The Ramsey Show - Delayed Gratification Is a Key Ingredient to Building Wealth

Episode Date: December 16, 2024

📈 Are you on track with the Baby Steps? Get a Free Personalized Plan 📱Watch the full episode for free in the Ramsey Network app. Dave Ramsey & Ken Coleman answer your questions and discuss: "Should I buy a $250K supercar?" "I borrowed from my parents to start a business," "How do we steer our daughter's career choice?" "Should I be involved in my husband's business?" "I'm unsuccessfully tried to settle my debts," "How do I budget my starting salary?" Support Our Sponsors: 🌱 Get 10% off your first month of BetterHelp ◎ Get 10% off Byrna product bundles and more! 🏥 Learn more about Christian Healthcare Ministries 🏡 Get started today with Churchill Mortgage 🔒 Get 20% off when you join DeleteMe 🏦 Go to FAIRWINDS Credit Union for an exclusive account bundle! 🥗 Save 15% on your first Field of Greens order with code RAMSEY 💤 Visit Helix Sleep for special offers! 💻 Visit NetSuite today to learn more 🗂️ Use promo code RAMSEY for 18% off at The Nokbox 💵 Learn more about Timothy Plan 🏛 Get started with YRefy or call 844-2-RAMSEY 🔐 Visit Zander Insurance for your free instant quote today! Next Steps 📞 Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET or click here! 💵 Start your free budget today. Download the EveryDollar app! 🎟️ See Dave and John LIVE in a city near you! 🎄You could win $5,000 in the Ramsey Christmas Cash Giveaway! 🎁 Our 50 days of Christmas deals are ending soon! Get 30% off meaningful gifts. Listen to more from Ramsey Network 🎙️ The Ramsey Show   🧠 The Dr. John Delony Show 🍸 Smart Money Happy Hour 💡 The Rachel Cruze Show 💸 The Ramsey Show Highlights 💰 George Kamel 💼 The Ken Coleman Show 📈 EntreLeadership Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show. show we help people build wealth do work that they love and create actual amazing relationships Ken Coleman Ramsey personality number one best-selling author of the book paycheck to purpose is my co-host today open phones at triple-8 825 5225 Leon is with us in San Francisco. Hi Leon, how are you? Hi Dave, how's it going? Better than I deserve, what's up? So I've been fortunate enough to mass some money over the years through just working and some very nicely timed company acquisitions. And now I would like to make one of my childhood dreams come true. I like to buy a super car that's worth about $250,000. Cool, which car? Specifically the Lamborghini Huracan, a used one. That's a beast. Yeah, used one would be $250,000, you're right. News what, 450? Yeah, I think so, yeah.

Yeah, okay. Cool. So what your model would that be? Well, looking on some of these websites anywhere from a 2015 to a 2017, 2018. Okay, so a 10 year old has lost 200,000 in value. Yeah. Yes. That's about right. Okay. Yeah. And what's your net worth? You sound like you're a bazillionaire or something. My net worth, so I can break this down. I have a net worth if you include the mortgage, about $3.66 million. Okay and what are you making a year? I make about $300,000 a year which doesn't include a 30% bonus. It's a single income. I am married with

a one-year-old child but my wife is a stay-at-home mom. And how old are you? I'm 39 and she is 41. Okay all right. You can afford the car if you want it. The thing is, here's how I look at these. Here's how I decide this and I answer questions on this show like what would I do if I woke up in your shoes. That's how I answer questions, okay? You said you're how old? 39. Okay, good. Well, you've how old? 39. Okay, good. Well, you've done really well.

Congratulations. Thank you. There's a couple of rules of thumb. Generally speaking, you do not want to own all the things you have with motors or wheels to be more than about half your annual income. Now your income is a little wacky because you've made big chunks of money doing a few deals here or there that don't really include your 300. So this violates that. You know what I'm saying? It's more than half your

annual income. So that's one rule I look at. It's not a hard and fast rule. The second thing is, the main thing I do today if Sharon and I are doing something that feels kind of like a weird large purchase that strangely, or even a large amount of money we're giving away in generosity, the same thing. We just, we use the burn the money in the middle of the floor thing. If I took this much money and set fire fire to it does my life change if the answer is yes then it's too expensive

i think you could lose eight percent of your net worth two hundred fifty as a percentage of three point eight million and and probably not miss it okay because the two fifties gonna be worth 150 in 20 minutes. You know that. I mean we already established 450 turned into 250, right? Right. It's going to go down in value and the bigger it is the faster it's going to go. I mean the good news is most of the loss is gone. The first 10 years you're going to lose the most of it. And don't get caught up in the illusion it's going to go in value they're not they're gonna go down in

value and and let me just tell you the new ones are better they don't make them like they used to thank God I got a 1960 Corvette frame-up restoration compared to the new Corvette it's a piece of crap I mean compared it's a beautiful little antique car but thank God they don't make them like that anymore we have like brakes that work and power steering and all kinds of modern conveniences now you know and so you know it's so number one can I if I burn the money in the middle of the floor does it does it affect my children my grandchildren my wife no it doesn't you can you can do you can, it doesn't. You can afford the car.

I think you can afford the car. Then the last thing I do, Leon, is I ask myself some contentment questions, particularly about cars because I'm a car nut. If no one ever sees this car and only I see it and enjoy it, do I still want it? For me, if I'm driving that car the answer is yes. Because I don't give a crap what you think. I'm gonna enjoy that freaking fine piece of machinery, right? But if you're buying it to impress other people, that a danger sign spiritually agreed agreed Leon I had two quick questions is there anything you haven't told us that we should know I mean I do have the mortgage which is it you know it's in California and it is a sizable mortgage of about $739,000 at 6.74%.

But the house itself is worth about $1.9 million. All right, and then my second question is, how much cash do you have total? So out of what I say is the net worth, about 2.1 million is in brokerage and index fund that follows large McCapp US market and then about 150k is liquid mixed between check and savings about five hundred ten thousand dollars in my 401k about 500k in my wife's 401k and so that's liquid and then about 500k in company RSUs

which are vesting in approximately one third every year. Before we buy toys we grow up and pay off the mortgage so you need to pay off the mortgage too. You've got the money in brokerage to pay it off, you got the money in brokerage to buy this car and you're still fine and you've still got the exact same net worth when we're done with this discussion. So until the car goes down in value and then it'll go back to normal. That's what I was wondering. In this current situation, I would say no.

I just, I wouldn't do it personally. I'd want to have the house cleared and I- Pay off the house. I know, I know, but I don't know. I can't believe I'm actually saying a little bit more conservative than you as I love cars But I I just when you walk through that I personally put myself in the what would I do if I were him and I don't Think I'd spring for that car at that price right now I'd that's fair, but but you laid it out. He can do it. He can afford it and it's not going to ruin him

I mean if you call me up and you tell me you make three hundred thousand dollars a year and I dreamed about it since I was a child I'll kiss my butt you know I'm gonna and you know I got no money and I'm gonna go get a car loan to buy that no I'm gonna rip you to shreds no that'd be dumb okay for your own sake because I love you but yeah yeah but I mean yeah. That's so I honestly, it doesn't make the sale to me, because I've had to quit doing that myself. I always wanted that since I was a child. You know, that's just something you want, then go for it. I mean, it's not the end of the world. But that's the trick. Well done. Well done. Well done. This is The Ramsey Show.

