The Ramsey Show - Different Outcomes Require Different Choices

Starting point is 00:00:04 Brought to you by the Every Dollar app. Start budgeting for free today. Normal is broken. Common Sense is weird, so we're here to help you transform your life. From the Ramsey Network and the Fair Winds Credit Union Studio, this is The Ramsey Show. I'm Dave Ramsey, Jade Washaw, number one best-selling author. Ramsey personality is my co-host today. Carlos is in New York City.

Starting point is 00:00:32 Hi, Carlos. How are you? Hey, hi. Thank you for taking my call, and God bless you all. You too, sir. How can we help? Yes, I'm 64 years old. I work as a security guard, and I don't have any savings,

Starting point is 00:00:51 and I got about $1,000 in medical bills. I own like $20,000 in credit card, and I own about $12,000, and I own about $12,000, and IRS. Ooh. Yeah. Okay. And you're working 40 hours as a security guard?

Starting point is 00:01:14 Yeah. What do you earn? About 55 a year. Is it just you? Or do you have a family, Carlos? Anybody else in the house, a wife? No. I'm recently divorced six years.

Starting point is 00:01:32 Okay. So do you, did much of this happen because of the divorce or help us understand how you got here to 64 with really nothing to show financially? Well, I'm very, I'm very, I'm very embarrassed with myself because I went through a lot, through a lot in my life and I never, I was never teach about saving and, you know, and it was, I was just, I didn't have the right advice, you know. Well, I appreciate that. I'm very embarrassed of myself. Well, we're not here to shame you. We want to help you go forward.

Starting point is 00:02:19 The only benefit of looking back is figuring out what not to do because it brought us here. Because, you know, the old saying, if you keep doing the same thing over and over again, you're going to keep getting what you've been getting, right? You don't want to expect the different results. So we've got to have some pretty dramatic changes. to get out of a pretty dramatically scary situation, because this is a little scary for you. You're looking down a tunnel,

Starting point is 00:02:44 and the only light coming at you is a train, right? Yeah, and I forgot to tell you, I just had my physical, and I was, oh, my God, I was diagnosed with prostate cancer, too. Oh, no. Yeah. What are the doctors saying, is what's your prognosis? Is it looking good with treatment or?

Starting point is 00:03:07 Well, everything is normal now, but I have to go on September 9th to see if surgery is the best or what they call like laser or something like that. Yeah. Okay. Okay. So you're going to be a down from work for a little while, and you've got health insurance and you've probably got some sick time at work you can use. Yeah. But they're going to do it at least at least an outpatient surgery here. be a major surgery to remove that. I'm sorry. Okay. So, yeah, yeah, kind of stacking up on you.

Starting point is 00:03:42 Oh, and I forgot to tell you, I'm sorry, Dave. I forgot to tell you that I have. Give me some good news, Carlos, for God's sakes. Yeah, I forgot to tell you that I have like a TIA craft, what they call it. Yeah. Yeah, what's in that? I have about, I have about 40,000 in there. Oh, that's good news. Okay, good. That is good news. All right. Well, here's the overall thing. The overall thing is in order for you to have a quality life at 70, six years from now, we've got to clear up the debt and pile some money into that cref and into some other savings vehicles, right? And so if you really lean into it for six whole years and you're going to have to, you know, when you hit 70, you should be debt-free and have piled another $100,000 or $200,000 into that account.

Starting point is 00:04:32 And you'd be sitting there with a couple of $100,000, $250, $150, whatever it is, somewhere in there, and no payments. And you've got Social Security coming in at that point. And you can make it then. But you can't make it keep doing what you've been doing. How do you live, Carlos? Are you renting or are you in a place of your own? No, I'm in what they call like a furnished room. It's an apartment, but I rent a small room.

Starting point is 00:05:00 Okay. And my rent here is 800 a month. Yeah. Okay. Yeah. Yeah, we're going to put you on every dollar budget, and your first goal is put $1,000 away. Your next goal is to list these credit cards and these other debts, smallest to largest.

Starting point is 00:05:15 I want you to clear the IRS and get them out of your life. You do not want that hanging over your head. Get these credit cards cleaned out. And then when that's all gone and you got no debt, They got that little $1,000 debt we got to get rid of. And when those are all clear and you don't have any payments, then you take that budget and you squeeze it like your life depends on it because it does. And you start throwing and chunking as much as you can set aside. And, you know, that's $7,000, $8,000 a year that you could do for, say, five years.

Starting point is 00:05:47 So that's another $40,000 or $50,000 you would have set aside plus growth. So you'll probably be it with that other $1,000. With that other 40 laying there, you'll be between 150 and 200 when you get to 70. But, and that's saving only 15% of your income. You probably could save more than that if you can once you've gotten the debt cleared. Because the more you save, the bigger your nest egg is going to be, duh. And the more comfortable and sustainable your situation is going to be when you get there. Yeah, this is going to require a major shift in how you approach each day.

Starting point is 00:06:21 Yeah. Major shift. Yeah. But I think you can get there to you. I think you can get to $150,200 probably. Yeah, 100%. I mean making $55,000. He's got $800 in rent.

Starting point is 00:06:30 His rent being low, even though it's just a room that he's renting, his rent being low is really going to help him out. And it's just him. There's nobody else to speak of. Yeah. You know, that's and just lean in and just, you know. But it's going to be as, and I'm going to use the embarrassment, you called it.

Starting point is 00:06:48 Yeah. As a motivation. Like, I'll never be here. again. So like Carlos, when I went bankrupt and lost everything, I was embarrassed. I was ashamed and I was really pissed off at myself and at everyone who was near the thing. So I'm still 40 years later mad at bankers. And I don't feel much better towards lawyers. And so I just generally, you know, just generally stay pissed off all the time. And that has driven me to get away from all this, you know, and to say, I'm not going to be there.

Starting point is 00:07:23 You know, if American Express calls my house, it's a wrong number. Because I don't want anything to do with that company. They're absolute hogwash. I don't want anything to do with that company. I don't want anything to do with SunTrust financial. I don't want anything to do with fifth third, ever, period, under no circumstances. You know, and so you just, in other words, as dramatically as I was heading the wrong, direction, I dramatically headed the other direction, and that's kind of what I'm calling out here.

Starting point is 00:07:55 And so sometimes the answer is some drama. Yes. Created drama, and it's to avoid the embarrassment, the shame, the anger, the source of the anger, whatever it is. And I'm just going to stay away from anyone that looks like they can do that to me again. Yeah. Oh, boy. Well, the good news is if he does that, he's got the $40,000, and I've just plugged in our calculator here, He's got the 40,000 already sitting in TIA Creft.

Starting point is 00:08:22 If he continues to put 15% of his income in for the next eight years, I mean, that's going to be $200,000 for Carlos. So I was pretty close. Yeah. 150 to 200 was my guess. Good. And it shows up in the calculator. Hey, guys, it's Rachel Cruz.

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Starting point is 00:09:46 They're an independent broker who works for you, shopping all the top companies to find the most competitive prices on coverage you need. Get instant quotes online in just minutes at zander.com or call 800356-4282 to get your family protected with term life insurance. That's zander.com or 800356-4282. Susanna is in Chicago. Hi, Susanna. How are you? Let me try one more time. Hey, Susanna, how are you? Doing well, thank you. How are you? Better than I deserve. What's up?

Starting point is 00:10:43 Thank you so much for taking the time to speak with me. I'm just calling, I've been doing a Dave Ramsey budget for the last probably nine or ten years since I got married. And every month, we are short, and every month we're pretty much paycheck to paycheck. And we're big grown-ups. I'm 52. My husband's 48. We have careers. And we make decent money.

Starting point is 00:11:09 But seemingly every month while going through the budget, we do seem to have a difficult time. And there's never any extra money. My husband did have a career change recently. And so we took out a giant loan for him to have a career change. And we have a vehicle. And we just bought our first house. And we just had an adoption for our son. So there have been some really big expenses.

Starting point is 00:11:34 But it all looks great on paper when I write it all day. and all the ticks and balances. But then when we try to see where did we go wrong, it's just very hard to sort of get it right, even after all these times. And we've had some financial advisors help us to look through things. I'm kind of doing it on my own, the budgeting. So I guess I'm just looking for a way that you could advise.

Starting point is 00:12:02 I'm sure the steps are perfect. And if I follow the steps, than I would be within where I need to be, but I'm just looking for a way to be more successful. I know that we do make decent money, and when I go through my budget, I'm just surprised that it's always so tight while we do have some large expenses.

Starting point is 00:12:21 Well, that's what you're facing is what a lot of folks face. When you have debt, it turns a quote, good income into paycheck to paycheck living. That's what it does, because you've said, okay, there's these things I want, a car, a house, I want to do the adoption, I want to do the business, but you've done it all on payments. And that's what's dwindling away.

Starting point is 00:12:39 You're really, really good income. So that's why it feels like I'm working and working and have nothing to show for it. Because you keep buying stuff on debt. Uh-huh. Uh-huh. You're going to stop that. Yeah. So what is your income?

Starting point is 00:12:52 No, I mean, you got to stop that. I don't want to hear any excuses. No. You got to stop it. But how do you buy a home? Well, you don't when you're freaking broke. You don't buy a car and you don't. go in debt for an adoption and you don't go in debt to change your careers.

Starting point is 00:13:11 Period. You save up the money to do those things or you don't do them. How could you ever save up $90,000? You live on less than you make. $90,000 for what? He's a pilot. Okay. Well, maybe he doesn't get to be a pilot.

Starting point is 00:13:28 There's an option. But now that we're here, how are you just, you know, you can't say, Jay's exactly right. You guys got to stop borrowing money and then wondering why you don't have any. The reason for this, Suzanne, is because if we just jump straight into, here's how you get out of it and you never figured out what the problem was, you'll go back and you'll repeat it again and the solution won't stick. Yeah. So the way you become a pilot is very, very slowly and you work there giving lessons on the weekend and you get your hours in for free as an instructor. and that's how most people go through flight school, or they go 90 grand in debt, and then they get a job making not a lot, not a lot of money. Beginning pilots don't make a lot.

Starting point is 00:14:12 So what we can do, what we got to do to get this out of control, under control, this out of control situation under control, is to Dave's point, first things first, you've got to decide, I'm not borrowing money. How much is your house payment? It's per month, it's $2,500. And what's your take-home pay a month? Mine personally or the household income. The household income.

Starting point is 00:14:35 Our household income is about 122. We rent out part of our home as an Airbnb. So your take-home is about $8,000. Does that sound right? No, it's more than, I'm saying it, what our take-home is $122. Oh, you're $1.22. So 10,000. So you're at a fourth of your take-home, give or take is your house payment.

Starting point is 00:14:52 So that's not the problem. What do you owe on the car? We've, we owe, it was a $45,000 car, and now we owe $12. so we've thrown a lot of money at that. And then for the loan, somebody helped us out so that we had a lower percentage, and we owe left of that

Starting point is 00:15:10 about another one year. So we owe about $38,000, I would say. That's on the adoption? No, on the school loan. We've paid the adoption. Okay. On the school loan, it's 90. And you're talking about the $90,000 on the pilot.

Starting point is 00:15:27 Correct. You got that down to 38. $36,000. You're heading the right direction. Yeah, you've been working on this. You've been beating it down. You're heading the right direction. Yeah.

