The Ramsey Show - Building Wealth Requires a Long-Term Investing Mindset

Episode Date: June 2, 2026

❓ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Have a money question? Ask Ramsey is here to help.⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠��⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ 📈 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Are you on track with the Baby Steps? Get a Free Personalized Plan.⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Dave Ramsey and Jade Warshaw answer your questions and discuss: “We make $200,000 a year but are still living paycheck-to-paycheck. How do I pay off debt?” “My sister is constantly running up her credit card debt and my mom keeps bailing her out with my inheritance.” “We are completely debt-free but it still feels like we don't have enough margin to enjoy life.” “At what point do I need to get an LLC for my side hustle?” “My wife is not on board with getting on a budget. How do I get her to buy in?” Next Steps: ✔️⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠Help us make the show better. Please take this short survey.⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ 📞 Have a question for the show? Call 888-825-5225 weekdays from 2–5 p.m. ET 📩 ⁠⁠Email Dave On-Air With Your Questions on Debt and Finance⁠⁠ 💵 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Start your free budget today. Download the EveryDollar app!⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ 🏠 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Get organized and prepared to buy or sell a home⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ❤️‍🩹 ⁠⁠⁠⁠Get trusted insurance coverage that fits your budget⁠⁠⁠⁠ Connect With Our Sponsors: Get 10% off your first month of ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠BetterHelp⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Go to ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Boost Mobile⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ to switch today! If you want your car to keep going and going, trust ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Christian Brothers Automotive⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Find a local shop and get an exclusive Ramsey discount of 10% (up to $250) off Learn more about⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Christian Healthcare Ministries⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Get started today with⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Churchill Mortgage⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Get 20% off when you join ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠DeleteMe⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Go to⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ FAIRWINDS Credit Union⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ for an exclusive account bundle! Debt collectors hassling you? Take back control of your life at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Guardian Litigation Group⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Find top health insurance plans at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Health Trust Financial⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Use code RAMSEY to save 20% at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Mama Bear Legal Forms⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Visit⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ NetSuite⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ today to learn more. Get started with ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠YRefy⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ or call 844-2-RAMSEY Visit⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Zander Insurance⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ or call 1-800-356-4282 for your free instant quote today! Explore more from Ramsey Network: 💸 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠The Ramsey Show Highlights⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ 🧠 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠The Dr. John Delony Show⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ 🍸 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Smart Money Happy Hour⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ 💰 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠George Kamel⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ 🪑 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Front Row Seat with Ken Coleman⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ 📈 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠EntreLeadership⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ramsey Solutions Privacy Policy⁠⁠⁠⁠⁠ Learn more about your ad choices. Visit megaphone.fm/adchoices

This is an ad for BetterHelp. Stress from money problems doesn't just stay in your bank account. It shows up everywhere in your life. Talking to someone can help you sort it out. Go to BetterHelp.com slash Ramsey to get 10% off. Brought to you by the Every Dollar app. Start budgeting for free today. Normal is broke and common sense is weird,

so we're here to help you transform your life. From the Ramsey Network in the Fairwinds Credit Union Studio, this is The Ramsey Show. I'm Dave Ramsey, your host, Jade Walshaw, number one bestselling author. Ramsey personality is my co-host today. Open phones here at AAA 825-5-225. That's a free call,

and some say the advice is worth exactly what you pay for it. Leonard is in Sacramento. Hey, Leonard, how are you? Doing good. How are you guys today? Better than we deserve. What's up?

So, long story short, me and my wife have together about $86,000 in debt. We make about $200,000 a year, and our current house and situation where we're living has rendered us paycheck to paycheck every single month. We have no money in savings. We have no dispensable money whatsoever. Okay. And what's your house payment? So we pay rent.

Our house is 3,300 a month. Okay. And all of our other... Go ahead. All of our other, like, utility bills accumulate up to about an additional, between 4 to 600. So we're paying about $4,000 alone in just rent utilities. What's the $86,000 in debt? So we got a little marriage happy and got into a truck payment on a high interest rate and high monthly payment.

So it's just one truck for 86? No, the truck is, we bought it for $62,000 and we currently owe $55,000, and that $55,000 has not moved at all in the past 12 months due to interest. Got it. I think we've identified the problem, entered. Yeah. It's one of the problems. What's the payment on the truck every month? $1,142.70 a month.

Okay. That's one of the problems, but there's something else going on here because you're taking home over $12,000 a month, right? Yes and no. I also, I pay $1,500 a month in child support. Okay. So that's another $1,500 per month. And then we have credit cards, like credit card bills that take up, you know, a couple hundred bucks a month as well. Right.

But I still got a lot going on here. How much is coming out for your 401K? I do not have 401K. How much is coming? How much of a tax refund are you getting? None. The past three years, I have owed like $6,000 every year. Okay.

Then this has got to be a budgeting issue. I think that you guys make a good income, and as a result of that, you can get a little bit reckless. I think that's what happened with the truck. And I think that if I were to plug your numbers into every dollar, I'd see a lot of areas that would surprise you that you could cut back in. And probably a lot of them are food and lifestyle. Is that fair enough? Are you there? Leonard.

I think Leonard flew the coop a little bit. Here's where I get that from, Dave. If he's bringing home over 12,000, he gave me 4,000 of rent. He gave me 3,000 of child support and truck payments. He's still got a lot left to go. That's only $7,000. Unexplained. Unexplained.

So that's why I say that. And I think that that is a key problem when people have a higher income. It gives you more margin to act silly and more margin to get sloppy. And I think that's probably what's going on here. Yeah, we're training the next Olympian in dance class. the next MLB player in Travel Ball. There you go. We're eating out fine dining frequently.

We have a wonderful vacation every year, but we can't make ends meet. And so, yeah, so you're going to have to go to scorched earth on the lifestyle, get a detailed budget, find the margin in the detailed budget by using every dollar. It'll point the margin out to you. It's one of the things it's built to do. It'll show you immediately, and you'll be going, oh, my God. Every time somebody does it, me included. When you first do a budget, you look at it and go, I'm so bad.

Where's all this money going? Yes. It just, you have this moment. You're like, I'm stupid. And so you're not stupid, but you've been doing stupid stuff. And so all of us. And so when you find that margin in there and you get that stuff going and you sell the truck. You got to sell the truck.

Sell the truck. Cut up the credit cards. Go to scorched earth. And you'll be out of debt and in control and have margin. Yeah. A year? Oh, yeah. And part of that, when we talk about the budget, probably the key behavior that a lot of people don't do is you've got to track your transactions just about every day. And that's the way that you stay on top of the numbers. A key thing that I find that people do that's actually wrong is they make the budget for the month, green check, that's great. But then they don't check in with their budget until the end of the month. Which means you're not living on it. It was a theory. Yeah. And then you're- It wasn't a guardrail. It was a theory. And then you track everything and you realize, oh, I was over budget here and I was over budget there. And by that time, it's spilled milk. There's nothing you can do about it.

Yeah, it's like you put the address in your GPS and then you never look at the lamp. Right. You just, I think it's this way. Right. Bad idea. Pretty over there. Let's go over there. Squirrel.

Let's go over there. But when you track the transactions in real time, you say, okay, here we go. I've already spent half of my grocery budget and it's only, you know, a week into the month. I need to pull back, right? You can start to make changes. You and Sam did a lot of work on cruise ship. and you know this, that a cruise ship is never on course. 100% of the time they are adjusting 1%, 2%, 1%, 2%,

based on the currents, based on the winds, based on the weather, based on speed, whatever. But you're 100% in time. And if you actually, you can't see it because it's imperceptible because it's 1% and 2%, but they're constant feedback and constant adjusting to the plum line, to the actual target. Yes.

And that's what the daily check-ins do, and it forces you to do this stuff. And it forces you to look at stuff like, that car is brain damage. Yeah. We can talk about a lot of different ways. But the largest thing that Americans buy in the typical American budget that is stupid is cars. Yes. And it's like stupid on steroids. The level of money we spend.

And go and get a car that's completely up. of control and and and will just sign me up for 21% because while I'm out of control I'm just going to be all the way out of control yeah and um but we do it and guys are worse than gals you think men will impulse a freaking pickup for 80,000 bucks he said a marriage thing and he's driving the pickup yeah and he blamed it on the marriage that come on Leonard you know car I'm gonna blame it on Leonard okay so that when Dave buys a pickup up. It's Dave's fault. Hello. Because guys, we get into cars. Some guys are more into cars than others, but I'm redneck. I like the loud mufflers and all that stuff. I love a good muscle car, a good,

a good sports car. I love all that. Now, my wife thinks the car is just a really large purse, but she's not as into the car other than she wants it to start when she sits down in it. But other than that, you know, she's like, oh, this seems to be a nice car. Yeah, you have no idea how nice this car is. You know, you should really enjoy it. No, it's just, it's a place to put the thing. I just bought at Target. Wow. You know. Car payments have caught up to student loans, Dave.

1.66 trillion. That's painful. I didn't think much could get as stupid as student loans, but they had it. I just had a whole other rent. Took your breath away. And I'm not going to have time. We got another segment. Hey, you guys, did you know that there are thousands of data brokers

whose entire business is collecting and selling personal information? things like your home address, your phone number, and even your relatives' names. You guys, that is just crazy, but that is why I use Delete Me, because those companies that pull information from public records, social media, and all kinds of other places. Then suddenly, all that information shows up on random websites. And removing it yourself means going site by site, filling out forms, and hoping they actually take it down.

It takes hours. and then it can even pop up somewhere else again. But Delete Me's team of privacy experts removes your personal information from hundreds of those data broker sites. And within a week, you'll get a report showing what they have found and what they have removed. And they keep scanning and cleaning up your data year round.

So take back control of your privacy. Go to join deleteme.com slash Ramsey and get 20% off your annual plan. That's join delete me. com slash Ramsey. Timmy is in Salt Lake. Hi, Timmy. How are you?

Whoa, try again. You're absolutely broke up. Your phone's not working. I'm sorry. Can you hear me better now? Yes, sir. Try again. I was just saying it's a pleasure to speak to you.

I'm doing great. How are you guys doing today? Better than we deserve. What's up in your world? Thank you, sir. So first, I just want to say I'm really grateful for what you guys do, and I'm calling for your advice. I'm a husband, father, and I just need some guidance in my situation here. So I've been laid off for two months. I just accepted a job

offer, but it is a major pay cut, and we still have $24,000 left in Baby Step 2. My question today is, should I sell our vehicles and just get a second job to attack this debt or focus on replacing my old income first. Both? Yeah, you need to take any job until you get the job. You did. So what were you making? So I was making $112,000.

Doing what? I was a manager at an insurance company. Okay. And the insurance company, it wasn't doing well and laid people off and you were one of them. Yes, sir. Yeah, and I got some severance pay. We had a little bit of savings. We were just tackling debt, like knocking out credit cards.

We were on this final one here, and then boom, I got laid off. I finally received a job offer. I've been applying, like, crazy interviewing a ton, and I got an offer for about $27 an hour, which is basically like half of what I was making. Yeah. Doing what? It's still an insurance.