One of the questions I get all the time is, which life insurance company should I use for my term life policy? A valid question since there are hundreds of companies out there with rates all over the place and riders and add-ons that are simply a waste of money. You need to get this done and make the right decision. That's why the only company I use and have recommended for over 25 years is Zander Insurance. Zander is a broker who shops the top term life

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taking my call. Sure, what's up? So I'm calling to talk about your favorite financial instrument, the whole life insurance policies. I have a question about policies that my parents bought years and years ago and hopefully you can help me figure out what to do with these things. So long story short, me and my family, me and my parents and my brother opened a small business about five or six years ago. When we did, we borrowed money against my parents' whole life insurance policies to help fund the real estate purchase and construction. It's a dog daycare, boarding and going facility.

It opened five years doing well, profitable, growing, it's in good shape. The first two years we didn't make any payments on those loans. So the unit grew as they capitalized the interest. Then I started making monthly payments on those loans for money that we were making in the business once we became fairly profitable. So here's my question. These loans, there's six total loans, excuse me, six total policies that my parents took out. So $1.4 million in face value insurance, plus the additional insurance they purchased over the years

as they were, I think they made some overpayments in the past, things like that. I have borrowed about $600,000 against the policy. So here's my question. What's the remaining cash value? The remaining, the net cash value of today is about 200,000 and the death benefit as of today and all of them combined is about 1.06 million. Okay. Uh, my question is, do I bother paying these loans down? And if I do,

do I use your snowball effect and go for the lowest balance loan first or do I pay them off all evenly? Cause technically they all have the same interest rate. It's basically like one large basket, right? So am I even benefiting from the snowball considering there's no minimum payments on these things, right? I can pay them at any time, any way I want. I could make the payment. I could not. I let the interest capitalize. You know, you can manage them any way you like. So what do I do with them should I pay him should I not so apparently your parents don't need the actual life insurance well I mean but they took these out thinking hey one what I'm asking is that if your dad died today, your mom's not going to get much money

because the loans are repaid from the death benefit. Yeah, well when you take, yeah correct, when you, so when you, the total value. So if you have a face value of 1.4 and you have loans of 600, you're they currently have $800,000 in actual proceeds would come to your mom if your dad died. Well, there's also an extra 200,000. They also over the years purchased an extra 200,000 of insurance by overpayments. So it's paid up additions. Yeah, paid up additions. Yeah, so they actually have a million dollar in debt benefit, but yet you are right though, by the way my parents, so they have an interest in our small business. Uh, they have income through that. I that's actually my second job. I have another job, uh, where I,

I'm a trader. I flipped the syndicate market, you know, I trade IPO's. Um, I borrowed money from my parents to see that as well and gave them a percentage of what I make off of that. So basically my parents had to come through me. Do your parents have other wealth? Yes. How much? How much? So I'm going to be honest and I don't have total transparency but I'm going

to say all in they probably have assets of about a million and a half dollars. In addition to all this, okay. Yeah. So. assets of that a million and a half dollars in addition to all this okay yeah so yeah and and income even though they are retired they have income from two businesses that I run that they have interest in so they they have you're right without those life insurance they would still be financially safe okay um well I don't think you guys are gonna do what I would do because you're so far afield and your parents are so heavily emotionally invested in this process that I don't think there's a snowball's chance that you guys are actually going to do this.

But you asked, so I'll tell you, I owe you that. What would I do I would cancel the whole life policies completely cash them out and end it I had a funny feeling you'd say that yeah I would just end it yeah because your mom is gonna be fine and if they want to if you want you to execute a note for six hundred thousand back to them then you would owe them that money because they you've reduced the amount they're gonna get from the cancellation of the policies by the loan to them then you would owe them that money because they you've reduced the amount they're gonna get from the cancellation of the policies by the loan

you've taken out so you know they either need to get equity in the business and or more equity in the business. They do have equity. I know but does that offset the loan? No you're still paying on the loan. Gotcha. Right? No you're right you're right well let me ask you this, just because you definitely understand these instruments better than I do, right? So say I was to cancel these policies today. They're not yours. You can't. Your parents can cancel them today. Well, you're right. They will put it this way. They've basically, I've been managing their finances for them, other than some just assets that they own that somebody else has,

and it helps them out with, because they're both kind of frankly, you know, they're a little older and both a little bit unwell say. So they basically asked me what to do with these things and do, you know, they pick my advice and trust me and I don't want to put them in the wrong direction here, you know? But pick my advice and trust me and I don't want to put them in the wrong direction here, you know. Okay, I got you. But say that I advise them, say you should close these things down today, right? So they do that, they get out of it, what? The net cash value that's left at about $190,000. Exactly. To get a check for that $190,000. Exactly. And then they have the $600,000 that is owed to them from the

start of our business. Correct. And that's it. That's it. Right. Right. Okay. And they got rid of all the expenses and you're not paying interest on your own money. Yeah, exactly. Yeah. Okay. That'll, that'll make sense. The only, the only counter I'd have that if you could help convince me here, Dave, is so there is say that they were to pass away soon, unfortunately, right? I mean, my parents to be frank, they're, you know, they're elderly.

There's just over a million dollars of death benefit left over after accounting for the loans, right? No. No? Why how come? Because you got a million four and death benefit minus 600. No well it's a million don't forget million four plus the other 200 and what are they called paid up additions? Okay. So it's 1.6 minus 8. Yeah all right. Yeah well minus six yeah so it's a I know I've looked at the statements and the death benefit amount for each one of these things added together is just over a million. So why walk away from that payout for taking... Well, I mean, if they're terminally ill and got a year to live, if you want to

play that gamble on your parents' death game, you can. I'm personally not doing that, and I don't think they are... I don't think they're one year from grave. I you play that gamble on your parents' death game you can, I'm personally not doing that. And I don't think they are, I don't think they're one year from grave. I may be one year from grave, I don't know. But the, you know, you guys are paying so much in such extreme costs and have for so long on these ridiculous things that the

last thing I'm gonna do is keep giving these people money I just couldn't do it and so but again if someone's terminally ill that's on one of these policies and you think they're you know you think they got a one-year as my grandpa said he said I'm not buying green bananas you know you know you think we're running on the end of this thing then if you want to play that gamble game against their death that's called an actuarial table it's the statistical probability of death versus the game you're playing and I personally unless someone is you know in hospice or something I'm not gonna fool with that the other the other question is are they

okay are you gonna have you got their finances set up in such a way that their mom's gonna be okay if dad does financially without these policies I think she is and and then the same question the other way but I mean you do whatever you want to do that's a different situation and then the loan you've got back to them for the doggy whatever it was, hotel or whatever it was. If you've got siblings and so forth, you may have some issues of dividing that up, you may end up owing them depending on how this wheel is set up. I don't want to know how the wheel is done for your sake, but wow.

Zero chance he does it. Agreed. This is the Ramsey Show. You've got a lot to keep organized in life. Kids and calendars and carpooling and cleaning. I mean, it is so much. That's why you need a knockbox. That way, if something happens to you, you leave your loved ones with happy memories and not a huge mess. Knockbox is a complete system to help you organize your accounts, personal history, estate planning documents, and all your other info in one place. I'm talking about everything from life insurance policies and social media accounts to your dog's vet, divided into 15 simple categories.

