The Ramsey Show - Don’t Be So Desperate That You Make a Stupid Decision

Episode Date: May 9, 2024

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Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. I'm Dave Ramsey, your host, Ken Coleman, Ramsey Personality, number one bestselling author, and author of the brand new book that just came out this week, Find the Work You're Wired to Do. He's my co-host today. You jump in, we'll talk about your life and your money. It's a free call, and some say the advice is worth exactly what you pay for it the phone number is 888-825-5225 emily starts this hour in grand rapids michigan hi emily how are you i'm good how are you better than i deserve what's up in your world so i just graduated college and got my bachelor. I am currently not in any debt,

but I'm about to go into about $250,000 worth and I won't be able to pay it off or start paying it off right away either. So I'm very, very terrified over it. I was just hoping for some advice on how I can limit the debt hopefully and how I can pay it off as quickly as possible. What pray tell are you doing? I got accepted into medical school. Okay which one? Michigan State their MD program. Yep what kind of scores did you have on all that mcat stuff or how where were you ranked

um i was above average of course it wasn't the highest score but all right it wasn't bad but it was pretty darn good and and and my guess is is that Michigan State is a pretty nice little brand name program, and you should be proud of that. I'm going to jump in and say the way to lessen this debt is to think about going to a medical school that doesn't cost as much because I can tell you who doesn't care about where you went to med school, and that's your patient. I have never once asked my doctors where they went to school and what their GPA was. I probably should, but I'm just telling you what's reality.

Make sense? Yes. So have you looked into less brand name schools and see what they actually cost? And then have you looked at, based on your above average performance on the MCAT, could you get a huge, huge chunk of that paid for? Have you looked into that? Yes. This is actually, from my understanding, the cheapest medical school in Michigan,

I believe. And on top of that, I've been offered a $20,000 renewable scholarship. So that'll take it down about from the $250,000 to about $200,000. Yeah, you won't really feel that, trust me. So why are we staying in Michigan? This is where family is, and then the program that I applied to medical school only allowed me to choose from schools in Michigan. Okay.

But it is possible, and you're aware that there are other medical schools that cost a whole lot less and could probably give you a whole lot more scholarship. You're aware of that? Yes. All right. That's reality. You do not have to go to Michigan State Medical School. Right. Well, you asked.

I know. There's really no other answer, honestly, because you said, how do I limit this? Because you are going to be facing, and walk this out for people who are thinking about this, because you've actually done the homework, I think. How many years are we talking about before you start to make anything resembling decent money after med school? After four years of medical school, I'll have anywhere from three to six years of residency, depending on what I go into. And you're making what in residency? 50k. Very, very little. Exactly. So that's your reality. You're choosing a name brand school to be close to family,

and you're exchanging in that decision years and years and years of barely keeping your nose above water. I'm not trying to be depressing, but this is the decision. I mean, yeah. So bottom line is I don't really care where the school is or where your family is. If I'm you, I'm going to go someplace that I can severely change these numbers and not just be, oh, I'm so happy I got accepted to med school. I will pay you anything because you like me. And that's what usually

happens not accusing not excusing you that emily but i'm just saying because med school is so hard to get in that when you do get accepted it is such affirmation there you go well those people like me so i should really give them all my life yeah my whole life for the next decade. Yeah. I just think it's very wise to rethink this. Where you go to law school, where you go to med school, changes the numbers dramatically. That's right. Dramatically. And there are good doctors and good lawyers that come out of virtually any school

that teaches law or medicine. There are very few hack situations like almost none uh and so we used to have a thing here in nashville that was called ymca nashville law and you it was night school on armory drive to go be a lawyer no way and you could go be a lawyer not doing night school And you could go be a lawyer at not doing night school. And it was pretty much blue collar methodology, right? Love that. You just work all day, and then you go down there to law school at night.

And it took two years longer, but you could pay for it as you went. That's right. And then I actually had a guy that graduated from that law school that represented me one time, and he absolutely mopped the floor with the other guy. I mean, he destroyed the other side. And so, but I guess something about that whole blue collar process set him up to be a, to be a fabulous litigator. So, but yeah, that's, that's the thing. So Emily, you know, you just need to think through and not, uh, follow the

path of affirmation and follow the path of least resistance. And, uh, because it ends up being the path of greatest resistance. If you're not careful, that's what we're trying to point out to you. And so we want you to live your dream, hon. We don't want you to live a nightmare. And I've told, we talked to too many people on the other side of this coin. Oh man. I mean, I think Dave of the dentist that we feature so prominently in our award-winning documentary you can get it on amazon or wherever uh borrowed future but i just remember i can feel it right now the very first time i watched it our entire staff watched that dentist talk about the debt that he had a million dollars a million dollars and it was soul crushing for me as a

consumer as a surgeon yeah and and so dave what's happened he got out he got out he did get out of it and it is by the way but what we're actually trying to do here emily is keep you from getting the middle of that and dave there's a false choice in society right now and i'm not trying to demonize med schools or higher ed but there's a false choice. And folks, you just heard Emily walk through it. The false choice is follow the emotion, as Dave said, of affirmation. And let's be honest, it's impressive to be a doctor. Doctors are still one of the most respected positions in society. We get it. But we are told to follow the emotion of the accomplishment of the affirmation and not exercise logic.

And I just walked her through, listen, I'm as dumb as a doorpost compared to med students. That's just basic logic. And we don't tell kids there are med schools that would die to have Emily join them this fall. She doesn't even look because it's not even considered an option. It's not her fault. It's what society has done here. So anyway, food for thought. Yeah, something to think about. That's what even considered an option. It's not her fault. It's what society has done here. So anyway, food for thought.

Yeah. Something to think about. That's what we're here for, to mess with you. It's our job. This is The Ramsey Show. These days, it's not if your identity gets stolen, it's when. And the only ID theft protection plan I have ever recommended is from Zander Insurance. It helps real people with real life situations. Like the call we got on the show recently where a

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more. Call 800-356-4282. Ken Coleman, Ramsey Personality, is my co-host today. Open phones at 888-825-5225. Isaac's in Sacramento, California. Hi, Isaac. Welcome to the Ramsey Show. Hey, guys. It's an honor to talk to you. You too. How can I help?

Well, I feel like I'm going to be paying quite a bit of stupid talks here with this question. So my wife and I, we took out a home equity sharing agreement with one of these companies and we had good intentions. We wanted to pay off some higher interest debt and that all got paid off. But now I'm staring at this agreement and now that it's been a little while, I'm looking at it, and it's just becoming more and more daunting. So basically, they gave us an upfront cash investment of about $62,000, and any time between now and about 30 years from now, we can choose to square up with them, but they get the $62,000 plus 40% of the appreciation of my house from the time we signed there was an appraisal to 40% of the equity between the time we signed and the time that we settled. And we have that time.

So I'm just wondering. If you did that now, how much would that be today? Well, we'd have to get an appraisal, but approximately, yeah, maybe probably around $100,000. Okay. So this makes a payday lender look like a sweet deal. It really does. I mean, you sold your soul to the devil.

Yeah. And so hopefully people hear this call and just never do any home equity sharing agreement of any kind. How long ago did you do this? It was about eight months, so that makes it even worse. So you make a $100,000 return on a $60,000 investment in eight months so that makes it even worse so you make a hundred thousand dollar return on a sixty thousand dollar investment in eight months and we don't call that highway robbery in california hmm interesting hmm okay yeah uh i don't have an answer for you i mean obviously the sooner you take care of this, the better. The less it's going to cost you.

I might call them and beg for mercy. Like, if I get you a check now for the 60, what is the minimum you would take on top of the 60 I mean double your money that'd be a deal right for them and for you I mean if it only costs you a hundred percent interest and not 200 interest that's a pretty good deal so just by talking to them uh compared to what you've got right so um I as far as I to what you've got. Right. So, um, I, I, as far as I know, what you've done is perfectly legal, um, in terms of, you know, is there some kind of a basis to go at them? No, I think you just signed up for a really ugly trip and are getting to take it.