Starting point is 00:15:37 But of course you've got no money because you've got these big stinking expenditures that turned into debt. And that's where your money's all going. So, I mean, it's not like doing a budget doesn't work. Yeah. It's doing a budget while you're reducing debt this dramatically is not going to leave you any margin. So yes, you do need to sit down every month, you and your husband, look at the every

Starting point is 00:15:59 budget and plug that in and spend every dollar on paper, and that includes huge amounts of debt reduction, which you've been doing, and no eating out, and no impulsing anything. Nothing. You don't get to buy anything. You're broke people. And you just attack these debts, smallest to largest, with every piece of margin we can squeeze out of this budget, but the two of you need to be doing that together. So the thing that I want you to remove from your discussion in your head, if I were you, this is what I would do.

Starting point is 00:16:35 When you called in, you said, we've been doing the Dave Ramsey thing for like six years. And the answer is, no, you haven't. Because you wouldn't have done any of the crap you told me you did if you're doing Dave Ramsey stuff. Because we don't tell you to do anything you were doing. And so you said, I'm sitting down to do a budget by myself. That's not what we teach. and then I get to the end of the month and I can't figure out what happened. That's not what we teach.

Starting point is 00:17:00 So, you know, your attempt at a budget has been okay, and thank you for doing that. And I'm glad you're reducing your debt. But so far, the reason you're not getting anything out of this is you're doing it halfway. So the full way is you sit down with your husband before the month begins and say, this is where we're going to spend money. And we're not going to spend money anywhere else. And we're certainly going to lay out a budget that's tight, that every dollar has an assignment. So everything's gone.

Starting point is 00:17:29 Everything comes in. Everything goes out. But it's going to be chunking on this debt. And we're going to get our satisfaction from that. And we're not going to have anything left over. And we're not going to have any luxuries. We did an adoption, a pilot's license, and bought a house. And and and and and we can pay in for that now.

Starting point is 00:17:49 And so we're going to. And then we're going to stick to the budget. budget. We're going to pinky swear and spit shake. This is the plan. And pretend like it was your job to stick to the budget. And they were going to fire you if you didn't stick to your budget. Because that's what would happen if you worked somewhere. I've got 14 profit centers inside Ramsey. The vice president that runs an area has a budget. He misses budget three months in a row. He's probably working somewhere else unless there's real reasons that were beyond his control or she. So, I mean, you need to lay out and plan where your freaking money's going and then make that happen.

Starting point is 00:18:26 And that's if you work here, right? And that's if you work somewhere and this was your job. So treat it like it really, it's not a passing thing. It's not like, well, we're going to write it down and hope it happens. No, we're going to write it down. And that becomes the boss of you. It tells you what you must do. No, they must do it.

Starting point is 00:18:44 They're 502 years old. Do what now? When you're 48 and 52 years old, you must do it. Yes, you must. Or you're going to end up like Carlos, who calls you must do it. in earlier at 64 with nothing saved for retirement. And you have to stop buying anything for the rest of your life unless you pay cash for it. Facts. No rationalizations, no justification. No, it's the only way you can do it. Then it means you can't do it. If the only way I can do that is go in debt,

Starting point is 00:19:12 I can't do it because I don't borrow money. And that's me. If the only way I can do X or Y or Z is if I have to borrow money, I can't. can't do it. I don't have enough money. And I'll guarantee you, there's everyone in the world has to eventually go, I can't afford that. No matter who you are. I mean, even Bill Gates, there's some things he can't afford. Not much, but there's a few things he can't afford. Jeff Bezos, there's a couple of things he can't afford. Not many, but a couple. I can't, assuming he's paying cash, I can't afford that. Hey, it's Rachel Cruz. I don't know about y'all, but I can build something up in my head

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Starting point is 00:21:14 mama bear legal forms dot com with promo code ramsi Well, tonight, for those of you listening live, September the 1st and second, the first is today for those live, we'll be doing our Investing Essentials event. That's George Camel and I doing a virtual event for thousands of you, a record number of you have signed up for this. Thank you so much for the response. We're going to go into the nerd stuff on investing, down in the details. Not only cover the basics to make sure everyone has a seat at the test. but then from there investing 201 to go with 101. I'm going to go open the real estate playbook and go,

Starting point is 00:22:11 here's some properties I actually purchased. Here's why I bought them. Here's what the returns are. Here's how you do it. And then we're going to go into wealth planning. How to not destroy your family tree with your wealth? People always ask, how do I not mess up my kids? Well, I'll go ahead and spoiler alert.

Starting point is 00:22:29 You don't mess up your kids with wealth. Your wealth reveals the fact that you already messed up your kids. And so that, you know, we'll go ahead and tell you what the answer to that one. But anyway, we'll get there. And we're going to cover, you know, stuff like doing your will and basic estate planning stuff. Wealth planning, which includes estate planning. And that's tonight and tomorrow night. It's a two-night event.

Starting point is 00:22:51 So it's hours and hours and hours of this stuff for $199 a virtual event. You can watch it from your couch. And Ramsey Solutions.com slash events and click the link in the show notes. If you're listening or on the podcast, Dave Ramsey and George. camel, we'll be doing it. D. is in St. Louis. Hi, Dee. How are you? I'm living a dream, and by the way, so happy to be able to talk to you and Jade and love you both for your ministry and the rest of the team. I have a question that I'm dealing with. It's a struggle. My husband and I have gone through all of the baby steps.

Starting point is 00:23:33 And so at this point, we are debt-free other than our mortgage for our house, which we have significantly paid off over time. Good for you. Well done. But I would also say that I have a relationship in the family, and that would be my brother and his wife, they have. two kids, my nephews, and we haven't spoken in a couple years. And I think mom and dad helped them out here and there just to keep access to the kids. And so I'm really struggling with whether I decide with my husband to come up with some sort of fund for the boys for

Starting point is 00:24:29 college or whatever, but also I'm struggling because I don't want my brother and sister-in-law to have access to that money because I'm not sure that they'll be wise about how they use it or spend it. And I know... So what's your household income? Me and my husband? Mm-hmm. Should we talk about salary?

Starting point is 00:25:05 I don't know. What do you make in a year that you pay taxes on? That's your household income. Yeah. Well, I make $3.50 a year. Mm-hmm. But with bonus, my target is $458 this year. Phenomenal.

Starting point is 00:25:21 And my husband brings home W-2 about $68 to $7.7. awesome so you've got a half million dollar of your income that's wonderful and you've done very well congratulations um and and yet these are not your children so you don't have any legal access to them they're minors i take it yes they are okay all right um the only thing i would do is finish paying off your house and pile up cash and become very wealthy and then if at some point that you that they reach college age and you want to write a check and pay for their tuition You just take it out of your account and write a check and pay for their tuition. Okay, but you wouldn't do...

Starting point is 00:26:04 Absolutely would do nothing with anybody's name on it but yours. Your brother is not trustworthy. Yeah. Well, that's true. Yeah. For sure. With money. Yeah.

Starting point is 00:26:16 I'm not putting any money in his name. He doesn't talk to me. No way. But if those boys go off to college and as an act of love, you want to reach out to them maybe through your parents, and say, you know, old Aunt D that you heard all the bad things about is going to pay for your tuition this border? That'd be kind of fun.

Starting point is 00:26:37 Well, it would be great. I just, I guess, like, I struggle from it, like, from a moral perspective, because it's not the boys' issue. Yeah, but you don't need to put any money in the boy's name. You can just take care of them. There's nothing immoral about you giving the boys, paying their children. tuition for them. How old are the boys? You said they're minors, but how old are they? So the boys are in seventh and ninth grade now. Are you concerned for them that you feel like

Starting point is 00:27:10 you need to do something prior to college age? No, I'm not concerned in that regard. I'm more focused on the fact that they don't have any background, right? Like my parents, when they raised us, they put us on the credit cards early in age, and I would have to ask permission to spend 25 bucks, but that was to build, like, you know, credit history kind of. You don't, this is, this is not your circus and not your monkey. They're not your kids. I know. If the kids are not in physical harm, then you've got no say in it.

Starting point is 00:27:54 They're not. You got no say in it. None. it's just part of the heartbreak of the estrangement. Yeah, I agree. There's nothing that you have the right to do or the ability to do to fix those kids' life. Nothing, unless you call child services because they're being abused. And they're not.

Starting point is 00:28:16 Yeah, but they're not. And they're not. So you need to quit worrying about whether these kids are raised with work ethic, whether they're raised with integrity, not your monkey, not your circus. You can pray for them. but that's all you can do. And, you know, I feel like you can do things now that will allow you to cultivate a relationship with them when they're older. Like now, you can make sure that you send them a birthday card every year or a holiday card. Like, right?

Starting point is 00:28:39 There's ways that you can be part of their life so that when they are 18, you can kind of show up. And if you suddenly want to bring them to dinner or find a way to create a relationship with them, it's not we've never heard of D before. I'd like to buy your breakfast and hand them the receipt where you've already. paid for their tuition. Don't give them a check. No, don't give them a check. Just give them a receipt where you've already paid for it. And that kind of stuff. I mean, that's the kind of stuff. But they're going to have to reach adulthood before you're going to be allowed access because of this estrangement. And so, Jay's right. I mean, you can send them a note, send them a letter, send them things

Starting point is 00:29:17 through your parents or whatever, but just letting them know that you're there and that you care about them. But you don't get to control how they turn out. Not your monkey, not your circus. And you just don't get to. And so even the influence that an aunt would have in a normal setting is limited. Yeah. Our kids live on top of each other. They live three doors down and a quarter of a mile away from each other.

Starting point is 00:29:45 So their kids are all growing up more like siblings than cousins. But that's the most. But even then, it's not Rachel's kid. It's the niece's kid. Yeah. I mean, they don't reach over and tell them, you know, We all make them all behave. Sure.

Starting point is 00:29:59 But that's that, but that and that, and we're freaking on top of each other. Yeah, but you have more, you definitely have more of those liberties when there's a healthy relationship amongst the siblings. And she's just, I mean. But even then, it's not a, it's not, you don't get to parent them. No. I mean, I'm, we were at the soccer game last night, but I don't get to parent them. I can just, you all kick the ball.

Starting point is 00:30:19 That's the one thing I'm allowed to do. You know, I mean, it's like, that's it. And so, um, that, that's normal boundaries. that. And you've got even worse boundaries here because of this estrangement. Lee, I think you're, might be trying to fix your broken heart through the kids. And it's not going to work. The broken heart's just broken because of the estrangement. And that's just sad. And someday, hopefully that'll be mended. And maybe you can do some nice things for the kids financially as you get there from your checking account.

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Starting point is 00:32:44 Rod is in Oklahoma City. Hey, Rod, how are you? I'm well. How are you guys today? Better than we deserve. What's up? Well, so to give you a little bit of background, my wife and I moved about a year ago, back to the hometown one from for a job.

Starting point is 00:33:01 And we have had our house on the market since January and we don't really know if we should continue to try to leave it on the market or maybe try to have a bigger investors mine like turn it to a rent house or an Airbnb kind of thing and it takes up about a third of my salary and so that could be a lot of money that could go towards the debt that we have or what's how much is the house on the market for 215,000 what's wrong with it nothing it's nothing it's four-bedroom, two-bathroom, it's a six-year-old house. We built it in 2020.

Starting point is 00:33:40 And the interest rates were about 3.1. And so we paid 159 for Iowa, 140 on it. And excuse me, I meant 225, not 2.15. Okay. Is it too expensive? Or is it it a neighborhood? Is it too far out? I mean, is it on a piece of ground?

Starting point is 00:34:02 That's the kind of conundrum that, it's right by a university and it's right by a hospital. And so I thought, you know, it's selling no time. My realtor can't seem to get any feedback. There was only been, we've had, we get about three showings a week. And I don't know, I really just don't know what the, what the issue is. I mean, are you objective enough to say if you stand in the street? Is this house ugly?