It's a different type of insurance, kind of starting out for my level one, basically, but it'll be under the small business side of things. Okay. I would take that for the time being because you need something. But I'm not settling for that. That's for today to get you off the street. Okay. What kind of debt are you carrying in Baby Step 2?

It's just a personal loan. our payment's about $600 a month. Now I have three vehicles that I'm considering selling and just like getting a second job just to knock it off. Well, tell us about the cars, the three of them. What are they each worth? So to do our dad's fund car, I've got a Corvette to 1986 Corvette,

pristine condition, and then a Pontiac Sierra. I could probably get like 12 grand for both. And then we have a second family car. That's probably worth $6,000, $7,000. Mm-hmm. So you own a total of three cars, including the vet and the Fierro? Yeah, well, we have three cars, and then we have like a family car that we would just use. Four cars.

Four cars. Four cars. Yes, sir. Oh. Yes. Okay. So if you sold the vet and the car, and then. Fierro, that would pay off the

family loan or the personal loan? Pay off half of it. Yeah, it'd pay off about half of it. I think I could probably get down the personal loan from 24 to about 10. Oh, they're not worth 12 each? Mm-mm. 12 together. No, no.

Yeah, I've been like going to dealers, CarMax, Kelly Booble, trying to like sell it online. Yeah, that's usually wholesale. And those are cheap enough cars. You're probably going to track somebody in private sale and get a little bit more. if they're only selling for six or eight grand apiece. So, I mean, the Corvette are going to attract somebody that's just interested in that cool old car. You know, same thing with the Fierro, I guess, sort of, ick.

But, you know. Are you the only one working? Yes, ma'am. I am the primary breadwinner. My wife, she takes care of our kids. She does have a small side hustle. She does, like, flower arrangements. How many children do you have, sir?

I have two, sir. What age? Five-year-old and one-year-old. Okay. Little. All right. Well, yeah, she's probably going to have to do more than arranged flowers, and she can do that from home while they're in daycare taking a nap or whatever it is that she works her schedule around where she can make a lot more than the few hundred dollars a month doing flowers. She's not making anything doing that.

That's a hobby. And then you're going to pick up an extra job, and you're going to sell at least those two cars for sure. but this is not a debt problem. This is an income problem. This is a career crisis where you go from 112 to 50 grand. That's your problem. The other things are little things we can do to kind of shore up while the waves are crashing in. But the big deal is for you to get back to 100K. And where are you going to do that and how are you going to do that? And it's not just applying for jobs. It's getting your foot in the door. on a job and using the skills that you used to run the insurance company before, you know, you could be a project manager with those kinds of skills because you have administrative skills and people skills. You know, a lot of different things you're doing when you're a general manager in an agency like that.

So you need to start looking at that way and reset this in your mind so that you don't look up four years from now and still be making 50 or 55. Absolutely. Yeah, you can't consider the 112 a fluke. You have to consider that your new standard. Yeah, once you have driven at 112 miles an hour, it feels weird to drive at 50. Your body is now reset at 112. Your mind is reset. Your spirit is reset at 112. And so you're going to, you should, if you keep a positive attitude and keep looking for opportunity and how can I do this, who do I know that works over at that place where I want to be doing that thing?

what is it I always wanted to be and I accidentally got in the insurance business. What was it I wanted to be before that that pays $200? And just reset your whole way of looking at things and continue this career to where this is just a temporary setback, not a permanent path. Yeah. And we can give you find the work you're wired to do. That will help you convert those skills into other career paths along the way. Stephanie is in Canada. Hi, Stephanie.

How are you? Hi, how are you guys? Better than we deserve. What's up? So my husband and I are having a little bit of a disagreement on when's the right time to upgrade my car. Cool. How long y'all been married? Over 13 years. How old are you? And I've been driving. I am 40.

What are you driving? I'm about 15 years old. 15-year-old Honda Civic. Okay. It's a piece of crap. All right. Are y'all broke? Not at all. We make about 250 combined. You have money? I can pay cash, but... We can pay cash. We make decisions on our cars. How much are you thinking of spending on the new car?

This is a bit of disagreement. The car, this is Canadian dollars, so the numbers are a bit bigger. It's a second-hand SUV. It's not a Honda basic, but it's slightly above. And with taxes, it is about 50. 15. Okay. And what does he drive? Like 5-0. Mm-hmm.

What does he drive? He drives Hyundai, another piece of... Oh, his is old, too? Okay. So this guy hates spending money on a car. He got it. No, he got it last year. It's not old.

It's not new, it's a two years. What's it worth? What do you pay for it? We paid about 47 for it. Okay. You have debt? zero debt except for so we can buy his car for 47 but we can't buy yours for 50 i'm confused well it's it's not that we can't it's more no i mean i'm talking to i'm looking at him he says

no you can't buy a 50 000 car i just did but we won't one by one buy one for you yeah that wouldn't go at my house 50 but he wants me to wait another two three years and it's already no AC in my car No backup camera. Well, just tell him to take your car and you drive his. Yeah, there you go. My car is manual. He doesn't know how. Well, then he's going to have to learn because he thinks it's an awesome car.

And I guess that's what besides that we have a law. It's federal law in America. A wife gets the good car. You all need to do you all need to pick that up in Canada. I'm just saying. I agree. So, no, this is, this is weird, honestly. the fact that if you have the cash and you're just wanting to spend what he just spent on a car,

but you're not, yeah. You lose the argument, my man. My man, Stephanie, she's right. You're done lost. We're throwing a penalty flag on this one. Statistics show that half of Americans don't have enough life insurance or they don't have any at all. I don't understand this, John. Why don't people want to take care of their family?

They think they're going to die or something? Well, I used to be one of those guys. I didn't even think about it. And one of my buddies said, hey, the only reason to not have life insurance is if you hate your wife and kids. And I immediately went and got term life insurance. That's a gut punch. And you're telling me, for decades, Dave, I've sat across people who've lost a spouse. They've lost somebody important to them.

Me too. They don't know what to do next. Me too. I mean, you're going to have a crisis here. And, you know, you've got two options while you're sitting and talking to a young widow. She's concerned about how she's going to invest all this. money properly and not mess this up, or she's concerned how she's going to eat tomorrow. That's exactly right. These are the two options.

Take care of your dadgum family, man. Term life insurance can replace income, pay off dads, cover funeral expenses, so your family can actually have the opportunity to just be sad, to just miss you. That's exactly what it's supposed to be. It's saying, I love you to your family, term life insurance. Jeff Zander and the team of Zander Insurance makes it easy and affordable. I've used them personally for 25 years. They're the only people I trust. Go to Xander.com or call 800-356-4282. Keith is in Omaha.

Hi, Keith. How are you? Oh, thank you. I'm fine. What's up? Are you? Good. How can we help? Okay. Yes, I'm in a situation where my sister is running without any financial conscience at all. She's running up her credit cards.

And my mom is willing to bail her out. And it's at least into the hundreds of thousands of dollars over the last five or ten years. And so that's really eating away at what should be coming to my inheritance, my kids' inheritance. It's anything I can do. I would let to know. So your mom is wealthy? Yeah, there's money coming in. There's a real, real significant amount of wealth in the family. So what is your mom?

How much does she have? A million? 20 million? It probably could be. I don't know exactly. No, I mean, you have an idea. Give me a guess. It's probably a million. Could be two million. I don't know. Okay. But it's not a hundred million. All right. And the problem is your sister's...

It's just you and your sister are the only two siblings? That's right. You're still money coming into the estate, too. And how old are you? I'm approaching 59. Okay. And what do you make a year, sir? Okay, I'm having a long career, as a software developer.

We're in a new career now. We're in managing departments. And we're in basically low income, low expense mode here. And basically starting to get up in about the $35,000. them a year range. So is there a plan for that to be a good income later? It's building. We acquired a new property.

We are trying to turn the corner and start getting some savings from it. We've got, you know, my retirement. I'm available, especially as $5.59.5 to help us. Yeah, and how much do you have saved in your retirement? It's in the neighborhood of $500,000. Okay. That's good. Good job on that.

Did you buy them? Yes, we own them. Brain and clear. I haven't taken any loans. And what are they worth? It's three different properties together. There would be probably about $800,000 something like it. And you only make $35,000 on an $800,000 investment?

That sucks. Well, one of them is one we live in, so I can't separate it exactly out because we have one apartment that we do in our building. And what is that worth? I mean, if you took your home out of it, you still don't have a good rate of return. What's wrong with the rent roll on this? Okay. The second property, so we take mine out, then we've just got the two properties,

and one is still just finishing. So we haven't really turned it around to start the income on it yet. Oh, it's being renovated? No, we do. it's just almost finished being renovated. We got one. I see, so when it's renovated, what will your income be? Well, that's what I'm hoping is going to turn the corner into more toward 40, $45,000.

So you're going to be making a whole $45,000 on all of these apartments. That still sucks, man. Your rental rates are horrible for the money you've put into these things. So my reason for asking all of this, Keith, is very simple. Yeah. Your mother has some money. It's her money. She's allowed to do with her money, whatever she wants to, even if it's stupid.

Yeah. And even if it's harmful to your sister. And I agree that what she's doing is harmful to your sister. But the basis for you having an argument here is not that you are entitled to this money. I would prefer you, sir, at 59 years old, to go have a life and not be worried about your mama's influence. or your mother's inheritance to make your life good. I want you to go make your life good. And then we can look at this through eyes of strength and say, how can I lovingly help my sister get her act together?

And my mom quit being a classic serial enabler. But instead, you're worried about you getting some money because you don't have any money, other than you've done a good job saving for retirement. But your income sucks, especially if you've got 800,000. thousand dollars in paid for real estate and you're making a whole 45,000 bucks on it. This is horrendous. I mean, I love real estate. I own a bunch of real estate. I can't imagine how mad I would be at myself if I bought into something that paid no more than that as a rate of return. That's nothing horrible. So, you know, we've got some work to do to get our rates of return up

on these rents and not $45,000 as your new career after you've been a software. engineer and we're going to go into retirement broke and wait on mom to die. This is not a good plan. Not a good plan. So, you know, I want you to approach this subject of dysfunction in your family, not from your rights because you don't have any. You're not entitled. Your mother could leave it all to your sister. She's allowed to do that. Would I agree with that? No. Do I agree with her paying bailing her out on credit cards and continuing her overspending? No, I don't. But mainly because it's harmful to your sister and your mother, not because you are entitled to some of the money. You, sir, need to go have a life and then not worry about it. And that puts you in a different place.

I agree. Yeah. It's not a good look. So, moms and dads. Rachel and I wrote about this in Smart Money, Smart Kids many years ago, and I was just talking about it with a content team this morning. I think I'm going to do a talk out of it. I haven't done it in a while. I'm doing it with a bunch of wealthy people. And they always ask me, how do I become wealthy and not ruin my kids? Right. And I always tell them, well, you can't. The wealth didn't ruin your kids. They were already ruined. The wealth exposed it that you sucked as a parent. That's what it was. And so, you know, but the wealth, money doesn't ruin people. It exposes the fact that people suck. It makes you more of what you already are.