Um, so the only thing I can think of is, you know know first off is try to talk them down and and then go refinance and take care of it immediately and then second off if you can't do that you know you've got to end the cost as quickly as possible because every day you screw around with this in California in Sacramento your house is going in value, and every time it goes up in value $1,000, they get $400. I'm just curious. What did you do with the $60,000? He paid off the debts. Oh, I see.

He paid off his debts. Oh, he paid off debts. Okay. Yeah. Yeah, so in reality, we just made our situation worse. So you were just so stressed out and freaked out that you just didn't look at this. Is that what happened? I mean, you had to willingly close your eyes to how bad this was for some reason.

What do you think that was? I think it was just seeing the debt and then seeing how long it would take and then kind of because I was working hard to pay off the debt, which is perfectly fine. Like what you had to run these numbers. Right. And I just figured I'd let it, I'd let it grow until I was ready to, I was ready to sell my house. And then just, you know, the, the values weren't going to go up. And it was a lot, there was a lot of little lot of little things, and I'm not justifying.

No, I'm not either. I'm just trying to, for folks listening, I'm trying to get inside the headspace of someone who's so desperate that they don't look at a deal that's this bad and go forward. I mean, that's because I always talk about on here, man, that the dumbest things I've ever done in my life are when I was desperate. Right after I get desperate i get stupid and um so that's kind of you know and i've done i can i can look back and tell you about 10 different things times where i get freaked out i get put in a corner i get i can't move and so i do something desperate and i get stupid and it's

just not a good plan so anyway uh aside from that for your for you tactically um it's very unpleasant but you're in a very unpleasant scenario so best case is you talk them down and you go get some money right now and pay them out talk them down to 100 return on their money in eight months that's a sweet deal for them and compared to the terms you've currently got it's a sweet deal for you right yes i mean that if you call me got, it's a sweet deal for you, right? Yes. I mean, if you called me up and I was in this deal and offered that, I'd be thinking about it if I was on the other side of this. And so that's, you know, have them think about it.

Then if you can't do that, then you either refinance and buy them out today and end this because you've got that option, or sell the house and get out of it. And that's your most painful of the three, staying in the property and letting this thing continue to tick, letting this bomb continue to tick in your closet. Nope, not doing that. You're going to wake up 10 years from now and your whole life is going to be screwed. So meanwhile, you could have been owning a house that you owned and so forth. So yeah, you need to clean this up in the next six months by talking them out of it, refinancing or selling. One of those three.

And if you can come up with another idea, I'd be willing to listen. I just don't know what it is. That's the first one that comes to me. So, shared appreciation mortgages, SAMs, came out in the 80s. They showed up in the 80s they showed up in the 80s and um to to try to get a lower interest rate because rates were so high in the 80s you know we were in 12 14 in the early 80s 18 for a few minutes real estate market and in order to get a decent rate and come down like to a 10 or a 9 instead of getting the your your money as the mortgage maker on the interest rate only we could you could also participate in the mortgage

shared appreciation mortgages and actually fha came out with a program that underwrote sam's now they weren't as um onerous as this guy's boy that's a mess he got into i was gonna say do you think this meets the criteria of predatory lending from an from a legality standpoint no from a moral standpoint a hundred percent right yeah yeah a hundred percent yeah when you're making usurious amounts of return um you know but again they didn't the company did not mislead isaac that's correct that's he walked into this straight up with his eyes open and just said sign me up for stupid you know and i've done that so i'm not picking on isaac and he's beating himself up enough without me beating him up that's not the point but um yeah it's definitely predatory. I mean, but so is payday lender at 800%.

That's true. On a $200 cash advance. Yeah, that's true. To poor people. Yeah. But it's legal in most states. Yeah. And it's, you know, it's absolute scum.

It's a horrible product. Yeah. And how do you sleep at night doing that to somebody? You know, no. I mean, they're basically stealing equity out of his home no no you steal it they they well okay he gave it to him i'm saying conceptually though the deal works out for them yeah yeah oh it's it's unbelievable i mean they're they're they they said we'll give you 60 000 bucks and you can't get it anywhere else and uh because

you're broke and in debt and your credit's bad and everything else and here you are desperate and you know you just have to sign over you know three of your children and we're going to put them in the safe and feed them through the door until you come back and get i mean that's what we're doing here it's hands-on gretel right so oh man some of you people need to look up hands-on gretel you don't know that is. It'll be good for you to read a good paper. So true. Oh, my goodness. The chicken bone and the whole thing. Look it up, people. Look it up.

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betterhelp.com slash deloney to get 10% off your first month. That's betterhelp.com slash Deloney. Well, your graduate just spent more than 4,300 hours in class. We're guessing no one taught him how to handle money. Could be wrong. But unless they were in a school where they were teaching the Ramsey curriculum, which a lot of high schools are teaching it, thank you. But, you know, probably they got nothing. So you got graduations everywhere right now, from college, from high school.

You got weddings everywhere right now. And, man, we got a couple of really good ideas for you. The Total Money Makeover is celebrating its 20th year. We're going to be announcing that formally soon. And we're just under 10 million of these have been sold. And, of course course it's on sale for you graduates at bramsay solutions.com be sure and check it out george camel's book is probably better for a graduate because it's uh more relatable because george has got the millennial

snark down to a freaking science and so you will love this i loved it because i love the millennial snark so uh breaking Free from Broke, The Ultimate Guide to More Money and Less Stress. Check it out. It was number one bestseller. It's on sale right now for graduates. And Ken Coleman's book, Oh, Maybe We Need to Go Into Work That We're Wired to Do. Do the Get Clear Assessment, which almost 100,000 people have taken at the RamseySolutions.com website and used it to figure out what they need to do, who they are, where they're going. And, Ken, the book took off. It did a great kickoff this week.

When you buy this book, it is the guide on how to read the assessment that comes with it. You've got a code for it. Yeah, it's essentially about a 40-minute read, and it's me coaching you through your actual results. So once you know what you're good at, what you enjoy doing, and results that you care about, how do you now ideate and select an actual professional path to where you can become like the net worth millionaires that we studied that love their work and they're crushing it? So this is a coaching manual that

really comes with the assessment. So it's a fun tool. Self-awareness is a superpower. That's what I've learned about successful people. Don't you wish you got some of this kind of stuff at graduation instead of whatever it was that you got? I don't even remember now. I don't either. I think I got a tie from my grandfather. Someone gave me a very important item.

I'll tell you what it was. A gold cross pin. Now, I... Remember cross pins? Let me tell you. Of was a gold cross pin now i cross pins let me tell you of course i do those were big my dad used to write with those yes before the mont blanc craze that's correct if you were cool you had two you had a cross pin and a cross pencil you put it in your highly starched pocket right there in your highly this lady knows what we're talking about but you got to be old to know that that's not that lady but the other people got to be old yeah you aren't old ma'am we We are. Not that.

That's like you go back and look at the early Dave before the Mont Blanc was in that same starched pocket to prove that I knew something. The two cross pins were in there. That was my greatest. Did you have a gold and a silver? No, I just had the gold. Just the gold. That's all I had was the gold.

Big deal. My dad got me one. I thought that I had arrived. I'm pretty much an adult now. Yeah. Yeah. Pretty much. I got a me one. I thought that I had arrived. I'm pretty much an adult now. Yeah. Yeah. Pretty much.

I got a cross pin. I'm ready to write stuff now. So, ramsaysolutions.com slash store. No pins will be sold. That's correct. Only books. Check it out. Kim is with us.

Kim is in Chicago. Hey, Kim. How are you? Hi, you guys. Doing well. Thank you for taking my call. Sure. What's up well um my husband and i thankfully thanks to you guys paid 180 000 in debt earlier this year so super excited wow wow

yeah yeah so it was 110 student loans and 70k in000 in car loans. Man, you knocked it. Way to go, kiddo. I bet you feel like free. We feel really good. Thank you. Yes, yes. Thanks to you guys. I mean, we followed the baby steps.