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than an ugly tie for people you love. Yeah. I get something that actually matters like building a non-anxious life by Dr. John Deloney, breaking free from broke by George camel. Of course, paycheck to purpose for by my own Ken Coleman sitting here, by Dr. John Deloney, Breaking Free from Broke by George Campbell, of course Paycheck to Purpose by my own Ken Coleman sitting here, my co-host today, obviously Total Money Makeover, Baby Steps Millionaires, those are all on sale, Questions for Human Cards by Deloney, oh all of this at ramsaysolutions.com, Slave Store, and I bet you, for most of you, we can still get it to you, so check it out to you so check it out but you better not wait you better not wait all right Taylor is in Fort

Worth hey Taylor what's up hi thanks so much for taking my call sure how can I help and so my question is should I go back to school and pursue my nurse practitioner license and why would you want to do that? So I'm currently working as a nurse. Um, I'm newly married and I make about 75 K before taxes. My husband makes about a hundred K before taxes. And it's something that I've always considered doing. Um, and I just, we don't have any kids yet. So I kind of feel like maybe it's now or never. Um, but my biggest concern is I've watched several of my friends go back to school and then they have had babies or, um, kids in life come up and they have

decided to be a stay at home mom. And so I'm a little bit nervous to make that decision, that financial decision to go back to school before having kids. And then I don't want to regret when I have kids still having to work because of that degree. Yeah, well, the answer to that is not what you're concerned about. The answer is pay cash.

If you don't go into debt, then there's no regret because then you could, let's just fast forward. Let's say that you pay cash, you cash flow your way through this. And on this income, you should be able to do that. And then you get the nurse practitioner degree. You have kiddos, you want to come home for a season, then they get to school and you go, I want to go back.

That entire transition is very likely, but there's no regret attached to that. And that extra income is going to be worth the ROI on that's going to be worth it. So the answer is don't go into debt, cash flow your way through it. And with your income, you should be able to save up and do that. Right. Yeah, that would be the plan. We actually already have the cash set aside. Oh, well, then what's the regret? Let's say you spend that cash. I mean, is the regret that I spent the cash and now I'm never going back into it. And so now I've just, oh, I burnt that money. Is that what you're saying?

Yeah, I think it's just sacrifice over the next two years. I mean, if I didn't go back to school, we would start our family a little bit sooner. Um, I think probably within the year and going back to school means pushing that off for two years. And so I think just kind of struggling with that. No, I'd have babies. I would too. I was getting ready to say, I think that's the priority. Right. No, I'd have babies. I would too.

I was getting ready to say I think that's the priority. Babies are better than school. And the school will always be there. Like, you see? And you already got the cash set aside. I'm going to say the same thing because I'm thinking if Stacy and I are having that conversation, I would ask you if I was sitting with you and your husband, I'd go both of you vote, write it down, secret ballot or tell me straightforward, which is the higher priority.

And if you both say kids, then I think it's a no-brainer. Right. And I mean, I know kids are, I mean, we're only 28, and so starting a family at 30 isn't crazy, and so it's just kind of trying to decide if, you know, it makes more sense to go and increase my in-tempo school. We have kids rather than having them and then trying to, you know, suffer through school and daycare and everything else. School will always be there. Yep, and I'm not trying to, but I'm just gonna speak some truth over you. You have no idea when these babies are coming, so you don't have any control over that. No, I certainly hope it happens in a time frame that you'd love, but we

don't know. Spoken like a guy who adopted two and then had one. Right, and our journey was a long time. I don't wish that on anybody as far as a long period of trying to have babies, but I am saying, you don't have any idea what that's gonna look like. So you can't hedge your bets on, well, if I go to school, then we have the baby. You just don't know.

So I would move forward with the bigger life decision, the bigger desire, the bigger priority. That's what we do. Then we manage the rest of the decisions against that. Another way that I've learned on big stuff, whatever the big stuff is, that helps me, and it helped me to make, that's why I spoke so quickly, is if I pan back and I say, all right,

I'm now talking to 58 year old Taylor mm-hmm which one would she have wished she had done ding ding ding ding for easy yeah I heard it in your voice yeah okay and it's not it's not your friend it's not your friends it's not what your friends are doing I don't give a crap what your friends are doing I'm talking I was just listening to you and you're trying to say, okay, should I go make more money and expand my career and therefore have children later?

But I kind of, you know, I heard it. I want to have them now, that's what you said. No question. And hear from us, You've got plenty of money Yeah, you're fine. You're okay we okay, just keep keep working your baby steps and And then at the appropriate time you can work on Nurse practitioner which by the way is an incredible wonderful fantastic control. That's a beautiful career field

You're gonna make so much money and you're gonna have so much access to you'll have all the work you'll ever want you'll always have work so really good Devin is in Raleigh North Carolina hi Devin how are you? Hi I'm good thank you so much for taking my call sure y'all doing better than we deserve how can we help? I just had a quick question obviously that's what I called um so my husband and I actually just finished paying off our debt. Good, congratulations. Thank you so much.

You have been a game changer for us. We are currently saving for our three to six months and then going to be saving for a down payment. And I needed to know, should this just be going into just a savings savings account or like a high yield savings or should we be putting the money somewhere else? Oh high yield savings is fine. Okay okay then. You're gonna make a little bit interest but the money you're gonna have for your down payments gonna be from the sweat of your brow not from the interest rate. Okay.

Because you're not gonna have it in there long enough to make any interest amount to anything. No, and I didn't think that's why it really mattered, but okay, okay, awesome. Yeah, you're the secret sauce to having a down payment, not the investment. I mean, just go ahead and get what you can get, a high yield savings of what, four or five right now,

that kind of thing. There's nothing wrong with that, but I mean mean five percent of a hundred grand is five thousand dollars and that means if you had a hundred grand in there you'd have 105 100 versus 105 does not change the house you buy the hundred is what changes the house you got so the you're the secret sauce that put the hundred in there because you're again interest rates matter a lot more when you're thinking in a long term time horizon. Mathematically, they matter a lot more. And so yeah, I would just park it in a high yield savings. You don't have to think about it. Yeah, I love it. And I love hearing the excitement. I love hearing-

She's winning. Knock it out, baby. They just paid off their debt and now you got a young couple. The American dream is alive and well is what I take from that call Absolutely, despite what you may be reading or hearing somewhere else. That's fun Absolutely, Mary is on Facebook and says at age 56. How much should I have saved for retirement by now? Oh, no, you're not gonna make it You're gonna be fine. I don't even know how much you have but you're gonna be fine. There's not a set number, okay? The the goal is by the time you quit working, whenever that is, and the government made up the number 65. No one else did. It just made up. Okay, so you can work

till 85, you can work till 105, I don't care. You can just work until you don't want to work or until you hate that job and you go do something different, right? But if you can live off of 8% of your nest egg and it's invested at 12 you'll be fine. So if you have $500,000, 8% of that would be $40,000 a year. And it'll be growing at a little more than that. It'll be growing at about $60,000 a year. So if you grow $60,000 and you pull off $40,000, you'll be fine. that that that program right there will run in perpetuation it doesn't have an end it doesn't have an end you never run out of money with that program so if you build a nest egg that

you can live off of 8% then boom you're gonna be there just fine so just start targeting that and be serious about it be be intentional about it, but don't be anxiety-ridden about it. This is the Ramsey Show. For free tools and resources to help you reach your home goals, go to ramsysolutions.com slash real estate, or click the link in the show notes. Remember the good old days of the internet

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letter YREFY.com slash Ramsey. Might not be in all states. Today's question comes from Kate in Maryland. My daughter is a junior in high school and has no idea what she wants to do when she graduates. My husband and I love the idea of her owning her own business, but neither my husband nor I have experience in this. We both wish we had made different career decisions that would have given us more independence. Where can we research with her to get a better understanding and vision for this option? Or would you still recommend college versus real world experience? Okay, I'm going to put myself into this particular situation and say if this was my daughter, what would I do?

