The Ramsey Show - Debt Is Not A Problem Solving Tool - Financial Peace Is

Episode Date: June 17, 2026

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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 Studios, this is The Ramsey Show. I'm Dave Ramsey, Dr. John Deloney, Ramsey personality, number one bestselling author

and host of the very popular Dr. John Deloney show on Ramsey Networks. He's my co-host today. Open phones at AAA 825-225. Gabrielle or Gabriel is in Los Angeles. What's up? Hello, Dave. Hello, John.

A long-time listener. I'm 27 years old. I'm going to be 28 in November. I just got a job as a buyer slash planner. I'm making $65,000 a year before I was making minimum wage, like $17 an hour. I have two children. I always hear you say before. I got a PhD in stupid when I was younger.

I'm definitely trying to change my life around. I have about $60,000 in debt. And yeah, I'm just trying to figure out how to navigate that. Both my children, I'm not with, you know, their mothers. So I'm having to pay, you know, about $1,100 a month in child support, which I have no problem with. I guess my issue right now is starting to make, you know, going from $17 an hour to $65.

I know it's not life-changing, but for me, It is a big deal. That is a big deal. Congratulations. Thank you so much. Thank you so much. And, you know, it opened my eyes to, you know, like, maybe I can't have a future for a long time. I guess I was in my head that life was over, essentially.

So I guess now I'm having a brighter outlook, you know, listening to you guys and hearing other people's stories. I feel like it's possible. I have an amazing girlfriend. She's going to graduate in a couple years with her SLP degree. So I just want to plan our life. I want to get rid of all the debt that I have. You know, I want to marry this woman. I want to provide a good future for my kids and for myself.

And I guess, yeah, my question is just, how do I attack it? Is it possible, you know, to even get a home one day and, you know, do all this? It just feels kind of suffocating right now because it's just me. Sure. You're not suffocating. You're on a curve, man. You're excited. You've got a thing called hope.

It showed back up. Yeah. And so good for you. I think that was, I'm proud of it. At first, it was the whole. Yeah, I see a really, really bright future for you. You're asking all the right questions with the right urgency and the right belief. So, yeah, you're in good shape.

Yeah, I mean, as far as the money piece, sir, I would just tell you to follow the baby steps, and we'll help you. I'll send you a copy of the book of the Total Money Makeover and make sure you read that. Go over that with your girlfriend. And, you know, your first thing you do is get $1,000. And the second thing we're going to list these debts smallest to largest. And here's the weird thing. start paying attention to the debt and you quit borrowing money, you can make that debt go away.

It's just you weren't paying attention before. Exactly. I think that's another thing. It's like I'm blessed. My girlfriend is also, she's better at saving than I am. She works a part-time job and still manages to save more than me. So I'm blessed in the aspect of having, I'm more of the, I like to budget and do the numbers and she likes to actually do it, you know.

So I guess for me, though, like I got into a. So I think we balance each other out well, so I'm lucky in that end. Well, you don't balance each other out because you're not married, but you can coach each other, you can be cheerleaders for each other and share each other on until you're married someday. Let me give you a huge warning, okay? Yes, sir. When I graduated college, I don't remember the exact number. I think I had $20,000 or something by myself in student loan debt. I got my first big, fancy job, and I worked a bunch of extra.

I was a coach and a teacher, and so I could coach extra sports and make even more money. And I ended that year double, if not one and a half X the amount of debt I started that year with. Because I finally got this job. I've been driving an old beat-up car since high school all the way through college. I didn't say no to myself ever. And the big trap you're going to have to be careful of is you finally have a paycheck and you're going to want to catch up on all the spending you haven't done over the past few years. If you will hold tight for 24 months, you can change everything in your life.

Yeah. Just tear into this debt. I feel that way, too. The only thing is, like, for example, I was of the same mindset. Before I drove a 2005 Toyota Camry, it had like maybe $100. I got it for like $1,000 at an auction. It had maybe like $98,000 miles, so it was just preseason for the Camry. New, yeah.

Yeah, exactly. But I did get into an accident a month into my new job. So a couple months ago, my car got totaled. So I, you know, I wasn't listening to you guys as heavily. This has been a couple weeks where I've been every day I work just listening to you guys all day. But I had to get a, well, I got a car because I live a, I work a bit far. How much did you spend on this stupid car? 17,000.

Okay. That's not as bad as I thought you were going to say. No, no, no. So that's in your list of 60,000. Now, the first step of getting out of debt, honey, quit borrow more money. So no more of that. You're done. If you keep that car, that's fine, but you're going to have to now say beans and rice, rice and beans,

and the next time a little problem comes up, we don't solve it with debt. You suck it up, Buttercup, and you push through. You've got to lean into this now. Now's your time, and that's exactly what John's talking about. totaling a $1,000 car does not constitute purchasing a $17,000 car. These things are not on the same page. This is your emotions got out of control. So when you total a $1,000 car, you buy another $1,000 car.

That's what you normally do. But people don't. They do what you did, and that's a mistake. So, all right, hang on. We're going to send you a copy of the Total Money Makeover book and get you going. Taj is in Baltimore. Hi, Taj. What's up?

Hey, thank you for taking my call. Sure. How can we help? Um, I'm kind of, I'm one advice on how, um, I continue going through the baby steps and kind of managing my money moving forward. So, um, earlier this year, you know, my parents got divorced. And, um, now I pretty much got to move out. And, um, I have, like, a lot of credit card debt. And, um, I have a vehicle.

And between that and my vehicle and my car insurance, um, I just want to know the best ways that I can kind of prepare to pay. rent, you know, toward the end of this year and kind of move forward. How old are you? I'm 24. What do you make? I make $56,000 a year. How much car did you take on? Well, right now I'm in the lease.

I don't know. What's your stupid payment? It's $500. Good God. Okay. So let's talk about selling that lease car back and getting out of that lease and getting you a beater. Right. So right now my current payoff amount is 19,000 and it's worth about 16.5.

Yeah. And I was listening to your show recently, and I know that, you know, you could potentially go to a, you know, a credit, you know, like a creditor to get a loan to pay it off. I'm not sure how that would work being as though like I'm upside down right now. Well, you'd have to borrow $4,000 to pay the difference and sell the car. you got because you're in the hole you're upside down and so you got a $4,000 personal loan that's better than a $16,000 or $17,000 or whatever the thing is here and we don't 19,000 and then get you a beater and let's you know because you got to move out and stand on your own and 24 years old making $56,000 in Baltimore. You need to run those numbers go look at one bedroom apartments or two bedroom apartments with a roommate. How are we going to do this? and it's not going to be driving that car. Hey, George Camel here.

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real estate. We go into deep on the real estate stuff. We've only done that event of investing essentials two times. This is the third time ever to do it. We are changing the content a little bit, and we're going to go a little bit more into navigating wills, building a legacy, maybe even look at taxes a little bit. It's a couple of cool things you can do there. But tickets are $199. The next investing essentials, the third one in history, is going to be September 1 and 2.

It's George and me, and we're going to unpack my personal playbook and go through a bunch of the categories of investments. and so if you're very serious about the investing side of this discussion, then this is a great place to be. Again, $1.99. You can get your tickets at ramsysolutions.com slash events or click the show notes if you're on podcast or YouTube. Victoria is with us. She is in Seattle. Hi, Victoria. How are you?

Hi, Dave. Thank you for taking my call. Sure. What's up? Yes, I'm just a little bit overwhelmed. I'm basically getting over a divorce where I owe over, oh over like $20,000, and $14,000 of it is kind of pertinent. It was a personal loan. They took me to small claims, and their intention is to try to potentially garnish my wages.

And I was wondering what your advice would be if I should get a HELOC to kind of get out from under all this divorce debt. How is the divorce related to the small claims court? Well, the person loaned me. It was a friend. No longer a friend, really. But they loaned me the money because I just didn't have it. And the divorce was just, we had to just keep going back to court. He kept just taking me, taking me back to court.

And I had to get a lawyer. So they loaned me money. So you borrowed money from a friend to pay for your divorce? and then you haven't paid back your friend and now your friend is suing you? Yeah, I haven't paid it all back. I tried to make payments. So what do you make, Victoria? So currently I make $52,000, but I'm going to be starting to make $72,800.

How long ago was this divorce? The divorce finalized a year ago. Okay. And how long had you been? been have you been loaned this money? About a year and a half. In the last year, how much have you paid towards the $14,000? I paid like $1,000 because I lost my job, and I just, you know, I haven't been really making it with my, and that's what, you know, my old job, I wasn't making it.

It was just very sporadic income, my old job. How long have you had the new job, the $56,000 job? The $52,000 job, I started May 10. Oh, just the other day, okay. Yeah, and then, yeah, so I've been really struggling. I haven't. Well, there's a couple things. Obviously, a judgment is final in the state of Washington, where you are, and then they execute on the judgment, which gives them the ability to take a lien on

any assets, including doing garnishment on your wages in your state. Okay? Usually that takes a while. When was the judgment final in small claims? The small claims we had already previously mediated, and it was agreed that we were going to be on a payment plan, but now because I have... Because you didn't keep the agreement.

Now they're going to garnish you. Now they were going back. on the end of August. Okay. To have a hearing and then, but the person's intention wants to garnish my wages, but of course we're going to have a hearing about it. Well, what they want, and what they want is their money. I understand.

And for different reasons, you've not paid them their money. Yes, I understand. Okay. And so it's not that their intent is to garnish you. Their intent is to try to get their money back. And you've never paid them in a year more than $1,000. because you lost job, you had a bad job, you finally got another job, and you made an agreement. On May 10th you made the agreement?

No, May 10th is when you started the job. I'm sorry. When did you make the mediation agreement? A year ago. Oh, so they've been sitting around waiting a year for you to keep your word from the mediation. And now they lost patients a year later, and they're going to come. after you. That's fairly patient.

Okay. If I was going after your throat, I would have come sooner. Yeah. Well, I mean, I said, so that's why I'm thinking, should I just get the HELOC to just pay them? Yeah. I have no other. Yeah. That'd be a great idea.

Or better than that, do you have an attorney or you're working with this person's attorney or what? No, it's just pro se, just self. Okay, but does he have or she have an attorney representing them? No. Okay, so both of you just walked up before Judge Judy and did this? Yes. Oh, crap. Okay, and I'm guessing that it's real tense between the two of you.