We got really intentional and had three babies along the way, but we did it. Very good. Good for you. So how can we help today? Well, now I'm in baby steps four, five, and six. I have a mortgage of 390 and I'm saving for kids college and also our retirement. So I'm doing 15% on my 401k. And my question is, my husband's a police officer, and he's going to receive a pension, which is 75% of his income at retirement, and he does not have a 401k there.

So I'm trying to figure out how do I fund his 15% for retirement. Okay. It's our 15%. So we add up our total household income and we need to get 15% in retirement somewhere. So we do not have a 401k at his place to work with. We have one at your place to work with. And you have two Roth IRAs you could do as well. So another 6, thousand each there and um so if you maxed out your 401k and you maxed out

two uh twelve thousand dollars worth of two roth iras uh would that equal 15 of your household income well my household is 210 okay so you need about 30 000 bucks going in you're gonna get close you're not quite gonna be there but you're probably going to max your 401k and max two roths and that's about as close as you can get unless you got some self-employed income anywhere do you i do not no okay all right yeah i think you're probably limited to that he does not even have a 403b at the police department yeah i just asked them that to look into it a little bit more. He said he was not aware of anything like that, but I'm going to check in a little bit more because I've heard of that one. Most of them have a deferred comp 457 and or a 403B in addition to pension,

and both of those would work. I would rather use your 401k and max it out and then do two roths and if that doesn't get there then i would use a 403b or a 457 more than two they'd be my last choice though to get to the whole to get to the whole 15 but the point is we're dealing with 210 times 0.15 so we're 31 000 thousand dollars we're trying to get thirty one thousand into something that's the point and that that's so between those two and it doesn't matter whose name it's in because you you have marital rights to your uh 401k of your spouse um whether you know in other words if there's a divorce that you know that's an asset that's laying there that gets divided up so if it's all in your name, it doesn't matter.

Like the big 401k load up I'm talking about here. But the point is just take your household income, 15%, going into something for retirement. And the best thing out there, folks, for those of you listening, is a match. You want to do that first. The second best thing is Roth. The best thing of all is Roth with a match, okay? But match, Roth, traditional. So match beats Roth beats traditional.

It's rock, paper, scissors, except there's only one way to win, okay? Match beats Roth beats traditional. And if you just go down that path, then you can do it. And so the 403B and 457 would fall in the heading of traditional because they're tax-deferred like a traditional IRA or traditional 401K. Same mess there, same pile of fishhooks. Danon is with us in Morgantown, West Virginia. Is it Danon? Is that correct?

Yes, it's Danon, sir. Sure. How can I help? Absolutely, Dave. So I have about seventy four thousand dollars worth of debt sixty of which is my house uh at the end of the year i'll have my car paid off which is the other 14 and then i'm getting a twenty thousand dollar bonus from the military not for sure if i should use that on buying a new house or just throw all of it at my current house. What's the bonus for? The military. It's my reenlistment bonus.

Oh, okay. Okay. All right. Thanks for serving. What branch do you serve in? The Navy, sir. Okay, cool. Good for you.

All right. How long have you been serving? About six years. Okay. So you may have landed there and going to stay there, huh, in that location? Or are they going to move you? So, no, I'm reserves. I live out of Morgantown, West Virginia.

Oh, okay. And I do, like, travel, like, four times a year with the military. Gotcha. It's reserves. Okay. All right. That part I didn't catch. Okay.

That makes more sense then because you're in 100% that I'm throwing it at the house so you're in baby steps for what we call four five and six you have an emergency fund of three to six months of expenses i i have roughly like two right now i'm currently throwing into it when you get the car paid off let's beef up that emergency fund okay and so a fully funded emergency fund and debt free but the house leaves you in baby steps four five and six and now you're starting to attack that way and uh uh you just throw the money at the house at that point let's just get this house paid off you only owe 60 grand way to go man you're killing it. Good job. This is the Ramsey Show. Buying your first home is a big deal and sets the stage for your financial success.

So work with a mortgage advisor you trust, not just some random website. Churchill Mortgage is Ramsey trusted because they help you avoid hidden traps and expertly guide you through every step. Learn more at churchillmortgage.com. This is a paid advertisement. NMLS ID 1591. NMLSconsumeraccess.org. Equal housing lender. 1749 Mallory Lane, Suite 100. Brentwood, Tennessee 37027. Ken Coleman, Ramsey Personality, is my co-host today. Thank you for joining us, America. If you like the show, you could help us. We could use your help big time. You want to help? Ready, set, go. Here's what you do. Click follow or share the show or subscribe or leave a five-star review. Mama said,

if you ain't got anything nice to say, don't say nothing at all so try that you little trolls and uh you know have some fun out there people hey spread the word we appreciate it very much we know that we were the fourth show in history on apple podcast to have a billion downloads that was a year and a half ago joe rogan was one of the first and it's one of the mprs and then us and um now we're at a billion and a half downloads where you get about a billion minutes watched on youtube every 35 minutes it's crazy i mean it's nuts i mean the i need to call my mom billions and billions of you are i mean the number of hours and minutes consumed by you guys out there is crazy thank you so much.

So we know you're there, and we know you're spreading the word because the numbers are growing. So thank you, and continue to share the show and spread the word and subscribe and follow and all that kind of stuff. It does help us because it changes the algorithms and pushes the show forward to other people to see it. Lauren is in New York City. Hi, Lauren. How are you?

Hi. Good afternoon, Dave. Afternoon. How can I help? So I am at a point where I am drowning in credit card debt. I have about $70,000 in credit card debt currently, and I can't really stop the bleeding. It's all due to attorney fees. You paid $75,000 in attorney's fees? Also moving, I was in a situation where I was married, and my husband was an alcoholic and substance abuser, and I had to get out of that situation.

So what did you spend to move? I'm in Westchester, so it was about $9,000 to move between like broker fees. So you spent $60,000 on lawyer fees? Yes. For what? I've had to fight tooth and nail for my child. It's been a very challenging court case. At this point, the court has ruled he cannot have access to my nine-year-old daughter. But it's been contempt orders and violation, not on my part, on his. And also, there's an attorney guardian ad litem as well. Um, so I'm paying both of the attorneys. It's just been a very harrowing, um, experience that we are thankfully going to come to the end of hope soon by the end of the year. Okay. So the bleeding is stopping then. And, uh, it will. What a horrible

thing you've been through. I'm so sorry. What, what do you make? What's your income? I make $90,000 a year, and I'm in a very expensive area that I'm not legally allowed to leave. I am currently working at a nonprofit organization, and I can make more money. I have a doctorate in physical therapy, but I am tied to my job for the next two and a half years because I have extensive student loans totaling in the amount of $260,000 and I'm in public service loan forgiveness. And I only pay for 14 months. So after that, my loans will be forgiven. So I'm, plus they're very flexible. I have a daughter with special needs. So I'm really kind of stuck at that amount right now, making that $90,000. So the way it stands right now, I'm basically making, barely making my bills at this point. And I do not receive any type of child support or anything

like that. And I'm just making the bare minimum on the credit card payments. And so I'm trying to figure out when this is all said and done, and I can go and I can't touch anything right now. Is there any financial settlement that you're going to get from the divorce? No, no, there's absolutely nothing. I'll be lucky if I get child support at this point. I'm not going to bank on anything at this point. If you could, I understand the limitations based on the loan forgiveness,

but could you practice physical therapy today just theoretically on paper with your current qualifications? The answer is yes, but I also have a daughter with special needs that requires a lot of my time, and if I had to pay for child care, plus finding a provider that would be able to provide that child care, I'm kind of in a very difficult situation. So no family support or friends in Westchester at all that could help out? No, no. My family is from Florida. I don't have any family here.

Okay. So here's what's going to happen. Something's going to explode because you have painted a picture that says, I'm stuck in the corner and everything around me is wet paint, and I can't move. And yet you're going to get your feet.