It makes you more of what you are. So the way you break that is from the time they can talk and walk, you will start with gratitude. Yes. Gratitude. Thank you. Please. In the south, we called it manners. I know that's right.

Yes. Thank you, Mom, for dinner for standing over that hot stove. Mom, I'm going to help with the dishes. Yes. because if I don't, dad's going to hurt me. Because you're going to learn gratitude. You're going to count your blessings, right? You're going to say, thank you, Lord, for bringing me this food.

Thank you. The world doesn't revolve around you. Thank you. And that leads to the next one, which is humility. But you can seldom be humble without first being grateful. I agree. Yes, Dave. And then if you're humble and you realize it's not all about you,

the axis of the world doesn't run through the top of your head after all, then the natural thing that happens is contentment. This is where contentment comes from. Contentment doesn't just evolve as lightning in a bottle. It's a series of events that comes through gratitude and humility that says, I'm not entitled. No. It's the antidote to entitlement is gratitude, humility, and contentment. And so, you know, I can remember one of my kids, we finally were driving this old piece of crap car and We were broke and finally scraped a little bit of money. Things were starting to get a little better at the Ramses. And we got the car.

And, you know, at our house, we always would, especially when I was growing up, but even when our kids, we do it too, get a new car. Everybody gets in the car. It's not a new car, but it's a new to us car. Just a slight upgrade. We're all going to drive around the block in the new car. And one of them lays back in the back seat and says, we're doing pretty good. My favorite story. And I said, we aren't doing anything.

And you are broke. I am doing pretty good. You got nothing. I know that's right. You are a poor child that lives with me. That's what you are. We aren't doing anything. You got a mouse in your pocket.

We hadn't done anything. All you do is consume. I know that's right. You are not a producer at this stage. Reloaders. This show is sponsored by Better Help. Summer is here and whoa, everything changes this time of year. The kids are out of school, routines are out the window.

You're traveling more, probably sleeping less. And if you're not careful, you and your family can end up running on fumes. I know I'm running on fumes right now. If you don't take time to slow down and take care of yourself, all that stress is not just going to disappear. It will show up in your body. It will show up in your relationships. It will show up in your work and your patience everywhere. This is why I'm a big fan of BetterHelp.

BetterHelp is an online therapy platform that matches you with a licensed therapist based on your goals and preferences. All of their therapists follow a strict code of conduct and you can message yours or schedule sessions right in the app. And if it's not the right fit, you can switch therapists at any time for no extra cost. Listen, you don't have to carry everything all by yourself this summer. Go to BetterHelp.com slash Ramsey to get 10% off. That's BetterHelp. H-E-L-P.com slash Ramsey.

Marie is with us. Hey, Marie, welcome to the Ramsey show. What's up? Hi, nice to meet you all. You too. How can we help? So we desperately need to buy a new house. And we are trying to become

as most debt-free as we can. I don't think we're going to be able to do it all by the time we need this house. But our biggest loan is our solar panels. It's 40,500, and we'll pay it off by the year 2047. Might as well be dead by that point. What in the world?

So long. It is so bad, but the reason we did it was because we were homeless for two years before that, and our budget was so tightly needed. We couldn't have our bills fluctuating every month, and then sometimes it would go to 400, sometimes it would go down to 80, We never knew what we were going to get. Oh, wait, stop, please.

Please tell me you know how stupid this is now. That you traded $47,000 for $100 fluctuation in your utility bill. Yeah, it was like a $300. Yeah, it was better. But still. Either way. There's no possible way any of this math accomplished what you wanted to accomplish. You completely surrendered major long-term debt for a tiny little movement in your monthly budget.

And don't blame it on you being. homeless. Tell us why you desperately need, which is a strong language, to move right now, why you need a new house. We have a two-bedroom, one-bath, 900-square-foot house. We have four kids and one on the way that's coming in December. We have our three oldest kids sharing the room and the baby's sleeping with us in our room. But my boys, my oldest are boys, and they're get into the age where they need to be in their own house. Four years. How old were they when you moved in this house?

Well, this is 11 now. So you already were the old woman in the shoe when you moved into the house. Yeah. You barely fit in there when you bought it. Wow. Yeah. You don't even know what that is. You got to look that up after you get off the year.

Okay. The... It's better than living in the streets. Yeah, you remember being in the street, but you also bought a house that wouldn't handle your family. And now you're realizing that. And it certainly wasn't a crisis when you bought it. And things have not changed except by one baby. Okay.

Now, what is this house worth? This house has about 35 to 40,000 in equity right now. Not counting the solar panels. No, you don't take that out. So nothing? So it doesn't have any equity when you pay off the solar panels because they're attached to the house. Mm-hmm. And what's the house worth?

About $2.35. We're at 186 right now, and after all the payments we've made. Okay. Now, my screen says, should we get our solar panel loan canceled? Why would you be able to get your loan canceled? Well, you know how Facebook is? As soon as you start going in and searching something, it sends a bunch of ads your way in.

You never know what's a scam. Everything on Facebook is a scam. All of it. This is not a place to get solid information. Yes. That's why I was calling because they sell a really nice story. So I keep seeing the same name of the loan, which I'm sure has done on purpose,

of the people who sold us the solar panels, saying that because they were making shady deals and things like that, that people are getting their loans forgiven. Is it a lawsuit? Was there a, yeah. I don't, there have been some lawsuits, but it feels a little shady. I need to do some independent research on that. Don't go by Facebook if you want to know, just research if there's a lawsuit pending against that company.

Is there a class action lawsuit again? Or is the Federal Trade Commission gotten a ruling? There you go. Go to the FTC.com. Go to FTC.gov, Federal Trade Commission.gov. Have you done that? No, I was going to ask what are some good places to search because I go on Google and I get all these companies that pop up with the same stuff.

So I don't want to go in the wrong direction and then go into debt because of a lawyer or a fee or whatever and that was unnecessary. What's your household income? $84,000. Okay. We have our three kids are older, have special needs. silly home school. I have several chronic illnesses as well. What's the nature of the special needs for the three kids? Well, my oldest has severe anphylaxis too a lot. And they have, all three of them

have ADHD and anxiety and two of them have autism. Okay. And I have Lyme disease and rheumatoid arthritis. Oh my goodness. Boy, oh boy. Okay, there's a lot going on. What do you guys pay? What do you pay for the mortgage? Every month, what do you pay? $1,400. And in November, that will go up by $300. The windows on our house were cracking, and it wasn't safe.

They were single paying from 1984. We have to get new windows for the house. So to answer your question at hand, you don't have the money today to move up in house. You just simply don't, and we don't want to add insult to injury. The best thing I could think of is if you're trying to find another place that you could rent for a while, that's got an extra bedroom. That's in the same range, the $1,700 range. If you got your house sold.

Uh-huh. If you sell this house, and that can buy you some time to save up a down payment. Yeah. Okay. Marie, I'm going to be honest with you and love you. Are you ready for me to do that? Absolutely. You sure, brace yourself.

Put your seatbelt on, okay? It's already ugly here. It's all good. Okay. All right. You guys make a lot of decisions that are large decisions that are very drama-based. Suddenly, the 1984 windows were dangerous. No, they weren't.

A window salesman called. Suddenly, we couldn't afford. We were homeless, and so we bought a house that doesn't fit our family. instead of going and renting something that fit our family. And so we went from drama to drama to drama. Oh, and we buy $47,000 worth of solar panels to stabilize a $300, $200 utility bill with another bill that is equal to almost that. So all this stuff is you go to drama, and every time I do drama and you too, Marie,

every time you've done drama, you've made bad decisions. Anytime I get feeling desperate, right after I get desperate, I get stupid. And most people do. So if you feel this rising up anxiety inside of you that this house is a crisis, this utility builds a crisis, this homelessness is a crisis, and you build that to where you justify doing something really dumb to get away from the crisis, you're making things worse every time you do that. You've made three large, bad decisions in this phone call. And they all were based on that pattern.

So you've got to take a step back and take a breath. And you've got a lot on your plate. I mean, you've got all kinds of special needs in the house. You're doing it all in 900 square feet. You were doing it in a homeless situation before. Those are all real stressors. but when you're in the cooker like that, you've got to be real careful to move carefully and slowly on the next step. Otherwise, you're going to step on a rock and fall in the creek.

And that's what I do. I get desperate. I get a little little jinky, and all of a sudden I get stupid. And you've done three really large, bad ideas. You should not have bought that house to stop being homeless. You should have gone and rented something that fits your family. You shouldn't have bought windows because they suddenly were a problem from 1984. Crap, those windows were in that house when you bought them. And then you shouldn't have bought solar. So, I mean, I'm picking on you. I told you to put your seatbelt on, but I'm loving you well, hear me, because I can see

this pattern real clearly. And if you don't break it, it's never going to go away. Yeah. And so I want you to stop. So, yes, I want you to investigate and see if you can get rid of the solar loan. It's possible. I'll give you a 10% probability that this particular company, has been set up by the FTC and the loans are being forgiven.

You can check it out, Federal Trade Commission, FTC.gov. I would pay a lawyer 500 bucks to research it for me and check it out against $47,000. That's a good investment. And find out if there's a class action suit or something out there or a Federal Trade Commission ruling out there to get rid of this. That'll help you get this house sold and then gently and carefully and calmly, go rent something. If you run a business, you already know,

this. Bad information leads to bad decisions. And right now, AI is everywhere, but AI is only as good as the data behind it. The best AI is built on the best data. That's why I recommend NetSuite. NetSuite is the number one AI cloud ERP and more than 43,000 businesses run on it, including us here at Ramsey Solutions. Their AI isn't bolted on. It's built in. And it connects everything that runs your business, accounting, inventory, customer data all in one place. Because when your numbers are connected, AI actually works like it's supposed to. NetSuite's AI helps flag cash flow problems, spot inventory issues, close your books faster, and cut down on manual reporting. If your revenue is at least seven figures, go to

NetSuite.com slash Ramsey for a free product tour. That's NetSuite. website.com slash Ramsey. Welcome back to the Ramsey show in the Fair Wands Credit Union Studio. Andy is with us in Dayton, Ohio. Hi, Andy. How are you? I'm well, Dave. Good. How can we help? Well, before I ask my question, I just want to say, first of all, thank you so much to you

and your team at Ramsey Solutions for helping my family and I to be able to get out of debt and be successful. financially, and then to be, to equip your equipping of us to be able to help other people through doing FPU at our church and doing personal financial counseling. Wow. And you guys have just been such a blessing to us. Thank you. Sounds like you guys are a blessing.