I mean, I can try again. No, I'm guessed, answer my question. Is it tense between the two of you? Yes. Yeah, I would think. I would think. Okay. Because here's what I would normally do, and I don't know that it, I don't think it'll work here, is I would ask their attorney what they would accept if we just wrote them a check. If I go borrow the money on a HELOC and write them a check, what's the minimum amount they'll accept to settle this debt? If this was a bank, they'd take a quarter on the dollar. You could settle it for three or four grand. But this is a pissed off individual, so you may not get any discount. Okay. But yeah, if you have the ability to go borrow the money on a HELOC and pay, them? I would. They were there for you in your time of need. You owe them the money. You have the ability to pay them the money by doing the HELOC. I'd go get a HELOC. Because the other thing is,

this is taking a lot of stress on you. And when this person and this lawsuit and this mediation and all this garnishment is out of your life, you're going to sleep better. Would you agree? Yeah. Is there a possibility to go, is your credit in such shambles, that you couldn't go down to a local bank, local credit unit, get a personal line of credit for $14,000? I don't know. I can try doing that, but, like, I have other, you know, the divorce just really put me in a big hole,

so I still owe more than just the $14,000. What else do you owe, Victoria? I mean, I owe my credit card. I owe my old lawyer. How much you owe your old lawyer? Like $3,000. Because here's my fear You're going to treat your

Your helock Just like you've treated this Past friend And your past attorney And you're going to end up losing your house No, I'm a single mom I have, you know I've been just trying to hold on

You know I got that But if you take a helic out What you're doing is you're putting your house on the block That means you have to have to pay this off As fast as you're possible What's your home worth? My home is worth

I'd say about 350 And what do you owe? And I own about $2.75. Okay. And how much debt do you have? 14 and 3 to your lawyer, and how much on the credit card? About three. Okay.

And what other debt? And then I have like a student loan. How much? And I have... How much? How much is a student loan? My student loan, I would say, is about $15,000. Okay.

All right. I want you to put the divorce in your rearview mirror. I want you to get your fight back. I want you to list these debts out. I want you to take six jobs and attack these debts and clean them up as fast as possible. So much has been happening to you, and now it's time for you to happen to things. No more victim. You're going to have to be a victor.

Now, you're not a victim of the divorce. You're going to have to stand up and fight, girl, and fight your way through this, and you can do it. If you're waiting for the perfect interest rate before you buy a home or refinance, that moment may never come. That's why people should talk to Churchill mortgage, because rates move every day. And when rates drop, buyers flood the market, which means more competition and higher home prices. Smart buyers know they can't time the market. They move with a strategy. Buy the home you can afford now and refinance later if rates improve.

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This is a paid advertisement. The Churchill certified homebuyer program is available for qualifying borrowers and select loan types only. NMLSID 1591, NMLS, ConsumerExS.org, Equal Housing Lender. 149, Mallory Lane, Suite 100, Brent went into C, 37027. So if you have a pile of debt and no money, and life kicks you in the side of the head, now you've got a real mess. And bouncing back is hard, emotionally, psychologically, John, financially. And if you have an emergency fund of $20,000 and no debt except your home, and you have, and life kicks you in the side of the head, you're emotionally in a different place to bounce back because you don't feel unsafe.

You don't feel vulnerable. Like I'm about to be homeless. My check is getting ready to be garnished. This divorce set me back. This illness in our family set us back. job loss set us back this name name your tragedy name your poison uh but it's coming that thing is coming every time and there's you know being ready for it financially by being out of debt and having an emergency fund you know when there's an emergency hello it it does help it doesn't

it doesn't keep the problem from being there doesn't keep the depending on the extent of the tragedy, the extent of the event, how bad it was. But even then, people recover at different speeds from a nasty divorce, a job loss that was devastating, a death in the family, the death in the family, a whatever. I mean, those are the three things that come to mind. But, you know, so, yeah, my husband died. My wife died. We lost a child. We, you know, my company, I was making serious money, and they just walked in one day in corporate America, and they just cut my head off. Just fired me. I didn't see it coming. And or my husband of 23 years walked in and said he had a girlfriend, and we're done.

And I haven't worked in the workplace in, you know, 12 years. And so I don't know what I'm going to do now. And people recover from those things at different. speeds, different resilience almost. John, what is the, the reason I'm setting all that up is I wanted to ask you on the air. What are the principles if you're facing something like that? Where you want to be, I think, is within a certain number of months, you want to have that tragedy. It still hurts. It's still betrayal. It's still whatever it is. But you want to have it in the rearview mirror and be looking forward.

Other than, you know, but sometimes when I take a call or we take a call here, they talk about that thing that happened in such fresh terms that you think it was 10 minutes ago and you find out later in the call, it was six years ago. Right. And they're still living back there emotionally. What causes people to be able to move past the horrible thing that happens because it, granted, it's horrible. It's trauma.

Yeah. But how do you move past trauma? and get it in your rearview mirror as fast as is healthy. I like to think of it not in terms of getting past it as much as I'm just going to start taking action. If you lose a child, that will be with you forever. If your spouse walks in after 25 years and says, I got a girlfriend, that will embed itself in your nervous system.

You'll be on guard for that for the rest of your life. My goal in that moment is I don't want to pass that on to my kids. But I get to decide, and this is, This is honestly where a group of people, this is where a community, this is where a good group of friends, a good group of family members, even a therapist if you have to call somebody or a minister, this is where when you can't carry it on your own, people will walk alongside you and help carry the load. But I have to start taking the next right action. And what I'll find is after two months, after four months, after six months, this thing may still be on me, but I'm going to be stronger and I'm going to have moved down the road a little bit. It's when you just stop and it surrounds you like a fog and there's no one to help lift that fog. There's no one to shine a light in there.

And there's no action taken moving forward that you wake up two years, three years, seven years, 20 years. And it's as though it just happened to you because you haven't taken that step to start moving towards a new thing. And I don't know where this process happens in the brain. And I'll be interested to your take on this. But the Bible says out of the abundance of the heart, the mouth speaks. and so what I have noticed is is the language that we use is an indicator as to whether we're taking action and moving forward or whether we're sitting in the acid. That's right.

Yeah, yeah, yeah. Like, because the language acts like I'm still there and it was six years ago. Right. The language sounds fresh and the words you use. So do you consciously say I'm going to choose different words or do you just choose a different dance, a different posture and the words then change. Probably a little bit of both. I think it's a, I mean, it's a cocktail of genetics and life experience, etc.

I think that's the beauty of a show like this, is what you've been doing for so long is some people don't have people in their life to speak those words. Some people don't have wise counsel. Some people don't have a hand that can reach out and pick them up. And some people don't, I have a close friend of mine when she was pregnant with her third kid, her husband just up and said, I'm out, left. And I remember saying a few years later, I don't know how you did that. How, you know, she had to get on, she was on welfare for a while.

Now she's this many years later, she's got a great career. She's crushing it. She's remarried. Her new husband's awesome. But I said, I don't know how you did that. And she said something to stuck with me. She said, I had to. And I think there is a gap between I have to.

I got three miles to feed. I've got to do something. And there's this gap. And culturally, that gap has gotten wider and wider. I don't have to have to have to. Right? I can continue to stay complacent. I'm just not going to pay. I'm just not going to do this. I'm going to let these things go to collections. And I'll get this judgment against me. You'll pay the Piper at some point. Someday you're going to have to. But our culture is allowed that there to be a bigger and bigger space. And what happens is just end up basing in it. A literal survival. I have to. We don't have literal survival anymore. Yeah. The way that we're struggling with. I mean, that's how I felt when we went bankrupt. That was a life-changing tragedy experience. I lost everything. I've got a brand new baby, Rachel, a toddler, Denise, a marriage hanging on by a thread.

And people are like, so how did you get up and go to work? I had to. I have to. Especially about 30 or 40 years ago, there wasn't programs or wasn't, like, I have to write the second. There had to be money. There was a baby that wanted milk. Right. You know, there was a one in formula.

There was diapers. There was an electricity that had been cut off and didn't need to be cut off again. I had to go to work. Yeah, yeah, yeah. That day. Yeah. I didn't file bankruptcy and then take a week off and mourn the tragedy that I'd been through for the last two and a half years prior to that. I didn't, PTSD, I didn't have time for. I couldn't spell it.

Well, I think the bigger thing is wherever you find yourself, most of us believe, and again, it's another cultural lie. It's the air we breathe that in the right time or when things feel right, then I'm going to go. I need to get my confidence back and then I'll go do X, Y, or Z. And the fallacy there is your body gains confidence through action. You begin to go look for... You don't think your way into confidence. You can't. You don't think your way into being well. Confidence comes from competence.

From doing. You begin acting well and your body starts to stand up taller and you start to be able to breathe a little deeper. You don't sit in your house and say, I just want to, when I can breathe better, then I'll go. I'm going to download an app and start doing breathing exercises in my living room because that's what I got to do right now, right? And you begin taking tiny, tiny, tiny actions. And, man, you look up six months, seven months later. Some of those things will never be in your rearview mirror, but they're not going to be so suffocating. They'll be with you, but you'll be taking action moving through it.

Now, there's always going to be a tender spot where that scar is. Oh, yeah. Oh, yeah, yeah. I mean, I was 28 years old, so that's almost 40 years ago. And I can hear someone's voice here on the air. and it takes me my body back to there. I can feel it. My boat starts tightening up.

Oh, yeah. I mean, I remember that. And I talk to any number of parents who lost a child 10 years ago, 20 years ago, within 30 seconds, they'll be in tears again. That will be with you. But I'm going to take the next right action. I actually like what our buddy Jocko says. We're talking about service members that were under his care that he lost. I got two lives to live now.

I got three lives worth of laughter, three lives, worth of adventure, three lives worth of giving and generosity. live now. But it's taking that responsibility and saying, I'm going to, I'm going to head this way. The answer to the overall thing is action. It's action. Instead of paralysis. Take action. And if you can't take action, get someone to reach out and take somebody's hand and let them pull you towards action. That's right. Let me tell you what I get asked all the time. When should I get term life insurance? How much do I need? Is it affordable? Those are the right questions to be asking. So let's take a quick review. The fact is, term life isn't a baby step. So if anyone is dependent on your income, you need to have 10 to 12 times your income in life insurance. Now, and most people are surprised

by how affordable term life really is. Even if you're not in perfect health. Look, I understand the hesitation, since most insurance companies make it more of a hassle than it needs to be. Not at Xander insurance. They're not an insurance company. They're a broker that works for you. That means they'll shop and compare the top term life companies to find the most competitive options on the coverage for your family. For almost 30 years, I've recommended Xander for straight answers, competitive rates, and coverage that actually protects your family. Call 800-356-4282 or go to Xander.com for a quick and easy quote. That's zander.com. Kenneth is in Richmond, Virginia. Hi, Kenneth. How are you?