You're going to get paint on your feet. Something's going to give. This is not sustainable. That's why you called us. So I don't know what it is that's going to give, but something's going to happen here, and it's not going to be pretty. You're going to have another set of problems and anxiety-ridden mess following this anxiety-ridden mess of a divorce because you painted yourself into this corner of, I don't have any choices, I don't have any choices. You better make some because what you're telling me isn't sustainable and you know it's not

sustainable so you need to get your lawyer that's so dadgum expensive to go before the court and get you out of Westchester County and you need to forget the stupid loan forgiveness because you're probably not going to get it and you need to go make about $200,000 a year and get your freaking life back or something I don't know what is, but something's got to change because everything that we bring up, everything we talk to you and ask you about is a trap. I'm trapped. I'm trapped. I'm trapped. I'm trapped. That was the answer to every one of your questions. I don't have any choices. I don't have any choices. And yet the math is not working. So math will not give you a pass. Math does not believe in grace. Math does not believe in mercy.

It's going to come for you. And it already is, and you're feeling it, and that's why you're calling. So I'm not trying to scare you, but your process by all the stress you've been through and all the damage you've been through, it has made you believe that you are trapped and don't have choices, and I'm challenging that. You do have choices, and you better make some. You better change something here because you're not going to get help from him. I'm betting that the student loan forgiveness doesn't work

because such a low percentage of those actually do go through, and you may have sacrificed a great income for a lousy income and I don't think you're trapped there I think if you go before the judge and go your honor I don't make enough money to live in Westchester I can't live here help me out here where can I go what can you tell me what to do and you go before the judge with that plead and then you go okay now how am I going to work with this special needs child and give them proper care and also be able to feed them and house them and and so uh you can't the math that you've given me doesn't work doesn't continue it's something's going to come up short and it's going to choose you if you don't choose it that's what i'm saying so you're not stuck but um but you do have a very

difficult situation and um part of it is um you're my heart's breaking for you honey because my I hear your language it's as if you have been abused in this relationship. So if you were in a domestic violence situation, one of the things the abuser convinces the person of is that they don't have any choices in that they're stuck. You can't leave. You can't afford to live without me. So you have to stay and let me be a let and be my punching bag. And so that's one of the lies they tell. And then you start to believe that lie yourself. Now you broke free of this guy, but your language of I'm stuck, I'm stuck, I'm stuck, I'm stuck is breaking my heart. Because it still sounds like he still owns you. And I want you free from him and free from this trap and free from all this.

I wish I had a magic wand. I could just say there's an instant thing here. But the one thing I will tell you is you've got to make some different choices. This is not working for you, hon. I'm so sorry. She can find people that can help take care of the child, but she's the only one that can feed the child. And so for that reason, I would drive this home. I would be getting into physical therapy and making the most money possible. That gives you more options. I'm stuck in a nonprofit making no money in the most expensive county in freaking New York area, except possibly Manhattan. This is The Ramsey Show. Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love and create actual amazing relationships ken coleman

number one best-selling author host of the ken coleman podcast on the remsey networks he's my co-host today open phones at 888-825-5225 jordan is in columbia missouri, Jordan. How are you? I'm good, Dave. How are you? Better than I deserve. What's up? Yeah, so my burning question is that I'm getting married here shortly. I've got a good chunk of cash saved up. We're looking at getting into the real estate market, but we'd like to know before we start having kids what the lowest risk method is for what we have in front of us. You're talking about your home or a rental property? Rental, building spec and sell. It's a toss-up in the air. I'd really like to know kind of what the best... But you own a home that you live in. We are actually currently building a house that we're about to start living in.

Oh, okay. Good. Okay. And is it paid for? We're going to have about a $40,000 note. The rest will be paid in cash. Good. Okay.

First thing I'm going to do is pay that off. Okay. Okay. Now, then when I've done that, then what type of real estate. Now, there's real estate investing, which is a buy and keep it idea, and then there's real estate speculation, which is why they call them spec homes. If you're building a spec home,

it's a speculation that you can sell it. It's a short-term play. It's not a long-term play. It is speculation. Flipping houses is speculation. And both are high risk because, obviously, if you pay cash for them, it's not as much risk. But if you pay cash for a house, fix it up and flip it, if it doesn't flip, at least you're sitting there with a paid-for house, right? You figure it out.

You could rent it or do something else. But you need to separate the mentality of what is the lowest risk. The lowest risk is a buy and hold strategy because real estate goes up over time when you have to sell that spec house or your, or your money sitting there burning taxes, property taxes, it's burning insurance. Even if you don't have a note on it it's sitting there burning money until you sell it whether it's a flip or an actual build of a spec house but that's speculating is short-term investing is long-term now when you go to investing the probably the the entry point would be a good home single family home in a solid neighborhood not super expensive but also not

trashy okay that's the lowest that's the lowest risk okay okay can i can i ask you this as well sure where where we live uh there there is a lot of inflating house prices, if you must. So there's not a whole lot in the market below the $250,000 range, probably within a 15 to 30-mile radius. And so with that, I actually work for a builder. And so one of the initiatives that they've talked about but I'd really like to do is maybe build a cheap speculation home to sell to a lower-income family simply because I have the high confidence that it would sell quickly just because there's nothing really in the market for it. What's your thoughts?

That's just a side hustle. That's not an investment. Okay. It's just your side hustle is you're building houses that you flip. Okay. Gotcha. And that's not bad if you're paying cash for it. And if you've analyzed and said, okay, what are all the downsides?

So what happens, and you've got to be able to answer this question and not throw up, what happens if this house doesn't sell for a year after you finish it? Spend a lot of money. Okay. I'm just saying, you've got gotta be ready for that because i don't know i don't know what's going to happen i don't i mean i'm i think you probably do know the market you're probably right in most markets in america if you build something less than the median house price in the area you have a very marketable property because entry-level properties are just

non-existent they're very hard to find and so any just about whatever the median price is and you sit in your area it sounds like it's 250 then there so if you build something that 150 range that's a nice little home man it'll probably go fast yeah yeah yeah i walk through i walk through one uh that's about uh let me think how far it's probably 80 miles or something like that outside of nashville so it's out in the country okay uh down there one of my lake houses a guy building a house on the corner up there and i walked it one day and he was in there and i walked it with him i was like wow this is a nice little it's a 1750 foot little three bedroom okay three bedroom uh bath and a half uh two car garage and and not super fancy but it was it was well built nice little brick out a little brick and

uh siding house right and it was 188 grand it was unbelievable i thought wow this is this is like all these people are here you can't buy it well yeah you can't but i mean it's out there it's out in the country you know it's not and where you are you're probably in a similar feel um uh you know in the columbia columbia is not a huge town uh and you know there's not a there's a whole bunch of columbia-esque size towns around you but you got to get all the way to st louis or kansas city or even jeff City before you get to a major town, right? Right. And so you got a lot of rural rings around you, if you will, that could fall like that little house I'm talking about. But that was a sweet little house and not a bad.

I mean, I'm thinking a young couple coming in there or somebody wanting to downsize a brand new everything, of course, dishwashers and all that stuff. And it's like, man, i could live there easy when we first got married and called that a palace you know um but again it was it's freaking hour and a half or more to nashville so and in this area that's that's considered a crazy commute so uh but my point is that if you get below that median house price, and that house sold, I mean, before he broke ground on it probably. I mean, he sold that thing so fast. But that's a great place in the marketplace.

So I think what you're talking about makes sense is my point. But I'm not an expert on your particular market. But that's a good place to be if you told me you wanted to build million dollar houses in a 250 market as spec i'll tell you don't do it um because you're going to get you're going to get into get end up with a million dollars sitting there but that's not what you're talking about so i do you have a temperature for him whether it be renovate something or build something brand new and he's in the home building business he's got the itch he's going to build right he's going to do it i think you're right i would tell most people not to do it but he's in the business i agree and to your point at that price range i

would imagine they're going to have a lot of people trying to get in that house if he builds it at the right price oh yeah yeah i mean there'll be a line around the block i suspect um so that that's the again the point is this, it's not really starter housing, but it's, it's, it's, you know, anything below the median price point. Yeah. The median meaning middle. Okay. The middle of your market, the median house price nationally right now, I think is about,

is it's bumping up close to 400. Um, and so, uh, forever, it was a saying says, uh saying says uh 394 oh there we go almost like i knew what i was talking about yeah okay that's impressive yeah okay so let's call it 400 yeah well that was the listing price the median sold price was 288 in columbia as oh no that's columbia columbia missouri i was talking about national oh sorry i was pulling up his area nationally would be over 400 okay i'm probably wrong probably wrong. Sorry. I went to Columbia. That's okay. Good place to go. This is The Ramsey Show. May 21 and 22, I'm going to be doing a two-night virtual event,

meaning you have to be there both nights or you won't see everything. And I'm going to unpack my personal playbook on buying real estate and on investing. And it's an advanced investing class. Dave Ramsey's Investing Essentials. I've never taught this stuff before. It's stuff I do and have learned over the years, but it's not stuff I have taught. So if you want to do an advanced investing class, it's $199. We've got, I don't know, $3,000 or $4 four thousand already signed up for it. Thank you for coming. We appreciate that.

