The Ramsey Show - App - Your Mom Has Been Brainwashed by the Banks (Hour 1)

Episode Date: June 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. Thanks for joining us. We appreciate you being here. Open phones at 888-825-5225. That's 888-825-5225. Michael's going to start us off in New York. Hi, Michael.

Welcome to the Dave Ramsey Show. Hi, Uncle Dave. How are you, sir? Better than I deserve. What's up? All right, just a quick question. So I got offered um my dream job which is a police officer um and the police department would send me through the academy

and i'm guaranteed a job once i graduate but while i'm in the academy which is roughly six months long i won't be getting paid um i was one i do have my six month emergency fund i was wondering if i should use if i should use that or if I should start racking up money on the side and use a separate fund. You'd want as much money as you can have. You don't want to get down to zero. Right. And so if you used your six-month emergency fund for six months, you'd be at zero. We don't want to get there.

So how long before you start the academy? It's in January, so roughly six months. Okay. And are you single? Yes, sir. What do you make now? Right now, I'm making around $25,000. Cool.

Okay. So what I would do if I woke up in your shoes is I would go bananas and work like I was trying to get out of debt, work a bunch of jobs and everything else, and let's pile up an extra $10,000 in that account by Christmas. And then when you go to the academy, you've got a pad. Right. But I think you go, man. All right. Thank you, sir.

I really appreciate it. Cool. And thank you for wanting to serve your community that way. Very cool stuff. Open phones at 888-825-5225. Jason's in Virginia. Hi, Jason. How are you? Great. How are you doing? Better than I deserve. What's up?

Well, my wife and I have a rental property, and it's currently rented. It brings in about $2,300 a month. There is a mortgage on there, but there's enough equity in there where if we sold the rental property, we could pay off our main home. And I was wondering if that's a good idea or not. What do you owe on your home? We owe about $160,000. What do you owe on the rental? On the rental, we owe $260,000.

Oh, okay. More than your house. All right. Yeah. And how did you end up with this rental? Oh, I purchased it before I got married. So, yeah, there's about $160,000, $170,000 in equity. So it was left over from your single days.

It was your bachelor's. Yeah. Okay. Yeah. All right. Cool. Cool. And so what's your household income? $300,000 a year. Sweet.

Okay. So here's what I would do. You got $260,000 and $160,000. So we've got $420,000, right? Right. To be 100% debt- free. How old are you? 40. Okay. So we need $420,000

to be 100% debt free you make $300,000. Right. So if you put $100,000 on a year for four years you'd be 100% debt free all of it. Right. You like the rental? I do.

I was thinking of it kind of like one of those annuities. Well, it's not. You have to collect rent. Right. They're not annuities. They're a lot more hassle than annuities, but they make more money than annuities. It's a quality investment. If you like the property, I don't have a problem with it.

I just want a game plan to be debt-free. Right. And so if you say, all right, we're going to get on a budget, and we're going to pay this thing off both houses in four years, that's $400,000. You can do that. Okay. That'd be all right. Because, hey, if you sold it and you turn around and paid off your house,

what would be the first thing you do? You start saving to buy a rental. Yeah, exactly, yeah. What allows you to do this and it to make sense is your high income you've got this fabulous shovel to get out of this hole okay so when i look at that ratio of 300 to 420 that's doable if it was a different ratio if you made 100 and we were talking about it i'm thinking probably sell the rental because you're going to be drag-butting along in this forever otherwise. Right?

Yeah. You see the math change there? But you could throw $100, $120, $150 on this thing and still have a pretty dadgum good life for a couple of years. And then when it's all paid off and you don't have any payments and by then you're making more than $300 yeah you know for a couple years and then when it's all paid off and you don't have any payments and by then you're making more than 300 and all the rental income is pure because there's no payment on it ding ding we're starting to make some serious coin then yeah that's your four year

out or your three year out game plan so okay yeah that but but you know are you if you're married you need to sit down with your wife and say all all right, we need to not sacrifice, but we need to be very intentional and very careful. It isn't exactly a sacrifice to live on $150,000 a year. Right, exactly. You know, and put $100,000 on this. So that's what I'm looking at. You know, that makes a lot of sense to me. It's what I would do.