Starting point is 00:34:30 No, sir. No. It's a very beautiful house. I mean, it's kind of cookie. better. It's like a lot of houses in the neighborhood, but... Have other things in the neighborhood, so... No, sir. Huh.

Starting point is 00:34:44 It's kind of the thing. There's a lot of other houses up for sale, and so I don't know if... What city's in again? I really don't know, to be honest. So it's on the outskirts of Oklahoma City. It's close enough, but it's technically called Shawnee. Yeah, I know Shawnee. Is it freestanding, or is it attached?

Starting point is 00:35:00 No, it's freestanding. Huh. Is it a Ramsey trusted real estate agent? No, sir. Okay. Or not that I'm aware of. Have you seen a competitive market analysis? When they listed it, did they show you the comparative sales in the area to give you a value?

Starting point is 00:35:16 Yes. I can't. I know they showed me the report back when we priced it, and so they thought it would easily sell for $250, but I've lowered it to $2.25 since then. Okay. And your monthly payment is, how much? $1,200. Okay.

Starting point is 00:35:36 So every year that it sits there costs you $15,000 in payments. Yes, sir. Okay. So if you lower at 30, that's not smart because I'd rather sit there and wait. Okay. Assuming we've addressed anything that's wrong with it. Okay, because the first thing I think about from a real estate perspective is when I walk up to the front door, what am I seeing and what am I smelling? And when I walk in the front door, what's the first thing?

Starting point is 00:36:05 what's the feel and is this bad floor plan is the color's awful you know what's the and a real estate agent with a little bit of experience should have the ability to kindly tell you by the way your carpet's ugly you know i mean they need to be able to yeah they need to say that to you and honey you need change just a living room carpet this thing and go sell because people walk in to see this they start itching you know i mean whatever it is i don't know but you said it's by university and hospital, are they getting the ambulances screaming through there every, you know, 10 minutes? Is it, is it the university traffic? Yeah, it's both.

Starting point is 00:36:46 I mean, the university is not, it's not a huge university. So I really wouldn't think it's connected to two major highways. So, I mean, not directly, but the neighborhood sits between like where they kind of intersect. So I don't know. But when you were talking about the flooring and stuff, I mean, it's all new flooring. like we paid about $4,500. Yeah, you just finished. It's not a house isn't that old. Yeah. But I mean, again, you said, is the highway in your background? Are you on a, you know, up against the freeway? Those are the sorts of things that I'm thinking of based on what you're saying. Yeah. Number one, the first thing I'm going to do is call a Ramsey trusted real estate agent or two and have them come out and interview them and look at the house and tell you why this thing isn't selling. Get somebody with feet on the ground that knows Shawnee, that knows what the market's doing. They go, look, here's six other.

Starting point is 00:37:34 ones just like it that have sold. There's no reason this has a sold. We need to put this on the market at 2199 with a selling bonus to an agent and let's get this thing moved, something like that. I mean, I would take it off the market, put it back on the market with someone else. That starts a new listing number and put a slightly different price on it, 29-9 or 19-9 from your 25 number. And I'm also going to go through, do I need to put a coat of paint in this? Do we need to go in there and bake bread every morning? So this smells like Mama's Kitchen when they walk in. What is it we got to do to market this property? And then I'm going to wait and wait on my buyer because, you know, $1,500 a month.

Starting point is 00:38:14 You can wait a long, long time before you give up $30 or $40,000 or $50,000 in price cut. And so, you know, you can decide stuff like that. and I did do one one time that, I don't know if I would recommend this to anybody, but it was kind of fun. I just dropped the price $2,000 a month until it sold. Let's put a new price in MLS every time and just kept, and I don't know if I recommend that or not. It was kind of weird, but it's like a reverse auction, you know,

Starting point is 00:38:49 and it was kind of fun just to mess with it, just see if we could wake somebody up. Yeah. Somebody's sitting around and we're going, I don't know if I'm wait, going to wait, going to wait, get a wait, you know. And we finally just got to, we finally just got a, we finally just got a, good offer on it and sold it. But, yeah. But I don't think that's the case here. I can't tell you don't know why it isn't selling, and so we don't know why it

Starting point is 00:39:08 didn't selling. It feels like for them, the neighborhood was fine, but for other people, it's not a desirable neighborhood, just based on what he's saying. Something going on there. I don't know. And, you know, I need a real estate agent to tell me what, to get feedback from showing. If you're getting three showings a week, you should got an offer. Yeah, for sure.

Starting point is 00:39:28 That's a lot. Median days on market is 57 days. In the nation, right? Uh-huh. Yeah, and he's been on since January. Yeah. Yeah, exactly. All right.

Starting point is 00:39:39 Aaron is in Houston. Hi, Aaron. How are you? Good. How are you? Better than I deserve. What's up? So I'm a college student, and I'm expected to graduate here this year.

Starting point is 00:39:51 Congratulations. What's your degree in? Electrical engineering. Hmm. Cool. Future millionaire. but after graduation I'm looking at about $40,000 I'm going to be in debt from student loans but on top of that I'm looking at a job offer that I've been interning with I'm expected to get a return offer

Starting point is 00:40:12 with about $100,000 annual salary plus $10k signing bonus god. Way to go. Wow. I mean it does. You know, I work really hard. So if you live like a college student, you'll be debt free in like six months. Yeah, because that 10K signing bonus. is about to knock out a quarter of that student loan debt.

Starting point is 00:40:32 And, Aaron, you don't get to buy a car. Yeah, I know that part. My parents had made that abundantly clear. No car until you get the student loan paid off, even though you got the big fancy job. I'm proud of you, man. That's a great job. Congratulations.

Starting point is 00:40:49 Yeah, can you not just go live on nothing and keep living like a college student and pay off $40 grand in less than a year? I mean, yes, you can. I'm going to answer that for you. Yeah, that was my next question. Do I put all this $10,000 to buy two of loans? Well, no, you got to cover your move.

Starting point is 00:41:06 You're going to need some for deposits on utilities and deposit with the apartment. And, you know, you got to have some gas to put in the car to load your 14 things you own in the car and drive up there. Do you have any other money or this is it? I have the babysat number one where I have $1,000 in savings that I used with an emergency went in school. Good. I would get moved. I would get moved in without spending any money, the minimum money, and then I'm going to throw what's left down to $1,000 at the student loans, and then I'm going to start. I'm just going to live like I'm not making anything.

Starting point is 00:41:39 I'm just going to live on nothing. You're used to living on nothing. Yeah. You're calling. I was like, do I move back with my parents? No. No. This version of nothing is still going to feel like an upgrade. Like you living on this version of nothing, be just.

Starting point is 00:41:54 because you're earning a paycheck is still going to feel like an upgrade from living from being in college and being in a dorm and being on campus. But no eating out, no trips, no buying a car, no buying a bunch of furniture, buy garage sale furniture. Yeah, live on. Live on 60. And buy some ladies' couches. You're throwing out that there's nothing wrong with it and buy it for $18 and haul it away for, you know, and that's how you furnish the first apartment. And then you go pay cash for this, man. I'm so proud of you, man. That's awesome. If you want to free up margin in your budget, one of the first things you should do is take a hard look at your monthly bills. Because every dollar you overpay is another dollar you don't have for reaching your financial goals.

Starting point is 00:42:48 And overpaying for your phone bill, well, that makes zero cents. And it's why I recommend Boost Mobile. Their unlimited plan is just $25 a month forever. No contracts, no hidden fees, no surprise price high. If you already have a phone you love, you can keep it and keep your number when you switch. And if you're skeptical, Boost Mobile offers a 30-day money-back guarantee so you can try it risk-free. Listen, your phone bill should fit your budget, not the other way around. Reaching your financial goals is easier when you can pay less for the same service.

Starting point is 00:43:25 Switching to Boost Mobile now is just a smart money move. Go to BoostMobile.com slash Ramsey and make the switch today. That's boostmobile.com slash Ramsey. $25 forever requires customers to remain active on Boost Mobile and Limited Plan. Welcome back to the Ramsey show in the Fair Winds Credit Union Studio. Jody is in Toronto, Canada. Hi, Jody. How are you? Better than I deserve. What's up? Hi, Jade. I listen to you guys like every day while I'm working in the field on the farm that I work. So I'm so excited to actually speak to you guys today. We're excited to speak to you.

Starting point is 00:44:14 too. What's up? So, um, so I'm trying really hard. I've been listening to you guys like avidly since, um, like the end of February, like daily. And I'm so encouraged by like the whole team's wisdom and like you got this. You can do this. So I'm like, I've got motivation. But between my income and like, what I like have available after expenses, I'm having difficulty getting my baby one or baby step one emergency fund and setting aside like sinking fun, sinking fund, like item lines like kids, Christmas gifts. I have two boys, their birthday gifts, those birthday Christmas gifts, like all those little things, dental visits, like car repairs, having those set aside and working on my emergency fund.

Starting point is 00:45:13 And I feel like it's a weird time of year to start this because like Christmas is in like three months time. So how do I get enough at this point for Christmas, well, putting enough away from my emergency fund? And I have started my emergency fund. How much do you have? How much do you have so far? At the minute, I don't have anything as far as an emergency fund. I ended up using it. Here's what I would do.

Starting point is 00:45:38 Here's what I would do. I would prioritize the emergency fund before getting a, into a bunch of sinking funds. The number one thing you need is a thousand dollars saved. Because if you don't have it, something pops up, Jody, and you're going to be looking at credit cards, you're going to be looking at debt. You need $1,000. Most people get it done in 30 days. This is scorched earth. So scorched earth means I'm not thinking about sinking funds. I'm not thinking about Christmas presents. I'm not thinking about anything extra except getting this $1,000 said. Matter of fact, I'm selling old Christmas presents to get it, right? I'm selling off things. So that's, I mean, your hair is

Starting point is 00:46:13 on fire on this to get this thousand dollars what's your income um about 35,000 Canadian what do you do I saw I'm a farm hand at a local agro-agrochurism farm and your single mom oh well no I am married oh I said what's your I mean I meant what's your household income I'm sorry what does your husband make sorry I my husband is roughly about the same he has his own family farm with his dad. So his income's roughly about the same.

Starting point is 00:46:48 You have $70,000 a year coming in. So $6,000 a month? Technically, but our expenses are separate from one another. He's still paying child support for his children that he has with his... Why are your expenses? That doesn't mean you have to have separated accounts. No, no, no, no.

Starting point is 00:47:10 Like, we don't even have a mortgage because it's included as far. as like part of his salary with being a farmer here and there's like not a hydro expense so it doesn't matter the two of you still have seven six thousand dollars a month coming in don't you I mean you make 36 and he makes 36 right before expenses you should have 6,000 yeah before taxes we we keep our like we keep our expenses separate I know okay that's problem number one you're trying to run us like a single mom. I knew you were going to, I mean, you're trying to run this like a single mom with a boyfriend. And it's not.

Starting point is 00:47:50 Do you all live together? Yeah. Yeah. Oh, yeah. So the property that he is being furnished as a part of being a farm hand on his family farm is free to you all. So you don't have housing cost? Exactly.

Starting point is 00:48:03 Oh, gosh. Even more. Okay. So you, why have you, why are you not combining your incomes? Um, just we're more comfortable. this way. Well, it's not working. It's what you called us because you're not comfortable.