And if you're interested, it's ramseysolutions.com slash events. And that's Dave Ramsey's Investing Essentials. We'll be taking questions live throughout this class as well. And George Campbell is going to help me with the whole process because he knows how to interrupt me and so and answer a question and all that so we're going to do that it's going to be fun we've already been talking about it and laughing out loud as to how much fun it's going to be so gonna but george is always fun i mean he's hysterical yeah diana is in philadelphia hi diana how are you hey guys i'm good how are you? Hey, guys. I'm good. How are you? Better than I deserve. What's up? So my question is, my husband and I are deciding whether we should buy a new car or not. We are looking at used.

The situation basically is right now we both have vehicles. My car, I have a $350 car payment on. My husband's car is paid off. It has about 100,000 miles, and it is out of inspection. It has no air conditioning. It needs about $4,000 worth of work. We do have two young children, so we do rely on that vehicle as well

for transportation um so my question basically is where if you if it's out of inspection does it have a tag on it um yeah so it's when i say it's out of inspection it's of this as of this month so it's something where we're coming up on about you know should we pay to have all this work done um to keep it you know inspected and legal after this month is up or um do we go ahead and and proceed with starting the process of looking for a new car a used car or something along those lines okay yeah you don't have any money, do you? So we have money in savings. How much?

We have about $20,000 in savings. Okay. All right. So the first thing is I'm just calling BS on the $4,000. I think you cooked that number because you wanted to get rid of the car so i think you can actually get that car fixed for probably half of that if you start working on a little bit but you jacked it up because you're sick of it you're trying to figure out a way to justify getting a car if you want to get a car it's okay get a car but um i don't think it takes four thousand dollars to get that car back up and get it running to where it should be to pass

inspection i think you can get a different back up and get it running to where it should be to pass inspection. I think you can get a different mechanic to look at it, somebody that's not, I don't know where you went, so don't go the dealer to get a car like that worked on for sure. But anyway, let's figure out exactly what's wrong with it because here's the problem. If you don't get it where it passes inspection, it's going to sell for $4,000 less. Okay, right. You can't give it away. Yeah, because that was the other thing is if we traded it into a dealership versus sell it privately to have that fund as a down payment.

Yeah, you can't. Well, you've got $20,000. So, you know, I think you probably get the car up and running and where it'll pass inspection for a couple grand and then sell it. And then if you want to sell it and move up in car a little bit with some cash, that's fine. But buying a new car, no, you're broke. You don't have the money for a new car.

And you certainly don't need a car payment. And you need to get your car paid off as fast as you can okay yeah you got to get out of the car payment business kiddo if you don't want to be broke your whole life if you want to folks if you want to be middle class the rest of your whole life keep a car payment mathematically it'll just hold your butt right there it'll just keep you from succeeding it'll keep you from prospering and just go well everybody's got a car payment. It's just the way it is. Car payments are just the way of life.

And that's exactly how people that are middle class speak and talk and think. And it just keeps you right there. It just locks you in. You cannot get it. You can't break free from it. And so you've got to go, nope, I've had it. Not paying payments on these stupid automobiles ever again. And these are the words of rich people.

People that become wealthy are the ones that get rid of car payments. I could get rid of my car payment if I was wealthy. No, you missed the point. You could be wealthy if you got rid of your car payment. You got that backwards. So, now, Diana, that's the cycle I want to break in your whole discussion. I don't care if you fix this car up and sell it and move up into a little better car. It sounds like it's a piece of junk.

I don't disagree with you on that. But then we need to get your car paid off as fast as we can, and we need to get in a game plan here where we stop talking about cars as if they're a constant crisis and instead get around in front of it and start managing the vehicles in a way where they don't own us. We own them. And that requires a different thought pattern than, oh, well, we're screwed. We've got to go get a car payment.

And we're stuck. Can't get an inspection. Got to go get a car payment. And that's kind of how your question sounded. Maybe you didn't mean it sound that way, but that's kind of how it sounded. And you want to break that cycle. And I'm old school. I didn't have time to pick it apart, but I'd want to break that cycle and i'm old school i i would i didn't have

time to pick it apart but i'd want to know what repairs are necessary just to pass inspection tennessee is a whole lot different than pennsylvania so it could be sizably different but if i was worried i wouldn't be worried about the air conditioning i think kids these days need to stink and have the windows down and let it blow in their eyes and their hair my goodness i mean i drove a car without air conditioning for a year and a half when we say c and i first got married because i because it was a cash car and i I drove in the morning, I drove in the afternoon. It was like, come on. So some of these things are about saving up money, suffering a little bit. And how big of a deal is it to suffer and have your kids have the summer air blow

through the car? You know, I wouldn't fix the AC on that car. You sound like a boomer. I am. On this issue, here's my point. Because then I would say, I'm with Dave. I would spend the minimal to get the inspection and then sell it and then buy a $10,000 car. And then get a car with air conditioning, for God's sakes. Well, then, yes. But until then, you tell people not to see the inside of a restaurant. Now, I'm the owner for telling them to let the wind blow through their kid's hair?

Well, I mean. Thank you, folks. Listen, I don't't have any hair so it doesn't matter so you trump my mom always called our air conditioner on our old car when i was growing up at 240 two windows down 40 miles an hour that's what she called it i get them a full cup of ice and uh roll the windows down just blow right over the car a couple of dinosaurs here giving out advice to non-dinosaurs but yeah yeah honestly you drive like no one else so that later you can drive like no one else so yeah if you need to go without the ac for a little while to get your goals hit fine i've done that to act like it's a convertible the kids will never but that's not a it's not like this is like like this is somehow better you know they don't build

them like they used to thank god they were a piece of crap. Thank God they're better now. But yeah, check all that out. But do the minimal and get the inspection, get the car run, keep your family going, get your car paid off, then save up and buy up in car and save up and buy up in car and save up and buy up in car as you build wealth, move into better and better cars.

Never again a car payment and never again a new car until you have at least a million-dollar net worth. There's some good rules for you guys, okay, and for you, Diana, as well. Thank you for calling. We appreciate you joining us. Open phones at 888-825-5225. Here's the numbers. A new car loses, according to Kelley Blue Book

and according to Yahoo Finance and about three other sources a new car loses 60 of its value in the first five years so that means if you buy a forty thousand dollar car when you drive it off the lot and you hear that sound going over the curb when you went into the street that was that sound was ten thousand dollars that's the first drop as soon as you get it as soon as it's titled to an individual and it touches the street it's going to drop 20 25 percent that day okay then from there you're going to lose the rest of that 60 so forty thousand 000 that means you're going to lose 24 000 that means your 40 000 car in five years is going to be 16 000 car okay and that's a new car now if you lose 24 000 every five years don't be scratching your head and wondering why you're not don't have wealth it's because you're driving it

down the sewer okay and you're causing this and so you can afford to take that hit if you got a million dollars you can't afford to take that hit if you're broke this is the ramsey show ken coleman ramsey personality is my co-host. Thomas is in Jacksonville, Florida. Hi, Thomas. How are you? Hey, Dave. How are you? Better than I deserve. What's up? So I've been following you for quite a while,

and me and my wife have been treating debt like it's cancer. We've been living kind of frugally, and I'm left with about 15 to 20 credit cards that are completely paid off, and we can't decide what to do with them because our credit score is so good, we can't decide whether we want to close them or just hold on to them. Okay, I'm confused. I thought you said you were following us, and that you said you hated debt is that the same guy and i yes sir okay so if you hate debt why do you need a credit score and that's where i'm at but i don't this is where the contention comes from i don't think my wife's quite where i'm at as far as so she she doesn't hate that she wants more debt

it kind of feels like that yes sir okay well that's that's a different issue where I'm at as far as... So she doesn't hate debt. She wants more debt. It kind of feels like that, yes, sir. Okay. Well, that's a different issue. Sometimes it feels that way, yes, sir. If you want debt, you do need a credit score. If you want to go into debt, credit score is a good thing. Yes, sir.