And so because she's a junior, we would begin to identify areas of interest, not come up with the business idea. I think this could be very paralyzing for a youngster. It's paralyzing for a lot of people in their 30s and 40s because we know, Dave, from the data that 70% of Americans want to be self-employed, but only 6% are. So I'm speaking from data here. So what I would do with my daughter

is we would begin to identify areas of interest. In other words, people that she wants to help, solutions she gets excited about, problems she wants to solve, and there's an industry. If there's a business, there's an industry. And so we want to get broad so that she gets some real interest and begins to see some areas of interest. At that point, we're going to shadow. I'm going to allow her to go have coffee, lunch with people that are in those industries or maybe run businesses in those industries. Shadow at work if she can get shadow opportunities. All of this to begin to create a field of three or four of her most interesting options. At that point, field of three or four of her most interesting options, at that point, then we start to have the discussion,

is college, is a degree, the best decision? Or is it getting right into the workforce and working in an industry? And give you an example to help clarify this some more, if this were a young man, and by the way, it's not limited to young men, but let's say she decides she wants to own a business in the trades.

At that point, then I want her shadowing folks that are working in those trades and getting a real world experience. The good, the bad, the ugly, the smelly, everything. At that point, we determine whether or not she's really interested. And then the path is going to be to go to work and hustle and learn on the job and Eventually you work your way into spinning off on your own and starting your own business So that's a hard question to answer in such a short amount of time without back and forth But that would be the advice that I would give because that's what I would do these young people need to see it

Touch it experience it smell it yes, experience it, smell it. And then they can decide. Completely agree. Because Kate, you did not say she has this extreme passion and apparent natural talent and bent towards X, because you did not say that, that would have led her towards a business. The people that we've talked to that are 18 or 19 or 21 years old that have had success and they call this show and they are really killing it

and we're all kind of aghast at how far ahead of this curve they are running their own thing. They almost always had a natural gift towards something. Technology's not unusual for a 19-year-old today to be something that they would go, you know, they've been screwing around writing code, messing around building apps, and all of a sudden they built an app and took off and ran a business, okay?

Or, you know, whatever. That's fine. I mean, that would be Michael Dell. That would be Bill Gates. Both quit college. And Steve Jobs, all three. And that would be Michael Dell, that would be Bill Gates, both quit college and Steve Jobs, all three. All three companies were formed by college dropouts. But they were super nerds with their eye exactly on what they wanted to do. There was no question.

Instead, you're asking a very generic thing. My husband and I always wish we were in business, so we wish our daughter would go go into business but none of us have a clue. Yeah. That no don't go in business. Business is too hard. That's correct. Don't put us 18 year old, 20 year old out there with no education to go into business doing that. No. If she thinks or that in talking with her that she has got some entrepreneurial flair and wants to do a business someday maybe in the future, a great, you know, just get a business degree, get a degree in finance, a degree in marketing. You'll learn accounting, you'll learn statistics,

you'll learn marketing, you'll learn strategic thought. I mean you'll get some of these basic things in a good four-year degree, that's's what I have and I use a lot of those classes I took 40 years ago every day running Ramsey. You know it's a 300 million dollar company it's a dead good dadgum good thing I had a couple of accounting classes hello you know rather than just trying to figure that out with a high school accounting class and so it's a good thing that I understand marketing at an academic level before I actually get neck deep in it. And then try to figure out how it works out here in the real world too. So I would do that if she thinks she's going to go that direction,

combined with Ken's advice of really go in there and study, study, go visit these places. Quit talking about this stuff in the abstract. Here's what we know about entrepreneurs. Business is very hard. It is. And people that have never started a small business and run one have this romantic view. But there's a lot of dirt under the fingernails,

boys and girls. I mean, there's a lot, it's a long hours. It's the hardest boss you'll ever work for in your life. That guy's a dead gum slave driver. Yeah, and to that point, the entrepreneurs that win are driven by deep, deep desire to solve a problem. And they come up with a solution. That's the business, is a solution.

And they're deeply passionate about it. That's what keeps them going. Because it is, you almost need that magnetic pull, or else you're gonna quit. If you're just in it because in air quotes, I always wanted to work for myself, you're not gonna make it. No, no chance.

It's too tough. You're gonna get your butt run over in the middle of the street, man, I mean, you're just gonna be roadkill. And it's just too, I mean, because you put up with too much, you shovel so much manure, it's unbelievable. There's a pony in there somewhere, but you got to shovel the manure. I mean it's real and I'm not complaining and I'm not whining, but I have a call for a certain thing.

That's correct. And I've had two in my life. I mean one on real estate and went broke and then one doing this and I could do the real estate tomorrow and still be okay but obviously God called us to this right here and I'm happy with that but yeah I wouldn't put up with the BS that nobody will that's why we see business people quit all the time it's why we see a chef who is good at cooking and nothing else has a failed restaurant. That's why restaurants have the highest failure rate of almost any stinking business category. Because somebody thinks because they can cook or like cooking for their friends that that makes them a restaurant owner. Now, you've

got to hire and fire people all day long. Restaurant has a 325% turnover ratio in a year. It means you have to hire three people to fill that one position during that year. That's it. So you're in the hiring business. You're in the firing business. You're in the food sourcing inventory. There's all this stuff that goes with running a business. It's not cooking. That's right. And that's that it blows a chef's mind and they they go, Oh God, I wish I'd never yell. That's right. We that's that it blows a chef's mind and they they go God. I wish I'd never yell Yeah, we all wish you'd never That is a great actual example of do I want to run a business that serves food or I do do I just want to

Cook food two very different paths by the way both honorable, but there is a big distinction between the two and that's the key You know It's even like when we're talking with entree leaders these small businesses and they're getting ready to promote their best salesperson to be sales manager. It's two different skills. That's exactly right. You're managing salespeople is different than making sales. So one of the sometimes one of the worst things you can do is take your your best seller and turn them into a sales manager because they don't have that skill set. They're good at selling. They're not good at managing sales people. And don't forget they may not enjoy it, they may enjoy the service.

They may hate it. They enjoy the service of the customer, they don't enjoy the service of leading a team of people. Again, two very different. You lead a bunch of sales people, it's like running a beauty parlor, it's drama. Two very different job descriptions. So you know, you need to get in there what it is. So that's a great question, Kate, and we'll have the team send out.