We appreciate you partnering with us. Thanks. Well, it's been great. So here's my question. And this is, it's kind of a summary of experience that we've had counseling people, but it also includes our own experience, and I'm using our numbers because it's what I have available. Okay. So I'm not trying to convince you to change your program, but I am kind of asking for help for those of us who are still,

it feels like we're still in the trenches even after following your programming being successful with it. So my wife and I started the Baby Steps in 2011. It took us seven years to finish Baby Step 2. We taught FPU several times during this period, and eventually we paid off our home in 2023, and in 2025 we paid cash for a new roof. In 26, we paid cash for a new-to-us car. We believe in the baby steps, and we stick to the plan. But our problem is sometimes it just feels like there isn't enough.

So here's the numbers. 17% of my income goes to taxes. 25% is just for groceries. We give 20% or utilities are 17%. Transportation is about 12%. Wait a minute. What do you make? What's your household income? About 67, not including overtime. Okay.

So if you total all those numbers up, that leaves 9% for retirement, insurance, and lifestyle. And we're not looking to live an extravagant lifestyle, but I guess our question is, when do we get to take a real vacation? Well, whenever you want. I mean, you have to budget that in. I don't know how you're spending 25% of $67,000 on food. Well, grocery costs went up 38% in the last few years. I know what they did.

I'm sitting here. I'm talking about $67,000 times 25%. I mean, you don't, do you have children? You have eight children? No, both of my children are married and out of the house. Two people are spending $20,000 on food, $15,000 on food. Groceries are expensive. Yeah, that's the number that we have.

And we're not living extravagantly. Now, we stick to, we try to stick to a carnivore diet, but that's not exclusive. Okay, so back to your original question then. I just got sidetracked on that number. I was throwing me. All right. Anyway, the, well, you have a below average household income. Household income in America is 78.

And yours is slightly below average. And you have zero debt, but all of your bills don't go away when you have zero debt. So I think the only, I don't think you're going to live a millionaire lifestyle on that income. but your income taxes shouldn't be 17% either. They shouldn't be that high. So you're a detailed guy, so I'm struggling with to be the guy to question all of your numbers, but I'm questioning some of them already. So I don't know the answer to your question philosophically,

except to back up and say, if I had that, I'd be screwed in this scenario. If you had a house payment and two car payments, I don't know how you'd make it in this scenario where you've locked this down so tight that you only have 9% left to save for retirement, and you don't have a stinking payment in the world, including a house payment. And somehow, from 2011 to 2023, wasn't it? Like 12 years. You found enough margin in your budget to become completely debt free and pay off your house. And now there's no margin. That's weird. Yeah, that is weird. I mean, I think my guess is there probably is margin. It's just not what you thought it was going to feel like. And there's something to that. You made the point about the income, which is true. And there's something to that. If we talk to a teacher, if we talk to a teacher, who makes a lower income because they love teaching and they love that, then we say, well, you're going to have a Camry lifestyle. That's just part of it. You're going to drive a used

Camry. You're not going to have a ton of margin because that's the income. That's the life that your income is affording you. And I think that there is just part of that that the cost of living is high and because of that your income doesn't go as far. It doesn't mean you're not free or... Did he say 20% on giving? He said 20% on giving, 17% on taxes. That doesn't feel right. One of those makes sense. Yeah. 20% giving is a choice. He could be...

I would be doing my tie that 10% until I got my retirement funded. I agree. I agree with that. Until I got my retirement funded. It says you're... Okay. And biblically speaking, the tithe is off the top before anything. Offerings are from surplus.

And regardless of whether some preacher tells you he wants the widow's might to build his building. But I can argue about that teaching all day long. but the offerings come from surplus all through scripture and the tie that's baseline off the top before you do anything. And that's how Sharon and I have given our whole lives. And so, yeah, I'm going to, I'm going to check in on a bunch of these percentages if I'm you. Yes. His tax should be 12%. I got three of them written down. I have 17% income tax, 25% grocery and 20% on giving that I question all three of them. So anyway, check in on all that and dial it in and then redistribute and let's make sure we're getting 15% of our income into

retirement because you said you only had 9% left over to do that with and to upgrade a car and so on. Now there is something to be said. He said he put a new roof on. He did new cars. Where did that money come from? You saved it up and you did it. With front what? There's not enough margin here. He explained a budget that was gone with down to 9%. And 9% won't do those things. If you did not. nothing. You know what I mean? So it didn't get him out of debt. It didn't get his house paid off. So that's the other thing. So something's changed and it's gotten some of these percentages have fattened up a little since everything got paid off and since we did these other things. So but you're always going to

have stuff come up and you're never going people that get confused. I wrote about this in maybe steps millionaires too. We get emotionally confused because when the word millionaire kind of came out was the 1920s, 1910, 20, right in there. And in those days, a million was a lot like a billion today. Yeah. And so when you're a millionaire, you drive a two-year-old Toyota. You don't have three houses. No. And you don't have a private jet. Those are all billionaire things. And a billion is a thousand million. So it's not going to feel like you're rich. Yeah. Yeah, absolutely. Like unlimited funds. for something. So, A, your income's low, B, lower, low-ish. B, you did this before somehow,

made these other things accomplished. C, look at your percentages again because some of them are a little wonky. Okay, guys, let me ask you something. What would it take for you to switch your bank? Because if you're still earning next to nothing on your savings, you need to check out Fairwin's credit union. And I know what you're thinking. It might sound like a hassle, moving your direct deposit, updating bills, getting a new debit card, feels like a lot. But here's what most people don't realize. Staying where you are could be costing you hundreds of dollars every year. Y'all, the average savings account pays less than half a percent.

So let's say, for example, you've got $20,000 saved. You might earn around $70 a year. But with a fair-wind high-yield savings account, earning 3% APY or more, that same money could earn you over $600. And that's real money that you can use towards the baby steps. So don't let temporary comfort keep you stuck. Check out the smart bundle from Fairwind Credit Union. You get a high-yield savings account, a no-feet checking account, and the Ramsey B-Weird debit card.

Go to fairwinds.org slash Ramsey to learn more and make the switch today. That's fairwinds.org slash Ramsey, insured by the NCUA. Continuing that discussion for just a second, there is something I have observed. as you go through the baby steps and as you go through your wealth building process, that gradually shifts, and it's so gradual it's almost imperceptible. And that is that as you build wealth and as you get more and more margin in your budget because you don't have any payments and because you start to have a pile of money in your retirement 401k, you've got a good strong emergency fund. The further down that you move,

and it makes sense when I say it out loud, but you don't realize it's happening, the further down that you move, the bigger the event has to be, before it, financially, the dollar amount has to be larger to emotionally strain you. Yes. So, like, If I had a flat tire when I was broke, my life looked like a country song. Everything that could go wrong did go wrong. And so a flat tire was the national debt. It was drama, drama, drama, drama, because it was yet one more thing. And I was so broke I couldn't pay attention.

Now I would have to total a car with no insurance to have the same feeling. you know, or I'm bigger, you know, even. But, and it's not just because I'm older or I get it, but your perception is different. The more wealth you have built and the fewer, the more margin you have in your monthly budget. And so what used to be a crisis is no longer a crisis. You will experience that, but it is so subtle and incremental that you don't feel like you've arrived. People have a perception, and this is one of the things he was asking about that I didn't properly address. That's why I wanted to continue the conversation into his defense, was that when you, people have a perception that when you hit baby step seven, you're going to feel like you hit the lottery.

But your income is the same. Who-hoo moment. Yeah. There's not a woo-hoo moment. There's a, it takes a lot bigger problem now to be a problem moment, and it snuck up on you, so you didn't even realize it. So you don't feel like you got there. You don't have this top of the mountain, put the flag in or something, celebration moment when you get to Baby Step 7, it's kind of a yawn. Yeah, I could see that.

And so, you know, I do want you to go there because it's a better yawn than the nightmares you're living in before you get there. So, you know, let's have a yawn for sure. but you're not going to have the suddenly I have unlimited funds feeling. I think that's the difference. You become a baby steps millionaire. Maybe you have a million bucks in the bank between all your assets in your home, but you don't earn a million dollars a year. You still earn 60 or 70 or 80,000 dollars a year.

The only difference is instead of the $800 a month going to the debt, now it stays in your pocket. And most people say, okay, we're going to bump up. giving a little bit. Maybe now you increase the grocery budget a little bit, but it's not these major life. But $800 is not two weeks on Santorini and Mechino's in the Greek island. And that's my point. You're not. That's $800. Yeah. It's the ability to have freedom in the day to day, the small things in life that you used to have, you used to go to the grocery store and the budget strings had to be ultra tight. Now it's okay to loosen it up a little bit. You used to, you see what I'm saying? It's these little things. We can upgrade a car. Yes.

And pay cash. We can put a roof on and pay cash. And by the way, it's still. And those are the celebrations, but they feel so mundane that you don't feel like the celebration is there that you should have felt it should feel better than this when you get. His point was it should feel better than this. But you're still. Because you still have to have delayed gratification. I think that's why.

And you still have limited dollars. You're still not in Congress. That's right. Yep. You know, it's still, that's it. You still have to say no. It still takes time to save. Yeah.

What you're buying and everything else. Julia is with us in St. Louis. Hi, Julia. How are you? Good. How about you guys? Better than I deserve. What's up?

All right. So I started looking to the Ramfee Show about six, seven months ago. I recently got married. And I had a virtual job that was in my hometown. And it was great. I had full-time hours. I moved here about two hours north. where I'm from in St. Neos here.

And my work downgraded my hours. It's a smaller startup company. And there was a bad business venture on their part. And long story short, I'm only getting 10 hours per week, which really sucks compared to like 25 or even 30 at this point. So I had the bootstrip up and I say, what can I do in my community to make myself make money? And I started a small cleaning business. Good.

That's great. Now I'm cleaning up to four or five different houses and there are big square footage houses. So I'm getting about anywhere from 250, that's the smallest range, all the way up to maybe $1,000 per week when it comes to just cleaning houses on the side. You are a grind and hustle girl. Way to go. Great. Thank you. Thank you. Yeah, long story short, that has become my main source of revenue at this point. Make it more you ever made in your life.

Yeah, are you making more from the houses than you made full-time doing the other gig? Yeah. I mean, whenever I was full-time, I thought smaller, it was a smaller doctor's office. Like, it was a virtual. That wasn't what she has, honey. They're making more money now than you used to make it, a J-O-B. That's what I said. Yeah, yeah.

Good, good. Now, all right, so what's the problem? If anything, when should I decide to make this in that, though? fee because I don't need an LLC. Do you have a separate checking account that you run your business on? Correct. You do, you have a DBA account doing business as? Yes. As a sole proprietor. You run all of your income from the business end of that account and only expenses out of the account. And then when you take money home from that account, you set money aside for your quarterly estimates, one-fourth of what you take out of the business to take home. You set aside for taxes, okay?