But it's the antithesis of building well because your most powerful wealth building tool is your income and when you give all your income to other people because you stay in debt all the time then you're going to be broke your whole life and build other people tall buildings not your own and yes you know so our goal here is to get you out of debt so that you can become wealthy and the only way a credit score is built, it's 100% based on how you interface with debt. And it's for the purpose of getting in debt. And the way you get a good score is get in debt so that later you can get into more debt so that you run your score up so you can get into more debt so that you run your score up so you can get into more debt. And that's

the essence of the FICO score. We worship at the altar of the great FICO. We bring him offerings of interest and say, oh, great FICO, thank you for being my provider and letting me buy crap I can't afford with money I don't have to impress people I don't really like. And that's the whole purpose of FICO. It's like a generational curse almost. Yeah, it is.

It's exactly what it is. And it's designed to prosper the bank. It's not designed to prosper you but people you know people get caught up in this false measure of success it's not a real measure of success so you know that's what you guys have to decide at your house and then once you decide that it's an easy fix you just close the accounts and chop up the stupid cards. Have a plastic surgery. Now, do you recommend keeping any credit cards? I don't have any.

I haven't had any. My credit score is indeterminable, known as zero. Wow. Just like the interest I pay, zero. It's almost hard to imagine because I've spent the past 10 years building my credit, focusing on, you know, I've always been financially... I know. Once you belong to the FICO cult, it's hard to imagine because I've spent the past 10 years building my credit, you know, focusing on, you know, I've always been. Once you belong to the FICO cult, it's hard to get out. Because they brainwash you. You know, but because you, you know, what you have to actually do is intellectually decide, is this a measure of success? And my contention is it is not a measure of success,

that net worth and income are measures of financial success, not a score that says I've borrowed money a lot. Right. And made them successful. I told my wife today, I said, I'll be a millionaire by the time I'm 35. No, you won't. By the time I retire, I'll have a million dollars.

No, you won't. You're not going to. Not unless you fix this problem. Oh, I'm going to cut those credit cards up today. Okay. And call those companies. And close the accounts. All right.

And close the accounts. All right. Well, and you better be on board with your spouse in doing this. I'm not trying to cause a divorce here, okay? I mean, the two of you need to sit down and talk about where you want to be but if you if that's how you're going to live you are going to be a millionaire because that's the secret i mean it's not it's not a secret it's that you keep your money and invest it instead of giving it to ford motor company and master card and amazon freaking prime and everybody else is profiting off your butt.

All you do is work for other people and give your money to them all your life. And that is the essence of debt. And so when you quit doing that, it's magical how much money you have. It reminds me of one of my favorite lines from a movie, Forrest Whitaker's the actor. It's called The Great Debater. It's about a true story. And at some point in the movie, his son, who's all into debate,

he's a great student, but he's spending all of his time in debate club, and he's letting his studies start to slip, and his dad's getting on him. And he runs out with an attitude, and his father follows him out on the porch, and Forrest Whitaker says, son, do what you have to do. Then you get to do what you want to do. And that's the essence of the matrix that everybody's in because the credit cards say, do what you want to do. But wealthy people, they've already figured it out and they go, I'm going to do what I have to do so that later I can do what I want to do. And this applies to money. And so if I have to wait to save up to buy something, if I have to wait to do the vacation I want to, if I have to wait to pay off my debt, my student loan,

you know, the idea here is, is that there is a difference. There's two very clear paths. One is the path to average and the other is the path to excellence and really wealthy people it's a much smaller path and they figure that self-delayed they can delay gratification they can figure out discipline because they got their eye on the prize they're thinking 30 years from now that's what they're thinking and you got to pull yourself out of the matrix 30 years to live my life well it's not gonna be 30 years duper i mean it's to be 30 months for you to be debt-free and start to have an emergency fund and start to get control. It doesn't take that long.

But, yeah, after 30 years, you're going to have millions. To be really wealthy, yeah. Millions. You have to have that long view. You know, if you live like no one else later, you'll get to live like no one else. Zig Ziglar and the great motivators used to say, if you want the things that other people don't have,

you have to do the things that other people won't do. Yes. And so decide, you know, decide. What does it look like? What does your life look like to be different than average? Because average is broke with a car payment and a student loan that's been around so long you think it's a pet averages credit cards are necessary i'm gonna get rich on airline miles the dumbest butt statement

i've ever heard in my life i'm gonna i'm gonna make my money on discover points let's do the calculation on that one okay shall we you we? You run $100,000 on your Discover card. They give you 1% back. That's $1,000. In what school of thought does turning $100,000 into $1,000 cause you to be wealthy? What logic is in, I mean, how much drugs did your parents have to do for you to believe that turning $100, believe that turning 100,000 into 1,000 is a path to wealth?

I mean, the 70s were good to your folks. I'm just saying. Oh, my God. Wow. I mean, that's about as dumb as a rock right there. But people, they look at me straight in the face with this sincere thing that this is a methodology for building wealth. I'm going to take 100 grand turned turned into one grand and that's wealthy huh that's just dumber than it's hard it's

hard to get my head around so but this is these are the mythology that that average normal people believe and don't for god's sakes don't challenge their little myth because they get all pissed off if you challenge their falsehood that they're living right square in the middle of and believing yeah they get all they get all tick tock on you then man and just turn you into a meme i'm just saying i know a guy that happened oh man it it really is funny though the cultural like you've got to have the credit score you heard it right out of his mouth by the way there's nothing wrong with him he's literally repeating what nine out of ten people repeat which is i gotta have the credit score to actually be a functioning human being so what do we got just

under 400 million people in america roughly now right i think that's right 26 million millionaires 26 million millionaires out of 400. So what is that? That's, uh, well, just, uh, what is it? 5% a little over five, right around 5%. So that means that if you are doing the things that we're talking about, you're in the top 5% of people in America. And then there's the rest of you. That's right.

That are just going to keep doing the stupid butt stuff over and over and over again until somebody yells at you enough that you'll get your attention. It's like, oh, I have my plan. Well, good luck with that. Look at how it's working for you. Your $1,200 car lease is dumber than a rock. This is The Ramsey Show. Ken Coleman, Ramsey Personality, is my co-host.

Perfect question of the day for you with your frustrated sports announcer voice. I solved this. I'm a little excited. Today's question comes from Nathan in Michigan. By the way, I should point out that Nathan is from the state that has the national championship undefeated Michigan Wolverine football team. Just want to point that out. Just like you're trying to say go blue is what you're trying to do. I really am trying to get away with it. All right, here's the question from Nathan.

What is your opinion on the recent changes allowing college athletes to profit from their name, image, and likeness? For sports fans, you know this as NIL. For non-sports fans, when you hear that, we'll explain that in a second. Do you believe this is a positive development for college athletics, providing athletes with more opportunities, or do you have concerns about potential implications for the integrity of collegiate sports? Well, let me address that first. The irony is that NIL has actually probably brought more integrity to collegiate sports because now it's removed all of the edges and all the cheating that's involved with recruiting which would have been always cash to families or cash to athletes and

since the adoption of nil where college athletes can be paid for their name i mean image and like it was an adoption it was a court court mandated yeah but i'm just saying court yeah but it said they had that's right and so now that is the law of the land so what that has done is really removed a lot of the cheating and the the backroom deals where you saw boosters causing a lot of problems uh on the other issue what is my opinion of it uh i'm not i'm not a fan of it i certainly understood that there was a case to be made that colleges and their athletic departments were profiting mightily from these athletes but what has happened is i think it swung too far the other way. And that with the

transfer rules has now made it free agency. And so college sports mirrors professional sports. But in fact, it's even crazier. It's the wild, wild west. There are no contracts. An NBA or an NFL free agent is under contract for X amount of time, the team and the athlete and the agent all know that the contract is coming up. In college sports now, kids can just simply declare via the transfer portal. My coach hurt my feelings. That's right, and then they leave. So I think we're in the wild, wild west of the early days. I think this will continue to morph.