I love the student assessment, it would be great for them. Okay, perfect. We've actually got that and that's a young person can take that and get a pretty good idea of what a current snapshot of what a professional job description of purpose would look like for them. And that can be a business. That's right. I'm not completely killing that, but make sure you understand that, you know, business is not romantic. This is the Ramsey Show. Okay, here's the hard truth. Your investment dollars could be winding up in the pockets of companies that hold positions you don't agree with. People are unknowingly putting

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Live from the headquarters of Ramsey Solutions, it's the Ramsey Show. We help people build wealth, do work that they love and create actual amazing relationships. Thank you for joining us America, we're so glad you're here. Ken Coleman, Ramsey personality, number one best-selling author, host of the Ken Coleman show and of course the book is Paycheck to Purpose, the other one's Proximity Principle, he's my co-host today. Open phones at 888-825-5225. Andrew is in Winston-Salem, North Carolina. Hi Andrew, welcome to the

Ramsey Show. Hey. Hey. Hey Dave, hope you guys are doing well today. Appreciate you taking my call. Sure. So I'm 32 years old and I've been following your baby steps and your content on YouTube and your website. I've just reached baby step number four. So congratulations. Well done. Thank you very much. Yeah, it was a, it was a big achievement. So in regards to investing, I just took a look at kind of what my current situation is and I'm enrolled in my employer's 401k and, and contributing 6%, which is what my company matches. Now I think your advice is to next open up a Roth IRA and max that out.

And if there's any leftover, put that back into the 401k to hit my 15%. Is that correct? Yeah, exactly. Unless your 401k offers a Roth and has good options, good mutual funds to pick from. In which case you could just put it all in there. Doesn't matter. But does your company offer a Roth 401k? It's through Fidelity, so I'll have to go and check into that.

I was going to open up a Roth IRA through Fidelity just to keep it under one roof. I wouldn't. You would not, don't you? No, I would go find it's not whether it's from Fidelity. Fidelity offers Roth 401Ks to the employers that use Fidelity to manage their 401Ks. And the only question is whether your employer allows that or not. If they do, you need to switch your whole thing to Roth.

Now, do you have good long-term options for mutual funds inside that 401k? I believe so, just based on the quick searching I've done. If you've got great options there, I would just put it all there and I'd put it all in Roth. Okay. That's what, you know, if that gets you to your 15%, if it doesn't, then you can open a Roth and I would go to a SmartVestor Pro at RamseySolutions.com to get your investing

started. But the mutual fund family, the brand is Fidelity. There's Vanguard, there's Templeton, there's American funds. Those are brands like Campbell's Soup. But then the mutual funds inside is the vegetable soup or the chicken noodle soup or the chili or whatever analogy or metaphor we want to use here. So you don't have to have all of your soup from Campbell's. You could get a different brand of soup. So it's not required that you go get a

Fidelity Roth with your 401k, I mean just because your 401k is that. Not at all. I'm not saying they're bad. Most of these fun families, these brands have good funds and bad funds track record wise. So you just need to learn about their track records and if you want some further help to do, go to ramsaysolutions.com and sit down and do that. And Ken, the big thing he's doing right

is he's actually doing it. Yeah. And that he worked really hard to get there. I loved how he kind of paused after you said great job and he went, this was a big accomplishment. And you know know what's fun to hear about that is this is a guy who now understands the pain that they went through to get to baby step four and now you get to the momentum stage where we're like now we're getting wealthy and building wealth and that's fun to hear. Yep, yep absolutely and yeah it's like man I got rid of all those payments and I got some money to

invest time to flip the switch from being a broke person to being a rich person. Right. Oh, I will ask a question because we got a lot of new people all the time and I'd love, I know the answer, but I'd love you to address it. Because we tell people in Baby Step 4, 15%. So the 15% explain that because he's got 6%.

He's putting in, this company's matching. Because I think a lot of people have questions about that, about what we teach on that number. Just take your household income, if you're married, you and your spouse's income total times.15, and that dollar amount needs to be going into retirement, somewhere, somehow. The best thing you can do is take a match, regardless of if it's Roth or traditional. If your company's matching, like he's got a 6% match, the best thing you could do, and the 6% match

does not count towards a 15. You are putting 15 in. The fact that they give you 6%, that's irrelevant. It's wonderful, but it's irrelevant to this discussion. So you put in 15%, that was your point. That's right. And then, but the, it's kind of a rock-paper-scissors except it only goes one way. Match beats Roth beats traditional. So you go down the order,

you first get all the match you can get. If they have a Roth, like I suggested to him he may, then you get the match in a Roth that's a double win then you max out in Roth and if you can't do anything except traditional beyond that because for instance you did a your company only has a traditional 401k so you got the 6% match like he may have he thinks he might have then you move on from that 6% we move on down we do Roth at the at the SmartVestor Pro Well that Roth amount plus the amount you put in the 401k at 6% match still not up to 15% Then the last stage is you go back and finish off with the traditional which he had that exactly right?

That's right. He'd been listening and had that figured out exactly so match beats Roth Beach traditional because a match is a hundred percent ready return You put in a thousand bucks. They put in a thousand bucks they put in a thousand bucks you made a thousand dollars on your money instantaneously and there are no mutual funds that have a hundred percent ready return none and there are no taxes that are a hundred percent tax rate so you can always win with a match always matches trump card it wins the whole thing tara is in salt lake city hi tara welcome to the ramsey show thank you dave i'm happy to be here good to have you what's up i am little background i have a degree in health care administration and since i had babies i found some jobs

where i could do billing from home so i do insurance billing and I run co-pays and things like that. My husband is a licensed therapist and just this year he became independently licensed so he started his own private practice where he sees patients on Saturdays and so he works at his 40 hour a week job and then Saturdays he sees his patients. And I want to be involved in his businesses finances. This is what I do from home for other offices, like I understand insurance and co-pays and deductibles and he doesn't want me to touch his business at all. Why? It's not so much that I don't trust him.

Why doesn't he want you touching him? That's weird. Yeah, he says he's worked for companies before where like the husband and wife have both been in charge and he's like, I just see that their marriage isn't great and they're fighting over business things. But he's like, I'd rather not have business conflict in our marriage. So he kind of wants to just have that. He's like, you can manage all the money I take home, but I want to run the business myself.

I mean, did Sharon help you when you were starting your business like with the finance or like you're like- No, but she also didn't want to and didn't have the skill set to she does not have an accounting background like you do So this is not a common listen. This is like Pete. This is like someone who says family should never work together That's bull family can work together Just fine as long as they know how to do it As long as they know have the relational skills a therapist that does not have the relational skills to do this scares me. Yeah, I mean, he's not a marriage therapist, but yeah. Well, I mean, he's there up in something

you're doing some kind of teaches people to function with other human beings. That's what therapy does. Yeah, that's interesting, David. It's like run the business is one thing. She just wants to help with the finances. No, he he didn't want her involved at all that's weird it's weird no I think you should be involved but I think you also need to work together sweetly

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Your future self will thank you. you're listening or watching YouTube or a podcast, click the follow button maybe. Maybe the share button also where you can share the show or click a cut a link out and send it to somebody and say hey listen the Ramsey Show it's helping me. Check these guys out on Spotify, Apple, wherever it is, Google Play, wherever it is, on our local talk radio station. Help us share it, tell people about us. When you do that it makes a big people about us. When you do that it makes a big, big difference. Thank you very much. And those five star reviews, you can keep those coming too. They're very, very helpful. All that changes the algorithms on

those things and pushes those formats right up into somebody's face and we're able to help more people because you guys followed, shared, subscribed and left nice reviews and so on Jan is with us in Tampa hi Jan welcome to the Ramsey show oh hi Dave what an honor thank you so much sure how can we help well I've got a lot of things but this is a this is my main thing right now well I am an accountant who's learning embarrassingly late in life, how to start to manage my own finances. Um, been trying to, I've been following your system.

