can't all the classes are online too as a part of the membership and there's all kinds of community online as a part of financial peace university inside of financial peace university only people that are doing this stuff are in this it's not open to the public it's not any you... You know, we've got a huge Facebook group. The Ramsey Baby Steps community is about 250,000 people. But that's not inside

of Financial Peace University. Inside Financial Peace University are communities of people just doing FPU. They're just doing this stuff. And you can get the support and the community that way. Because really what you've got is you have nobody walking alongside you except wondering

if you're crazy plus i mean you're just a ghost you're in and out of town all the time with what you do and so it's hard to have a lot of connection anyway uh because you just travel all the time and it's the nature of your job so yeah hang on and i'll have a zach pick up and we'll get you plugged into that but use the community aspects of it because what you're outlining is a normal human need and that is to have encouragement and accountability from people that are on a similar or a journey that at least shares the value systems of the journey hannah is with us in Louisiana. Hi, Hannah, how are you? Hi, I'm doing great, Mr. Ramsey. I appreciate you taking my call. Sure, what's up?

Here's my question. So we have drank the Dave Ramsey Kool-Aid, and we will do exactly what you say. We're on baby step two. We've paid off $150,000 in one year. Way to go. Thank you. We have $77,000 left to go. Our income in January will increase to $525,000. Holy moly. Increase from what to five and a quarter? From $360,000 to $525,000. What in the world?

Who is doing what? Who's the rocket scientist? Well, my husband's a surgeon, and I'm a psychiatrist. So what is happening? Did he finish a fellowship or something? He finished, and then I finished in December, and we both have jobs lined up. Ding, ding. Way to go.

It's wonderful. What a wonderful story. I mean, we've lived like no one else, So, you know, we're finally ready to. But here's my question. We want to know, and this has never been, and I've been looking, we want to know if we can buy both a vacation home and a home at the same time if we stay within your guidelines of putting 20% down and stay within 25% of our budget. That makes both of the mortgages between $8,000 and $10,000 per month.

No. We want to know if we can do this is because this is one of our big whys. We want to have this vacation home. You make a half a million dollars a year. You're going to be able to save up and buy a vacation home in 20 minutes. But no, you don't finance a vacation home. That's a toy listen you can rent a 25,000 square foot villa for a week staffed with eight people for 35 grand in Jamaica on the beach okay for 25 grand as opposed to going and buying something for 250,000

now I don't mind you going and buying a vacation home i have a very nice lake home it's one of my favorite places on the planet when i turn down the street my blood pressure goes down i love that place okay but toys you have to pay cash for and vacation homes are toys what you're going to discover is you constantly have to work on them and for the number of hours you actually spend in them, what you have spent on them is actually ridiculous. But that's okay. You can afford it. You make enough money as long as you pay cash.

So when did you buy your vacation home? Can you buy that in baby... Okay. All right. But listen, we're not that far away, okay? Right. Okay. You make $525,000 a year.

Yeah. You paid off $150,000 last year, and you made $360,000. Yeah. Okay. You're going to be there in 20 minutes. Just do it right. Just don't get in a hurry. Yeah, we needed to know the right answer.

That sounds right. Okay. Yeah, the right answer is buy your home, pay your home off, and then buy your vacation home with cash. Okay. And do buy the vacation home. Where do you want to buy it? Where is it? We want to buy it in Florida.

We want to be in one of those beach communities and have, like, the pool and, like, have our kids have all these memories growing up. That's cool. You know, on the weekends and everything. That's cool. How old are your babies? I have a one year old and twins that are uh almost three now which be which area of florida are you talking about uh we're thinking like gulf shores destin orange beach like florida or um or alabama okay

so it's like the whole 40a thing that's happening and all that. Okay. But here's the thing. Just jump online and look what VRBO is for the best house in all of Orange Beach. It ain't that much for a week. If somebody makes $5.25, it ain't that much. Okay? If somebody makes $32,000, it's a lot. But, I mean, relative to you buying a $250,000 home on the beach there, you can start the memories now is what I'm saying. Right.

Okay. Expensive vacation you can afford. Right. Once you're up into baby step four, five, six. So, yeah, you're right on track. Golly, wow, what a wonderful shovel. Congratulations. I'm so proud for you all.

Enjoy your money, but do it at a pace. Do it at the speed of cash, which is the speed of wisdom. Enjoy your money, but you always pay cash for toys. They're much more enjoyable. When you finance your dream, whatever it is, and you put it in the garage, and it just sits there and looks at you, and you ride it five times a year, or you take it to the lake six times a year, or whatever it is, and you put it in the garage and it just sits there and looks at you. And you ride it five times a year or you take it to the lake six times a year or whatever it is. It just takes, and you're paying payments on it 12 months a year.

That just doesn't make sense. It doesn't work. It takes the joy out of owning the stuff. So, yeah, pay cash, pay cash for toys, pay cash for toys. Good question. I love it. I'm so proud for y'all. That puts us out of the Dave Ramsey Show and the Bucs. Hey, guys.

This is Blake Thompson, senior executive producer of the Dave Ramsey Show. Did you know over 15 million people listen to The Dave Ramsey Show every week? And a lot of those people listen to one of over 600 radio stations across the country. To find a station near you, head to DaveRamsey.com slash show.