Yes, definitely. Yeah, when you do all of that, you do not. The LLC does not save you a dime on taxes. The sole proprietorship has exactly the same right-offs than LLC does. Exactly. Okay. The only thing you need an LLC for, the only thing you need an LLC for is risk. If you are, if you're a multimillionaire and you start a business and you think somebody might sue you because of the business and try to get your multimillion.

then you would start an LLC. If you're in a business that is high risk, where you could get sued inside the business, and you're not, you would start an LLC, or if your company starts making over a million dollars a year, you would do it for risk. But the LLC is only for risk, meaning that if you're doing business as an LLC,

everything's in the LLC name. It's Julius House Cleaning LLC, right? And that's the name of it. and everything's billed to that. All the workers are working from that. If somebody falls while they're working on the job and they want to sue the company, they have to sue the LLC and all they can get is the LLC's assets. They couldn't take your home.

They couldn't take your cars. It couldn't take other stuff because your LLC is the one doing business as a standalone entity. That is what it's for. It's for risk management. So it does not save on taxes. If she started hiring on other house cleaners to clean as a part of her business, Yeah, we're five or six weeks into this. I'm just saying.

Yeah, I mean, if she's been running this thing six months or a year, it starts making bank, it starts getting really complicated. There's a whole bunch of players involved. You're in rich people's houses or you're in a high risk environment, like some kind of sensitive office situation where somebody misbehaving in that situation is at risk. And you're sending employees into that, not yourself. Then, yeah, you know, where you start perceiving. risk is what an LLC, but there's all this crap on the internet that we're getting LLC, you're safe on taxes. And that's what happens when you're so stupid you listen to TikTok. But yeah, oh my gosh. And I'm on there. I know. I know, I know. Shut up. But anyway.

If you've had your phone two or three years, there's a chance it's unlocked. So bringing your own phone is a great way to unlock savings on your wireless bill. You can switch to boost. You can switch to boost. Mobile to get unlocked. Bring your own device and save big. See, the big wireless companies count on you staying right where you are, paying more than you should every single month. They make it sound complicated to switch. It's not, by the way.

And meanwhile, your bill keeps going up. That's not inflation. That's them taking advantage of you. But Boost Mobile is different. They make it simple. You bring your phone, keep your number, and get unlimited wireless for just $25 a month. and that price is locked in forever. No contracts, no hidden fees, no surprises.

So if you're tired of wasting money on your phone bill, this is your chance to do something about it. Go to boostmobile.com slash Ramsey, get unlocked and keep more of your hard-earned money. That's boostmobile.com slash Ramsey. $25 forever requires customers to remain active on BoostMobile Unlimited Plan. One of our favorite things is when people send us notes saying they love, I love every dollar.

Recent quote. Love this app. Makes it super easy to budget with my husband. We've implemented this practice since our wedding day. Zero money fights because there's full transparency. We're on the same page. See, that is a key to winning right there. That'll cause you to be able to build wealth and to win in your relationships.

Every dollar, the budgeting app. It'll help you work the Ramsey plan exactly like you had us in your back pocket. It's in the app store for free and Google Play for $4. free. Donna is in Dallas. Hi, Donna. How are you? I'm fine. Thank you. How are you? Better than I deserve. What's up? Okay, so my husband, I're older. I'm 71. He's 84. During COVID, we had our 401 case, our retirement account. In the stock market, took a dive, and we went down like $26,000 in a week, and we got nervous. So we took it out real quick. And our thought was, I know, our thought was that

we don't have time to recover. Oh, no. And you've been out since then? We tried it one more time. The same thing happened, and we just couldn't do it again. We just couldn't do it. It went up 25% three years in a row, and you missed that. I know, but I keep thinking it can't stay like that.

It's going to be gone. Oh, God. Am I going to feel worse if I lose it or keep it or go up? But Donna. It's going to be the worst in there. Donna, the problem is the first dive when you said you, lost the 26,000. It recovered in like 50 days.

The moment you took it out, you just locked in that loss. You 100% lost the 26,000. You do not need to be investing in the stock market. Yeah, that's kind of like my thought. So we did try to gain. Because you don't have the backbone to stand the volatility. Yeah, the stock market's not the problem. No, the history of the stock market, you lost your butt.

You got out at exactly the wrong time, like the worst possible. You did it the worst possible way you could have done it. And so if you're going to do that again, you need to stay away. Meanwhile, I made 100% on my money while you did that. Because I just rode the roller coaster up and down and enjoyed the ride, got off, got on it again, and rode. Never got off. I just stayed on and said, take me around again. Yeah.

Take me around again. I think there's a bigger issue. at hand, how much did you have in the stock market? We had, I'm not like, about 190,000. I think that's the issue. I think that the bigger problem is you're worried that you don't have enough to live on throughout the entirety of your retirement. And so that's what's causing you to be very, like, trigger-happy with this and very, like, quick to move.

Well, now, what's causing that is a lack of knowledge of the market. And you're not familiar enough with a history. of the market to be comfortable. So you think all bad news is the only news. And so if you can't get past that, you're going to do this again and again. And I would recommend you don't do it again and again because you're taking a beating. Yeah. And at 71 and 84, you don't want to take a beating.

More than anything, you're taking a beating emotionally. Your 200 would be 400 if you'd have left it alone. Yeah. That's what I'm saying. My sister-in-law, my sister-in-law back, I think it was in the 80s or something. The stock market was bad, or the 90s. It was hers was the 91. And she lost almost everything.

No, she did not. No, no, no, no, no. There is no, no, no, no. There's no time in the stock market's history, it went to zero. Well, it was such a small amount, and I don't know, I mean, she's my first one. But she only would have lost it. She only would have lost it. But she did not lose.

That's like in 2008, okay, the stock market dropped in half. It went from third. The Dow Jones went from 13,000 to 6,500. And people said, I lost everything. everything. No, you lost half. And the only way you lost it is if you took it out. If you took it out at the bottom, perfectly. Meanwhile, how long does it get to recover? One year. Okay. And it's not 13,000 now where it started, down to 6,500. It's now 36,000. And that's since 2008. And so in the last year, the market has made 13%. Since the first of the year,

We started bombing Iran and the market went down and then back up. And it's currently from January to today down 1%. 1%. That's not losing everything. That's losing $19. Okay. So that's, but you've got to get your head around this, both of you, because if you're going to believe sister-in-law's mythology and you guys are going to sit

and watch the news every night and freak out, then you're going to do this. again and again and again, and I don't want that for you. I think you're better off making too little money and not being awake all night. Okay. Right now we have it in CDs. Put it in a high-yield savings account. You know, go to Fairwinds Credit Union, dump it in a high-yield savings account, and let her ride, and you're going to make three or four percent.

You're going to break even with inflation, but you're not going to lose anything, and you're going to sleep beautifully. But I've got to make fun of you, okay, because I love you. Meanwhile, my money is going to be doubling while you're making 3%. Because it's going up. Well, if I can convince myself to suck it up. You would have to read enough, sit down with one of our SmartVestor pros and read enough and look at the market. So here's the numbers.

97% of the five-year periods, if you leave it alone five years, since the stock market began, have made money. That's all of them. Okay. So if you had left it alone five years in any scenario that we're talking about, you would have made some money. Even in a weird, crashy, weird thing like COVID or Iran War or 2008. Okay? All of those. Actually, you can look at it.

It's about the same time. It's COVID hit in March, and so did Iran war. And so Trump starts bombing Iran to market dives, all right? and so because it always does that with geopolitical stuff. And so if you understand that every time it does that, it returns very quickly, then you start getting the opposite mindset that like, oh, he bombed Iran, great.

I'm going to get to buy this on sale. The stock market's now on sale because I know it's going to go up instead of, oh, God, I'm going to lose everything because my sister-in-law told me a mythology, gave me a lesson in mythology. And so, you know, that's, but if you're going to invest again, so here's what I would do. Let me, let me get back up. If I'm 71, I'm 66. I'm 65 getting ready to be 66. So we're close to the same age. I would put this money in a high-yield savings account and let it ride and sleep at night. Meanwhile, I'm going to challenge you intellectually to sit down with a smart investor pro and start learning. Because knowledge of how this these markets return, how they go down, how often they come back, what the bounce back period is and all that will cause you to ride out the waves. Yeah, let me go over it because this is so

cool to see. So what I'm going to tell you is a major market crash that we all know and how long it took to recover the losses. So you could go back to 1987. You were there for that, Black Monday. Black Monday, yeah. All right. It dove. It dove. It dove. 34%. And it took 22 months to recover. In one day. In one day. 22 months. That's less than two years to recover. 1990, Gulf War recession, it dove 20%. It took four months to get back. Just four months. Let's go to the dot-com crash. You said 49% half. It took less than seven years to completely recover. Half. That's one of the big, that's crazy. Look at this one. 2008, the Great Recession. I remember that. 57% it dove. It took less than four years to recover.

2018 federal rate sell-off 20% crash less than four months to recover 2020 COVID crash we remember that 34% dive it took less than five months to recover and then most recently the 22 inflation bear market that we all experience 25% dip it took less than 22 months to recover you just have to write it out if you can if you can sit tight for two years you get back that well that one's wrong because in um we had a 25% of 24, 3% and 26% market three years in a row. We did. And so that last one's wrong.

But the others are correct. Others are correct? All right. Here you go the internet. I remember the others. So yeah. Okay. Interesting.

That's interesting. So studying this stuff and going, how fast does it bounce back after the towers get bombed right over the top of Wall Street? Yep. 57 days. Wow. That one came back. New to the Ramsey show? Well, don't worry.

We'll help you figure out your next step. Take our free get-started assessment to see where you are in the baby steps and get a custom game plan for getting out of debt and building wealth. It's all free. Tap the link in the show notes and take the assessment. Our question of the day is brought to you by why refi, when people get buried under private student loan payments they can't keep up with. They might think there's no way out. Well, Y refi does help borrowers explore solutions with fixed-rate refinancing and a payment plan tailored. to that situation. Go to Y-Refi.com slash Ramsey. That's the letter Y-R-E-F-Y.com

slash Ramsey might not be in all states. Okay, today's question comes from Zach in New Hampshire. He says, my wife, and I have $250,000 in various savings accounts. My wife wants to use the money as a down payment to buy a home. I think it would be a waste to use it that way. I would rather keep investing the money and eventually live off of the interest in dividends. Our rent is affordable, and has not increased since we moved in. We have one child and a combined income of about 200,000. We're debt-free and our monthly expenses are very minimal. If you were in my position, what would you do?

Well, I'd buy the house. I would because, number one, you're stabilizing one of the largest line items on most people's budget, which is their housing. And your rent may not have gone up yet, but it will eventually. So I would do that. And I also just think there's a peace of mind with having a place that you can call home that's yours that is gaining equity and i think uh Dave what

I what I sense in this conversation and we've had this with many people who've called in is it's almost like people forget that purchasing a home is a form of investing it's like I just want to invest my money in the stock market and I'm like well I love the idea of investing can you do both can you do 15% in the stock market and can you invest in real estate which is your primary home yeah I think They're both very good to do. Agreed. So the premise that the person writing the email bases is on is that he's got cheap rent and it hadn't gone up. But everyone listening knows that's going to be false.