Hey, thanks for the call, man. I appreciate you joining us. Jonathan's in Los Angeles. Hey, Jonathan, how are you? Good, good. Thanks for taking my call. Sure. How can I help? So I have a question about credit cards. So I know what your take is on like just not having them in general, but I do have one. It's only got a $600 limit. And I've been thinking about getting rid of it because I kind of do feel like since it's there, it's really tempting to use it. And I've been trying to, like, you know, stay out of debt.

Everything else I have is paid for. So my family, my mom in particular, she wants me to actually keep the credit card because she thinks it is good to have for, like, I guess, credit building or 23. Oh, okay. All right. Yeah. have for like i guess credit building or 23 okay all right yeah she wants me to keep it because apparently it's good for um i guess like build your credit or like just i was told just having it in general but not using it if i just throw it in a drawer and just pretend it doesn't exist so um if you throw in a door and pretend it doesn't exist, it does not build your credit. The only thing that builds your credit is the use of it. The only way your credit is built is you interact with debt.

You borrow money so that your credit goes up. And so then why? So that we can borrow money is the only reason you need credit, right? Right. So that we can borrow money and so that our credit goes up so that we can borrow money so our credit goes up so that we can borrow money so that our credit goes up this is a dog chasing its tail okay um is it going to help me at all if i say later down the line want to buy a house and get mortgage well it'll probably help help you in one way if you want to borrow money so that later you can borrow money so that later you can borrow money.

But, I mean, you've just got to decide what you're going to do. What is the shortest path to wealth? Now, if you wanted to get a mortgage, you can do that with zero credit. It's called manual underwriting. So your mom means well, but your mom has been brainwashed by the banks and by our culture to believe that the best way to wealth and prosperity is to go into debt to get it and that is a misnomer it's a falsehood the shortest path to wealth is avoiding debt not playing footsie

with banks that have nicer furniture than your mother has so So you've got to decide. It's okay. I'm not mad at your mom. She means well. She's just wrong. And you'll find that out about a lot of things your mom told you. This is the Dave Ramsey Show. Are high health care costs getting you down? Are you confused trying to navigate your options? Do you wish you could find an affordable, biblical solution to your health care costs?

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That's chministries.org. Christian Healthcare Ministries is a proud sponsor of Dave Ramsey Live Events. chministries.org. Well, joining me for a segment right here to keep you guys in the loop on important things, Pastor Louie Giglio. He's the pastor of Passion City Church down in Atlanta. Louie and I have been friends a while. He is an absolute world-class communicator and runs a world-class church there. I've had the privilege of speaking there a couple times.

And he's got a new book out. So I called him and said, hey, Louie, let's talk about this because it is a great book. How are you, Louie? I am doing amazing, Dave. It's so good to be on with you today. Well, thank you for being here so i gotta tell you i love not forsaken finding freedom as sons and daughters of a perfect father that you you really hit a nerve here and and this is a great book i couldn't put it down i i laid it on my shelf i picked it up one morning started reading it and i looked up and it was an

hour and a half later it is fabulous well you know i think when you hear that word father everybody almost everyone instantly has some kind of gut level reaction either like really good or really negative really painful really bad and you know we all have a nursery dad and some of them were great and some of them were not so great they all leave a mark on our lives in some way. But man, what a hope. That's what this book is about, Dave. What a hope that all of us can see God in a brand new way and see that he wants us to know him, not just as a heavenly father, but as our perfect heavenly father. And he does father us in a in a very real way and you know i think what happens

to a lot of folks is is that their uh their view of god is based on their the experience they had with their earthly father you've probably run into that a thousand times you know that's a big hurdle for a lot of people and when you know jesus comes on the scene he does something really revolutionary and that is that he teaches us that god is a father you're in the lord's prayer think about lot of people, and when, you know, Jesus comes on the scene, he does something really revolutionary, and that is that he teaches us that God is a Father. You're in the Lord's Prayer, think about it, the opening line, everyone knows that, our Father who art in heaven. And so this is a major, you know, shift for us to see this Almighty Creator, Sovereign, eternal God is someone that we can wrap our arms around and know as a father. But man, when I've taught that over the years, Dave, a lot of people, man, they come straight back with, hey, if God is like my dad, then I'm not interested. And I understand