Hey, good. How are you? Better than I deserve. What's up? Yes, sir. So I wanted to call and ask you guys about opinions on refinancing some medical school loans in order to pay them off quicker. This recently graduated medical school, and I'll be starting a five-year residency here next month. I have about $100,000 in loans, and I would love to be able to pay them off from the next five years. What is your residency in? I didn't know. I didn't think residency is over five years.

It'll be an orthopedic surgery. I was going to say you're going to be a fancy pants, huh? Good for you. Yes. There you go. Thank you. So what do you make during residency? I'm sorry, what was that?

How much will you be making as a resident? Oh, in residency, I'll be making about $68,000 to start. I also have an additional about $15,000. military disability compensation each year as well. Thank you for your service. Are you married? Thank you. No, sir.

Okay. Okay. So we're dealing with $85,000 income with $100,000 in debt. And so $20,000 a year does that in five years, right? Yes. Correct. That should be doable. A single guy who can't do anything but work all the time?

You haven't got time to spend the money. Now, the trade-off to that is being able to contribute to my retirement as well. No, hold off on that. No retirement until you get student loan cleared. Okay. Put 100% of any free money you can get your hands on the $100 grand. If you can get done in three years, that'd be great. That's 33 a year.

You probably could do that. Right. If you could get done in two years, that'd be 50 a year, and you lived on beans and rice and live like a college student. Right. Hmm. That's a thought. Yeah.

The more intense you are, the deeper you sacrifice, the faster you get out. That's how the math works. By the way, 100% of your doctor friends are going to think you've lost your dadgum mind. Okay. Because they're all stupid with money. Yes, sir. Musicians, doctors, and sports figures.

Bad with money. By and large. Okay. Stereotypically. Not all, but stereotypically. So, yeah, anyway, so don't listen to other people in the medical professional what to do with money. It's a bad place to get advice. Get advice from them on orthopedics, but not on money.

How old are you? 28, almost 29. All right. Can I paint you a picture real quick? You at 34, you don't owe anybody any money. you're a board certified orthopedic surgeon heading out into the world making 600 making yeah half million dollars and you get to keep a hundred percent of it because you've got you've got attendings that you've got supervisors who are still paying off their student loans don't you yeah yes don't be one of them be thirty four years old making a half a million dollars to start before you end up buying your own practice a few years later and keep a hundred percent. of your money based off decisions you decided to make at 29. Yeah.

So I would say sit down and map it out in detail, but 24 to 36 months, I'd be clear of this, and then we can talk about saving towards retirement and or saving towards anything else. And your military service is what's done this for you, where you're getting out with only 100. And now you're in a position to clear that because you've got some income from the military service and you've got a great resident. and obviously you're bright. So just apply a system to this, like you were prescribing this to a patient.

You say, okay, either you do the physical therapy or you'll walk with a limp. You get your choice. So do the physical therapy, right? And that's what John and I are saying. Do the hard stuff now so that you can walk properly later. And I'm trying to find a metaphor of the fits. No pun intended for the orthopedic surgery. No, I was a pun totally intended.

But hey, I think that's the third call this hour, Dave. Whenever you get that first big paycheck, you cross that first big finish line. If you can hold tight, you set yourself up forever. And, man, I've lived it. I get it. You cross that finish line. And it's like crossing mile one of a marathon. And you just want to be so happy that you run a good one mile time, you got to keep running.

And, man, if I could tell anybody whether you're just, graduating from med school, head into residency, just like that caller in the very first call we took, that young man who has been down on his luck, he got a job, making 65, which for him is a million dollars. If you can just hang tight and consider future you at five years down the road, 10 years down the road, man, you can set yourself up forever. Yeah. So the deeper you can cut, Kenneth, and the less you can live on. Make a game out of it, you know, and say, I'm going to set this up for 24 months, and it'll be like holding your breath for 24 months.

And then you can excel after that. You can start retirement. You can start a lot of stuff. Build your emergency fund up. You can do, you know, do a lot of stuff once you're clear of that. But if you tinker around with these student loans people, you end up keeping them like you think they're a pet. And you look up 15 years later, and your student loan needs a shave. I mean, it's ridiculous, you know.

So it's a problem. Alvaro is with us in Kansas City. Hey, Alvaro, what's up? Hey, Dave. Hey, John. I'm grateful for this call, and just want to say thank you for answering. Well, thank you. How can we help? Yeah, so this is where I'm at. I make 160. My wife makes 90. So 250 grows. Wow. We live on about half our take home after taxes, tight in 401K. Wow. So we save about 6K a month. Wow. Our house is worth $3.50 with $119 left on the mortgage at a 3.5 APY.

And my previous plan was, let's just throw all the cash, be completely paid off by October next year, and then save up about 120 and two years to move into a new house. What's happened since then is that one street over, someone got shot and killed, and about a year and a half prior to this, there's been other shootings. In a $400,000 neighborhood, they're shooting up and down the street in Kansas City? Yeah, it's a busy road. And so it's not the neighbors, thankfully, but it's just people randomly walking at night. That's strange.

Okay, because this doesn't sound like it's in the hood or something. No, no. Yeah, so. So you don't want to live in a shooting gallery, so you're going to move, okay? Yep. But the plan was first, you know, paid off, completely. save up again, but now what I'm doing is I'm just saving for that next down payment, and we wanted to keep this home as a rental long-term.

Oh, not now. If you don't want to live there, why do you want to own it? Right. That's not an investment. I mean, you don't buy investments where you, oh, the neighborhood's going down. They're shooting up and down the street. That's a great place to invest. No.

Yeah, I would Paul. I would pause. The only thing holding you. back brother is you have this fantasy that this was going to be a rental house. Yeah. If you can let that story go, you're free. Sell it. Go buy your house, pay that house off, and then save up some money and go buy you a rental in a neighborhood that they don't shoot down the street. Okay. So do you still think I should wait and pay it off, pay down my mortgage? I thought you were going to, I thought you were unsafe and you were going to leave. Yeah, I put a sale sign in

the yard this weekend. Okay. If that's what you want to do, I mean, is it unsafe or not? Yeah, so that's a weird thing. I feel like there's been these pockets of unsafety, but it generally feels safe. Are you married? Yep. Does your wife move? One year old daughter. Eventually, yeah.

No, does she want to move because of this? Yes. Then move. Move. Okay. Yeah. I'm just telling you what I would do if I was in your situation. Absolutely.

I'd be out of there. But for the same reasons that you're not going to live there, you don't. keep it as an investment. I don't, I don't buy investments where they shoot down the street. It's not like, no, that's not going to go up in value. You're not going to get great return and great quality renters. What kind of renter are you going to get where they shoot down the street? The Cokehead, man. I mean, that's no. Thank you. 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. $100. 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's credit union. You get a high yield savings

account, a no-fee checking account, and the Ramsey B-Weird debit card. Go to fairwins.org slash Ramsey to learn more and make the switch today. That's fairwins.org slash Ramsey, insured by the NCUA. Welcome back to the Ramsey show in the Fairwinds Credit Union Studio. Ramsey Personality, number one bestselling author, is my co-host today. Jessica is in Austin, Texas. Hi, Jessica. Oh, are you? Better than I deserve. What's up in your world? Yeah, so I have been married to my husband, 16 years now. We have four kids. I'm contemplating if we should divorce or not.

We are completely drowning in debt. Our mortgage is in forbearance. He hasn't filed taxes in three years. It's just like snowball one thing after the next, right, like $48,000 in debt. I don't know what to do. What do you make? I make about $30,000 a year and work at a school. What does he make? Well, he's been out of work since December, and he told me he was leaving in March to go out of state to work with some friends,

and he really hasn't sent me anything. Is he still gone? Yes, he's still gone. So if behavior is a language, has he told you through his actions, I'm leaving you? Yeah, I mean, in March, we went to our marriage counseling session. We've been going for six years. And after about five minutes of me talking, he ended up leaving. and told me he was done.

It sounds like he's followed through on that. He left you. He's left the house. I agree. I agree. But then he flew home last week to see our kids for their birthdays and basically was like, I still love you. I don't want to get a divorce.

But then he left again. And he's been gone for a week and half now. And I've only heard from him once. Yeah. I hate this for you. I think it's just. It sounds to me just as a neutral third party guy. I'm just a dude on the radio.

It seems really clear to me what's happened. Right. And being home for a couple of days or one day, seeing the kids, then being excited, he got home. You seeing him kind of surprised. I can even go with him that he liked the idea of that. Right. But his actions are not of a man who wants to be married and build a life with somebody. His actions are not of somebody who wants to be a present father.

Is he sending checks? No, he didn't send any money. No, he hasn't sent me. Yes, I think it's metabolizing this awful, heartbreaking truth. He left you. Do you have any idea what he makes? Nothing, I don't think. Well, right now he's not really making anything.

He told me that he and some friends out of state wanted to start up their own company and basically all the money that they've been making has been put back. into the company. He said that he paid off a few bills in March. I'm sorry, not March, in May, but in reality, I paid like 90% of the bills in May, and I've paid at least a quarter of them for June, but I can't really afford to continue to pay anything else. Our mortgage is put into forbearance. We owe $10,000. What's your home worth? Well, it looks like we still, 0,403,000. We bought it for 421, but what's it worth today? The realtor came by and pretty much said because there's a ton of unfinished projects,

he could probably sell it for 430, but he said if we get all the projects done, he would basically get out of it even. Yeah, but I, with having that realtor over discovered that only his name is on the house. I don't think that latter's in Texas. Yeah, I'm not sure. I think you're going to be okay on that. And you've been married 16 years. I think you have marital rights to that house.

Yeah. And let's back up a little bit. This is not a person of integrity, your husband. He hadn't paid taxes in three years. I promise you he hasn't told you the truth about everything over the course of 16 years. Is that true? Yes. Okay.