It will change. So you can't extrapolate that out 40 years. Again, I'm 65 years old. So when I was 25, if I had been renting, can you imagine how much my rent would have gone up during that 40 years of my working lifetime. Absolutely. Even if I had a good deal initially with the first landlord who didn't go up on me for three years or something.

Right. But that's going to come to an end at some point. That guy's going to die and the next investor is going to go way up or whatever. It's going to 100% of rent goes up. Yeah. And while that's happening, by the way, real estate market's going up. Exactly. As well.

And so during that time, you know, Again, you've heard of say this before. We've done the largest study of millionaires ever done in North America. Detailed airtight research. And what we have found is that 89% of America's millionaires started with nothing, did not inherit the money to become a millionaire and became millionaires. So then you have to ask the question, what did they do? If you want to be one, you do what they do.

You study best practices and you emulate it, right? Right. So what did they do? Almost all of them, like an 85, 90 percentile looked like this. I mean, they all kind of fit the same mold. They were boring. And what we found is they worked and got their home paid off, and it was $600,000 and it took them 10 or 12 years to get the home paid off.

And then they've, during that time, they've been investing steadily in their 401ks and in their Roth IRAs, and they had another 800 or 900,000 or a million in that. that. And it took them 16 years to do that. So you got an $800,000 house and you got $1.2 million in your retirement or less anywhere in there and you got a $1 to $2 million net worth. So those are the two components of the first $1 to $5 million of net worth that we see people build. And that's normative among them. They bought a house and paid it off. They steadily invested in 401 case. That's what I mean by it's not sexy it's boring it's just like buy a house and pay it off and put money in the 401k and go to work and come home and eat your meatloaf i mean this is what you're doing right and you become a

millionaire it's not like you like you like you somehow invented applesauce i mean you didn't do anything that was that brilliant you were just steady and so that's why his idea is flawed because that house becomes one of the two components of wealth building, to your point, of investing, that causes people to become wealthy. And during that time, a hundred percent of the time rent's going up. Yes, it is. A hundred percent. There's very few things you can predict with a hundred percent probability, but you can predict a hundred percent of the time in the last hundred years, rent has gone up. Yeah, that's right.

And so, I mean, the house that I sold when I was 18 years old, my first house was a real estate agent. I got my real estate license when I was 18. I sold a house two weeks later. I sold it on East Ridge Drive in Antioch, Tennessee for $42,500. That house sells for $600,000 now. Don't be a renter. Yeah. That's the moral of the story. I mean, hello. If you were renting that house the entire time, rent is going. You would have been paying. Let me think what the rent would have been. A rent would have been $150,000 probably in those days. Wow. Maybe $200. We rented. an apartment a couple of years later a one bedroom apartment for

$2.335. Oh my gosh. Wow. And so right after we got married. So, and that was 1982. So this would have been 78. So four years later. So yeah, I'd probably been $150,200 for the rent on that $42,500 brick ranch built

in 1948, a thousand square feet with an unfinished basement. And yeah, and that house would go for $600K right now. Oh, my goodness. And that rent, which means the rent would probably be, eh, you'd probably be renting that for $2,500. Oh, my goodness.

So that's the problem with this theory. And that's, that's, that's everywhere in America, right? That's not in Antioch, Tennessee. That's everywhere. That's all over America. And so, yeah, not ashamed I sold that guy that house, by the way. I mean, I think I did, I think I did him good. I was an 18-year-old idiot, but I still did him good, you know?

I didn't know what I was doing. but I thought I knew what I was doing, but it turned out I knew what I was doing. There we go. So, yeah, so real estate's a great investment when it's a part of your plan where when you're out of debt, you have an emergency fund, your payments no more than a fourth of your take-home pay on a 15-year fixed. If you can put down, and this guy has $250,000 to put down, if you can put down 20%, you can avoid PMI, which is private mortgage insurance.

And that is a good thing if you can avoid that. first-time homebuyers often can't get a whole 20% down. I understand that. In this market, though, you're putting down more if you want the payment to be less than 25% of your take home. So you've got to get there. Depends on the house, yeah, and where you're living and all that. But yeah, you're exactly right. It's all numbers. It's all math. You know, one thing I find on this show a lot is people are always willing to sacrifice their personal residence, whether they haven't bought it yet and they want to put their margin towards investing. Or maybe they have bought the house and they don't want to put the margin towards paying it off. They want to invest instead. they're always willing to put their personal mortgage and the piece of that on the line. And I find that to be interesting because the truth is there's more tied up in that than I think

people realize in their day-to-day life. But all you have to do is be in a situation where you're up against the wall and you realize how much it matters to you. Anybody who's had a diagnosis, anybody who went through COVID-19, anybody who's been laid off or lost a job, the number one thing that you start thinking about is your home. And you want your home safe and you don't want to lose your home and you want to make sure you can make the payment. So don't forget that. Don't forget that. There's something very primal about that.

Yes. And a different kind of anxiety than I can't get the coffee that I want today. Right. That's a different kind of anxiety. So when you're in... I'm going to lose my home. Yes. That's different than having the lights cut off.

That's right. I've had both. But I don't want, and I don't want either again. And I don't recommend it as a method of learning. Yeah. So protect it. Protect it before your backup is up against. And I hope it never is.

But protect it when you have the ability to and pay it off when you have the ability to. So circling back on that guy just for a second. If he keeps investing steadily, his investments will not be enough to cover the difference in rent going up. So he's going to end up going backwards. That's a good point. You're saying percentage-wise? Yeah, he's going to end up going backward in that scenario. Your investments won't do well enough for you to stay ahead of that.

And if they are, you're playing stuff you shouldn't be playing in. Welcome back to the Ramsey Show in the Fair Winds Credit Union Studio. I'm Dave Ramsey, your host, Jade Washall. Ramsey Personality is with me. We were talking about stock market returns earlier, and during that break, we actually got to play with the actual app a little bit and look at it. And I misquoted some stuff. to clean up my mess. If some of you are still listening before you're bitching on the comments,

that Dave Ramsey's an idiot because he was, he messed up. So anyway, the thing to remember about the S&P, it recovered in about 90 days from the high. It was up in February. Trump bombed in Iran. It dove. It came back in, I think it's 92 days. It recovered to where it was. And it's well beyond that now. and I said the rate of return for the year was down 1%. I was wrong. It's up 10% for the year. So if you've been in the stock market invested in an S&P, which is the stock market, from January 1 to today, you know, then June 1, then you have made 10% on your money.

Meanwhile, it went down and back up. And so you rode roller coaster down and you wrote it back up. up 10%. Now, in 2024, the stock market made 23%. Yes, and P did. Then 25 and then 26 and then 17. And so those are the returns for the last several, four or five years under different administrations and all kinds of different situations and different volatility and gone up and gone down and back and forth. But you can go back and just pull up an S&P app and look at it online. You can see the thing going up and down. And you say, okay, there's a dip.

What was going on at that time? And you go back and look at the news stories of the day. And so you'll see it comes back in 57 days or whatever like that, just like we just did about 90 days on there, around more or 60 days. So anyway, the moral of the story is you do not put money in the stock market unless you're going to leave it alone at least three years and preferably five. If you don't have that mindset, you're going to panic every time you read a news story or see a new story. And Fox and CNN are going tell you the chicken little, the sky is falling every day. It's what they do. It's fear porn.

And they're going to tell you every day that the world's coming to an end, the world's coming to an end. They always report when the market is down. They never report when it's up, ever. They never say record stock market returns. Now, a business channel like a Fox business might, or in the old days, the old CNBC back in the day, not there anymore. But if it was a pure business channel with stock market reports, they might say the market's up at a record level. And I think I did say the Dow was at 36. It's like at 50,000. So I'm not even close on that. So I screwed up two things in one of those other segments pretty dramatically. But the moral of the story still is no one gets hurt on a roller coaster except those

that jump off in the middle of the ride. I do not take my money out of the market based on any singular event because I think the market's going down. Every time the market goes down, instead I am tempted to scrape the nickels out of the corner of the couch and put more in because it's on sale. When I was a kid, there was a store called Kmart. It's gone now. And when you went in Kmart, they had these little things that on rollers with a blue light on top.

And they would roll this thing over to the whatever aisle, the tool aisle or the socks aisle or the underwear aisle. And they turned the blue light on. And there would be a blue light special. And you could get a bargain. And so the rednecks would flock to the blue lights, right? Like a moth towards a flame. And so I remember my mama running down the aisle of Kmart to the blue light. light, that's what you should do when the stock market goes down. The blue light is on. It's on sale.

Get a bargain. Run down the aisle, you redneck. Get you some money. Okay. That's what we did. And so there's nothing wrong with that. But if you've got the mindset of it has always come back and the only game is how long it takes it. Then when it dives on one of these news items or geopolitical events, whether it's COVID, or, you know, fires in Australia or whatever it is. It causes, you know, the Russians launch a satellite. Somebody invades Ukraine. Somebody doesn't invade Ukraine. Somebody's oil barrel goes up.

Whatever it is, whoever, you know, whatever it is, whatever mess Trump is making this week ends up in the stock market, right? Or whatever victorious thing he does this week ends up in the stock market. And so, for a, but for a short period of time, overall, you just make money. Yes. So that's the moral of that story. I'll get off my soapbox. All right.

Let's go to Jay in Richmond, Virginia. Hi, Jay. How are you? I'm good. How are you? Better than I deserve. What's up? So, being my wife just had a baby in January.

Yay. What'd you have? A girl. Awesome. You're ruined. Yeah, I know, right? And so doing the, the current bills, we're trying to pay off debt, but she just had a school payment come up

and that kind of threw everything off. And then daycare is coming up in September. And right now we don't have enough to cover daycare. So we're trying to figure out what can we do to get to at least where we can afford daycare and then also pay off debt. What kind of school payment? The school payment itself right now is $360. But that's just one, that's the private, you know, Sally Maylor in the toe right now. Oh, student loan. It's a student loan. Yes, that's my life student loan.

Oh, I thought you meant she was in school. Okay. Got it. And how much is daycare? She's in a break right now. Daycare's going to be $1,600 a month. And when you say your wife is in a break, when does she go back to school? Or when did you plan for her to go back?

That's up in the air. She finds out by tomorrow whether she's allowed to go back. Right now, the school is not being very kind with her. having a baby. So she plans on going back in the fall. Can you afford for her to go back in the fall? It doesn't sound like it. She's on grants for school. So that is, her school's covered. And if the grants don't work, her school's pay, or her work pays for it. So they do like a, they pay for her college. I'm sorry. So she works also. She does. Yes, she full time. And the 360 is for an old student loan.

It's not an ongoing tuition payment. Correct. Got it. Okay. Why are you paying? Is that a federally insured student loan or a private student loan? It's a private. Oh, okay. All right. All right. So what does she make it work?

She brings in $2,000 a month. And $1,600 is the daycare? Yes. Well, that doesn't work. No. And, of course, you know, since you're mayor, our money's combined. So together we make $7,600 a month. I know.