Starting point is 00:48:21 It sounds like you're trying to do this on $35,000, and I don't know what happened to his 35 is what it sounds to me like. Well, a majority of it goes to his child support. How much of it? No, he doesn't have a $3,000 child support payment. No, $1,000 a month. Okay, that's hardly anything. Okay, so that's $1,000 of three.

Starting point is 00:48:39 So you still got $2,000. Where's his other $2,000 going? Oh, there's the problem. Okay. Just found it. He's going to there and playing farmer with his daddy, and he's not bringing money home to his own family. He is. He lives like debt-free.

Starting point is 00:49:00 He's good with his money. Here's the problem, Jody. He's not good with his money. His kids are not knowing how they're going to get Christmas presents. He's not good with his money. He sucks with his money. And you guys need to put your money together and develop a game plan to develop. That's where your struggle is coming from, honey.

Starting point is 00:49:18 It really is. You're saying that you're married, but you're doing this totally separate. And you're calling here because you're experiencing the symptoms of that. You sound like a $35,000 of your single mom to me. Everything you described early in the call had that symptom. I thought you were making no money. That's why the very first question I asked you was what's your income. And you stated it as if you weren't married. And then I had to dig to figure out you were married. So we can tell from the way this is going. down, you're kind of trying to pull this whole wagon by yourself, kiddo, and that's not fair. So the two of you need to sit down and say, we're going to put our money together. We have the responsibility, our first responsibility on this planet, both of us as grown up. So these two kids we made, and we have housing furnished. So we should have some money in this house, even with a thousand dollar child support. There should be some money to be able to get a thousand dollars saved and then begin.

Starting point is 00:50:18 begin to work your way out of debt. You can do this. But the problem is, is you're trying to, I don't know, everything is so dispersed that it has no power. Yeah. And by the way, because you said it, you said, oh, when we asked you, why are you keeping your money separately? So, well, we've always done that. Just because you've always done something doesn't mean you have to continue to do it. And just because you've always done something doesn't mean it worked. It didn't work. This is an opportunity for you guys to sit down and truly ask yourself the question, why? Why are we doing it this way? And challenge yourselves to answer the question with real answers. And I guarantee you it's going to be a lack of trust in someone's area. Yep. And I, you know, I think you can fix this in about 60 days. By the time Christmas gets here, you're going to have your $1,000. You're going to be reducing debt. Your budget's going to be working. And his child support will be paid and we're going to be able to buy Christmas for our kids and pay for their dental appointment. All of that can be done. I don't have to be for rent.

Starting point is 00:51:19 The numbers are there with what you gave me. There's nothing here that's prohibitive. But you're trying to do it all by yourself. That's the problem. You're doing it on half your household income. That's what's going on. So we just, you can't go there. All right, guys.

Starting point is 00:51:32 So here's the thing. Let's just cycle back on this again. The largest study of millionaires ever done in North America, we talked to 10,167 of them. 89% of them said one of the top reasons they became wealthy was that they combined everything and worked together towards one goal. When you ask the public, how many of you combine your finances? It's only about 40% and worked towards one goal. And the public is broke.

Starting point is 00:52:10 78% of Americans live paycheck to paycheck with too much month left at the end of the money. Stop it. Most people spend years changing their money habits, but never think twice about how their bank probably works against their values with nuisance fees and endless debt products. If you're being weird by sticking to the baby steps, you deserve a bank that helps with that. That's why Ramsey partnered with Fair Wins Credit Union. They built the smart bundle specifically for Ramsey listeners, not for everybody else. And it includes up to 10 high yield savings accounts so you can set up different funds for different needs and goals. And now they've introduced the Live Like No One Else debit card.

Starting point is 00:53:18 The original debt is normal, be weird debit card, is still available too. And every time you reach into your wallet, your card is a daily reminder that you follow a different path. Listen, if you're living like no one else, your bank should back you up. Check out the Fair Wins Smart Bundle, including the all-new, Live Like No One Else debit card at fairwins.org slash Ramsey. That's fairwins.org slash Ramsey, insured by the NCUA. Today's question of the day is brought to you by Y. Refi, if you've fallen behind on your private student loans, you don't need more shame.

Starting point is 00:54:21 You actually just need a plan. Why Refi helps borrowers explore refinancing options with a low, fixed rate payment based on what you can actually afford. Go to why refi.com slash Ramsey might not be in all states. All right. Today's question comes from Owen in Alaska. He says, what's the difference between an index fund, a brokerage fund, and a mutual fund? Is there a particular type that you recommend? Or can they all be used for different purposes? Wow. Great question. I think that's a really good question. It's a teaching question. It is. Do you want to teach, I can teach, but I feel like this is your bag.

Starting point is 00:55:00 I'll jump in, then you can help me. All right. How's that? All right. We'll start with a mutual fund. A mutual fund, if you'll visualize, is that Jade puts in some money, I put in some money, and Owen, you put in some money. We have now mutually funded it. That's all it is.

Starting point is 00:55:18 What the mutual fund buys with a mutual fund manager buys with the money that we give him or her to invest with, tells us what type of mutual fund it is. If they buy bonds, it's a bond fund. If they buy with the money that we mutually fund stocks and companies that are growing, it's a growth stock mutual fund. If they buy companies like Gerber and Nestleaver and Unilever, which owns Dove Soap and Ben and Jerry's ice cream, those are all foreign companies.

Starting point is 00:56:00 They were started in the U.S. in every case, but they are now owned by people that do not live in America. And so those are international or foreign stocks. And so you'll call it an international stock mutual fund, buying stock in companies internationally. And that tells you the type of mutual fund. The typical gross stock mutual fund, for instance, will have 90 to 200 different stocks in it. And as that group of companies goes up in value, that's where your return comes. One type of mutual fund is an index fund. The first one you asked about Owen.

Starting point is 00:56:40 An index fund is a mutual fund that buys stocks that follows an index. An index is a representation of a market. The most famous index is the Dow Jones Industrial Average. The most accurate index is the S&P 500. Standard and Poor rates the top 500 companies on the New York Stock Exchange, the big board we call it, and those 500 companies are represented in an index fund. And so that's the baseline of what the stock market's doing. So what the S&P 500 is actually the best measure of what the stock market's doing.

Starting point is 00:57:21 So is it up, is it down? that tells you what the stock market's doing good or not. And if you buy an index fund, you should do exactly what the market's doing. No better, no worse. You should exactly follow the market. I have some money in an index fund, and I just looked at the ticker a minute ago, and we're right at 12% increase in value since the beginning of the year. And this is the 1st of September, so we're eight months in.

Starting point is 00:57:52 Still got four months to go, September, October, November, December, and we'll see what the total return is on the stock market and the S&P 500 index fund will be what the market does. And so if the market's down for the year or up for the year, then it follows that. A brokerage fund is opening an account with a broker, a financial advisor, and you can put mutual funds in it, you can put stock in it, you can put index funds in it, you can put anything in it and run it. When you buy a 401k or an IRA, typically, and especially if you follow what we teach, you will be buying a mutual fund or funds inside your 401K. Your 401k is not an investment. It's how your mutual fund is taxed. And so if it's in a Roth IRA, it grows tax-free.

Starting point is 00:58:46 If it's not, you get taxed on it as it grows or when you sell it, one of the two. Okay, so that's the basics there. And the good news is the market has done very, very well. It's setting records this year and last year. The last five years, it's just been phenomenal, unusually good. It's not been down in a long, it's permanently down for the year in a long, long time. And so it's a great time to get in touch with a Ramsey SmartVestor Pro at Ramsey Solutions.com and find someone that can teach you the stuff I just taught you and show you some actual funds. And then you look at the fund, you understand it.

Starting point is 00:59:30 And only then do you buy it? Do not buy it because Jade said to, Dave said to, or because a SmartVestor Pro said to. So what did I miss, Jade? Nothing other than the fact that you're going to be teaching all this at the Investing Essentials event. That's why I tossed it to you. Oh, wow. Okay. That's true.

Starting point is 00:59:46 Yeah, I guess I am. I'm teaching that tonight. Yeah. In more detail. It's not too late to get tickets. In more detail. It's only $199. And we're going to do two and a half hours of what I just did in two minutes.

Starting point is 00:59:56 So you'll get the detailed. That was a primer, though. We just went to kindergarten. Yeah. And tonight we're going to go into graduate school. So I go a lot deeper into this. But that gives you the basics and gets you going. And Owen, you're brilliant to ask this question because.

Starting point is 01:00:12 you never invest in something you don't understand. So you never do it just blindly because you heard about it somewhere else and you don't know what it is. That's how people lose all their money. So go slow and always have someone with the heart of a teacher, not the heart of a salesman that's helping guide you. And that'll be a big help. And right along the same track is Davis in Montgomery, Alabama. Hi, Davis. How are you?

Starting point is 01:00:38 Hey, I'm doing pretty well. Nice to talk to you all today. You too. What's up? So I have some investments and I met with my guy the other day and we were talking about the percentage. So I am earning probably he said it's about 6% trying to get it to 7%. And I hear you talk all the time about should be earning at least 10% in your retirement funds. What are you invested in?

Starting point is 01:01:03 That sucks. Yeah. Well, that's what when I thought about that when he showed me that percentage and I said, well, shouldn't it be 10%? And he said, well, the market's going to get 10%. But you would never get 10%. And I said, I kind of, I don't know. What are you?

Starting point is 01:01:17 You're not invested in the market then. What are you buying? Do you know? I don't know. I know it's like 6040. I don't know exactly. 6040 what fund. I couldn't tell you.

Starting point is 01:01:29 I think you're in bonds. Yeah, it's probably 60% bonds. Yeah, I think he's got you too heavily in bonds and you're getting milked. You're getting destroyed. This guy doesn't know what he's doing. Get away from him. For two reasons. One is his job, he failed. His job is for you to know what's going on.

Starting point is 01:01:48 Yeah, yeah. So you need to get a, you need to get a SmartVestor Pro or somebody with the heart of a teacher. You need to know what's going on, because you can't even tell me what you're putting money in. No, no, I can't. That's an epic fail on his part. He's a teacher, not a salesman. And then he goes, well, yeah, you could make that much if you were in the market. How old are you, Davis? I'm 53.

Starting point is 01:02:09 And why has he got you in bonds? That's dumber than crud. Well, I have reached out to one of the investor pros, and they were telling me pretty much the same thing. They were saying you might be too heavily invested into something different. But I wanted to get your opinion on that because I hear you talk about. Well, I don't know because you don't know. But that's what it sounds like. So here's the deal.

Starting point is 01:02:27 Again, I just mentioned that. I just looked it up a second ago. Year to date, we're up 12 since January. If you were just in an S&P, if you're beating the S&P, you'd be above that. that and a lot of my funds beat the S&P. Now, I've got some money in the S&P. Last year, it was up 18 for the year. The year before was up 25 for the year, and the year before it was up 26 for the year. Meanwhile, this bozo's got you in bonds. Yeah, at 6%. I know. You're getting slaughtered. Yeah, that's what I figured.

Starting point is 01:03:02 Yeah, you need to, but here's the thing. The thing you violated, you can't do anymore after today. Never again put a dime in anything. unless you tell me how it works and what it is and why you put it there. Not like my guy's not doing it. No, you're the guy. You got to take care of you. Oh, yeah. Davis,

Starting point is 01:03:22 we'll take care of you. We'll give you tickets to the Investing Essentials event tonight. You need it probably. And then get to a, yeah, as bad as anybody. And then watch the thing tonight and then get to a smart best or pro as soon as possible. If you or someone you love is dealing with a complex health issue, navigating the health care system can feel like a full-time. job that you never signed up for. Several months ago, my family experienced multiple emergency

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Starting point is 01:05:56 And it is built into every dollar. Every dollar is our budgeting app that has the plan built into it to track your progress, give you personalized recommendations and coaching for your particular situation. It's kind of like us having us in your back pocket on your phone and saying, don't do that, do that, do that, do that, don't do that. start with every dollar for free by downloading it in the app store or Google Play. Mike's in Chicago. Hey, Mike, welcome to the Ramsey Show.