that. But what we're trying to say in the book is that God is not just the reflection of our earthly father. He's not just a bigger version of our dad. He's the reflection of our earthly father. He is the perfect version of our earthly dad. He's that dad every one of us has dreamed about having, and even more. You talk about in the book your interesting interaction with your dad. Tell a little bit of that story. Yeah, well, my dad was a great dad. You know, I grew up in this crazy Catholic Baptist household. My dad really wasn't a practicing anything. And here I am in college, all of a sudden out of left field, I get called into ministry, and I know the Lord wants me to be a preacher for my life. I didn't see it coming. My dad certainly didn't see it coming, and came down

to that Sunday night moment, Dave, when I was going to go down the aisle at church. I don't know if anybody remembers these moments, you know, and say to the church, you know, I'm going to surrender to God's call on my life, and I wanted my dad to be there, and so I couldn't get up the nerve for the last second to invite him to come, and I said, Dad, I feel like the Lord's calling me to be a preacher. And it's like time stood still. And my dad was a good dad. I mean, he did not knock me across the room. He didn't cuss at me or tell me I was stupid. He just looked at me with a blank stare and did not have any words to say. And it was a gap and a void. And I think a lot of people can relate to that.

You know, we all want our dad to let us know that we're enough, that we're good enough, that we're worth staying around for. And, man, it was an awkward moment. My dad didn't show up that night. I mean, I had a great redemption to that story a few years later after a lot of hardship. But, man, it just was that awkward moment of my dad's got to go to the poker game next Friday night, and there's some guys coming around the circle, and what's your kid doing again, and what's your kid going to do?

Well, my dad had that great opportunity to tell everybody, my son's going to be a Baptist preacher. Deal me in. Oh, my goodness. Yeah, you lose a chip or two for that at that table. Absolutely. That's great. Pastor Louie Giglio is with us.

The book is not forsaken, Finding Freedom as Sons and Daughters of a Perfect Father. And if you guys don't know, Pastor Louie has an incredible conference called the Passion Conferences that he and his wife Shelly have been doing through the Passion Church there for years. He's had multiple best-selling books, including Goliath Must Fall, including The Comeback, The Air I Breathe, and so on. And this is the latest in the chain. It's absolutely incredible. When you were speaking at Passion last year,

you mentioned two major issues that are facing this upcoming generation. And fatherlessness and anxiety, right? Yeah. Well, we talked about how two big ground-shaking things have happened in the last 10 years. One of those, the advent of the cell phone, what I'm holding in my hand right now, which put all of us in the crosshairs of everyone's opinion, instantaneously living our lives in real time on reality TV. And the second thing that happened about the same time 10 years ago,

not only did we get the iPhone, but no-fault divorce was passed into law in the state of New York. So all 50 states in America now have what's conveniently called a no-fault divorce, which means without a judge, without a process, without a lot of, you know, dickering around, you can pay a couple of hundred bucks and in a few days, you're divorced. And it's nobody's fault. But what now we're doing is we're reaping the harvest of a no-fault generation, and that is a fatherless generation. And it's not just people like me that are talking about it. Everybody out in culture is talking about it, from Jordan Peterson on down. And we're now looking

in the faces of kids who, you know, one in four kids in America living in a house right now without a father present in that home. And if we all intrinsically are hardwired to have our father's blessing, his love, his approval, his affection, his participation in our lives, and that's gone, then we've got an aimless, purposeless, searching, raging generation on our hands. And you don't have to look very far to see that. And this fatherless crisis, it's got to be turned around. And I believe it is the hope of the perfect father that we have got to help people see that this God doesn't hate him, that he actually loves him, and he doesn't just love him. he wants to love him as sons and daughters of a perfect father.