So I wouldn't believe him. therapy for sexes. Yeah, I wouldn't believe him if he suddenly started telling you he's got to reinvest all this money. Here's the truth. You'd have no idea where he is and what he's doing. Exactly. And so all you can deal with is you. The only person you can control right now is you.

And I feel like you're attached to a weight that's pulling you underwater. And the weight occasionally says, I want to swim. But you're the one paying the price for that right now. Yeah, I mean, we're completely trauma bonded. he got shot in 2022, and it completely shook our family. I got that. I got that. Listen, listen, be very careful.

Be careful of what I would call therapy speak, internet speak, all that kind of stuff right now. The bottom line is your husband's not been home and he's not sending any money home for a long time after he walked out of the marriage counselor's office and said, I'm done. And you got four kids who are hungry. That's real. Yes. Right. That's not on TikTok. That's real. That's real. Exactly. Yeah. And so the question before you is forget the diagnostics, forget the trauma, all that stuff.

The question you've got to ask yourself, and this is a hard one, what are you going to do now? Well, that's what I'm calling you for. I can't afford to leave. I can barely afford to take care of me or the kids right now. I can barely afford gas to get myself to go to work right now. You could live in a much cheaper place than that house. Oh, I mean, I'm going to have to. Yeah. Yeah. I know.

Yeah. And somebody's making the payments now, aren't they? No, it's in forbearance. No, forbearance is you make a payment and a half. No. We haven't made any payment. We owe $15,000. That's not forbearance.

That's default. Are you in foreclosure? Well, no, the paperwork that I have, it says forbearance. Okay. Forbearance is when you're making your payment plus some to catch up on your back payments. You are not doing that. You're not in forbearance. Okay.

Okay. You are in default. How long has it been since you all paid a payment? March. Okay. You're in default. You need to get this house on the market today. You're going to lose it.

Right. And then you're going to get... How do I do that? How do I do that when it's in his name? Because I had two realtors come over and they both told me that all the projects need to be done. You're not going to do the projects. You don't have any money and you don't have anybody to do the projects. So you need to put the house on the market and you need to sell it now.

And you need to call him and tell him we're selling the house and that I'm having a divorce, and I'm having divorce papers filed on you. That may be the only way you can get your name on there is through divorce settlement. I'm not sure there's any money. I don't care. I don't know if you want your money and name on it. Right. It's not going to bring enough to cover the bills.

And if it does, you know, we'll argue about it then. But if she puts on the market and he says, I don't want to sell it from afar, can he do that if he's just only name on there? That'll be up to her divorce attorney. Right. Okay. To convince him. Yeah, you may have to get a decree. He has four children.

And by the way, there's child support due. And probably alimony. I don't know if they do alimony in Texas or not, but I know they do child support. And so child support doesn't care if you want to reinvest back into your company. Yeah. The law doesn't care. It says you have four children that need to be fed. That's what it says.

And since March, that ain't cool. Yeah. That ain't cool. And Jessica, can we say, I hate this for you, man. I hate this for you. Yeah. Gally. Daddy needs to be feeding to babies.

Time to do it, bud. So you don't get to go off and play with your friends in another land. It's not how this works. You made babies. You get to feed them. That's how a functioning society works. And we that are functioning will make you do that. And we should.

So, yeah. Jeez. I'm sorry, Jessica. I'm sorry you going through this. I think you're done, hon. Hey guys, George Camel here. If you run a business, your phone is basically your cash register. And every missed call is money you didn't know you lost.

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gives you next steps. It's like having an assistant who never asks for a race. So try Quo free, plus get 20% off your first six months at Quo.com slash Ramsey. That's QUO.com slash Ramsey. Always say hello with Quo. The rich get rich and the poor get poorer. Most of the time when you hear someone say that, they're trying to make the point that they are stuck and that all the opportunity is gone and capitalism has ruined their life. But if you actually think about that saying,

you could ask yourself, okay, if that's true, why is it true? The rich, rich get richer because the rich keep doing the stuff that got them rich, rich people stuff, like live on less than you make, stay out of debt, be generous, be in agreement with your spouse. This is what rich people do. That's how they got rich and they keep doing rich people stuff and it makes them richer. Poor people, there's two reasons people are poor. One is, I mean in America anyway, in the United States of America where poor people are some of the richest people in the world. But in America, there's two reasons people are poor. One is they're being oppressed and some jerk, some predator is taking advantage of them and holding them down.

That is real. That happens all the time. And in other words, if you drive down the poor end of town, you'll see payday lenders. tote the note car lots, rent to own, pawn shops. You don't see those in the rich into town because they wouldn't stay in business because rich people don't do that stuff. That's poor people stuff. That's people taking advantage of poor people, right?

The other reason poor people are poor is when I was poor. Actually, I was not poor. I was just broke. Mike Todd said that there's a difference between being poor and being broke. Poor is a state of mind. Broke is I'm just passing through. I ain't going to stay here. I'm going to do something to get out.

I've been broke a couple times in my life. So when I started and then when I went broke. So if you do broke people's stuff, you'll continue to be broke. If you do rich people's stuff, you'll continue to be rich. Let me tell you, if you're going to win at anything, what you have to do, you have to have a plan to win and execute on the plan. In money, that's called doing a budget, you lay out and you tell your money what to do because you want it to do something good instead of just pissing it away.

Thank God it's Friday. Oh God, it's Monday. Said all the broke people. Just take it easy. And they mean it. Don't take it easy. Get up off your butt and kill something and drag it on. Have a plan. This is where the every dollar budgeting app came from.

It is the detailed plan that will help you execute the stuff we teach here. if you want to do things on purpose, if you want to do rich people stuff. You can download it for free in the app store or in Google Play. Mike is with us in Austin, Texas. Hey, Mike, what's up? Hey, Dave, how are you? Better than I deserve.

How can I help? Yeah, Dave, I'm considering retiring sometime in the next six months to a year. Fun. And I spent some time, you know, learning to, invest the way that worked for me. I made some mistakes early on. And this will be the first time that I've, instead of contributing and having that monthly income for my monthly cost of living expenses, that I'll actually, instead of contributing to retirement or to an investment account, that I'm actually going to be withdrawing for my cost of living. And I'm wondering to see if there's

things that I can avoid up front, that I, lessons learned that I had to learn the hard way early on, when I was younger, when I was investing. How much do you have in your nistic? When I start with your... Without the house, about $7.8 million. Way to go, stud! I'm so proud of you. Oh, man.

Mike, I thought you were, after you set that up, I thought you were going to say you had about $30,000. So what is that $7.8 in? Is that all in retirement accounts? It's in 401K. It's in index funds and then some stocks and then a couple years of cash. Okay. All right.

Very cool. When's the last time you did a cartwheel? Because if you haven't done one recently, you should start. Way to go, man. How much of this did you inherit? None. Yeah, look at you. I'm so proud of you.

Well, done, sir. Well, you need to sit down with your financial advisor. I'm sure you have one and ask them what the tax-efficient withdrawals are. The least efficient. That's my big question. Yeah, the least efficient. How old are you? 55.

55. Okay. Yes. You're not going to be able to touch your 401Ks, as you know, until after 59.5. But you don't want to touch them anyway because everything you're withdrawing there is going to be ordinary income, as you know. And if you've got some index funds that have appreciated, your withdrawals on that will be at capital gains rate. So that's pretty tax efficient. You probably have some stocks that you could begin to liquidate that the gains would be at capital gains rate because you've held them more than a year.

And so capital gains rate, what's your income? About 350. Yeah. If you break that, I believe it used to be 400. I think it may be 450 now. Then you get into a 20% capital gain instead of a 15. But talk to your tax advisor, your financial advisor, but I think you're going to liquidate the non-401K stuff first. And you're not going to liquidate anything.

You're probably just going to take the income off of it, the growth. Yeah, I just want what I need to live on monthly. Now, how much have you got, say, in index funds? I would say about $4 million. Okay. And so, you know, the market is already up just under 10% for the year on index funds, okay? Right. which would be $400,000 so far this year, which is more than you need.

Right. Okay. So you could live off of a portion of the income created from the index funds easily and have very minimal taxes on that. Now, having said that, I want you to also sit with your tax advisor and your financial advisor and begin a strategy to start moving some of the 401K money on a statement. steady stream into Roth and pay taxes on it now. Okay. Because, how much is in 401k again?

About $3 million. Okay. So that's going to roughly, if it's in good mutual funds, it's going to double about every seven years. So when you're 62, that's $6 million. When you're 69, that's $12 million. And all of that is taxable at ordinary income. Right.

And taxable to your kids. kids at ordinary income. It sucks. And you've got required minimum distributions at 73, 72 and a half. That's right. Okay, RMDs. So because of that, I'm 66, are getting ready to be. I have years ago moved everything into Roth and went ahead and paid taxes on it before it doubled.

So all the doubling has zero taxes. And the inheritance has zero taxes. That's great. because Roth is inherited tax as well. And I don't have RMDs. Right. Because it's in Roth. So I want you to begin to move that $3 million at a steady pace and pay some taxes to do it to Roth because before it doubles and triples and quadruples, I want it to be in tax-free growth and all that doubling and quadrupling and so forth will be.

Dad gums, son. Okay, so if I'm Mike, 7.8. I think I would cash out stocks today and pay it all in one lump sum now if I could. Would that be dumb? No, it would not be dumb. Depending on one. I guess the capital gains might kill me on the tax sale. He's already making $400.

So, yeah, probably not be dumb because you're probably maxed that on taxes either way. Your RMDs are going to max you out on taxes. So, yeah. That'd be one-pins. He's got so stinking right. These numbers are so big. that it does, it changes the equations. Yeah, very cool.

Yeah, I think you might be right, John. But I just, I change everything to Roth instantaneously every time I get anything that's not Roth. And so I just go ahead and pay the taxes right then. Yeah. And so there's a case to be made to move the whole $3 million this year to Roth. And just bite that bullet. It's one ugly tax payment and you'll never make one again. On that.

On that money. Yeah, if you keep putting money in 401K, you've got to change that to Roth. Roth as well. And go with that. Your match is never in Roth, and so you've got to convert it to Roth at the end of the year every year. That's what I do. But yeah, wow. Well done, brother. Hey guys, health care is one of the biggest stress points in your budget. It's confusing, and most of the time, it feels completely out of your control. But there is a better way to handle it. Christian health care ministries isn't health insurance. It's a health-cost sharing ministry where Christians share each other's medical bills.