Um, I'm working on trying to pay back my debt and I was, before I heard what you had to say about working with places like AmeriCorps and stuff. I was working with a debt settlement company and That was horrible. I finally saw the fees and stuff that they were charging. I can do better, you know, just on my own So I quit with them. Okay, and then I negotiated like synchrony Got that one paid off and the next one I was gonna I wanted to call you before I did this But I called Capital One. I hadn't talked to them in like a year and a half and I'm kicking myself because I got set up on this 20 month debt repayment plan like almost 300 a month I mean it's almost the full balance of the

debt and I thought then I after I did that I thought I heard you say on another show that you that you can you know, Settle it for I mean I understand paying back what I owe believe me that's weighing on my conscience a lot, too But I have heard you offer To you know that you can settle these things for like quarters on the dollar Yeah, if it's a two-year-old or one-year-old debt, yeah, they're gonna and a lump sum. They won't do that on payment plan How can we help you today Jan? Well, do you think if I offered them?

2500 no you have a payment plan now. Oh No Then what they have you I mean if you quit paying those payments and they don't have anything coming in they might If you want if you want to do that, but if you can pay this out now that you've done it, pay it out. But if you're not able to do it, then you're not able to do it. You settle a debt when you're not able to pay it. Well, I'm really not, but I mean, it's a hardship, but I do understand about paying whatever for... Yeah, I mean it's a balance in there. Are you able to, in the next 20 months, you know, pay your lights and water, food, work

some extra jobs and pay your bills? If you are, then pay up. If you're not able to and you're behind and you call them up and you offer them pennies on the dollar as a lump sum sum which is what you're talking about I recommend but that's only for someone who can't pay it's not a get-out-of-debt technique For someone who's able I have ten thousand dollars in the bank. I owe ten thousand dollars write a check Don't settle a debt like that if you took out the money on the credit card, right? Yeah, it's down to ethics and character No, that doesn't sound like she's trying to violate that

but I'm just trying to distinguish for I think she tried to get a deal for a listening audience payment plan and now she regrets that yeah that's that's exactly what it is yeah but it does also sound like you can pay it yeah it's hard but you can pay it if you can pay it and do your other stuff then do it finish it out you'll be done and you know maybe they waive some interest or something like that that's fine Austin is in Spokane hi Austin welcome to the Ramsey show hello sir thank you for having me I really appreciate it sure can we help yeah so I kind of a little bit of a

dilemma I've been with my current company I've been with them for 10 years now. I started with the company when I was in my mid 20s. I mean, my wife, we're having a kid at the time. We're like, okay, this seems like a good, good option for us. They have really good benefits. I've had good medical care, have great time off, flexible schedule. But the pay has been lacking. 10 years down the line I still have the same job I started with. I was hoping with this particular company there'd be growth opportunities, ways to move up and it just hasn't happened.

So I kind of feel like I worked myself or backed myself into a corner being with the company for so long. So one, know like what do you think the possible options are to possibly move away from this company or because the benefits are so good, do I stick it out for a little bit longer? Kind of my dilemma, do I move forward or do I just move on?

You move forward mentally, move forward, looking through everything financially involved with the move and then you make the move. But your soul has kind of left your body already around this job. You feel like you've hit a lid. And the answer to your first question is, no, you didn't paint yourself in a corner unless you're not telling us something.

Painting yourself in a corner is you have no options, you can't get out. That's the very idea there with that. So the question is, go back to 10 years ago, where did you see yourself going up the ladder? What did it look like? Was it in this particular field or is it a different field, different industry? Yeah, so what is this particular field? So I currently work with, as you can call it, a customer service role. I've been doing that for 10 years. Well, I kind of thought this company is so big,

it's got a good name for itself. If anything, it's gonna look great on a resume. But what did you think you wanted to be doing? Where would you like to be today? Let's answer that question. If you could snap your fingers, no risk. What would you like to be doing right now? I was like, I would, I mean,

the dream scenario, I would love to own my own business someday. No, that's not, that's down the road. You went a little too far. Give me the, you already answered the question and then you edited it, I heard it. So what would, what's the spot on the ladder you'd like today had the 10 years gone

the way you wanted it to? What would you be doing? If I was doing customer service now, if I were in a management position in that same particular field, I would have been happy with that. All right. So you get to management by virtue. In other words, you do good work and you're in a company that has a growth environment, meaning they do this. You've not grown for 10 years. One of the things I would challenge you as your coach, if we're sitting in a one-on-one session,

is do you have good evidence as to why you haven't moved at all in ten years? I'm not saying it's your fault but I'm also not necessarily blaming the company. I just don't know enough to just make them the bad guys but you need to know homework assignment number one is do I have some real clarity from my current leaders and through my records over the ten years as to why maybe I haven't moved up the ladder. Let's make sure we're not walking around with a blind spot. Second thing is, okay, what positions are available to me in different companies, same industry where I know for a fact, I've done my homework and they have a culture of growth.

Like Ramsey Solutions moves people up. You do a good job here and you stay with it you're gonna get an opportunity for growth here and so you're looking for that. We announced 32 promotions at a staff meeting this morning. Exactly, very normal. So you know the industry, Zach. You know the industry and you know the position. Go get it. Don't overthink this. But before you move we're gonna have something that we're gonna move into. We're not going to jump and start looking. It's just never a good idea unless for some reason you've got all kinds of wealth.

Is it too late at that company to go in and sit down with the supervisor and say, how can I add value? It might be. That's my next question. Have you ever sat with a leader in your 10 years and said, hey, I want to grow. What are some opportunities for me? Yeah. Yeah, I have. I've had a thing manager for quite a while and we've had those conversations. And I have moved or done rotational roles that only last for like six to nine months. I've tried those opportunities and unfortunately I haven't really accumulated or current into anything beyond that.

Yeah, I think Dave's right. I think one more time I'd sit with him and go, hey, I've been here 10 years and this is the kind of gig that I'd love to have. You've given me these opportunities. Shoot me straight. Let me know where I stand. I can handle it. We've been together a long time. Tell me, what are my options here to grow? And be okay with whatever the answer is. And that'll give you some clarity moving forward. But you're probably looking somewhere else as my guess. This is The Ramsey Show. Hey guys, I've never done this before, but I'm partnering with a nutrition company, Field

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Hey guys, Dave Ramsey here and I got a big announcement. I'm coming to a city near you live on the Money and Relationships Tour with Dr. John Deloney. This is the most interactive event we've ever done. You get to decide what we talk about. You do not want to miss this. We'll be coming to Louisville, Durham, Atlanta, Phoenix, Fort Worth, and Kansas City in April and May of 2025. Get your tickets and more information at ramsesolutions.com slash tour. You ever stood in the grocery store line nervous that when you spent that money it was going to cause check to bounce. I have. That's scary. Life's too short to live scary like that. You want to stop it? You have to tell your money what to do instead of wondering where it went. That happened to me when we were going broke. I got a brand new baby, a toddler, and a marriage

hanging on by a thread. Sharon would have left but she didn't have a car. I mean we were not, it was not good at our house. And I remember, I can show you the Kroger, I was standing in line. I'm writing a check and I can't figure out in my head if when I buy these groceries if there's going to be enough money to pay the electric bill, if the electricity is going to get cut off because I bought groceries. See when you have a written detailed plan you'll never have that feeling again. You'll know this is how much I have for groceries and that means I have enough for lights and enough for water and enough for the rent and enough for the kids school activity and enough for whatever because you've got it written

down and you know when I if I if I stay in this side this number that's written down for this category that means the other categories get to exist without any trouble the stress goes way down the The anxiety evaporates. The old word we used to use is you are empowered. Remember being empowered for things, Ken, that was a long time ago. Yes. Scary word to a lot of people now. Yeah. It's okay. You're empowered. You're in control of your money instead of it. Money is a great slave. it's a horrible master. You need a written detailed game plan for your money, it's called a budget. And that's why we developed EveryDollar, because EveryDollar gets an assignment before the month begins and you agree on it with your spouse.