Very cool stuff. Louis Giglio, Pastor Louis of the Passion City Church in Atlanta, Georgia. The book is not forsaken. You have not been forsaken. And if you feel forsaken by your earthly father because he was present or he was there physically but not emotionally, your heavenly father is different, and that's the good news of this book. It's a lot of fun. It's a great read, and it just keeps a lump in your throat the whole time you're doing it.

So what is it you want a reader to come away with when they read this book, Pastor? Well, Dave, I really hope a few things. Number one, I hope that they'll be able to see God the way that he really is. You know, we kind of live in this world right now where everybody kind of describes and builds their own God. But God is a revealer, and he wants us to see him the way he truly is. So that'd be number one takeaway. And number two, that people would see the power of the story of the gospel. You know, it's not just to get us to heaven. This is a revolutionary idea, Dave. It's kind of a simple thought, but this whole story of the gospel that we proclaim,

it's not just to get us to heaven. It's really to get us to our Heavenly Father. It's about a person, not a place. It's about a relationship, not about religion. And if someone could walk away from the pages of this book and go, man, I see God, and He is someone I can know. And yes, He's eternal and almighty and sovereign, but He's someone I can know as a father.

And second was that he loves me, and he's got a purpose and a real plan for my life, and that's what this is all about. And that would be a huge takeaway, and the biggest, biggest takeaway of all would be for somebody to realize how powerful this story is. They have the power to actually forgive their dad. And that sounds like a big chunk to bite off for a lot of people who've been through a lot of pain in their relationship to their earthly dad. But the gospel is real.

Louie, thank you for hanging out with us. The book is Not Forsaken. Pick it up on Amazon or at louiegiglio.com. Good to see you, Pastor. It's always great to be here Good to see you, Pastor. Hi, I'm following the state computer today. Thank you so much. In the lobby of Ramsey Solutions, Brett and Julene are with us. Hey, guys, how are you? Fabulous.

Good, Dave. How are you? Welcome, welcome. Where do you guys live? We're in Cleveland, Ohio area, about 30 minutes west of Cleveland. Cool. Welcome to Nashville. All the way here to do a debt-free scream. Absolutely. Love it.

How much have you guys paid off? About $114,000. Way to go. How long did this take? About 32 months. Good. And your range of income during that time? About $120,000 to $125,000.

Good. What do you guys do for a living? I teach elementary general music. And I'm a union carpenter. Great. Very cool. What kind of debt was the $114,000? Oh, a whole lot of stupid.

You were normal. Yes, we were totally normal. We had about $32,000 in credit card debt. We had some student loans for my master's degree. And my van. And his his truck and our camper. Okay, so that means you've been married about 10 or 12 years. Actually, 14 years today. Pretty close.

Okay, good, good, yeah. Takes about that long to get that far into stupid. Good for you guys. So what happened three years ago that lit your fire? I think we just got sick and tired of working for nothing. I mean, we were living paycheck to paycheck, and I was fed up with it. And we actually were starting a hobby farm for our 4-H kids, and the lot next door came up for sale. And when looking at the numbers,

there was absolutely no way a bank was going to give us more money for that lot. And it took us a couple months to find you, and I had posted on my Facebook page that we wanted to get out of debt, and if we knew anybody that had tried your program. And I had a friend private message me, and she said, you know what, I have a Financial Peace University home study kit, and I would like to bring it over to you. Wow. And that started our journey. Wow. Very cool.

Good friend. Yes. Very nice. Well, good for you guys. Way to go, you guys. So you went through the home study, and that got it going. It did. It did.

It really got the ball rolling, and we went for about a year, and then I started hosting Financial Peace University at our church, and I've done about six sessions of that. Wow. Yes. Well, thank you. Absolutely. Turned you into a coordinator, huh?

Yes. Very cool. All right, so now you've done it. $114,000 paid off. How does it feel? It really hasn't sink in yet. When was the last debt paid? it was the end of february um i left a long blubbering mess on my facebook page after i paid and the poor guy at a huntington bank i'm not sure he knew what to do with me as i'm standing there bawling paying off that last

debt yeah he goes home that night honey there's a woman at a nervous breakdown right in front of me. I love it. That's great. Very cool. So was it worth all the hard work? Absolutely. What do you tell people the keys are?