But her working, if she's not working, you don't have a $1,600 daycare. Right? Correct. Well, she's not making $400. I mean, we're not working full-time to make $400. Right. That doesn't work. So we've got to figure out a different job that she does from home or makes twice as much money.

Because her working and making $2,000 and paying $1,600 for the privilege is not logical. Yep. No, I would work part-time from home and make more money, net, of daycare and be home with a baby. that's step one. Then step two is you look at what you can do to pick up extra jobs and I'll sell the car. I didn't even ask about it. Yeah, something else is interesting. I don't even know if it's there, but probably sell the car.

All right, let's cut to the chase. It's easy to get discouraged about crazy house prices and interest rates. But when you have the right real estate agent to help you buy and sell the right way, you'll have confidence to make smart decisions. Ramsey trusted agents aren't just experts who guide you through buying or selling. they're people you can trust to have your back from the first call to closing day. Find a Ramsey trusted agent near you at Ramsey Solutions.com slash agent. That's Ramsey's dot com slash a.

Faith is in Boise. Hi, Faith. How are you? Thanks so much for taking my call. Sure. What's up? I just want to start off with saying I just know that this is a first world problem and I'm grateful to have it. But I really need your advice.

I'll try. Okay. Okay. So we need to know if we should pay capital gains at the number of $50,000 to the IRS, or if we should reinvest using a 1031 exchange. So you're selling a piece of investment real estate? Yes, we are. For how much? Probably we're listing it at $4.99. So you've depreciated it. You're adjusting it. Your adjusted basis is approaching zero?

No. But we are, we'll probably make about 300,000 equity on it. Yeah, that would be 45,000. But that's a equity is not equity. Equity is not your basis or your tax basis. Right. And let me tell you, we've gone over this with all kinds of like tax people and investment. Okay, so the tax people are saying you have a $300,000 gain at 15% that would be $45,000.

Right. Okay. That's what you're hearing, correct? And then with all of the money we've invested into the rental, they're saying we'll probably walk away with a $50,000 capital gains tax. So we can pay that or we can take that money and reinvest it into something else. Okay, let me stop you a second. Because I'm concerned that the number you're giving me is where it's coming from, and I want you to go back and double-check that.

Let's walk through the basics of that, and then we'll go back to your question, okay? So when you bought the property, when you bought the property, you're selling it for approximately $500, and you're thinking you have about a $300,000 gain. So when you bought it, you probably paid $300,000 for it, let's call it. And then you've been depreciating it, which lowers your basis, and you've been doing capital improvements to the property, which increases your basis. Yeah.

Okay. That adjusted basis down by depreciation and up by capital improvements, subtracted from your sale price, subtracted. that number subtracted from your expenses for selling is your gain. And I can't tell from the way you're wording this if that gain is 50,000 or if your tax is $50,000. The tax, I was told, is $50,000 after someone else worked out all those numbers. And the property, what kind of property is it you're selling?

It's a single dwelling. Okay, so it's a rental house. Okay. And you sold it, why? Well, we want to sell it because where we're living now and we're renting right now is so extremely expensive. So our ultimate goal is to lower our monthly housing costs. And take this equity and buy a home. Yeah, either buy a home or we thought buy a duplex so we don't have to pay capital gains tax.

If you live in it, you like the whole other thing. Yeah, that's a mess. Pardon? That's a hot mess. Can she do that and live in the other side of the duplex? Yeah, but you've got to try to figure out a way to bifurcate the duplex, and that's really troubling. It's not very... And in the area that we're wanting to live, a duplex, even if it was only like 1,400 on each side, square feet on each side, would be close to a million.

I would pay the gains and use the money and buy the home that you need to buy. You're forcing yourself all into a duplex. You wouldn't have bought a duplex anyway. The only reason you're doing that is to save this gain and to try to play some kind of shell game with this money. Right. And so, no, I'm going to pay the tax, get clean, and just buy the home that you're supposed to buy, that you need to buy that fits your budget with the money that you guys have from the sale of this and from what other money you've stacked up. Put as much down as you can put down and don't get caught up because you're forcing yourself into a duplex. and if you're living in one side of it, you can't 1031 that side, and yet there's not two sides to a duplex in terms of that there's no line down the middle that you can say one side's investment and one side's not, unless it's a zero lot line and it's not. It's a duplex. So you're getting yourself into a real potential barrel of fish hooks if you get audited. And I'm not sure how you'd come out on that. I wouldn't screw with it for all that. And you wouldn't be buying a duplex if it wasn't for this one simple issue. And so I just, I

just ignore the issue and go do the house you're supposed to do, not met taxes force you into a decision you wouldn't have made otherwise. I like that. I like that. And that's the way I would go at it. So yeah, but if you live in one side, does it become your personal residence? Oh, but the other side is rented. So that's a rental property. Yeah, but it's one property. It's very confusing. It's a singular property. It's not a dual property. If you bought two properties attached to condos that were attached at the wall, then one of them would be an investment. You could 1031 into that. You could not 1031 into the other because you can't 1031 into a personal residence as

she's already discovered. But I also, Faith, want you to go back, unless you guys have owned that property a very long time, I'm not sure the numbers you're getting, that's an unusual. If you've spent money on the property doing capital improvements, that's an unusual gain. So, but I would look at it and try to just make sure that your adjusted basis, that you understand that, and that the difference is times 0.15% for your capital gains tax is the 50,000. It might be. It might be. I might be wrong.

But I really want to understand it before I move forward just to be double sure, triple sure. But no, I would not do a 1031 in this case because it's forcing you into a purchase you would not otherwise make. It's a good question. Interesting discussion. Thank you. Zachson, Lubbock, Texas. Hi, Zach. How are you?

Hey, I'm great. How are y'all? Better than I deserve. What's up? Well, doing well until your lady volunteers beat my lady raiders in softball, but all things considered pretty well. But my question is, I'm a 1099 employee, or 1099, here in Lubbock, and I have recently done better and better in our career field. Good for you. Thank you. And I've been definitely trying to, I've been maxing out my Roth IRA and that's gone well. And well, even maxing that out, I'm not hitting my 15% in the baby step that I'm in where I'm debt-free and everything with my home.

But my question revolves around. I have a tax professional with the heart of a teacher that is telling me, hey, you might consider a traditional IRA with your S-Corp as a 1099 tax tax tax. You have an S-Corp? I do, yes. Okay. Yes. Well, cheaper than that, do you have employees in your S-Corp other than you? No, it's just me.

Okay. Yeah, you can set up what's called a simple IRA, which is a 401K for small businesses. And you're the only employee. Yes, sir. And you can max it out. Okay. And just hit your SmartVestor Pro up. And the good news is it's basically 401K for small business.

They call it a simple IRA. And the good news is it's $15 a year administration cost. It costs nothing. Oh, it's nothing, yeah. Yeah, like a big 401K, like our company, you know, we pay tens of thousands of dollars a year to administer it for a thousand employees, right? And then we have to pay another $40,000 and have it audited and all that stuff. You don't have to do any of that with a simple. It's all just $15.

It's like setting up an IRA. It's like setting up another Roth IRA. And you can do a simple Roth. So you can just make it more Roth, more good, and put it in there. If you did have employees, you have to match 3%. If you ever hire someone for your S-Corp other than yourself, you'd have to match 3%. But the weird thing is you can actually match yourself. Which really serves absolutely no purpose.

Well, if you're maxed out, it would serve a purpose. If you're going to put all the full amount in, that would get you there. Hey, what's up guys? It's Jade Warshot. Listen, summer spending adds up so fast between vacations and road trips and camp fees and events. And all the extra gas and grocery runs, money can get tight before you know it. To really get your money under control and keep it that way, you're going to need a plan. And that's what you'll get with the every dollar budget app. It helps you track your spending, free up cash to put toward debt and savings, and it's the simplest way to make a plan for your money before the month begins. So no more wondering where your money's going. You're telling it where to go. Download every dollar in the app store or Google Play and start for free today. So Jade's just teaching me something at the break that goes to our last caller. So the simple IRA for small business is what I said it was.

It is an inexpensive way to set up a 401K for a small business. If you have employees, you have to match 3%. All that was correct that I told him. You cannot put as much into a simple IRA as you. You can a solo 401K, but Jay, the solo can only be if you have only yourself and your spouse. That's right. Only the owner and the spouse. But you can't have any employees with solo, but you can put more in it.

That's right. So if you're a high, ultra high income earner on self-employed 1099, no employees, and you max out your both of you match out your Roth IRAs, you can also do the solo, which will get you way up there then. I mean, you can put like... Up to 72,000 is the contribution limit. With matching yourself and doing all kinds of other gyrations in there to get it to work. Yeah, okay. So there's two types that'll work for you. Solo and simple.

They are a little different product. But you can learn about both of them from a SmartVistor Pro, and you can find your SmartVistor Pro at Ramsey Solutions.com. Gregory and Kimberly are on the debt-free stage in the lobby of Ramsey Solutions, which can only mean one thing. Where are you guys from? Bay City, Michigan. I love it.

And how much debt have you two paid off? About $300,000. I love it. How long did it take you? 72 months. 72 months. And your range of income during that time? About $180,000.

Okay. Cool. What do y'all do for a living? I'm an occupational therapist, rehab director. Awesome. And I'm an electrical manager at a pickle plant. Great. I love that.

Very cool. And I'm guessing with that length of time and that amount of money, where are you all from again? Bay City, Michigan. Which is near what? Two hours north of Detroit. Okay, cool. All right. I have something in mind here when I'm thinking about 300K of debt.

What was it? Must be your house. Well, we had about $70,000 in consumer debt. Student loans, credit cards, leased cars, silly things. And our house. I know it. And the house. And the house.

And the house. And the house. Baby Step 7. You are debt-free, everything. I'm looking at weird people. Yes. Look at you guys. Way to go, y'all.

Excellent. So what's this house worth? $275,000. I love it. And how much have you got saved in your next-take so far? About $68,000. All right. We're creeping.

You were almost millionaires. Well, if you consider that we also have about $46,000 in liquid assets. You do. You are. Baby Steps Millionaires. Way to go, you guys. I'm so proud of you. So, wow, how old are you two?

I'm 58. 54. And you're millionaires. And you started with nothing. Surreal. How long have you been married? 33 years. Wow.

Congratulations. That is so cool. So very well done. So tell us your story. How did you get started on all this Ramsey stuff 72 months ago? Well, it actually started in 2014 when we moved to a town and in Ohio and wanted to start working on my retirement and went to a financial advisor and they said, well, you can't really invest until you get out of debt. It was at that point where I felt like

I was going to die at my desk. And in 2018, I met a guy where I worked and named Jeff. I called him 1F Jeff because I messed up. He's only 1F and is Jeff. I told him about my situation and he says, you need Dave. I said, who's this? Dave, Dave Ramsey. He says, I was like, who is this? Some snake oil salesman? What's up? Yeah. So I started listening to your show and I listened to it for about a year. And it took me a while to get on board. Yeah. Yeah, because a snake oil salesman takes a lot. I understand. I've got no issue with that at all. What changed your mind, Kimberly? We were just drowning in debt, living paycheck to paycheck and just tired of being stressed out all the time.