Starting point is 01:06:25 Hi, Dave. Thanks for taking my call. Sure, what's up? I got a question. My wife and I are kind of in a disagreement. My son, 17-year-old, his car just kind of broke down for the timing chain. And he's in the shop. She wants to buy, wants him to buy a new car.

Starting point is 01:06:43 Well, not a huge car, but basically a car payments. And I'm in a disagreement, so we're trying to brainstorm what the best path forward is. I think the problem happened about five years ago when you guys were not on the same page about borrowing money. Yes, we're still not on the same page. Yeah. So, yeah. So you guys are still. So if you haven't been able to solve that in the last five years, how are we going to solve that in five minutes?

Starting point is 01:07:12 Yeah, what? what's her argument for wanting to continue on with debt and what have the conversations looked like? Well, the debt would be here. Say it again, you cut out. Yeah. Yeah, he's 17 years old, so the debt would be on him. Not really. A minor can't sign a contract.

Starting point is 01:07:32 You're going to be on the debt. Oh, I didn't know that. So a minor cannot get a car payment? No. No. No. No. 17 years old?

Starting point is 01:07:41 Nope. No. You got to be 18? Yeah, you're not an adult. You can't conduct business. But the bigger problem here is even if you were 18, it's problematic that she's teaching him to go into debt and that you have a completely opposite philosophy it sounds like. Yes. So what happens the next time the two of you want to buy a car?

Starting point is 01:08:04 You probably end up giving in and getting a car, to be honest. Well, there's part of the problem, I think. Okay. So I can't help you as long as you give in. Okay. You're just saying battle that whole. Yeah, I mean, the deal is you know not to borrow money on a car. You know it's not smart.

Starting point is 01:08:24 You know it's not going to lead this young man where he wants to be. It's a burden on him. It fixes a temporary problem of a broken down car and gives him a permanent problem called car payments. And it's really, really dumb. And you should not be abusing your own child with a car payment. don't do this parents to your kid now why you know if your wife is dependent if your wife is or your husband is um out there is bound and determined to do something that's going to bring harm to your child i don't give in yeah mike why are you afraid why are you afraid of pushing

Starting point is 01:09:00 the issue why are you like no i'm not doing this it's yeah it's sometimes just maybe not worth the fight yeah okay well then you're going to have a car payment because you're going to be a wuss. So you can't be a wuss, man. You're going to have to stand up. And, you know, it is worth the fight. It's your 17-year-old son. You take him out in the middle of the traffic and go and dodge.

Starting point is 01:09:24 Don't get hit by the 18-wheeler. You know, I'm going to walk him through the gauntlet and get the hell beat out of him because you can't tell your wife no. So, no, this is worth the fight. Of course it's worth the fight. So it because it matters because it's your child. You're bringing harm to your child by not standing up. So, yeah, I got to tell you, me and the hillbilly wife, we would be having a knockdown, freaking drag out.

Starting point is 01:09:52 It wouldn't go good. It wouldn't go good. We're not going to do things that bring harm to the children, in my view. And not because I'm a bully and not because I'm overbearing. But also, if I try to do something that's going to bring harm to the children, she'd be all at me. She'd be all on my face like a raccoon. I mean, she'd be tearing out, tearing out my hair, what little of it was left. I mean, come on.

Starting point is 01:10:15 I'm right there with you. I would be fighting this battle all day long. Over and over and over again, I'd be fighting it. So run down to Walmart and pick you up a backbone. They're on aisle four. That's what you're going to have to do. You're going to have to stand up and go, no, we're not doing this. We're not going to live like this.

Starting point is 01:10:33 And the worm has turned. I've put up with this crap for 10 years and I'm not putting up with it anymore. No, we're not going to go in debt for a 17-year-old to get a freaking car because his timing belt went out. He goes and works six jobs and puts a time belt on the piece of crap car, or he goes and gets him another piece of crap car for a thousand bucks and drives it. That's what 17-year-olds have done since time began, and none of us died from it. I put two engines, three transmissions, and changed the brakes on my car by the time I was 18. because I kept blowing them up because I was such a hot rod idiot.

Starting point is 01:11:11 And guess what? Every time I did that, my dad looked at me and goes, you're an idiot. Go fix it. Deal with it, boy. And taught me to turn a wrench and taught me to quit driving a car like that, blowing up everything. So, I mean, you know, there's stuff good. There's consequences to this stuff. So, yeah, no.

Starting point is 01:11:28 No, that don't work, Mike. That doesn't work, man. Sorry. All right. Sorry, not sorry. Anthony's in New York City. Anthony, what's up? Hey, what's going on, Dave and Jay.

Starting point is 01:11:39 Thanks for taking my call. Sure. How can we help? So I wanted to call today. I'm 29 years old, by the way. I live in New York City, not in Manhattan proper, thank God. But I discovered you guys a couple months ago. And my whole life, basically, my parents raised me to never have a single dime of debt of debt to my name, right?

Starting point is 01:12:00 Gosh. Can they call them? That's the opposite, isn't it? Can I get much number? Yeah, way to go, man. Did you say you're 21? 29, 29. Okay, cool.

Starting point is 01:12:13 Good. All right, so you were raised well. Good. Raised well, but to that point, I also stayed home a little longer than I should have under the assumption that I was saving every dollar I made, which, as a young kid in New York City with a lot of friends, I did not. And honestly, I didn't start saving until I really got my first decent job at a 20. started putting a little bit away, but still was kind of spending my income not stocking all

Starting point is 01:12:41 away and being smart. When you say stocking it all away, how much were you supposed to be stocking away that you didn't? Like what was the standard? Realistically, Jade, I probably could have been, at the time I was probably making, you know, from 25 to 28 years old, I was making maybe 80,000, 85, 90,000 a year. And how much should you have been saving? I realistically probably could.

Starting point is 01:13:05 to save 75 of it. Oh gosh. And I did probably half of that. Listen. So how much money do you have now? So right now, my money spread all over the place. And I was getting there. So I have about $120,000 in a brokerage account that's tied between, you know, mutual funds and some general investing.

Starting point is 01:13:25 But also a Roth that I was doing just because that company at the time did not have a 401K. What other money do you have? So I've got at my current job, which I started last year, which has more than doubled my income from where I was at. I've got about $30,000 in that 401K plus about $16,000 in stock, and then just a $1,000 starter emergency funds. So what is it that you're trying to do? Are you trying to get a place of your own and move out?

Starting point is 01:13:53 What's your goal here? Yeah, yeah. So the last bit of context is a year and a half ago, I was getting ready to get engaged. I was engaged in ring shopping, getting all excited, and then I got broken up with because I wasn't making it off. I was at a dead end job. Anthony, what are you trying to do?

Starting point is 01:14:08 How can we help you today? Hold on. Hold on. Hold on. So where I'm at now? Moved out of my parents' house. I'm renting, paying $2,300 a month, and it's a great apartment. It's a great little one bedroom. But at the same time, now I'm shopping around for, you know, either an apartment or a small entry-level house, right?

Starting point is 01:14:26 Okay. And I've been following the baby steps. I've paid off all of my debt in the last three, four months here. But any entry-level two-beds, condo in a decent area around here is between 450 and half a million bucks. Then you can't live in that area with the income that you have. You just have to decide. You can't live in Tokyo and Toronto and Los Angeles in San Jose either, by the way.

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Starting point is 01:17:00 But what's up? How are you? Hi, I'm good. How are you, Dave? Better than I deserve. How can I help? So sorry. I'm a bit nervous.

Starting point is 01:17:09 I'm talking to my hero today. So, close. Thank you. So I got laid off last year for my full-time job. And then I started my small business. And then I also started a... a new part-time job last year, and I also got married last year, and I'm kind of stuck knowing what to do next. My business grew from $6,000 last year to $20,000 this year,

Starting point is 01:17:40 and I make about $22,000 from a part-time job. My husband and I have been talking about buying a house because he's getting a $100,000 inheritance soon, but I don't feel like I'm I'm going to get qualified for a good mortgage when I'm only making about $30,000 by myself. So I'm stuck that should I be closing everything down and moving into a full-time job, or should I just continue going? Because I have confidence that I can grow my business next year. Why wouldn't you and your husband, your newly married husband, why wouldn't you all combine finances together and buy the home together? Yes, that is a thing that I've been listening to guys, and I have been thinking.

Starting point is 01:18:30 I think it's a me issue that I, building the trust and also I'm nervous about having you don't trust the guy you just married? No, no, no, it's me. I mean, it's a me thing. It's a me thing. I've had trust issues in the past. Trust with who? My father.

Starting point is 01:18:48 No, I mean, why do you have a trust issue? Who's your trust issue with now on this subject? It's me. Me being nervous about... You have trouble trusting yourself? Yes. I'm decent with money. Okay, wait a minute.

Starting point is 01:19:02 The facts are that you're bringing in 20 at one thing and 22 at the other. That's 42. And your husband makes how much? He makes about $80,000 to $90,000. Okay, so the facts are that you have $120,000 household income with $100,000 inheritance to put down. Those are facts. Yes. Okay, there's nothing, there's no distrust in any of that. That's just a fact. There's nothing to trust in. It's not an emotional thing at all. Right. Okay. Now, do you have the ability to shut both of those things down and go make $80,000 at a job?

Starting point is 01:19:41 That is another thing. I started my own business because it was hard to get a new job. No, I'm asking, can you go get a job making $80,000 a year? Yes or no? Probably not. Okay. Why? Why? What did you use to make? What did you make at the job you lost?

Starting point is 01:19:59 55,000. 55, okay, now you're making 42. I'm after paying all this, um, the bills off for my, for my work. I mean, for my business. I'm bringing in 10,000, but you have to operate on net profit on business, not gross, but yeah. I mean, is the 20 of the gross revenue or the net profit? Net.

Starting point is 01:20:20 Sorry, so growth income and then net profit would be $11,000. Oh, you're not making anything. Oh. Yes. You need to go get a job. Yeah. Okay. Yeah, because you can bring $55,000 or $60,000 into the household and you're bringing

Starting point is 01:20:38 11 and then 22 at your part-time, so you're bringing in 33 and you have the ability to bring in 55. Right. And you've been working this business two years. Yes. Yeah, it's not growing fast. Okay. Okay.

Starting point is 01:20:56 It didn't grow fast enough to survive. If you want to keep it as a side hustle, you can. It's a fine side hustle, but it's not even a great side hustle if you're only making $1,000 a month. I mean, it's okay. It depends on how much time it takes you to make that $1,000. What are you doing? What's the business? I'm a living planner.