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because programs start at just $115 a month. And many families save hundreds of dollars a month, compared to traditional options. So if you are tired of feeling stuck, check out Christian Healthcare Ministries. Right now, CHM is offering new members a 50% credit towards their first month of membership. Go to CHministries.org slash budget and use promo code Ramsey. That's chmistries.org slash budget and use promo code Ramsey. Ramsey Show question of the day is brought to you by Y. Refi. If you've fallen behind on your private student loans, and don't know where to turn, Y-R-R-FI-R-F-I works with borrowers,

other lenders that won't, they won't help them. And they'll help you, Y-R-R-R-F-I will, find low-fixed-rate refinancing options. Go to Y-R-R-E-F-R-E-F-Y.com slash Ramsey. Today's question comes from Sierra in Mississippi. Sierra writes, I've been engaged for three years, but after finding out last weekend that my fiancé cheated on me, I called off the wedding. He had talked to me into financing our $8,000 wedding rings and now refuses to help pay them off.

The debt is in my name. Would it be smart to get another loan to pay off these rings if the current interest is really high? I have four kids to support so every cent that comes into my account matters. I just want to move forward. How do I do it? Eesh. Honestly, Sierra, here's what I would do. You did a big, hard, scary thing by saying I'm worth more getting married.

to somebody who's not going to cheat on me. So I'm not doing this. Good for you. Yeah, exactly. Good for you. Smart girl. The next sentence, he talked me into financing our $8,000 wedding rings. I would stop right there and I'd reframe this as I chose to finance our $8,000 wedding rings.

Take full ownership of every action you took. And then that reframes this whole thing. I made a big decision that I'm worth more than this. And that big decision also came with a financial cost because I chose to finance expensive, expensive wedding rings. And I'm going to be in charge of dealing with what comes next. And I get, man, you got four kids. It's just brutal. It's brutal.

But getting another loan to cover up another. It's just, you're just going to compound this issue. I would. Number one, we're going to sell the rings. Sell the rings and then pay the difference. That's what I would do. Yeah, sell the rings and pay the difference as fast as you can. Yeah.

Now, there's two other things I'd add to it. Number one, I don't know how long you've had the rings. We don't know that in this particular email. I'd swing back by that jewelry store, ask for the manager, the owner, if it's a local store, and tell them your story. And say, I have four children. The guys have bummy cheated on me. And you don't owe me anything, but would you help me? Mercy.

Would you give me some credit? buy them back, will you help me get out of this mess? Can I put them in here on consignment and get the most for them at a retail setting versus pawning them? You know, help me. And don't come in there acting like the jewelry store did something wrong. They didn't. They did what jewelry stores do.

They sold your rings and you financed them. And that's on you. But just ask the owner or the manager for some mercy, some help. I think you'll find yourself a listening ear. because they sell wedding rings and they might sell you another one someday. And if they take care of you, guess who's going to hear about it? Everyone you know, you're going to say nice things about those people. And you would, and you should.

That's thing number one. Thing number two is I don't know what all is going on here. But I'm pretty pissed at this guy right this second. And so I would – let's just pretend. I'm going to make something up, okay? She has four kids. These aren't a couple of 18-year-olds, okay? So I'm going to pretend he has some money, and he's a jerk and won't pay his part of the rings.

I'm going to pretend that for a second. And so then I'm going to ask a family friend that's an attorney to contact him and let him know that we're going to sue him for breach of contract because he breached our marriage contract when he cheated on me. and the settlement is $8,000. I'm just going to mess with him, just for the fun of it. I'm not really going to do it, but I'm actually going to make him think I'm going to do it, just to have some fun here.

But now, if he's a broke jerk and he's just out digging ditches or whatever, leave him alone. It's not worth of trouble. But I'm just going to pretend that he has a big old pile of money. He's driving a fancy car, and he don't want the hassle of Sierra being all up in his business. Between those two things, maybe we can add a little edge to this and get you out of these rings. Wow. One I go for mercy, the other one I go for the throat.

Go for blood. Please give me mercy. I'm going to kill you, by the way. I want to harp on this line. I just want to move forward, but how do I do it? That's good. Take action. That's good.

Take action. Take action. Don't sit and look at the rings. Don't keep them in your house. Get rid of them. Don't use his name in your house anymore. Lay out a game plan. And if you do this attorney thing, I'm half joking, I'm half not.

But if you did something like that, make it real quick and it's over and it's in the rearview mirror. Just see if we can get him write a check just for the fun of it. Because he actually morally, ethically, does owe this back because he's the one that breached the contract. Actually, if you really want to be technical about it. So I'm talking about the law. I'm talking about ethics. Well, do you have a contract if you shake hands on a... That's a contract.

On a It's not worth a paper It's written on. It's not worth a lot. It is a contract. You made a promise. And based on that promise, there was a financial transaction.

Yeah. And so there's damages. And I'm not an attorney. I'm just going to have some fun with it. It just happened to be $8,000. I'm going to make a legal case out of it, even if there's not one. I would say move forward.

Leave it alone. Don't say his name again in your house. That means I'm going to own that I sign my name to this financing bill. Quick as you can move on past this. Your heart's broken. I do love the idea of going back and look in the jewel in the eye. They may tell you to leave. What's the worst case scenario? You're going to get back in your car in the same situation. You're not out anything. But man, that's, it's worth asking for mercy.

That's cool. Chris Kirsten is in Orlando. Hi, Kirsten. How are you? Hi, Gabe. I'm good. How are you guys? Better than we deserve. What's up? Okay, so I just have some little questions. Me and my husband opened up a company about three years ago now. It has flourished into something we've never expected it to kind of, just dreamed of it too. I just want to know if I'm doing the right thing by paying him what we need because we do have credit card debt and stuff. car loans, excavator loan, that kind of thing, house loan. So I'm just trying to figure out if I'm getting my money.

Because everybody has an excavator loan. What in the world? I know. I'm guessing you got in the dirt moving business, right? We own a natural gas and propane company. So we install the gas lines for generators, cook stoves, water heaters. So you bought a backhoe? Yeah. An excavator.

Yeah. Okay. What did you pay for the excavator to dig a $400 ditch? We paid about $37,000 for it. We financed it obviously. Yes. We did it when we first opened up the company because to put some of these tanks in the ground, he can't hand dig them.

No, but you could rent one. Yes, but it was, we were spending about $10,000 a month renting one. No, you weren't. Ten grand? It was, yeah, it was about $600 a day. If you were spending $10,000 a month, why didn't you just pay cash in three months? Because we didn't know what to do with the money. But you still didn't know what to do.

Okay. So what's the profits on your propane tank business? So profit was close to $100,000 last year. Okay. And that's what you paid taxes on. That was the profit. Yes. And that was before or after you paid your husband a salary for running the business?

After. What does he get paid? I pay, we pay him about 1,500 a week. Okay, so another $72,000. So your household income from this business would be $172,000. Yes. And how much debt do you have? We have quite a bit.

We were young and dumb. We had credit cards. This week alone, we paid about $6,500 just in credit card debt. Just from the cash savings we've had over the years, just stuffing it away. We still have a remaining amount. I'll tell you what, hang on. I'm going to have to get the rest of this story because I got right down in the middle of it and I can't get to the end of it in the next 20 seconds.

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sign up for your $1 per month trial at Shopify.com slash Ramsey. That's Shopify.com slash Ramsey. It's Shopify.com slash Ramsey. All right. We're talking with Kirsten in Orlando. They started a propane tank business. And last year they made 100,000 profit plus paid him 72,000. So I make $172,000 on the business to the household.

And they've begun paying off debt, paid all. some credit card debt the other day. Now, total, not counting your home, Kirsten, what kind of debt do you have and how much is it? So we owe $57,000 on my car. We owe $26,932 on the excavator and about $7,000 left in credit card. Okay. And why do we have a $60,000 car? So my car's transmission was going out and I've always dreamed of having like a bigger SUV because I'm a sports mom. So my husband bought me a 2024 Ford Expedition map. Okay. Okay.

You need to say that sentence a different way, all right? We bought a car that was super expensive. Yes, we know. Not my husband bought me. You guys made this decision together. that we did and you and and I dreamed of putting myself into a nightmarish card debt okay no there's nothing in this it makes it makes it okay but you know one no one forced you to do this so anyway hey and you paid off 6,500 out of savings but if you've got a hundred and seventy-two

coming in uh what did you guys used to make before you started this business he worked full-time I've always been a stay-at-home mom. Our kids are 5 and 8. What did you use to make before you started this business? He made around about the same between 60 to 70. Well, now you make 172. This is not the same. Yes.

If you pull from the business. Of course we have trouble doing. We're broke and we bought a car we can't afford. And we're in debt. Of course we're pulling from the business. So what you do, does the business have any debt that you failed to mention? No. Okay.

So just the excavator. That's it. That was the only thing you bought for the business on debt? Yes. Okay, good, good. Okay. So what I would do if I was in your situation is you have no, the business is able to run off of cash flow and run the budget and able to buy the things it needs to buy. and it still nets you guys 172.

So you're going to pay taxes on 172 because you've got 72 set up as your income, and then you got 100 in profit. Both of those are taxable events in any given calendar year that that occurs. So I'm going to bring most, if not all of that, home, and I'm going to pay off this debt this year. Live on the 72 and be debt-free. If you're unwilling to do that for some reason, then you need to sell this stupid car. Okay.

The car is not stupid. The debt on it was stupid. You bought a car that was completely outside the picture. And the next time the business needs a piece of equipment, it needs to save up out of profits and pay cash for the equipment. Yes. Okay. So the number of times I have seen people in the construction world buy equipment, that they can't afford because they act like the rental fees are killing them.

And if the rental fees were literally $10,000 a month, that's $120,000 a year in rental fees. I don't believe you. I think your numbers are wrong. I'm positive your numbers are wrong. But it doesn't cost $10,000 a month to rent a backhoe from rent-all place because you don't need it every day all day long. You need it for a few hours to dig the ditch, dig the hole, and then you drop it back off at Sunbelt or whoever you're renting it from. And that's what people in the construction business do all the time instead of buying $60,000 back hose. And even if it did, Dave, what is the hesitancy of a small business owner?