So I'll try anything. Yeah. Even Dave, yeah. I understand. That's how it happens a lot. I like it. I like it. Very cool. Okay, so at that point, sometimes you all had to have a sit down and go, all right, let's do something. Well, tell me about that moment. Do you remember it? We started selling everything. Her and I, we did agree to, it's time to do something because like you keep saying, we're sick and tired of being sick and tired. And so we, I think it was April of 2019, we said, it's time. Let's do it. And we started selling everything. As you said, the kids were concerned about they were next and just started pouring money. We had spreadsheets. We used the every dollar app. We just did everything we could to get out of debt. And December of 2019, I turned in a stupid car, a lease. And it was at that point where we're like, holy smokes were out of debt. Everything with the house. Everything with the house. Just in time for COVID.

Yeah. Yeah. And then last year, Last year, we decided to move out of Ohio and move back to Michigan. And we sold our house down there. It took a while, but it was about December 9th when we closed down our house in Bay City. And we paid cash for the house. Wow. Wow. We walked out of the title office, which blew my mind.

It only took a half hour. Yeah. Yeah, I bet. I looked at us like, we're dead free. Completely debt free. Yeah. It was just, it was. We're in Baby Step 7.

What is this? And who pays cash for the house? You do. It was amazing. Wow. It was insane. Exilerating. Free.

Congratulations. How's it feel you'll have no payments in the freaking world? It's awesome. It makes the monthly budget a lot easier. Yeah. It's pretty simple now. So what big thing, Kimberly, are you guys going to do to celebrate that you have no payments in the world in your millionaires? We came here.

Yes. To do this. Y'all are people of simple taste. You are. No, seriously. You're going to go on a trip, buy a car, what are you going to do? You need to do something. Look for another sailboat.

Yeah. A sailboat. Bay City. Yeah. I love that. All right. So you have a little one? You need a bigger one?

No. No. You sold it. So you got to replace it. Yeah. We sold it. And when we moved out of Ohio, we sold the sailboat. Okay.

So what's the budget on this sailboat? Yeah, about 16,000 maybe. Okay. All right. That's nice. Very nice. I love that for you guys. Good for you. Congratulations. And I got to tell you, it will glide on the water better than that one with payments. Even the one we sold didn't have payments. Okay. All right. It's just helping you get out of the other payments.

A lot of people would have taken the 275 from the sale of the house and used it as a down payment on a bigger house. No. How did you walk us through your mentality there? Last kid was out of the house. We were empty nesters. So we went from four acres and a huge house down to a very simple, you know, 1,200 square foot, easy to take care of.

Half acre house. That made it a lot easier. Yours all yours. All ours, yeah. Yep. Wow. Way to go. Excellent, guys.

I'm proud of you. Who was cheering you on as you went? Our kids, mostly, and co-workers from time to time, you know. Yeah. the guy that recommended Dave. Jeff with 1F. I wish I could find them. I would buy him a drink or something.

Yeah, amen. Well, congratulations. We're very, very proud of you. And we really appreciate you coming all the way down here and sharing your story. And I can't wait to send us pictures of the sailboat. Yeah, okay. Yeah, that's very cool. Good for you all.

You get to your living the dream, man. That's fair. That's how it works. Well done. Gregory and Kimberly, Bay City, Michigan. Quite a journey. 300,000 paid off over 72 months, debt-free everything, house and everything, and in the process, become baby steps millionaires, making 180. Count it down, let's hear a debt-free scream.

Three, two, one, we're debt-free. There we go. So good. So good. Oh, man. Hey, you know you're serious when you sell the cellboat. You know you're serious when you take the 275 and buy a house and cash. Mm-hmm. and move down.

Go down in house to make something. Well, the kids are gone. Yeah, we don't need the, yeah. And don't have to keep up the upkeep. She's right about that. You spend hours researching before making a major purchase like a home or car, but it's also a good idea to put in the work searching for the right insurance coverage. To protect your biggest assets, I recommend using Ramsey trusted pros.

Whether you're looking for car, home, or any other type of insurance, Ramsey trusted providers have been coached and vexed. vetted to serve you like we would. Find what you need at ramsysolutions.com slash insurance. Buying or selling a home is a big decision. Last people sold their house and changed cities and moved down. You got to make decisions carefully about that. That's a big one.

House is one of the biggest transactions you'll ever do. And you need a high-quality, high-octane, high-protein real estate agent. If you want a Ramsey trusted agent, go to Ramsey-Sulley-Sulles. If you want to learn more about the market trends, you can go to Ramsey Solutions.com slash market or click the link in the show notes if you're listening on the podcast or on YouTube. Our scripture of the day is Psalms 14310, teach me to do your will for you are my God. May your good spirit lead me on level ground. Henry Ford said the only real mistake is the one from which we learn nothing.

Love that. There we go. Ben is in Raleigh, North Carolina. Hi, Ben. How are you? Better than I deserve. How are you doing? Better than I deserve.

What's up? The question, or need some help. Really help in question. I have a issue trying to get my wife to agree to a budget. The way things are is that she will look at money in the account and look at it as a way of, there's this amount of money, this is how much I can spend. And I've been struggling.

I've been, the money in the account has always been causing problems as far as trying to. Okay, your phone's breaking up. Can you get where you can speak directly into it and keep it clear? You hear me now? I'm sorry. That's okay. Try again. So your wife thinks there's money just because there's some in the account,

and you're having trouble getting her to understand. don't have all that money because some of it's got to pay the electric bill next week. Correct. So what I've done is caused problems in the past. So what I've actually done is I've pulled money into the account, to one account to make sure the house gets paid. But we're constantly running into issues with money being left in the primary account. Okay. So let me stop you for a second.

How long you all been married? We've been married for 14, just under. 14 years. Oh, gosh. And how old are you guys? I'm 58. She's 42. Let me tell you. So why does a 42-year-old woman not grasp the idea that we have bills to pay? Right. She does. But anything outside of that is an open invitation to spend. No, it's not. She's a 42-year-old grown woman. She's not a four-year-old. I agree with you completely. I agree with you completely. Okay, so why when you look at her and say, I need a grown woman to join me in my marriage and join me for our household good. And that's, you can't spend like you're in Congress.

We're going to write down together where the money's going to go, and you and are going to stick to that. And if you can't keep that contract, we need to sit down with a marriage counselor. I agree. Let me give a little bit more of a backstory. So I did lose my job, probably about a year and a half ago. and that put a lot of financial burden on her. Since that time, I've got the job.

He's gone through. I'm sorry, what financial burden did it put on her? She was the only one working? She was the only one working. No, it put a financial burden on the household. Right, because her job remained the same. So there's no financial burden, other than the household, had less income

during the fact that one of you weren't working for richer, for poorer, in sickness and in health. That does not give you a... reason to overspend, quite the opposite. Are you back to working? I'm back to working. Are you making what you were making? I'm actually making more.

Good. What do you make? Dents are stabilized. What do you make? I make roughly about $125. What does she make? She makes around about $35. Okay.

So let's start fresh. Here's how the conversation needs to go. Honey, we've tried to work on this together several times. I'm very concerned and I'm really worried about our relationship, our marriage, and our future. And I need desperately to get closure on our money. If we put all of our money in one account and before the month begins, we both sit down and we both have a vote and we both decide where there's $150,000 a year, $160,000 a year is going to go. We're going to decide this month.

Here's what our take-home pay is. And every dollar is going to have an assignment. Every dollar is going to have a name. You get a vote. I get a vote. We're going to come to a conclusion that every one of those dollars is allocated. We're not going to spend anything except what you and I have decided is good for our future. Can you help me and can we do that together?

If she says no, you don't have a financial trouble, you have a marriage problem. Okay. If she says, yes, now put your big girl pants on, your big boy pants on, and both of you sit down like two grownups and make adult decisions without any shame of I've lost my job or somebody had stress because of that. Well, we all had stress because of that. Hello. But that's in the past. Today we make $160,000 and today we need to get out of debt and become wealthy and outregister. generous and have a wonderful life, but that's not going to happen by accident. It's going to happen

when we sit down. Both of us have a vote. Both of us have a voice and we plan it out. What am I missing, Jade? I don't think you're missing much. I think that I don't want to say this, but I think he's afraid to challenge her and like push on this. You sound like you're a little too sweet. Yeah. Too nice. I'm a southern boy. Yeah. I think she can take it. I think she can handle you having. a very serious conversation when you're saying this can't continue. This is a detriment to both of us. It's a detriment to our relationship. And I'm not asking you to do what I say. I'm asking you to do what we decide together. And I think that she can handle it. And if she can't handle that,

then there's something else going on. And, but this thing of, I just do whatever the flip I want after 14 years of marriage. I'm 42 years old. There's nothing southern about that. That's just crazy. Yeah, because it wouldn't fly if you were doing whatever you wanted. I guarantee that. Yeah. And she'd be calling us going, how do I get my husband under control? My husband. I mean, it's like, wow. Yeah, there's, when you become an adult, you have to do the things that require adulting in your marriage, you know. You have bills pay. You have pay the bills. You have to work together. And here's the thing. You can't just do your own things. You can't. You can, you You can use the downloading of the every dollar app, and we're going to build this together

as a way to do the conversation. Yep. Because you're kind of starting to fret. This is a whole new way of us doing this. Instead of me being your daddy and little girl does whatever she wants, are you being my mommy? Yeah. And I get an allowance from you. Do it together.

I don't care what your mom and daddy did. I don't care what my mom and daddy did. I don't care what we did for the last 14 years. We're going to build a new thing going forward. forward, starting with his every dollar app tonight. Let's sit down together and both be grown-ups and both decide on purpose what's going to happen to this money and both of us push through. Yep. I agree. There's some relational breakthroughs when that happens. I agree because for him, it's going to have to be, he's going to have to share something with her

beyond dollars and cents. It can't just be, will you got to stick to the budget? You're not doing the money. He's got to share something that has a greater why behind it. It makes me feel scared when I see this. It makes me have a hard time trusting you when you react like this. He's going to have to share something that's a little bit of a deeper level when talking about the money so that she understands it and vice versa. The breakthrough at our house was when Sharon finally clicked that this was the best way she could get her voice, her vote counted. This is how she... The budget was a mechanism for her to have a vote that counted because she's dealing with Mr. Strong personality over here, right who just does you know just does it and then you figure it out right but that was that was like

i don't know 30 years ago right but um but that was still a breakthrough that's how she got a vote yeah with a strong personality and sometimes that's how you get the princess off the couch or the or the irresponsible guy to plug in and be a man yeah whatever whatever analogy you want to use on this but that's that's what a lot of people face ben it's not just you guys it's most people struggle in this area but if you can if you can't if you can solve for you for it, it's game-changing. That puts us out 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 to walk daily with the Prince of Peace, Christ Jesus.