What did you guys do to get out of debt? I think I start every Financial Peace University class telling them to trust the process. It's such a scary thing to to trust the process the it's such a scary thing to trust your teachings and it's so out of the norm but if you just trust what you have put together and all of your years of knowledge and everyone around here and their professional knowledge it it works yeah i had a good friend of mine who's worth a lot of money but and he you know we've been friends a long, but then he decided to actually do our stuff and got out of debt. And he said an interesting thing.

He said, I had to submit myself. That's a powerful word. Yes, it is. It's interesting that that's the same word we push when we pay the payment, submit. Yes. Right? Yep. But he said, I had to submit myself to a process, meaning I had to admit that I didn't have the answers.

And I had to work someone else's plan that was proven yours. Dave, he was telling me this. But that was a powerful word. And that's what you're saying. Trust the process. Yes. This is not our first ride on this cabbage truck. Six million people have been through Financial Peace University.

So we kind of are starting to get this dialed in. And we got the process the clear path figured out so now once you trust the process what's the process what did you guys do that made the most difference on you guys getting traction to get out of debt be the budget yeah which is the hardest part but yeah sticking to it yeah and we still struggle with it sometimes but it definitely knowing where our money goes and when it comes in. And it was amazing how much was going to restaurants. And, you know, those fast food restaurants going through the drive-thru.

I was ice creaming us to death. And once you tell it where to go, it's amazing how much more money you do have. And what's interesting is even if the budget isn't stuck to perfectly, you know it at least. Yep. Because when you don't have a plan, you don't even know it. You're just kind of wandering along, you know. And then look up, Shazam, I'm $114,000 in debt, you know. So you've got to break that cycle.

So that intentionality is everything. Well done, you guys. Thank you. Proud of you. Very cool. Who are your biggest cheerleaders? You know, I would say we had so many supporters on

Facebook. I was very open about our journey. I'm a very open person. As Brett says, I'm an open book. And I think that kept us going most of the way because a lot of the bad habits that we had formed was from the people around us. And we were just living normal.

And we were finally able to step outside that norm and encourage others, and they encouraged us, and it kept us going. Very good. Very good. Good for you guys. Thank you. Very cool. Got a copy of Chris Hogan's book for you,

Everyday Millionaires, How Ordinary People Built Extraordinary Wealth How You Can Too, Number one bestseller. That's your next chapter. Millionaires. Here you go, baby. Game on. Game on. That's the next thing.

So well done. Well done. All right. And the kiddos' names and the ages? Our oldest is Emma Rose. She's going to be 12 at the end of this month. Carter just turned 10. And Caitlin will be 7 at the beginning of July.

Awesome. And I can't see from here. What do the t-shirts say? They say, Thank you, Dave Ramsey. And on the back, they say, Proud to be debt-free. And we have a t-shirt for you as well. Oh, wow. Yes.

I can wear a Thank you, Dave Ramsey t-shirt. Well, you know. That would be a little awkward. We felt like you needed one at least. At least. Yeah, we'll have it in the collection. Well, thank you. Thank you, guys.

Very cool. Proud of you. Very cool. Thank you. You're why we do what we do. I'm so proud of you. All right, it's Brett and Julene, Emma Rose, Carter, and Caitlin. $114,000 paid off in 32 months, making $120,000 to $125,000.

Count it down. Let's hear a debt-free scream. You guys ready? Okay. Three, two, one. We're debt-free! All right! Now that's good stuff. Well done. Now that's the sound of a family tree being changed.

So here's what happens. Number one, the math changes everything. When you don't have any payments, you can build wealth and change your family tree. But the other thing that happens is those kiddos, I mean, little Caitlin is standing there. They drove from Cleveland, Ohio. This experience is in her mind she can tell her grandkids about the time that her mom and dad got out of debt and they drove all the way to nashville to do a debt-free screen this is part of their story now that family doesn't do dead anymore.

That's their new story. You see how that changes a family tree? So when that little girl is a grown woman someday and she's dating some guy and he's like, well, I'm going to stay in debt the rest of my life, she's going, I think you're not the one. I don't think you're the one. Because my family tree has been changed. Mom and dad did that when I was a little girl. See, that's what you hear when you hear those kids screaming, I'm debt free.