Like, let's say, for instance, it was $10,000 bucks a month. And they bought a, or they bought a $37,000 backhoe. why wouldn't you as a small business we went into debt bought this depreciating asset we're going to hold off for four months and just with the money we would have spent anyway and just pay the sucker off

in four months in four months yeah I talked to small business owners all the time what is that hesitancy to pull the money out of the business yeah I don't know I don't know the idea that

well you have to pull it out because it's taxable so it's technically out of the business if it's an LLC or a sub s which it should be, it's a hundred percent taxable. And so it's out, even if it's sitting in the business account, Ramsey, my money here. If I make a profit here, just because I leave it in the Ramsey account doesn't help me.

I still got to pay taxes on it. Right. I mean, the federal government still comes and takes a chunk of my butt. And so, you know, I didn't really leave it in the business. It's just after taxes, there's some money still sitting here, but it can be sitting at home. It can be sitting here. Right. It doesn't matter.

The only reason I would leave it sitting here. is if I'm getting ready to spend it on something inside the business. Or if you have a retained earnings account or something. Exactly. But even there, like if my business has that kind of debt on it, it seems like I just pay it off. You cleared it. You would clear it in four months at least because if the rental fees were really $10,000, you should have been able to put $10,000, increase cash flow right on that thing and been done within four months.

Instantly, yeah. Yeah. And you've got to have that kind of discipline on these equipment purchase decisions because they'll catch up with you. there's two things that kill small business startups like this, and they're doing great. Congratulations, Kirsten. I'm glad. I'm happy y'all are doing so good, and that's exactly what I'd do. I'd live on 72.

I'd pull 100 out of there, and I'd be a debt-free in a year. Simple as that. And the next time you get ready to buy a car, you pay for it or you don't buy it. Next time you get ready by equipment, you pay for it or you don't buy it. Just live your life that way, and you'll have a lot simpler or a lot cleaner life. Now, then back to the other thing. The things that kill small businesses is the one thing that kills them is cash flow. Because they don't keep up with their taxes.

They don't keep their books. They don't do their quarterly estimates. And then they get in debt. It's the second thing. And both of those cause cash flow problems. Number one reason for small business failure is cash flow problems. Translation. Tax problem, not paid, and debt problem.

So they, 76% of the small business in America are carrying credit card debt on the business. Wow. They use the stupid master card to do a business finance. I mean, this is in 30-something percent. Yeah. So, and then wonder why I have cash flow problems, okay? Now, she didn't do that, or they may have, but they just paid off the $6,000 the other day. But I don't know if that's business or personal. But, um, so you got to stay out of debt. Then the second thing that kills small businesses is what's killing her. It grows so fast that you don't keep your accounting systems in place and your other processes and systems in place, uh, they don't keep up. You're still running it in the mentality of, of out of my back pocket. And that's what causes people to leave $100,000 laying there because they don't know what to do. But the federal government doesn't care.

They've taxed that $100 and that $72 the same. Exactly. They've got their piece of it. So if you want to keep a piece of it in that account or this and this account, they don't care. Exactly. It's y'all just choosing to carry debt at your house and leave that money there. Exactly. Might as well take it home and pay it off.

Pay your debt. Pay your taxes and clear it off. But so success is the second thing. Rapid success. hockey stick growth up into the right that crashes businesses because they don't get quality people on their team and they don't put systems and accounting systems and overall systems and processes in place that keep you from doing this. You know, something like retained earnings, something like keeping up with your taxes and all those kinds of things. You've got to keep up with that

because you're just making money so fast and you've never seen that kind of money. Your eyes are kind of wide. You're in the street going, whoa, don't hit me with a car, you know. And it's like, wow, I can't, I can't, how can I mess this up? We're just, we got a warehouse full of cash back here. We're just stacking, stacking benjamins, right? And, but you can't out earn bad processes and bad accounting. It'll catch up with you. Well, and I've known some guys who got into construction who scratched and clawed for so long. And then when it hits, they can't say no to anything. Yep. Because they still live five years ago when they had to say yes to every job. And then they get way over extended. Get over your skis. Yeah. Get over your skis a big time. That's what happens.

And so, yeah, you guys got to catch up with that. It sounds like you've got a good business. It sounds like you're hard workers. Sounds like you're doing a good thing. But that's a couple of things. Don't be buying anything else unless you pay for it. Get this stuff paid off. And then get your systems caught up and really understand where you are with your taxes so that you don't get burnt.

Welcome back to the Ramsey Show in the Fair Winds Credit Union Studio. Elizabeth is in Grand Rapids. Hi, Elizabeth. How are you? Oh, I'm good. How are you? Better than I deserve. What's up? Quandry. My husband and I have been in our house for five years, and I'm on Social Security, and we have two separate bank accounts, and I'm afraid to put my Social Security in the bank because he won't pay the mortgage. Should I put my Social Security in the bank with our joint account? How old are you guys? He's 56 and I'm 55.

How long have you all been living like this? Did you say 66 and 65? 55, 55. How are you getting Social Security at 55? I'm disabled. I'm on disability. So you have SSI coming in. What's the nature of your disability?

Seizures and epilepsy. Wow. How long have you been facing that, kiddo? I found out back in 95 I was diagnosed, but 2020. 2015. Okay, and he is 57 and he makes what? How much money does he make? He's 56 and he makes $23 an hour and he's also on DoorDash during the day and he's he I mean I'm settled with the mortgage and he's not giving any. Why? He doesn't he said he's he's trying to figure it out that's all he gives me that's all he needs time to figure it out.

He's been saying that since he bought the house, and it's almost been five years. Okay. Well, while you're figuring it out, go get another place to live because I'm not going to let you stay here anymore. It sounds like you've made peace with this arrangement. It doesn't sound healthy, but if that's the world that you choose to inhabit, no, I would not put money in an account where he's going to spend it, and I'm going to get kicked out of the house. Okay. I mean, I'm hearing from my family that I shouldn't be paying the mortgage, and he should be because he's from a husband. How about both of you should be putting all of your money in the account, and both of you should be deciding what is happening to our money, which includes paying the mortgage on our house.

That's what normal healthy people do. Y'all are whacked. No, he is. No, you put up with it, which makes you whack. Yeah, I've been told that. And we almost lost the house, like, not even any. In fact, the year of COVID, we were on forbearance. And it was like, I left them twice.

Why would you be on forbearance? You had Social Security coming in whether COVID came in or not. I know. And you were the one paying the bill. Yeah. Why did the bill not get paid? Because he's the primary signer. No.

You're the one has paid the bill for five years, right? Right. So during COVID, why were you not the one paying the bill? Because I was with my family, and he was unemployed at the time. And after I pay the mortgage, I'm left with almost nothing. I know, but you're talking about your home, like, me and my two college roommates talked about our little townhome that we shared in college. Right, right.

Like, hey, man, I bought pizza, so you got to pay the light bill. And no, the water. I know. I know. How long y'all been married? 16 long years in September. I mean, so this is the world y'all have co-created together. And it sounds like it's annoying to you, but not annoying enough to leave it, right?

People told me to leave him. I know. We're not telling you to leave him. No. So, no, listen, there's not a good way for you to manage the situation that you told us about because the situation you told us about is a bad situation. There's not a good way to manage a bad situation. So the proper thing to do, and I don't think y'all are going to do it,

but if I wanted to say, all, Elizabeth and her husband of 16 long years are going to learn to work together, for the good of Elizabeth and her husband, and we're going to put our money together, and we're going to put our spending together, and that includes paying all of our bills. Who's going to buy the mustard? We're both buying the mustard. We're both paying the house. Everything goes in one pile, and we work that together, and we have good communication, and we talk about things. Y'all aren't anywhere near that. You're not even on that planet. And I don't know if I, I don't think I can get you there, but if I could talk you guys into it, that's what I would talk you into, because that's the only thing that there's,

is going to work here. Otherwise, you know, if you put your money into an account that he has access to, he's going to blow it and then the house doesn't get paid because you get to pay the house. But I don't know why you're tolerating this level of misbehavior that you use up your entire Social Security check to pay the house payment and your husband is contributing nothing to that. That is just not right. And so-

It lacks fidelity. I would have a duck fit. You know, you ever seen a duck have a fit? What's a duck fit? I mean, it's just, I'd have a duck fit. There'd be a problem. Next time you get mad in a meeting, Dave, I'm going to say, you know, that sounds like a duck fit.

Yeah, that's what it sounds like sometimes when I'm mad in a meeting. But yeah, but the, yeah, I mean, I'm not, some things need to change here, Elizabeth, and you are going to be the cause of the change or you're going to tolerate the lack of change. Right. One of the two. So far, you've tolerated the lack of change. And then you've got to decide if that's going to come. continue to be the script in your all's life. Matthew is in Pittsburgh. Hey, Matthew, what's up?

Hi, Dave. Thank you for all the wonderful work you do for everybody. Thank you and your staff. I really appreciate it. Thanks for taking my call. So I have a question. I have a question regarding just remaining healthy in my financial goals and how much is too much. So right now, collectively, we have about 280,000 debt. 210 of that is the house from a baby step two. I plan on having all the debt except for the house paid off by August of 2029. Hopefully, when the extra comes in, I can get more thrown toward that. And then the house paid off within eight more years after that and be completely debt-free by the time on 52. What's your household income?

About $140,000 a year. Okay. And you're talking about paying $22,000 a year? Yeah. Yeah. Why? Why not more? Well, we also started a small business because my wife's goal is to work from home. No longer works outside of the home. I'm sorry.

That's great. Does it make money? Yes. We started back in January and it's currently making about a thousand a month. Is that the hundred part of the hundred and forty five thousand? Yes. Okay, so if you make $145,000, why can you not put more than $22,000 towards debt? Well, some of that is going back into the business, so I had to... Then you're not making $145,000. Yeah, I was talking for us.

Is the business making a profit of $1,000 after reinvestment or not? No, no. Okay. We don't open a business as sucking money when we're in debt. This business needs to make money. now. She quit her job to spend money. No, we're not doing that. You should not feel uncertain about investing, and you don't have to. That's why we created investing essentials, a two-night virtual event where George Camel and I walk you through my playbook for investing and wealth planning. We'll

simplify everything from 401Ks and mutual funds to passing on wealth, so you can invest with confidence. Tickets start at $199. Get yours today at ramsysolutions.com slash events or click the link in the show notes. Emily is in Oklahoma City. Hi, Emily. How are you? I'm good. How are you? Better than I deserve. What's up? Good. So my dad passed away recently and he left me quite a bit of money. Thank you. and my fiance and I agree that it's my inheritance, but he's concerned about the financial imbalance between us.