Starting point is 01:21:18 Okay. So you're just not getting many gigs. a lot of time. You're not getting many gigs. It sounds like it's too much time for the amount of money that you earn on it. That's why I said it might not even be a great side hustle because a side hustle you just want to get in and get out and get your money. You know what I'm saying? So yeah, I think the key issue here, if you're really talking about trying to buy a house, if you're looking about looking at employment, I agree with Dave, you need to go somewhere and get a job, probably doing whatever skill you were doing when you were making $55,000. And when it comes to

Starting point is 01:21:47 the house, you guys, you need to combine your money. If you're standing here, And looking at me saying, Jade, I know I have trust issues. That means you've admitted it's an issue, which means you know you need to do the opposite of what the issue is. If you know you have a trust issue, that means at this point, I need to do the opposite, which means I need to trust my husband and I need to try something different. Let me try combining my finances. It's the opposite of what I want to do. But I know what I want to do is an issue. You just said it. So let's do the opposite. it. Yeah. We combine our finances. Here's the thing. I think I hear when you got fired, it shook some of your confidence. Oh, yes. Oh, I was couched out. And going, and us telling you to go back in, you're kind of like getting creeped out right now. I'm telling you to go right back into the fire again, you're like, oh, God, don't do, oh, let me keep the $11,000 where I'm safe. And I want you to go be risky. Don't be safe. It's not that risky, by the way. You didn't die from it. They just fired you.

Starting point is 01:22:47 And so, um, that feels terrible for a lot of people. Oh, it's like, it's horrible. It's like, it's horrible. It's not, I'm not making fun. But I mean, you kind of got to keep it in perspective, though. It's like, you know, so what? What's, what's next? I mean, I've been fired.

Starting point is 01:23:00 Can you imagine the guy that fired me? What do you think's I'm doing now? I mean, that's pretty interesting, you know, but, um, so it's, it's, you just move on. You go the next thing and go, okay, but what's good for our life? And our life is for me to get back out there in the game again. And that's great for our life. And then if you want to keep the wedding planner thing going as a side gig and try to grow it, and someday maybe it gets so big it surpasses your full-time gig and you quit, that's fine.

Starting point is 01:23:25 But not for $11,000 after two years. No, definitely not. Good question. I appreciate you call. Thank you for joining us. Robertson Toledo. Hey, Robert, welcome to the Ramsey Show. Hello, thanks for taking my call.

Starting point is 01:23:39 Sure, what's up? So I'm wondering, I'm 21, and I'm wondering about, employment retirement account I've been told that whether or not I choose like a Roth like a which I think is like a post-tax contribution or a pre-tax contribution it's all about personal preference no it's not it's about math and you should only do a Roth okay because the Roth grows tax free and when you got a million dollars in that account someday because you called the show today you're gonna have a million dollars without taxes if you do it pre-tax and

Starting point is 01:24:14 you got a million dollars in there you're going to have to pay taxes on the million dollars which would be like three hundred thousand dollars so this is not a matter of personal preference one's dumb and one's smart okay do do Roth it's a 300,000 phone call you just made because as young as you are you should have at least a million dollars in your retirement when you get there you might have three million in which case this is a million dollar phone call if you have three million dollars in your traditional versus $3 million in your Roth because you called this show today, I saved you a million dollars.

Starting point is 01:24:50 And your heirs will thank you. Yeah. America will thank you because you're a productive citizen. You're not on the dole looking for universal income. You're not trying to be a socialist because you are a capitalist and you went out there and produced something. You left the cave, killed something, and drug it home. Good for you.

Starting point is 01:25:10 Way to go, Robert. Way to go. Yes. Always do, Roth. So the rule of thumb, folks, on your personal retirement accounts is take the match, even if it's traditional first, up to the match, then do, because 100% rate returns better than tax free money. Okay. If you can do Roth and take a match, do Roth and take a match. But if you can't, then do traditional up to the match and then go do your Roth, whether it's an individual Roth or otherwise.

Starting point is 01:25:38 So it's match beats Roth, beats traditional. That's the math. and it's not a matter of personal preference. Isn't that interesting? He talked to somebody in HR. It's just a matter of personal preference. Oh, that's too bad. Yeah, you have to be careful who you're taking your advice from.

Starting point is 01:25:55 Yeah, who's giving you the math coaching here? Yeah, someone who doesn't know. The broke lady with $80,000 in debt and student loan debt in HR. Yeah. It's a matter of personal preference. I can't tell you anything because I'm in HR and we're not allowed to have opinions here. Corporate HR. You've got to help you people.

Starting point is 01:26:17 No, Robert, we just saved you a million dollars. And you know what? We didn't charge you a dime. It's pretty cool. This is the Ramsey show. As your business grows, everything becomes more complex. There was a time when Ramsey Solutions had too many disconnected systems and not enough visibility across the business.

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Starting point is 01:27:51 a.I. Welcome back to the Ramsey show. In the Fairwinds Credit Union Studio, Jade Walshaw, Ramsey Personality is my co-host today. Cameron is in Athens, Georgia. Hi, Cameron. How are you? I'm doing well. Thanks for having me on.

Starting point is 01:28:14 Sure. What's up? Well, me and my girlfriend are looking to get married in the near future. Oh, congratulations. Thank you. we're looking, excuse me, we are completely on board with combining finances like you recommend. But I was wondering, is it okay for each of us to also have our own small savings account? Not that either of us couldn't have access to the other, but in order to, let's say, if I want to buy her a nice piece of jewelry,

Starting point is 01:28:50 and I want to save up for that rather than it coming out of our joint savings account, Would that be okay? Or if I want to save up for an inexpensive truck part and don't want to take that out of our joint savings? Oh, now we get to it. You led with the jewelry, but you're going with the truck. Right, right. This is a fun money. It's really a fun money conversation, I think, because what you'd essentially be doing is saying,

Starting point is 01:29:12 okay, like whatever my line item is for fun, I'm taking that and I'm kind of putting it aside and stacking it up until I get the thing that I really want to buy, right? How expensive is a truck part? I don't have an example. I don't know. Give me an example. You got something in your head that caused that to come up. Give me an example. Is that a $2,000 item or $20,000 item?

Starting point is 01:29:36 $700. My current truck. How expensive is this jewelry we're going to surprise her with in our hypothetical discussion here? $1,000. Good. Okay. So at our house, what we would do is Dave has an account called Jim, gas entertainment, and miscellaneous.

Starting point is 01:29:56 Okay. And I'm generally walking around with more than that in my wallet. Okay. And so if I want to buy her a $1,000 item as a surprise out of my miscellaneous money, and it builds up sometimes because I don't use it, it gets a little bigger, and I stick a little of it in the gun safe, you know, and sometimes it gets a little smaller, but it's just Dave's bun money, and it's just, but it's laying around in cash, honestly. That's what Sam does. Okay. in my case. And so, but it's not, it's not a $20,000 item. It's, I don't walk around with that in my pocket.

Starting point is 01:30:29 But, but, I mean, at any given moment, I've usually got a thousand bucks in there. And I have for years, it's kind of a redneck emergency fund to have 10-100s in your pocket, right? And so, once we got up out of being, you know, once we've been working the system for several years, Cameron, that's kind of where we got to is we have one little line item called, I paid my gas out of that, my entertainment, my miscellaneous. and I don't have much of any of that, truthfully, that we aren't doing together that's on some other line item. So, you know, Dave's personal entertainment is fairly low. I'm fairly boring. So, you know, you just build that.

Starting point is 01:31:05 It's like your little personal, your little personal miscellaneous account and let that build up and cover those things in cash. And, again, if it gets to be $3,000 and you don't want that in your pocket, stick a little in an envelope and sit in the gun safe. Okay. That makes perfect sense. Yeah, good question. I appreciate it. Sometimes if you look at the amount folks on something like this, it frees you up from putting together some big system for something because it's like, you know, I need $23. Okay, well, don't open an account. It's not that big. It's not that serious. Just keep it, just keep it where you can get your hands on it and that kind of stuff. So, yeah, that's a good question. And here's the thing. Listen to what he's doing. We're going to get married soon. They haven't yet set a date. They're getting ready to set the date. He's getting ready to pop the question. He's trying to figure out how to be a good husband.

Starting point is 01:31:51 husband. Yeah. What a good guy. What a good guy. Yeah. I want to be able to pay cash for my truck parts and not cause problems for the family. Oh, and get her some jewelry too. Yeah. Duke is in Knoxville. What's up, Duke? What's up? How are you? Better than we deserve. How can we help? I just, I had a quick question. I have money sitting in my 401k that's more than baby step one, but I got a lot of that from school. You see where I'm going? Yeah, how much is in the 401K? It's not much.

Starting point is 01:32:30 I've only had this job for six months. How much is in the 401k? 2,800 maybe? 2,800? Yeah, it's not a lot. Okay, I got you. Okay, and how much is your debt? 64K, roughly.

Starting point is 01:32:44 And that's student loans? Yeah. And what's your income, sir? It's, there's a bonus. It's not always the same. Okay, roughly, what are you making? I mean, give me an idea. Are you making 10 or 20, 80, 100?

Starting point is 01:33:02 60 a year. Okay. All right, good for you. What do you do? Medical device sales. Good for you. Oh, that's a good job. You're going to be doing great.

Starting point is 01:33:10 Okay. Yeah, I would just leave that whatever's in the 401K alone, that 2,800 is not going to change your world today. It's invested. I'd leave it invested. But I would just work the baby steps from, baby step one on up with your income. Is it just you or is there anybody else wife or anything like that? I don't have a wife. I have a girlfriend. I believe it's getting pretty serious though here in the next couple months.

Starting point is 01:33:36 What we teach is to stop your investing. So no more 401K for right now. And instead let's start. The first thing you do, squeezed out of your 60 grand, you don't go out to eat and you don't go to happy hour and you put $1,000. in a little, you can just put it in cash if you want to in your underwear, or I don't care. This month, you should be able to do that here in September. You do that in a month, yeah, and just set that aside, and that's your baby step one, and then baby step two is we're going to start attacking these student loans, and that's going to take a hot minute.

Starting point is 01:34:07 Yeah. Yeah. And so if you go sell a bunch of devices and get above your 60, you may double your income if you have a great year in sales. That's the good thing. The 60 is your base, but it would surprise me you make 120 in that world, right? Yeah. I'm an associate, and so I don't, the commission is just if I do my job and just set rate.

Starting point is 01:34:26 That next step of, you know, getting paid off of doing good work doesn't really come until I have my own territory. What is that? It is. They said 12 to 18 months. Perfect. Good, good. Well, put your nose down and get to work, man, and earn that other territory. Because this is a good field you're in.

Starting point is 01:34:46 We work with a lot of medical device people making quarter million. So that's where you could be headed. Okay, that's why I was saying it's a good feel. But what amounts to is you're in the apprenticeship stage and you're in there to support the other salesperson, he or she, and you get in there and you learn the business. You learn how to interact with the docs and the surgeons. You interact with the hospitals and learn how to do the skill that takes you to serious business. That field, I mean, I don't know which device you're selling, but medical device field is an excellent sales field. But it's all people's skills and it's working with the docs and sometimes they're tough to work with.

Starting point is 01:35:23 and so, you know, and the nurses and whoever else is involved in deciding which company we're going to do the device with. But he has a major upside if he can keep working. But in the meantime, you could still pick up a side hustle. You could still pick up other things to do. In the meantime, if it's just you, you don't have kids, you don't have a wife. I'd be working day and night. Yep, I would.

Starting point is 01:35:43 I agree. And double your income that way. And while you're waiting on this, while you're waiting on your ship to come in. But yeah, stop your retirement. stop investing in retirement temporarily. That's what we teach while we get you out of debt. And here's the thing. If two years from now you're debt free and you're making $150,200, you're on your way to be in a multimillionaire than Duke. So that's where you're headed. You can't think short term about this stuff. You have to think long term. Is the price I'm paying now

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Starting point is 01:37:19 We wish we could get to every call on this show, but we can't. And so we took a bunch of years of answers on this show, all the stuff we've ever written in articles and books and dumped it into a data set called AI. And we have a thing called Ask Ramsey that answers questions only from that data set. So you get no filth from Tick-Tac. You only get Ramsey answers. So if you want to know what Ramsey thinks, you're going to get an answer just like on this show completely free. It's trained on proven Ramsey principles. And you have to train AI because it is artificial after all. Ask your question today at ramsysolutions.com.