You can download the world's best budgeting app called EveryDollar for free in the App Store or at Google Play. Or you can click the link in the description if you're on podcast or YouTube Kathy is with us in Indianapolis. Hi Kathy welcome to the Ramsey Show. Hi Dave, thank you, thanks so much for taking my call I feel like I could use a group call with all of you all Rachel, Jay, John, Ken and Dave. But Dave, you're like my financial father. I came from the same age, but I've been listening to you

for a long time. So I waited till a day that you were here. So I think I have two main questions. Can we afford to own two homes? And the second was if we divorce, what considerations are there for our investment account? So just a tiny bit of background. We're, we're living separately at home. I'm 65, my husband's 67. I travel two to three weeks out of every month to go and help our daughter who lives in a different state with her tiny little ones with another one on the way. I've

gotten involved in a church up there and starting to develop some friendships up there. My daughter and son-in-law, they want me to come as much as I want and to be there with them but they don't really want to spend time with my husband. Why? Behavioral and emotional immaturity I think I would say. Is that her dad? It doesn't seem to. No, I said is that her father? Oh, is that her father? I'm sorry, yes. Okay, so she doesn't want a relationship with her father? She wants it no more than a couple days at a time. She's concerned about him being around the young kids.

What's wrong with him? What's wrong with them? Well I have involved our church and attempted to talk to him but I'd say it's emotional immaturity, spiritual immaturity, relational immaturity, focus on maturity, relational and maturity, um, focus on politics and things that just don't matter. Um, and he has asked for forgiveness every time these things happen. What are these things? I mean, he yells at people or what? Um, I'm trying to think of a real quick example. Um, he doesn't know when to quit. When people say, I don't want to talk about that.

He, he won't quit. Um, and I've talked to my pastor about it and he's tried to set up times to talk with him, but he'll, he just says that he will go to counseling, but then it never happens. So we've been living separately in our own home here for about six months. Okay. Yeah. I do not like that your daughter and your grandkids are driving this.

You owe your marriage more than that. How long have you been married? Oh, we've been married for 41 years. And maybe I'm not explaining it correctly. You need to go, you without your daughter's input, I'm tired of her input already, you need to go sit down with a counselor and start talking to the counselor about how to talk to your husband of 40 years that you're going to require him to sit down in counseling with you and you need to be able to give some words to that for him for you to stay in the marriage okay well then I put boundaries around things and I may have I think maybe I jumped ahead this is just been getting progressively worse yeah because you ran

off to the you ran off to another city for three weeks at a time and griped with your daughter about how bad a man this is that you've been married to for 40 years. Of course it's not getting better. Well, and I hate to correct you there, I really do, but that that is not how it's panned out. It's what you told me. Well, yeah, I'm trying to be careful here Well, yeah, I'm trying to be careful here. Because this has been ongoing for years and years, and my going there so much has just recently started to pick up because of the need there. I am not running away from my home here,

and my responsibility is here. And I'm confident of that, and my pastor's confident of that. All right, then you guys have to decide if you're gonna be married, and then you need to decide that, and then you'll decide if you're going to be married and then you need to decide that and then you'll decide whether you're going to do stuff. No, I would not try to live in two different cities and act like we're not married when we're still married. That would be suicidal, relationally, emotionally, financially. Yes, so I'm deciding

our home here is paid off. When you divorce, you turn your balance sheet into a business. And you're just gonna look at what we own and what we owe and that's gonna be split. And so you're thinking about that. Yes, and I have and I contacted it. I have my investment account the 1.3 million with one of the brands. And I went to another one of the brands to have, because I'm right now 90-10 in stocks and then

bonds. Well, you don't need to move anything until you decide what's going to be split. Exactly. Exactly. Right now you need to decide. First thing decide what's going to be split. Exactly. Right now you need to decide, first thing we got to do is just add it all up and start talking to a diverse attorney and how much of that's going to be yours, how much of it's going to be his because in most states it's down the middle. Right, it's 50-50 here and he says, my husband says he understands that, I mean, I've managed all that, I've built it, we've done it together, but he said, you know, you deserve more than that. But I said, well, beyond that,

we just need to figure out what we're going to do. And they worked out this plan for me with a 50 50 split, but with it changing from 90 10 stocks and bonds to 70 30 stocks and bonds. So I had a question for you about that. I was thinking about going with a second company that they do individual stocks and I know that that is generally you just, you do not do that. No, I wouldn't do any of that. I think you've got a whole lot bigger plant problem than whether you're in stocks or bonds, honey, you're in a marriage of 41 years. You need to think about, you all need to concentrate on that. You need to put a bow on that one way or another. Either we're in a healing mode or we're in an ending mode. When it ends you take your poker chips

off the table then you sit down and you can go to a Ramsey Solutions and click on SmartVestorPro they'll sit down and put you in some mutual funds is what I would do. It's pretty simple. I wouldn't be in stocks, I wouldn't be in pretty simple I wouldn't be in stocks I wouldn't be in bonds I wouldn't be in 70 30 it wouldn't be in 90 10 be a hundred percent of mutual funds that's what I'm in and you've been listening to me you already knew that so wow that's a sad place you're in honey real sad this is the Ramsey show real sad. This is the Ramsey Show.

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It's a completely free app, the Ramsey Network app. Be sure and join it. Put that on your phone. Start listening using that to consume the show. Nicholas is in Washington DC. Hi Nicholas, how are you? I'm good, how are you Dave? Better than I deserve. What's up? So I just graduated college. I took my last final today and I have a job offer for But I've actually taken already for a hundred thirty thousand a year and you graduated from college and took a hundred and thirty thousand What's your degree in? Computer science way to go, dude Man much look at you

Wow, okay, and on that note, I have absolutely no idea how to structure this income and how I can save it the best. I have the blessing that I can live with my parents for a while after starting this job. So I think for the first six months, I'll probably be living with them and just saving up as much as I possibly can. But I'd love your insight on what actually maxed out

my 401k, any other investment tools. You have any debt? I do have debt.xam or 401k, any other tools. You mean debt? I do have debt. I have roughly thirty thousand dollars of debt. Here's what I would do in your situation. You need to do a detailed written plan and you're good at detailed written plans with computer science degree of what you're going to do with every dollar before the month begins. Now you do not know exactly what your take-home pay is yet, but you can probably get

pretty close, okay? And I would not stay with your parents six months to save money. I would stay there three months until you found a nice place and get out. So I know that roughly my take-home after taxes will be around seven and a half thousand a month. Okay perfect, then budget that out, stay there three months and find you an apartment and get the heck out man, start your life. I'm ready to start my life. Good.