And he came from divorce, and that woman took advantage of him. And so I feel like he's kind of like operating out of fear. So I'm trying to figure out what fairness looks like in our marriage and what your advice would be. A pre-nup. Yeah. So we have that. We have that going.

And then what does the pre-nups say about the future growth of wealth, not the current state? So I'm not sure. I've met with the lawyers. Oh. They're going to, we're saying that the trust that my dad has left is mine. I'm going to be creating a trust where all of this is going into. Okay. And I guess from his side, he wants to create his own trust.

And he feels like he needs to catch up. Like he's not... No, he doesn't. He can't catch up. I know. He's going to do something stupid trying to catch up. How much money did your dad leave you? Over $5 million.

Yeah, he doesn't catch up. Yeah. So the trust just sits over here as a third thing. There's you making money and you all build money together. There's your husband, future husband making money, building money together. He doesn't need a trust. He doesn't need money. So he does a little bit.

does anesthesia, so we have pretty good income together. So our incomes is our incomes, and we share those, and we share what we do with those going forward. He does not need a trust, and he does not need to catch up. The trust is sitting over here to the side. The two of you build a life together with your incomes. I wouldn't fool with that in the thing, and I would let the trust, you know, he has no access to that in the event of divorce, but anytime you get ready to use money, you're going to use it for us. Yes. You know, and so if we decide to buy a lakehouse later for, you know, for a million dollars,

and this trust has grown to $10 million, and I pull a million dollars out and buy us a lakehouse, that's fine. The lake house is in the name of the trust, but we are going to use it for our family, our kids and our grandkids and whatever. I'm making up something, okay? But you can use some of the trust money for the benefit of the family, and the stuff still leaves, still stays in the name of the trust. And so the money, the $5 million and any growth it turns into stays yours.

But keep it over to the side and then y'all just combine everything else and quit trying to be, you know, like he has to catch up. Yeah, that's it. That's ego talking. Yeah. I think it's more so like if we were to get divorced, he – Exactly. He wants to have enough money for himself. I don't know.

No. He does not need a pre-nup. You do. Yeah. He doesn't have any money. Yeah. And he's an anesthesiologist. If y'all get divorced, you'll both be fine.

He's going to make a lot of money. We're going to make a lot of money together. You're marrying an anesthesiologist. He's making 400 a year, right? Around three. He should be making four. Okay. But here what...

He's a CRNA, so it's a little bit different, but they do the same job. Yeah. Oh, okay. Here what Dave said that's really important. There's this thing over here. But y'all are building a life together. Mm-hmm. Right?

The fact that that $5 million landed in your lap has changed the way you all were talking about your future. Yes. And it shouldn't have. Don't let it. Yeah. It sits over there by itself and then you guys still have the future you would have had together. One checking account. We have an income.

Right. Okay. I made all of the income in the Ramsey household for the last 40 years. My wife has not earned a dime, but we have a great income. And there is no pre-nup on that income. We don't have a pre-nup anyway. We started with nothing. But the point is, and we went back a couple times, but all that to say,

So he has an income that's bigger than yours, but that doesn't matter. That's not in the discussion. That would not even been a discussion had the $5 million not dropped in your lap. Yeah. And so it doesn't need to be a discussion now. You aren't competing with each other financially. No, we're combining everything except the five. And the five sits over here as a separate entity and it grows and we handle the investments on that.

And we may use some of the money to buy something that. the family, you and your husband and future kids, if you have any, all that kind of stuff, are all going to do together. That's all great. There's nothing wrong with that. But just, yeah, you need a pre-nup. That's all. That's all. Very simple. Don't get, everybody has a trust because we don't trust. No, that's not good. No, I don't, he doesn't need a trust just because he's an anesthesiologist. And he's not even a real one. He's just a CRNA. I'm kidding. Well, I mean, he got a $100,000 pay cut. while I was talking to him.

But yeah, the... So in many ways that that pre-up just, it builds a wall around that money and we know it's there, great, and we're going to move forward. If she's presenting this as, I'm going to have this money that I can spend however I want, whenever I want to, he has a right to feel like, hey, there's an inequity here. Like, I feel like you're building the secret life over here and then you come home to this life that we're building. you take across the wall to use for personal use is ours that's right there's hours yeah with the

exception of if you bought something like a piece of real estate like a like a like if you bought a lake house in the name of the trust pay cash for it and then we enjoy the lakehouse together that could still stay in the name of the trust but if you're going to pull money out of this to buy a car we're not putting the car in the name of the trust we're just going to buy a car right and that's part of the marital property at that point. But I, just keep this real clean and simple. Tell me, tell me this is very combined. So if Sheila, my wife got $5 million and we signed a pre-up to protect that money and we started talking about, hey, it would be awesome if we had a lake house. And she said, well, let's pull from this thing. I would want that lake house in our name. Why would we keep that lake house in that trust?

Because there was a trust money that bought it. Okay. And, um, you. Yeah. And, um, you. You know, if you're going to say the trust is hers upon divorce, then if you use some of the trust money for something, it's gone. Okay. So it's not in the trust name. It's gone. Okay. She would lose that lake house in the divorce.

Yeah. If you pulled it out and put it in both names or at least half of it, you know, that kind of thing. So, again, that's probably not the issue. Right. The issue is the, and two, sometimes we're dealing with people that are in later stages, and it's the second marriage. They got three kids each and maybe a couple grandkids each. I talked to a 60-something-year-old the other day.

And they both had a couple million bucks. Not big, not 20 million, but a couple million. And I'm like, okay, just you guys, you know, you can leave the marriage with what you came in with. And then you could just say all the growth is going to be combined. Sure. But they're both coming in with similar piles of money. And what I would be careful in that case is I don't want. one of your second cousins suing for my money from my kids if I die.

Exactly. This one, I can feel it would be a little bit messier, but he's going to have to exhale through the ego that he's not trying to compete with her. It's not, oh, I got to get mine now because you got yours. I got to get mine. Catch up is a bad phrase. We are building this thing together, and we have this awesome stack over here. Yeah.

What if Sharon thought she had to catch up after not earning an income before? She'd have to kill you. That'd be the quickest way to catch up. Don't tell her that. That'd be the quickest way. She doesn't listen to this. She doesn't elicit the show, that's true. That'd be the quickest way for her to catch on.

Yeah. Well, she is convinced accurately so that it is all half hers. Yeah. And so I told her if she leaves, I'm going with her. It's that simple. Hey, guys, Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now, you can get that same kind of help anytime.

with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to Ramsey Solutions.com and try Ask Ramsey today. That's ramsysolutions.com. Buying or selling a home is a high stakes proposition because it's usually the largest thing. own. One bad deal? Oh, it costs you tens of thousands of dollars. Make you think that car deal was a good deal. You don't want to overpay for your next house and you don't want to sell your current home for tens of thousands less than it's worth. Instead, you need a Ramsey trusted real estate agent who has the experience and the volume. They do a lot of deals. They can

guide you step by step. They're not a beginner. They're high octane, high protein. No expensive mistakes. Connecting is really easy. Just compare agent profiles, interview your top choices, and then pick the right agent. A high-octane, high-protein Ramsey trusted agent who has your best interest at heart for free. Go to ramsysolutions.com slash agent or click the link in the description. It'll put you right there. George is in Jacksonville, Florida. Hi, George, how are you? Better than I deserve and things could always be worse. I hear you. What's up? Well, I've had a couple of bad real estate deals back to back,

and it's put me in a bind on using business lines of credit and business credit cards. Not sure if I should just do bankruptcy to reset or if there's a way I can dig my way out of almost half a million dollars worth of debt. Okay. Wow, what a mess. What do you do for a living? Well, I work on cars, so I've got an automotive business, and it's pretty taxing physically, so I've been trying to get more real estate going so I can get out of the car business. Yeah, what do you make on your automotive repair business? Between my wife and I, our W-2 is about $105,000 a year. Okay, cool.

All right, and you got a half a million. You said real estate, so some of that mortgages or what? No, business lines of credit. So I had one bank gave me a large line of credit to do deals with. So I used that to buy the land and improve it. And then zero percent interest credit cards, which many of them are about to be out of their zero percent interest term. And the first deal, everything just went wrong. And then the second deal got held up because the first deal didn't close because everything went wrong.

So just got crushed by holding costs. So do you still own the land? I own one of the two. It's for sale, but the market here is taking a big dip, so it's dropped about $30,000 in value and still doesn't have a buyer. What does it worth? Before the market dropped, it was worth about $140. No, what's it worth today? What do you got on the market for?

It's on the market right now for $115,000. How did you spend a half million dollars getting a $15,000 piece of land? Well, the first deal lost about $60,000 because of delays and market drop and then using business lines of credit to support just getting by while trying to get that deal going. The automotive business fell behind. So that business has debt. I had another business that the manager scammed us. So that lost about $30,000 getting scammed on that one. So, um, that's still nowhere near a half a million dollars.

Yeah. Well, the, uh, you lost 60 on one. You got scam for 30. That's 90. Yep. And then had to take a, And you have a $130,000 piece of property that I assume you paid for out of this half million, right?

Correct. So that gets me to $2.20. I'm still $300,000 off. I can't find it. Yep. Well, one of it's a car. Uh, that's, uh, that's, my wife's car. It's about $58,000 for that. But that's obviously something that if we needed to,

we could dump that and get another car. But I had to take a personal loan just because I had credit cards from before that had piled up. And then there's a high interest line of credit that I had that went some bad stock market trades. What did you buy with all of this stuff? What did you buy? Well, there's about $50,000 lost in the stock market. There was, you know, the money lost on the home. How did you lose $50,000 in the stock market? Bad advice, borrowing money to trade with, and yeah.

Day trading? It's gone. Correct. Of course you lost money. Okay. Yep. All right. Wow.

So if you sold the land for $130, you sold your, wife's car for 60, that's 190, and that leaves you $3.20 in debt. And there's nothing else left except your business in your home, right? Well, we don't even own the home, so we rent where we live. Do you own the land that the business is sitting on? No, we rent there as well. Okay. Okay. All right. And then the balance, if we, if we, if we, if we, if we, if you, if, we paid off the land and sold it and we sold the car, the balance of the debt is credit cards and personal loans, right? Credit cards, $78,000 on a personal loan, and then business.