Starting point is 01:38:11 It's free or click the link in the description if you're listening on podcast. 150,000 people a month are asking Ramsey for free. That's kind of wild, y'all. And it's going up every month. It used to be like 10,000 a month. And it's blowing up. You guys are using it. So we're glad it's there to help you.

Starting point is 01:38:32 Let people know that they can ask Ramsey. Sarah is in Philadelphia. Hi, Sarah. What's up? Yes, hi, guys. Thank you so much for taking my car, huge fan. Sure. How can we help?

Starting point is 01:38:46 Yes, so I have two questions, so I'll be briefed. My first one is, me and my sister's super close. We decided to buy a house together about a year ago. We both had excellent credit. You know, good savings. The house is folding in my name because we didn't need her credit. We're going to buy another house to put it with her credit. But at the moment, we're having issues.

Starting point is 01:39:07 She has a boyfriend. They're engaged after a couple of months. I didn't agree with it. So now I'm the bad sister. And it's just like, where do we go from here? You don't agree with the boyfriend? They are engaged at the moment. You don't like him?

Starting point is 01:39:24 No, after three months, they got engaged. I have my reservations on him. Sure, for my opinion. She don't like it. Your phone is awful. Can you speak more directly into your phone? It's all muffled. Yes.

Starting point is 01:39:35 Can you hear me now? Yes. That's a little better. Okay. Thank you. Sorry. Yes. She asked for my opinion on it, and I gave my honest opinion.

Starting point is 01:39:42 She didn't like it, so now things are awkward at home. Okay. But, you know, now it's messing with the peace at home, and I'm just considering it's a time, you know, she doesn't want to talk about anything. Should we, should I wait it out? Should I, you know, we consider putting the house up for rent? I thought the house was in your name. It's in your name. She's the roommate, right?

Starting point is 01:40:02 She's just renting a room in your house. Yes, but we both went half on the deposit for buying the house and the down payment. How much? Correct. How much each? I would say each maybe like 30K. 30K each.

Starting point is 01:40:16 And what was you guys's agreement when she moves out? Does she just get the 30 or does she think that she is entitled to any other bit of equity that made it accrued? I'm sure you didn't write anything down, did you? No, it was verbal. So the agreement was we would still, you know, pay half of the other portion. if one moved down until we either served the property or until one got a roommate. So you can't afford the property, you can't afford the mortgage if she moves out? I can. I just wouldn't want to because it will take up a chunk of money.

Starting point is 01:40:49 That means you can't afford it. That would mean you can't afford it. Okay. Okay, sell it. Okay. It was a bad plan. It was a bad plan. Okay. Now, let me say this. I think the way you do this does matter. If you, she says, hey, what do you think about Ken? And you say, I don't like your boyfriend Ken. And then you say, well, that's it. You're kicked out of the house, right? That doesn't go well. So I think that there's a way that you can not do this throwing a hissy fit. Right? She's, I mean, she can marry whoever she wants to marry. She's a grown woman. I mean, that's not the point. The point is, okay, look, we're not getting along. And so it's not good for us to own this house together anymore. So let's get it sold.

Starting point is 01:41:34 That's all you have to say. You don't have to talk about Ken. Okay. You don't think putting it up for rent would be a better option? No. It's not a better option. You still own it with somebody that you don't like and it's not mad at you. Well, I own it by myself. She got on the deal. Right, but you can't afford it. I know, but you own it because you did a deal, a handshake deal that said you own it together and she gets her money back out. So you can't just put it up for rent and cut her out.

Starting point is 01:42:03 Right. Yeah, you got to get, you got to undo this deal because you guys aren't getting along. because you shouldn't have been in this deal in the first place because you guys might not have been getting along. Did Ken move into your house? I hope not. I hope not. No, he doesn't, he hasn't moved in, but he's 30 very good amount of time. He's always there. Okay, I see what's going on here.

Starting point is 01:42:24 Yeah. That's what I was afraid of. Yeah, it's time to get the house sold. Yeah, let's just talk about, okay, guys, you guys, it looks like you guys are moving on with your life. I'm going to move on in my life, and so real good time. Realtors coming over. we're going to put the house on the market. Sister, you're going to get half or whatever we get out of this at closing because you put in half of it and I'll be signing all the papers and you guys have a good life.

Starting point is 01:42:49 And love you. I think we put so much into remodeling it. Listen, what I would do is if you sell. All that doesn't matter. You called us and said this situation sucks. So don't stay in it regardless of how you got here. And if you sell it and you make a profit, split the profit too. You guys split it down the middle.

Starting point is 01:43:06 You split the rent. you split the down payment. If there's profit, split the profit. Yeah. That was your deal, wasn't it? Yeah. Yeah. Well, you did a dumb deal, and now you've got to undo the dumb deal. Buying a house with your sister when you are not aligned on how life works is a dumb idea. And so you got yourself into a barrel of fish hooks here, and the best thing do is dump the barrel out and get out of it. As fast as you can, that's going to be the best thing for your money.

Starting point is 01:43:37 it's going to be the best thing for your peace of mind. And it's actually going to be the best thing for your relationship with your sister. I agree. Because now she feels like she's like the house is in your name and her boyfriend's over there all the time. And there's all this tension in the air. But when the house is sold and, you know, they got to go do their own apartment and you do your own situation and everybody will be okay. And all of a sudden, 10 years later, you might like Ken. Who knows?

Starting point is 01:44:01 That's why I said don't do it with drama because if you just look at it and say to her, it looks like you guys are getting ready to go into a new phase of life. This is the perfect time. Let you go do that. Yeah, that way it doesn't mess with your relationship further. Instead of like, I got to sell the house because I hate your boyfriend. That's not the reason. Yeah, that's terrible.

Starting point is 01:44:18 It's a bad idea when we did it. And it looks like you guys need to do your thing and we're going to let you. And I'm going to go do mine and everybody's cool. It's all good. It's all good. It's all good. No problems. And, you know, you don't have to get into trying to fix her life, which is where you got into trouble.

Starting point is 01:44:35 Yeah. As soon as you started telling her who she could date, that was a problem for her. I wonder why. Strange. Okay. Yeah. I mean, that's... She doesn't like it.

Starting point is 01:44:46 That's fun. Matthew's in Charlotte, North Carolina. Hey, Matthew, what's up? Hey, Dave, how's it going? Better than I deserve. How can I help? Good deal. So, well, my question mostly is what to do with all this extra money that I've kind of came across.

Starting point is 01:45:04 So, long story, short, my wife, I'm not. I are in Baby Step 4 now recently. And that happened by paying off student loans, finished off paying a car. And another good news, my wife actually just landed a great new job where she's getting like a 32% increase on her pay. Wow. And also within the next couple of weeks, I'm getting a promotion to director. So that's life is good on Matthews Planet. It is. Well, with some bad news, I feel like I'm a little bit behind in my retirement. So I'm 35 years old. I don't think you're behind it. I think you're okay. You're okay. So what will you be making in your new position? About 110. And what will she be making it with her 32% raise? She is going to be up to about 85.

Starting point is 01:45:56 Okay. So we have a 200 and a 200 and something thousand dollar household income, give or take. Okay. Yeah. I think we can prosper at 35 and and, and, and, and, and, and, and, and, and, and, retire a multi-millionaire. I hope so. If you were to invest 15% of that because you're debt free except the house right now, is that what you told me? Yeah, correct. Okay, so that puts you a baby step four.

Starting point is 01:46:21 If you're to invest 15% of that, that'd be $30,000, about $2,500 a month going in from age 35 to age 65 is going to be a bunch of money. Jade's going to put it in the calculator for us. So you're just fine. So you want to do Roth 401k at your place and at her place first. Get the match if you can. And so match beats Roth beats traditional. And if you need some help, go on to a smart vester pro at Ramsey. Jade put that in the calculator.

Starting point is 01:46:52 That'll be $5.2 million. If you never get a raise and you only invest 15% from age 35 to age 65, I think you're going to be okay. Dave Ramsey here. than 30 years, I've been talking to folks on the air, and I can tell you that most people are broke, not because they don't make enough money, but because they don't have a plan. You need to give every dollar you earn a job, because when you do that, something changes. You stop guessing, you stop worrying, you stop stressing. Our every dollar budgeting app will show you how to find extra cash, pay off debt, and finally start winning with money. But most people won't do it. They'll

Starting point is 01:47:54 keep living paycheck to paycheck. Keep hoping things will change without making a change. It's time to say enough is enough. It's time to take control of your money. It's time to start your every dollar budget for free today. Go download it in the app store or Google Play. Seth is in Portland, Oregon. Hey, Seth, how are you?

Starting point is 01:48:33 What's your bad? How are you doing? Better than I deserve. What's up? Oh, see, now I can get out of this debt I got. on a one income with a married. So my wife can't work. She's pretty much basically disabled. So just trying to get some ideas on how to attack this

Starting point is 01:49:00 and then also get to a good retirement, you know, money yet. So how much debt do you have, Seth? I got a This is about 74,000 On what? 23,000 student loans I got two car loans

Starting point is 01:49:23 What do you owe on the cars? Break them down? 18,000 on my truck and 15 on my wife's car And then 13,000 credit card Gotcha, so you're kind of normal Only normal sucks, right?

Starting point is 01:49:39 Yeah, it does Gotcha And what's your income? What do you make? I'm about 65,000. 65? What do you do? I make, I build helicopters. Cool. Good for you. Okay.

Starting point is 01:49:57 Civilian side? Are you in the military? Well, we do both, actually. But you're a civilian? Yeah. Okay. And what's the nature of your wife's disability, sir? Well, the past eight years Her Been trying to figure out exactly what it is

Starting point is 01:50:18 But it's really hard for her to walk And stand and her balance is really off So You've got a other plan Is also to move Probably in Arizona Because they have better Care over there for neurologists

Starting point is 01:50:33 And A better opportunity for her to actually get help What would your career? be in Arizona? Probably the same thing, aerospace. So you think you can land a job there before y'all go? Oh, yeah, yeah. I've done a little dry run and just a couple people that wanted to hire me,

Starting point is 01:50:52 but I'm just not down there. So once you get down here, I'm good to go. No, no, no, no, no, no. You need a job offer before you walk away from the current job that you have because you're the only thing feeding your family. Yeah, that is the plan. going to happen. Come on down and then we'll hire you. You come on down, then they don't hire you. You're screwed. Aside from landing the job, what other things are you waiting on to make that move?

Starting point is 01:51:22 Well, I need a, you see some money to get down there because it's, you know, moving cost money. Has she applied for and received permanent disability? Is she getting SSI? She applied. We're just waiting on the eight years? No, well, we started it about a year ago because it started getting worse and worse. The last like year and a half, it just got it, you know, twirce. So you can, you know, trips over anything. And when it's cold, especially that's the other reason. But you've gotten a doctor's ride up to be able to send to the Social Security Department

Starting point is 01:52:04 to be able to get her on SSI. And you've done that, right? Yes and no, because the neurologist here. They, you know, leave all the time. And, you know, we get one and she gets an appointment, and then all of a sudden they're gone. They leave because I don't know what's up with Oregon, but they just have issues keeping neurologists.