But on that note, what should I be aiming to pay for rent? Because this is a very expensive area, kind of hence the large salary. And one-bedroom apartments in the area of where I work go for around $2,500. Is that something you think I can afford? Nope. You need to bid a fourth of your income, fourth of your take-home pay. Fourth of the take-home, okay. So you may want to get a two-bedroom, get a roommate, or you may want to live a little

bit further out with a bit more of a commute than you were looking at you're not gonna be able to live in the cool area of DC Not on a hundred thirty grand. It's not a hundred thirty grand budget Yeah, but you can live in the area. You just can't live in the cool kids area And that's where the apartment was Yeah, yeah sure was Do you think I should be maxing on my 401k? No, I think you need to dump everything you got on the 30k until you get rid of it. And then after that? Then after that I would start I'd make sure

you had an emergency fund of three to six months of expenses. After that I'd start putting 15% of my income away towards retirement in my 401k. And really you should be there within a year but let's take this year and get the 30k and build you an emergency fund of 20,000 cash start talking about maybe buying a house someday and let's start putting money in our 401k at that point I'm gonna send you a copy of the book the total money makeover which outlines what we call the baby steps Nicholas and it'll walk you through every little bit of that

and jump online and get every dollar of the budgeting app for free and get started on laying out your budget and give every dollar a game plan before the month begins. But completely concentrate on the debt until it's gone. And two to three months at your parents' house is plenty in this situation. Yeah, I was gonna say, Nicholas, the one thing you're going to need to fight is that

you've been in college, presumably for four years, and you got a dorm room or an apartment in the cool part of town, and life's been a big, big blast. And you've done well, and you got a good job. Now it's the time to start being patient. And I think the roommate living further out, learning how to manage your money, you're gonna be so far ahead if you just can be patient and not try to keep a portion of that college lifestyle going, this is the real world now and that means not

getting an apartment in an expensive place, getting one, two, maybe three roommates for a year, whatever that is, so that's my encouragement to you, is now things are changing, and the mindset has to change with it, or else you're gonna feel like, oh, I should have this, and I've been doing this. Well, you can't afford to do that.

It's a very different world now. Now, we have this sense when we take a step up, when we level up, and you're leveling up, and you're graduating and getting a great job. It's human nature to have a sense of going, I deserve. That's right. And let me help you with what you can do, what you deserve. You don't deserve anything unless you can pay for it. That's your measure whether you deserve it or not. I, no, I don't want, no, I don't care. If you have the money you deserve it. If you don't have the money, you don't deserve it. You haven't made enough

yet. And that slows your butt down and pushes you into a contentment zone which goes, okay, and then I'm going to live like no one else so that later I can live and give like no one else. Nick's in West Palm Beach. Hi Nick, how are you? Hey Dave, I'm doing good. How are you guys doing? Better than I deserve. What's up? So I'm in a little predicament here. I've been running my business. I started about eight years ago. It's a party and event rental company. We're located in South Florida and I have just recently, probably within the last six months, kind of been listening to a lot of your videos and watching you guys consistently starting the baby steps. I've had about a little over $70,000 in debt between a vehicle or two as well as just mainly

credit card debt. Within the last six months, I've paid off over half of that. I have about $30,000 in debt remaining with $22,000 of that being one of my vehicles and then about $8,000 left in credit cards. And now with it being December, I've got Christmas bonuses that need to be going out, you know, that I'm normally paying every year and that, you know, I've got about 10 employees total and I'd say four or five of them have been with me for a few years now and are used to, you know, that Christmas bonus. This year I've just been, you know, I've been tightening everything up and I'm

just in a predicament right now and wondering, you know, if I should pay those Christmas bonuses or if I should have a conversation with my employees about things. Do you have the money? I've got the money, yeah. I definitely have the money to pay them for sure right now. How big a bonus do you were talking about? Not a lot.

I would say over the 10 employees, they're all going to be small bonuses, maybe totaling up to $3,000. Okay. How much money do you have? I mean, right now, just liquid in the bank between my personal accounts and my business accounts, I'd say approximately maybe 35 grand. So you're just wanting to save the three this year to keep going towards all this debt elimination? That's your why?

Right, that's my why. How do you think they're going to react to that? What do you think their real reaction is going to be if you told them today? Definitely some disappointment for sure. I'm sure they're kind of counting on it. It's later in the month than I would have normally paid it to you because I'm just, you know what I mean? Have you ever seen Christmas Vacation with Chevy Chase? I haven't, unfortunately not.

Wow, you know, watch that tonight. That didn't go well when he didn't pay the bonuses and he gave him the Jelly of the Month Club. These people are counting on it. Listen, it's a comedy, but people are counting on this and you waited way too late to change this on them. It's my opinion. I wouldn't do that for what money you think way too late to change this on them. It's my opinion. I wouldn't do that for what money you think you're going to see.

And you have the money. You'll lose them. That's right. You have the money. Right. It's not like you have $30,000 in bonuses and $30,000. Sure. That's not, you have the money.

It's not going to kill you. It's really not even going to change your get out of debt plan. You're just more cognizant now where money's going, and that's a good thing, but in terms of communicating with the team on something like that, you should have communicated before Thanksgiving. Yes, okay, I agree.

And if the truth is we're not profitable enough to pay out bonuses this year, but that's not even the truth here. Truth is you have the money, you just wanna put it on debt instead. And so in that case, no, I think part of running your business is a small, and these are small, Christmas bonus.

And yeah, I definitely would give that out. I'd give it out today, by the way, in cash, as soon as you get off the phone. This is the Ramsey Chef. What up, what up! It's Dr. John Delaney from The Dr. John Delaney Show with some amazing news. The latest episode of United States of Anxiety is available right now exclusively on the Ramsey Network App. This docuseries follows real people from my show

as they embark on a 90-day journey to transform their lives and I personally walk alongside them every step of the way. Okay, now here's a sneak peek of what the new episode is all about. And don't forget to click the link in the show notes to download the app. What's up, Kelsey? So I've lived with crippling anxiety for as long as I can remember.

How do I stop it from constantly coming up in different areas of my life? What does crippling anxiety mean? Paint me a picture of that. All right. So you're ready to jump in? I'm ready to jump in. So we're going to check in with Kelsey, 30 days, 60 days, 90 days.

I cannot even function because I'm just crying. My mom left us when I was four. I truly felt like for a while I had no family. She's experiencing things that really hurt a long time ago. Tell me about this boy. He triggers me a lot. Scared of losing Paul, scared of doing the wrong thing, scared of not being enough.

It just feels like it would be exhausting to be Kelsey. It is. Whenever somebody's playing whack-a-mole with their anxiety, when it just keeps moving, that tells me the underlying system's not okay. How do I get my inner child out of this relationship? Because I feel like she's running the show. One of two people that's supposed to never leave took off I was this I was this burden you burden that's right

to the one person Who should carry it all did you ever tell a little girl that it wasn't her fault? I? Don't know what to do You either have to choose to let this guy love you are you got to choose to let this guy love you, or you gotta choose to let this guy go.