But like a personal loan at the bank, right? Correct. Okay. All right. Well, I think what can happen here is that you clear off what you can clear off by selling things and then you negotiate the rest of it in default at pennies on the dollar. You probably could get out of this whole thing for, you know, after you sold off everything for another $100K out of pocket. So you probably can make it out without bankrupting if you want to fight

all the way through it. However, I do want to establish that day trading sucks and you suck at it. Yep. Yep. And that. that buying real estate you're not very good at. Well, they were mobile homes, so that's, I know what your take is on mobile homes. Pretty much sure now that you're not good at it, yeah. Well, these are the first two that had really gone wrong, so everything else was going well, and mobile homes were hot items in the area and, you know, barely spend it any time on market.

So you're the guy that hit at the slot machine, and you thought that made slot machines a good idea. Yeah. So one of the things I did when I went broke, George, was I had to sit down and go, what was broken inside of me that allowed me to make bad decisions? Because I want to come out of this at least with wisdom. If you're going to get the crap kicked out of you, you ought to know why so you don't go in that bar again. I don't go in there again.

I don't want to get kicked again. And it doesn't sound like you've looked at. learned that. No, you're still defending. Yeah, mobile homes were hot. Said no one ever. You know? I mean, really. And day trading and it just, I just caught a bad, no, day trading, 97% of the day traders lose money.

That's all of them. And while you're, it's fools gold. While you're hemorrhaging money, you go by a car for 60 grand. Yeah. That you can't afford. Yeah. So you need to do an autopsy on the behaviors and the beliefs that got you here so you don't repeat this. And then claw your way through it if you can.

If not, you might be bankrupt. I don't know. In Florida, it is one of two states that you keep your home, you don't have one, regardless of how much equity there is. I don't know what they'll do to your business in a Chapter 7 bank. If you file bankruptcy, I'm not sure what they'll do with evaluation on something like that You might lose that in a bankruptcy. It's possible or a bunch of your equipment or tools or whatever They actually could liquidate that place on you. So you need to be very very careful about thinking bankruptcy is just going to be an easy way to walk out of this. I don't think it's going to be easy. I think it's going to be really, really messy,

so I would avoid it. So I would sell the land. I would do a detailed autopsy on who I am and why I make the decisions I made so that I don't repeat it. That's what I had to do when I made all those mistakes. You do too, George. And then I would see if I can start settling these other deals in default for 25 cents on the dollar and scratch up the cash by fixing a whole lot of cars, car repair business, and work my way through this. I come in. Hey guys, Rachel Cruz here, and I love summer.

There is more fun on the calendar, more time with your people, and way more chances to make memories. But you know what else there's more of? Spending. Oh, between the extra groceries and gas and camp fees and family trips, it all starts to add up so fast. And before you know it, money stress starts to steal the fun out of everything. And that is why I love the every dollar budget app, because it helps you plan your

money, track your spending, and find more margin in your budget so that you can put extra cash towards the goals that matter most. Enjoy your summer without the money stress. Download the every dollar app in the app store or Google Play and start for free today. Our scripture of the day, Galatians 5-1, it is for freedom that Christ has set us free. Stand firm then, and do not let yourselves be burdened again by a yoke of slavery. Lou Holtz said, it is not the load that breaks you down. It's the way you carry it. Ooh, that'll go.

Wow. So, John, in the 70s, there was a book that came out, and I was a teenager. My dad was in the real estate business. He asked me to read it because he's always going to read these motivational books. The 1870s, right? Yeah, absolutely. And there were dinosaurs in the backyard. But the book was called Con Manor Saint.

written by a guy who was in jail, so apparently he was a con man. But he was trying to make the case that he was a saint. He had run a multi-level, I mean a pyramid scheme, not a multi-level scheme, an actual pyramid scheme, an illegal. That's why he was in jail. There's a difference between multi-level and pyramid. People use them interchangeably, but they're not the same. And so he ran an actual con, like a Madoff type thing, Bernie Madoff deal, and went to jail. in the book about the only thing I remember out of it was this bizarre case he was rationalizing all this

that he had stolen all this money from his people but he'd made a few people fortunes in the process so that made it all okay in his mind and but the thing that stuck with me the reason I bring it all up is he said that you can con anyone if they are one of two things afraid or greedy. That it doesn't matter how smart they are, doesn't matter how dumb they are, if they're one of those two things, you can con them.

And the more of one of those two things, the easier they are to con. And so when I go back and usually when I look at someone having a financial catastrophe, including me, losing everything in my 20s, having the opportunity to start over, in the real estate business.

business, I had to go, okay, what was I? Why did I get, because get rich quick is a con. Right. Get rich easy is a con. It's a house of cards always. So playing the roulette wheel, sports gambling. Losing weight quick is a call. However you're, however you're going to do it quick, it's a con. It's a con. If it's a life change, a permanent process. Because all the data that we now have at Ramsey says that the people that build wealth do it gradually slowly and they're not doing it based on fear or greed. And so when you're trying to get rich quick with nothing down real estate, you know, some of these guys on TikTok or whatever, or you're trying, and that's what I was doing, I got a bunch of real estate. I had a $4 million

net worth. I was making $200,000 a year, but I was deeply in debt. I had $4 million dollar net worth. And I was 26 years old starting from nothing. But it was still a of cards that I had built and I was trying to do it quick, do it quick, do it quick, do it quick, do it quick, catch it while it's hot. Crypto is another one. People are chasing that. I'm ashamed to say this, but I had this, this thought during this big IPO that just went out. Yeah. I thought, I wonder if I should, I wonder if I'm going to kick myself 20 years from now for not doing this. Yeah. And I actually had the thought, my son's out of town right now. And I thought, I might have to tell him. I didn't put money in on this.

And it could have hit. And I thought, and again, I talked myself out of it. I was like, that's foolish, right? But that even somebody does this for a living, I had the thought of, I'm scared to miss out. That's quick money. It's fear. I'm scared to miss out on this. Yeah.

It's a FOMO. Yeah. You're missing out, which is fear and greed. And so if you catch yourself saying, I've got this situation I have to get away from. I'm desperate. you're setting yourself up to be conned by one of these get rich quick things that's out there or i've got to get that i've got to get that i've got to get it you know in george's case he he's like okay i don't my body is not going to last working on these cars and so i've got i've got this

desperation in my soul to get away from the automotive thing and i've got to go so i went and daytray went and did this went and did that and he's just he's just walk-a-moing everywhere with debt, this pops up, he pops it down. This pops up, he pops it down. And that's exactly what I did. And so I'm no better than him. It's the same, I'm the same guy as him. And that's why I can, you know, I've got a PhD in DUNB.

I've got experience from my own stupidity. So, but the point is, folks, just the lesson that you take away from today's show will summarize it is, okay, if you feel yourself getting greedy and everyone does, if you feel yourself getting fearful and everyone does, you're getting ready to make a bad financial decision. Yeah. And slow your butt down. And underneath all of that, one of the things we tell people, hey, don't ever borrow money, I can guarantee you that that, you know, George, that last caller didn't take out this huge business loan,

this huge personal loan with the intent of, I'm going to buy this over here, I'm going to do this, oh, we need a new car over here. If you go take out a helock, I'll just get a little bit extra. just in case. And when you have it, it's so impossible to not spend it and you end up making the problem so much bigger. So if you just say, hey, you know what? I don't, I don't mess with, I don't borrow money just as a rule unless I'm buying a house, right? Like, it keeps you from, it's like a, it's a barrier, it's a break, it's a hurdle. It keeps you from making even a bigger mess than the one you're already in. But the reason people have lost so much money on crypto is FOMO.

Yeah. And that's a form of greed, a form of fear. fear of missing out it's greed it's like oh they're going to get theirs and i'm not going to get mine right and instead i instead i got really after i went broke i got really comfortable with being boring yeah slow and steady wins the race the tortoise beats the hair every time every time i get desperate and fearful right after that i get stupid and i do something stupid every time I get greedy and I think, oh, this is going to be a hot knife through butter. This is going to go. And it's just like, and it's just a hundred percent of those things bite me in the butt.

And it's just like, and the things that we have made, everything that we've made on were death by a thousand cuts, incremental, little tiny, little tiny, little tiny, little tiny, little tiny. And then when you add it all up, it's a lot. Right. But none of it was sexy or impressive. and everybody wants sexy, impressive, the greed side, everybody wants the quick thing. I've got to get out of this. I'm desperate. And so as soon as you say that, you're set up.

So all of you out there, that's the lesson you can take from Dave's stupidity in my story. And even from some of the stories that call in here is you have to be really, really careful to avoid fear and greed or greed driving your decisions around money. because it very few times do you go slow in those situations? Both those things cause you to go too fast. Both of those things cause you to rationalize and look past all the warning signs. Bridge out, bridge out, bridge out, bridge out. Not me. I can Bo, Duke, jump that sucker, right?

Bo and Luke, here we go with the General Jackson. That's it. But yeah, you think you're the one. And no, you just end up in the edge of the bridge embuckment. Stuck on there. Like a fly on the wall. I'm sitting here thinking of the last 20 bad decisions I made, every one of them came back to, I talked myself into a fear of something. Yeah.

Or all media today is selling you, it's all coming down. So you got to do this or you got to do that or you got to do this, right? And the more I consume of that, the more my eyes are open looking for things that are coming to get me, which means I'm going to look for things to buy. All the signals, the people involved are bad people. but I'm going to keep going because it's probably going to be okay. Yeah, yeah. No, they're not.

They're going to keep being bad people. So why am I continuing? Proverbs 22. The wise see danger and hide. The fool sees danger and moves forward and suffers for it. And when I see those warning signs, the only way I look past them is when I'm greedy or I'm fearful. And I overlook the warning signs.

I go, well, that guy, he didn't mean that. Yeah, he did. He's a freaking crook. And you're going to go in a deal with him anyway Because you just have to No, you don't Can I tell you what helps me in these moments? Wise counsel, a good group of friends

Yeah That now I know I could pick up a phone and call And say, hey, I'm about to do this Or I'm scared of this And they'll say, that's dumb, John, don't do that That's called a good friend That's a good friend That's dumb John friend

Yeah I've got many of those That's dumb Dave Dave, you have had some dumb ideas And this is at the top of the list Yeah, I get those too to. George, we'll pray for you, my friend. It's a hard thing you're going through.

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.