Starting point is 01:52:27 Okay, because that income, that SSI income would probably be $3,000 or $4,000 a month or it might be very helpful. Right. And so it's very important that you follow through and get that income coming in if she's not able to work, that's a legitimate thing to get and get going. Regardless of your location, you need to push that on through. And so if you have to chase a neurologist around the state and tackle them, then let's do that and get these letters and get these forms filled out and get this done.

Starting point is 01:52:59 It's very important. Is she able to drive? Yes, she's able to drive. She can't, like, you know, lift anything. Just all, you know, her balance just goes right to nothing. Are you sure she's safe driving? Yeah, I mean, I'm just looking at these, or does she, maybe she can, but maybe she doesn't drive much? Because I'm just looking at these cars thinking, gosh, I wonder do you need both of them.

Starting point is 01:53:20 Yeah. Yeah. She can drive, you know, not problems. Like, we've got an x-ray on her. And they said that she has, like, right where this is and the L5. disc is basically like a little there's a muscle and nerve tear and also like this little disc degeneration yeah I'm sorry so you guys have been through a lot man yeah yeah so yes what what I would do though is I think you've kind of been um sitting in the middle in limbo and so if I'm gonna do anything

Starting point is 01:54:01 if I'm in your shoes to start being it's time to start taking some action so I think it's time to move to Arizona. Matter of fact, you're a year late. So you need to call up, go down there, interview, get a job, and get your friends to load you up and help you up down there. So it doesn't cost you much out of pocket. And just get your stuff down there and get your new job started. And let's get her landed down there and get a neurologist there and get, you know, get her disability signed up. Decide whether or not she really needs to keep a $15,000 car debt in the driveway or not. In this situation, I doubt she's out driving around much. It doesn't sound like.

Starting point is 01:54:38 And then you begin to work as all at like she's like Jade said, every extra job, every piece of overtime you can. And you work like a maniac. You get her income coming in from disability. And between those two things added to your new job of 65,000 or more, maybe it's more in Arizona. Then we start working these deaths off. But the problem is you've been kind of hovering around the edges of everything because

Starting point is 01:55:04 of the pain she's been in. and because that medical problem has just got you on hold, you know, got you on hold, you know, and so we have to get turned loose here. And you're just going to bust loose. So it sounds like you said the cold is a problem, the care is a problem in that area. And you've got a good lead there in Arizona. If I'm you, I'm going to wrap that up next couple weeks and be in Arizona in about, like by the end of the month and have an apartment there, get this one.

Starting point is 01:55:36 call the landlord, get out of this lease, or whatever it is. Let's get moving and get this done. If I'm you, that's what I'm doing. Monica's in Atlanta. Hey, Monica, how are you? I'm good. How are you? Better than I deserve.

Starting point is 01:55:50 What's up? Good. I'll give you a little story here. I'm married. I'm 50. My husband's 54 years old. We have four kids. Two are in college and set to live good financial lives.

Starting point is 01:56:02 Good. My question comes into play that we have a fourth child who, who is nine years old that we adopted with special needs, who will not be able to provide for himself in the future. He will live on SSI and Medicaid. We did set up a third-party trust and special needs trust for him just within the last month. That lawyer advised us to look into whole life insurance

Starting point is 01:56:24 because her thought process is that when we leave, our son will need a large lump sum of money to live off of my son. and idiot. My older son will most likely take care of them. That lawyer should stick to practicing law. That's horrible advice. I know. It's horrible advice.

Starting point is 01:56:44 Horrible. Do you want to know what the real answer is? That's where I'm calling you the real answer. Because this is horrible advice. And don't take any more financial advice from this lawyer. They're moronic on financial things. Or their brother-in-law sells whole life, one of the two. Now, by term life.

Starting point is 01:57:03 and name the trust as a secondary beneficiary. You're the beneficiary. If he dies, he's the beneficiary. If you die and the secondary beneficiary, if both of you die, which is all we're concerned about, is the trust, and it goes in the trust, and then you name that the trust goes into good mutual funds. What's the child need to survive a month income-wise?

Starting point is 01:57:25 Right now, he's nine. No, I mean, into his adulthood, when you're not here anymore. Into his adulthood, well, he'll need to carry. caregiver home need. Yeah. 5,000, 8,000 a month? Sure. Okay, 8,000 a month is $72,000 a year.

Starting point is 01:57:41 That means there'd need to be a million dollars in there. $700 to a million dollars in there. So go buy a million dollar term life policy until you can put a million dollars worth of mutual funds in there at your death. But don't buy a whole life for anything ever. It's a horrible product. Way too expensive. It does not accomplish your goals.

Starting point is 01:58:16 You shouldn't feel uncertain about investing. and you don't have to. At Investing Essentials, our two-night virtual event, George Camel and I will walk you through my playbook for investing in wealth planning. We'll simplify everything from 401Ks and mutual funds to passing on wealth. It's happening now, September 1st and 2nd. Tickets start at 199. Grab yours today and lock in full replay access at ramsysolutions.com slash events or by clicking the link in the show notes. You are the God who performs miracles.

Starting point is 01:59:11 You display your power among the peoples. Peter Marshall said, when we long for life without difficulties, remind us that oaks grow strong and contrary winds, and diamonds are made under pressure. Lynn is in Dallas. Hi, Lynn. Welcome to the Ramsey Show.

Starting point is 01:59:30 Hi, Dave. Thank you so much. Sure. What's up? Well, I have a question about a consult. validation loan for debt. I am really kind of embarrassed to even talk about this because I know that I was stupid in doing it. I get it out of fear. And, you know, I've been here before and I know the Lord takes care of things, but I mean, it just, it overcame me because of a lot of trauma

Starting point is 01:59:56 in the last four years. And anyway, I retired medical in October of last year. I retired medical in October of last year. I was working out of pathology. And I retired because the job had gotten so much that I couldn't handle it. I'm 77. And I just had never believed in retiring. I've always done something and had side hustles going. But I got frauded four years ago and it took me a while to recover from that. It was about $25,000 company representing themselves as Amazon. and over $5 million worth of ID insurance, they ruled it as fraud and not ID theft. And so none of it was covered. And when I muddled through all of that and got over it, I had no credit card debt.

Starting point is 02:00:55 Everything was cool. And I ended up this year not having a lot. And I was living off of... the income from the medical, which was last year on my taxes, I made $45,000. When I retired in October, I was dealing with some medical things that they couldn't put a finger on, but I was healthy on my blood panels for good. In February, I was taken to the hospital by ambulance, and they thought that I was having a stroke, and I was gone.

Starting point is 02:01:36 I mean, in my mind, I couldn't think. I didn't know where I was. they found out it was a UTI. It took me, has taken me quite a while to get over this, and it was brain fog. And they said, this was normal, and I've been doing everything. All of my numbers came back and everything's good, but I've been little fuzzy. And I have sewn professionally for years on the side. I do high-end wedding dresses and men suits and all kinds of things like that.

Starting point is 02:02:06 stuff that most alteration specialists won't even touch. And so my business here has been growing. Your alteration business has been growing? Yes. Okay. So how much are you making at the alteration business? Right now, because of the business I lost, last year, with the alterations and another side hustle I had, that alone was 12,000.

Starting point is 02:02:33 And, of course, I've had Social Security for a long time, and I have another little thing coming in. So what's the debt consolidation loan for? Okay. Just recently, I put $5,000 on a credit card to finish a website that I am doing for holistic products, organic, holistic, supplemental type things. and it just went live the last couple of days, but it's taken much longer to get through the setup of that business. So you've opened another business?

Starting point is 02:03:15 You have an alteration's business, and now you have an alternative medicine business. Yes. How much did you spend to do that? 5,000, she said. Okay. 5,000. And it's on a credit.

Starting point is 02:03:29 No more than that. And you want to get a debt consolidation loan for $5,000? No. I have the other, I have a total of just under $20,000 in debt. That's all the debt I have. And you have no money? Yes, that's true. I bring in about $2,500 a month.

Starting point is 02:03:53 That's over the last three months because I had, after the hospital trip in February, it slowed me down. I didn't lose the business, but I could not do it. I didn't lose clients over it. And all of that has come back up. I want you to work on one business, not four. You're 77. You've had all kinds of medical issues.

Starting point is 02:04:22 The last thing you need is trying to run four directions at one time. And the second thing is never again for the rest of your life, be so urgent to do something in business that you force yourself to borrow money. Slow down. And let God provide you the money to build the website for a business that you might not have even should have been in. You might have should have been just working on the alteration side. But I don't want you to open anything else. You've got too much going on now to do it all well. and no debt consolidation is not your issue.

Starting point is 02:04:57 Income is your issue. And so anything we can do with either one of these businesses to get them moving without borrowing money, like working like as much as you possibly have the energy to do on one or the other or both to create income and then just really dialing down your budget and just begin to pay these cards off. And Lynn, please don't ever pick up one of them again. just see my face in your mind saying, I don't want my friend to lend in debt anymore. It's not good for you.

Starting point is 02:05:32 It's making these medical problems worse, the stress that goes with it you don't need with everything else that's going on. You need to clear this, and a debt consolidation loan doesn't get you out of it. It just moves it around, and the P is still under one of the shells. So cut the cards up,

Starting point is 02:05:47 list them smallest to largest, call each of the card companies and ask for reduction in interest rates and then begin to work them off smallest to largest, living on nothing and doing anything you can with either one of these businesses to get your income up to attack this with. And that becomes your new focus and leaning into that. And it sounds like you've been thrown off a lot. So I sure hope that you can turn that around.

Starting point is 02:06:12 But borrowing your way out of debt does not work. So no. Debt consolidation, it's a, it's a, it's a, It makes you feel like you did something and you didn't. Yeah. I also find that when you have individual debts psychologically. I mean, it's like we teach. It's nice to have them, list them smallest to largest.

Starting point is 02:06:30 You can see them go away. You can see them go away. You check off the boxes one at a time versus one giant debt that you have to kind of tear into. And, you know, if you have, anytime you do something, regardless of if you're 17 or 77, and it causes you to feel shame. that's an indicator to never do that again. That's good. And so I've done stuff that I look back and I go, Calie, how dumb is Dave, you know?

Starting point is 02:06:59 And I feel shame. I feel convicted. I feel condemned by the action. Well, why would I, then I'm never going to repeat that action. And in this case, it's credit card debt. And so, you know, if you're going to grow your business, grow it more slowly and with cash,

Starting point is 02:07:16 you have enough to eat. and you have enough to pay your lights and this is what matters. Past that, we're just trying to build a nest egg and trying to get things going. And so let's keep things in order here. Good question. I'm sorry you're going through that. It sounds like it's a lot.

Starting point is 02:07:33 Sounds like it's a lot. So I couldn't tell in her situation without an donut. We didn't have time to get into it. It sounded like she lost $5 million. $25,000. I thought is what she said to a, company pretending to be Amazon. Yeah, or something.

Starting point is 02:07:50 Maybe that's all it was. Yeah. Okay, thank God. It's 25,000. I had identity theft and fraud and everything else involved, some kind of a con. And so you've got to be very, very careful there. But the thing is just move slowly with these kinds of things and double and triple check them, folks, and it keeps you from getting bit by one of these fraudsters that are out there.

Starting point is 02:08:13 There's a lot out there now. Good time to check out Xander's ID theft insurance, too, and make sure. you have that in place in case there's some kind of an identity issue going on. Didn't sound like that was hers, though. 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.

Starting point is 02:08:34 Christ Jesus.

The Ramsey Show - Different Outcomes Require Different Choices

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