But to answer the question, I'm not a fan of NIL. I think it's just made the sport a little bit wackier, and I think it's made prima donnas out of high school kids, who, by the way, are showing up at signings for their college in Lamborghinis.

University of Alabama. That happened this year. Kid showed up at his high school, Dave, to declare he was going to Alabama and he was driving a brand new Lamborghini. So that can't be good. There is something wrong with this picture, ladies and gentlemen. I knew that would load you up.

This is the equivalent of me putting a golf ball on a large brush tee so that you can hit it right down the middle, Dave. Thank you. Thank you. What say you, sir? Well, I agree with you that the kids, they were due something, but the court ruling completely took it out of the hands of the colleges to develop something because the colleges screwed up. I mean, if they had come forward, if the NCAA had come forward

and put together a plan where the kids could make some money and managed it and adopted that then it never would have gone to the supreme court but the supreme court just kicked the door completely open there's absolutely no rules like you said yywest it's um it's chaos and the problem is several fold then um we've got uh i don't mind keep some anybody profiting off of their their efforts okay regardless i think i'm that's called a meritocracy and i'm a big fan of meritocracies i believe if you work hard you should get something for that and if you have talent you should get something for that i'm fine with all of that the the problem

is with it can being completely out of control like i've had athletic departments uh call me and say hey would you come speak to the team and And I'm like, sure. Uh, what about, well, we've got a quarterback that makes 2 million a year and the guy blocking for him makes nothing. How do we build teamwork in that? And I'm like, I can't help you with that one. That's like known as can't be done. Uh, and so, uh, you know, you need to restructure the whole thing, uh, but they don't have that option because the court took it away from him. You can't structure it. You'd have to, you know, you'd get sued again if you said okay we've got to put some of this money in a pool and the whole team benefit so we can build a team character and then you add to it the portal which every time you piss somebody off they just hit the road and uh if you

want to piss somebody off piss off a highly aggressive 18-year-old who you are training to run over other people. And then piss them off. And be surprised that they're pissed off. Because what you do all day long is teach them how to run over other people. And then guess what? As soon as you hurt their little feelings, they're gone. And so it's very difficult to build a college team now in this environment. It's very difficult because there's this disparity of income.

And then the last problem is the same problem we've been facing when you and I have been working with the NFL, and our team's been working with the NFL for years, going to these rookie camps, and we tell these young guys, you just got a $10 million signing bonus and i understand uh but you know 10 million is not enough to buy everyone in your in your you know in your entire family a two million dollar house that's not 10 million okay that's 100 million and you did not get 100 million besides that you're in the nfl which stands for not for long 3.2 years is the average career. 88% leave the league permanently physically

disabled in some manner. The divorce rate 10x the public. Okay, this does not spell out well for wealth building. Okay, it doesn't. So let me tell you what happens to your 10 million it's gone in that situation that's what happens to it it's gone you don't have it and so but but you but you know you got bling and you got a lot of friends right now that aren't really friends and you're taking them to the bahamas and go swimming well good for you that's dumber than crap and you know and so this is me talking to nfl people and guess what guess how far popular that is it's not popular so um but it you know and now it's worse because now you're dealing with a 16 year old because the nils dropped down into high school now a hundred percent there are actually no limits now we're seeing it show up in high schools and we're going to see it in junior highs

we're going to see nine-year-olds ten-year-olds start to get payment to lead them through because we you know we worship these sports figures and it's just guys it's it's not good for the people you know that kid that gets 10 million dollars and doesn't manage it well and it leads to horrible things in his life it does it's not good for him well so you know it's done it's really killed amateur athletics because the very word amateur is now completely defunct. It's not. I mean, once you collect a check for doing something, you are by default a professional. But it is pretty cool if you can show up for signing Daniel Lamborghini.

I don't judge the kid, but my goodness. Hey, there's a defensive Alabama in here who said it's actually it was Ole Miss, not Alabama. Oh, I don't know if that's true. We've got it. We've got it. an old miss player all right i have no problem being wrong because i was still using a great example so i apologize all you roll tide people people you gotta be careful big blue people we beach in the rose bowl there's that yeah oh it feels good to say but anyway the point is you got an old miss kid all right showing up oh that's a kiffin with yeah oh that that does make careful careful dave that makes total sense now yeah okay that was a little close to home lane kiffin left uh the balls at the altar folks

and so that dave's not over that yet no i'm definitely over it yeah you got a good coach but but here's the deal this has absolutely changed college athletics forever and here's the other thing you're going to see this begin to affect the non-revenue generating sports if you like college when i was dealing with college coaches um and we're sitting down talking to college football coaches and they say hey it's not unusual at all for some of the young men on my team for me to be the first male figure in their life to lead them well and to love them well yep and um regardless of race yeah and he goes it's not unusual at all uh for me to be that guy and guess what he's not anymore he doesn't have that he doesn't

have that capability to love those kids well because they make more than he makes. Yeah. And they will leave as soon as he challenges some of their mythology that they're living their life based on, or their behaviors, or whatever. Tries to make them sit on the bench. Yeah. And here's- Don't they have to sit on the bench? Here's one other unintended consequence. It's driving some of the great legendary leaders out of the game.

The last two years, Entree Leadership Summit, I think it's the best leadership event in the world. It's our signature event here at Ramsey Solutions, part of Entree Leadership. We've had on the stage arguably two of the top five coaches of all time, any sport, Nick Saban in football and Coach K just this last couple weeks, and both of them left

and they've told Dave and I, we were both around them. NIL was one of the reasons that drove them out of it. It's just changed the landscape. The NIL and Porter together is just... Both of them, yeah. It's not good. It's not good for the kids.

It's not good for the sports. That's the summation of it. And yet, I would never deny someone the right to earn money. There's nothing wrong with that at all. So you've just got to figure out some way that it's done in a wise way that's a blessing to everybody involved. This is the Ramsey show live from the headquarters of Ramsey solutions. It's the Ramsey show where we help people build wealth, do work that they love and create actual amazing relationships. Ken Coleman, Ramsey personality, number one best-selling author, is my co-host.

The phone number is 888-825-5225. Denise is in Syracuse. Hi, Denise. Welcome to The Ramsey Show. Hi, Mr. Ramsey and Mr. Coleman. It's nice to talk to both of you. Thank you so much for taking my call. Sure. What's up? Well, my question is,

I guess I'll start there. Do I keep putting or do I stop putting money into my 401k until my 401k is paid off along with my car and, um, a six month emergency fund. So next month, I'll be 57, was a single mom, took care of the kids, all that. They've all got one's married, gave them $10,000 for a wedding. The other one got engaged, bought a house, gave them $10,000. I'm at $176,000 in my 401k, $25,000 in a Roth. How much other money do you have saved, not counting retirement? Well, here's the thing. That's why I don't even know what baby step I'm in.

I paid my house off already. Good for you. How much money do you have saved other than your retirement? A thousand dollars. Okay. All right. So you got things all that you got you're a little bit discombobulated but i think you've done a good job overall we can just work on a little bit of smoothing the wrinkles out if that's okay so oh my god yeah yeah baby step one is a thousand

dollars saved two is don't do anything until you clear all of your personal debt. Now, you have personal debt that's a car and a 401k loan. Did I hear that right? That's right. My 401k loan, they take out $800 a month. What's the balance? What's the balance? $27,000.