We're debt free. It's more than simply I don't have any credit card debt. Oh, that's the starting point. That's the first piece of the onion that we pull back, right? The first piece that we pull back. And then there's another piece, and then there's another piece. And it gets deeper and more profound as you go along. It starts to get past the math, and you start to realize the spiritual and relational implications of not being a slave to the lender anymore.

It changes everything for you. And it's a key data point in all the research that says that you can now build wealth. We're working together. We don't have debt. Wow. This is the Dave Ramsey Show. Thank you. Jeff is in Tacoma. Welcome to the Dave Ramsey Show, Jeff.

Hi, Dave. How are you doing? Better than I deserve. What's up? I'm a new listener to your radio program and sort of new to the money makeover. I'm looking to begin moving, I guess. I think I'm in phase four. I've got no debt except for my house, and I'm building my emergency fund. We've got about $17,500 in it right now now and I was looking to get to $35,000 and I'm

moving to the next step it's feeling very daunting of moving to paying the house off I don't know if I have the right plan in place for getting this done my house is $340,000 left on it we just moved and we just bought this house so we've got a long way to go

before we pay it off it just feels like lot. I just wanted some strategies for how to start paying off the house aggressively. Gotcha. Okay. So what's your household income? $120. Before, I also get tri-annual bonuses that could be up to 40% to 60% of my income again. So what do you typically make in a year, household income? Well, I just started a job last September, so at the moment it's $120,000. No, that's not what you're going to make in the coming 12 months. Okay. What are you going to make in the coming 12 months?

On the average, I'll add another $21,000 in regular bonuses on top of that. Okay, so let's call it $150,000, all right? Okay. And you're making $150,000, and you have a $340,000 debt, right? Mm-hmm. Okay. And you're finished your emergency fund, and you don't have any other debt. Is that correct?

Yes, sir. Okay, cool. That's where you are. Then that brings you to what we call baby step four, and you start putting 15% of your income away into retirement every month in growth stock mutual funds and Roth 401Ks, Roth IRAs, those kinds of things. Take the matches if you got that, all that kind of stuff. Do you have children?

I have two, yes. Okay. Baby step five is we start saving for their college. And six is any other money above doing those two things that we can find in our budget, it might be those bonuses, it might be just an extra $500 a month laying around, we start chunking it towards the house. Okay? Now, if you pay, including your current payments, if you pay $34,000 a year, you're a debt-free house and all in

10 years. Mm-hmm. I think you're probably going to do that. That sounds about right to me. Yeah. That's about, I mean, what's your current payment? $2,200. We've been putting an extra $100 in right now, so $2,300 a month.

Okay. bucks in right now so 2300 a month okay well um you'd put in more than 100 bucks then because you need to put in about 2500 principal only to pull this off that's 30 000 a year okay okay and if you do that and you fund your retirement you fund your kids college and you got room in your budget for life and you should have with your income you got a good income and a new job, then, you know, I think you're going to have your house paid off in about 10 years. How old are you? I'm 39. Okay.

So before you're 50, your house is paid off. Now, you know what we just did? We made a mistake in our projections. You know what the mistake was? What was that? We assumed that your income was not going to change. Right. That's not a true assumption most people's income goes up over time i hope so okay yes yeah and so you know whatever that is is going to shorten this so the average person working our plan for at the point that they

get to where you are pays off their home in about seven years that's the average person working our plan at the point that they get to where you are pays off their home in about seven years. That's the average. But it's got to do with we put the income instead of on a straight line, we put it on a curve, and then we change the set of mathematical assumptions you and I just use. So no need to get all that nerdy about it. But the point is the numbers work, and when you lay the numbers out,

it's not as freaking daunting anymore. That's good that's all i need is a kick in the butt to get me moving forward it's not a kick in the butt it's just saying the numbers say you're gonna do it it's called hope all right it's hope you can do it and you can do it and by the way the typical millionaire pays off their home in 10.2 years. So oddly enough, you are right where you should be. You are doing a great job. Just play through, baby. Just play through. And, you know, don't get a wild hair and go buy a cabin.

You know, don't get a wild hair and go $50,000 in debt for a four-wheel drive truck. You know, if you just don't do stupid and you stay on track with what you're doing and pay cash for things as you go, the things you're going to buy, you're going to enjoy, you're going to be there, and you're going to be in really, really good shape by the time you're 50. That's pretty incredible. Christina is with us in Miami, Florida. Welcome to the Dave Ramsey Show, Christina. Hi. Good afternoon. Afternoon. How can I Show, Christina. Hi. Good afternoon. Afternoon.

How can I help? Yes. Okay. So my husband and I, we have been married for two years, and we don't have any children. I'm 35, and he's 40. We have saved, well, I'll backtrack a little bit. We have two houses, one that we just bought cash for $2 we paid it cash and it's being rented wow um yes and then we have another house that we bought about four years ago two years before it got

married and we bought it at 250 the mortgage is down to 200 but it's also being rented the rent on that is 2200 and it covers the house you live in say00 and what do you own the house you live in say that again what do you own the house you live in well the house we live in is actually my parents house that's paid off so we don't owe anything and we don't pay anything we just stay here for free basically but you don't own it we don't own it they're just letting us stay here until they live outside the country so they just let us stay here until we want to leave this house. Oh, okay. Well, that's pretty cool.

But so, yeah. So we have one house paid off, like I said, and then the other house, $200,000. So where does all this money come from? Are you guys making bank? What's your income? $250,000 a year. Wow. And you're taking care of it.

You're managing it. So you've actually ended up with some. Good for you. Yeah, well, we save about $20,000 a year. Wow. And you're taking care of it. You're managing it. So you've actually ended up with some. Good for you. Yeah, well, we save about $20,000 a month. I love you. You're awesome. Very cool. So how can I help?

It sounds like you're winning. Well, no, we're confused. We have $120,000 saved in the bank, and we're not sure what to do with this, if we should buy another property or if we should pay off the one that has the $200,000 on it or just keep saving. Right. Way to go. How old are you guys? I'm 35, and my husband's 42.

Yeah, you're doing great. Well done. But we don't have kids yet, but we're in the process. Okay, great, great. Well, here's what we found. Number one, you have learned to do something that's magical. You have learned to live on less than you make, a concept Congress can't grasp, right? It's pretty amazing.

And you've not only lived on less than you make, you live on almost nothing, and you save almost everything. Yeah. And you make a lot of money, and so you're going to end up with guess what a lot of money so you're building wealth you're doing you've got the you got the formula figured out i mean there's not anything complicated about it and you just did it uh by your nature and by how you were raised or whatever so well done yeah now we teach a process that says the fastest way to becoming very wealthy is to get out of debt and avoid debt and so um i would make sure i had enough money set aside in a separate account just for a rainy day just for emergencies that should be three to six months of household expenses in your case i'm going

to call that like 30 000 bucks okay and you set that over in a savings account and never touch it for anything. That's just for when stuff happens. Okay. And you've got a little money if the transmission goes out in the car and that kind of thing. It's not saving up for vacation. It's not saving up to buy something. It's sitting there as an umbrella for when it rains. Okay.

All right. Now, past that, then I want you to start investing into your retirement accounts and you can do that with a roth ira or 401k roth 401k whatever you want to do in good growth stock mutual funds 15 of your income we call that baby step four above that we start paying off all this real estate so what that tells me is most of the money that's in this account sitting there is going to go to start paying off your house and almost all your future savings. Because your savings, you're just saving like crazy. Just start chunking it on that house and get that house paid off. All that's going to do is cause you to have a bigger problem.

You're just going to have more money then. Oh, darn. And so increase your generosity and, you know, keep investing. Keep buying properties that you pay cash for. And you're going to be in a great position. This is The Dave Ramsey Show. Hey, it's Kelly, associate producer and phone screener for The Dave Ramsey Show. If you would like to do your debt-free scream live on the show, make sure you visit DaveRamsey.com slash show and register. We would love for you to come to Nashville and tell Dave your story.