Okay. $27,000. What's owed on your car? $6,200. Good. And what do you make? And I can have that paid off at the end of June. What's owed on your car? $6,200. Good. And what do you make? And I can have that paid off at the end of June. What do you make?

I bring home about $6,500 take-home a month, but I also have an Airbnb in my house. And I can average, like May and June, I already booked, and I'm getting $1,000 extra for each month. Excellent. So that's how I'm paying the1,000 extra for each month. Excellent. So that's how I'm paying the car off and stuff. All right. So that is the right goal. We're going to list your two debts, smallest to largest. We're going to pay $100.

And I do have a credit card. And balance on that is what? $1,800. Okay. Let's pay that off before you do anything. That's your first thing. And cut it up. Credit card.

Okay. First. that's your first thing and cut it up okay and then we're then we're going to stop your investing temporarily into your 401k the word is temporary because you're going to knock these debts out fast okay now yeah and i want you we're going to get you on every dollar budget which is the budgeting app i'm going to give it to you as my gift okay oh my god and i want you to to lay out every dollar having a name you kind of are doing this because you've got a game plan it's just rumbling around in your brain instead of down on paper okay if you put it down on paper it gets much more efficient meaning into the app okay so we're going to put it into the app and make every dollar behave stop all of anything

going on and point all your guns every dollar you can squeeze out of your whole life, at these debts. First the $1,800, then the $6,200. Those will both be gone by August for sure. Then we're going to tear into that $27,000. Now, you're not allowed to pay extra on a 401k loan. They only withdraw, or you can pay it off in a lump sum. So what you've got to do is just pretend like you're paying it off and put the money into a savings account no i actually called them i called them and yes i can make extra payment and i can pay it off in full i can make extra payments

very unusual to the point i'm not sure that's right but if you can that's great i don't care just okay we're going to chunk money at it after these other two are gone until it's gone. And so basically what we're saying is we've got $35,000. We're going to clear up pretty quick here. Like by spring, you're going to have no debt. That is correct. I'm hoping by February or March. There you go.

So you've already run the numbers out. You're doing the same thing I'm doing by February or March. There you go. So you've already run the numbers out. You're doing the same thing I'm doing. Good. Now, when you're 100% debt-free, house and everything, yeah, that puts you at baby step seven, except that you don't have your emergency fund at that point. So you need to go back to your $1,000 account then and raise it up to three to six months of expenses. So we'll just make up a number right now. Let's call it $15,000. That money's sitting there just between you and life you never touch it for

anything unless life comes and knocks you over it's not a wedding fund it's not i need a car fund it's not a vacation fund it's only for emergencies everything else you save for separate from this fund so you get that emergency fund in place then we restart the 401k and you're going to do that by about this time next year roughly after that then start investing yeah and you'll be able to easily invest because guess what you don't even have a house payment yes i mean you can load that 401k up. You're going to be so rich, it's going to be unbelievable. But can I be 57 and starting so late with 176 in my 401k and 25? What did you say you made? I average right about $6,500 a month.

Okay, that's take-home. So you're making like $80,000, $85,000 a year, right? Yes. If you invest $10,000 a year, $15,000 a year, which you should be able to do pretty easy, you're going to have a lot of money.

The $176,000 will double every seven years. Have you got it in good mutual funds? I have it through work. I know, but is it in mutual funds? It's Vanguard. I don't know. I know, but is it in good mutual funds? Vanguard's got bad mutual funds, and Vanguard has good mutual funds, and Vanguard has all kinds of crap that you don't want it in, okay? So Vanguard's a fine company, but not every one of their instruments are good for you. You need to be in growth and income, aggressive growth and international, and growth. And that's the four categories. I'm going to teach

you every bit of this. I'm going to plug you into Financial Peace University and show you how to do every bit of this. But if you've got it in good mutual funds, if it's averaging 10%, it's going to double about every seven years. So when you are 64 years old, you are going to have 400 000 you're going to have 550 000 uh we'll count the 15 000 we're putting in over the next seven years okay and yeah you're going to be a millionaire when you're 70 i think you're okay i think you're gonna make it and we don't know how much your house is worth so not counting there's that not counting your house yeah you're going to make it. And we don't know how much your house is worth. Not counting your house. There's that. Not counting your house. You're going to have, you should have a million dollars in your mutual funds by the time you're 70 with what we're talking about here. That's 13 years. So double, double twice.

And, um, and you're going to be adding to it all that time. And you're never borrowing money again for anything ever. You're paying cash for everything for the rest of your whole freaking life. And you did it. You're going to be a millionaire, single mom your whole freaking life. And you did it. You're going to be a millionaire single mom. Isn't that neat? I think that's pretty neat.

Hang on. We're going to sign you up for every dollar and sign you up for Financial Peace University and give it all to you just to say thank you for being a new listener. And then we can get your baby steps discombobulated because they're they're combobulated right now so they need to be discombobulated that's how that works right i'm gonna write that down and remember that that's a that's a classic bad joke right there this is the ramsey show ken coleman ramsey personality is my co- today, number one best-selling author of the book Paycheck to Purchase. Purchase. Purchase, yeah, you can do that too.

If you had a paycheck, like that book maybe. The best way to make most of your money is by creating and sticking to a plan. It's called a monthly budget. The dreaded B word. Yeah. Why do people dread it? Because you get to tell your money what to do. If you don't like it, it's your fault. You get to decide what it says. If you hate it, why would you design a plan? You hate design a plan. You love. I can't have any fun. Well, that's your fault. You decided not to have any fun. You could do that, but that's okay. You could live like no one else so that later you could live like no one

else. You can keep a pulse on your spending, make progress, work with your spouse, make your money behave. This is why millions and millions and millions, that's a lot of millions, are now using EveryDollar. It is one of the world's largest budgeting apps, but it's definitely the best budgeting app out there, and it's ours. We love it. Download EveryDollar for free at the App Store or Google Play today or at EveryDollar.com. EveryDollar Premium, you pay a little for, and it connects you to your bank and does all kinds of goodies like set up your net worth. It'll get you going on the whole thing. Yeah, track you through your baby steps right there. Oh, yeah, baby.

It does all of that. Check it out. Tracy's with us in Canada. Hi, Tracy. Welcome to the Ramsey Show. Hi. Hey, what's up? Thanks for taking my call.

I'm super excited to be on. We're glad to have you. How can we help? Thank you. So we recently, well, about a year and a half ago, we bought a house and we were slowly, we were living in it and slowly renovating it and kind of using it to be also an ink,

like we were planning on selling it in a couple of years once we were done renovating it. And then in the middle of renovating it, we found out we had asbestos in all the drywall. And so we quickly moved out and we're living with my father-in-law. And we're trying to renovate it now super fast, but definitely incurring a ton of debt on our home equity line of credit. Because you're using asbestos removal companies.

Yeah, yeah. We have it all. Like all the asbestos has been removed, and we're just now in like kind of the rebuilding phase. Yeah, you're down to the studs on the whole stinking house. Yeah, totally. So now we're drywall up. Wow, how much money are you going to lose on this when you're done? Well, we've had a realtor come out, and she gave us the number, and I mean, I don't know. Acreages, it's an acreage, so it's a little trickier than like a home in town. I wasn't what I asked.

I asked what you're going to be able to sell this mess for when you get it completed. I'm hoping 1.1. Okay, and how much will you have in it at that point? Probably $350. So you're going to make some money yeah we might well i mean 1.1 over 350 you're gonna have to screw it up bad to not make some money yeah yeah well let's get it done and get it sold what's the question oh i just i feel terrible about going into debt and using our line of credit to do it.

Good. Good. So get done and get out of it. A couple years ago. Yeah. Get it done and get out of it. This dream has turned into a nightmare, but it'll, I mean, you're going to end up with some, this fertilizer is going to grow some stuff. So, I mean, you stepped in a big pile of poop, right?

Yeah. But, but, you know, you're going to get out of it with growing some stuff yeah 350 is what we're putting into it like out of pocket into the house as a renovation cost okay you're not answering my question then would you pay for the house 535 plus 350 yes so you're going to have I ask how much you're going to have in it. So you're going to have eight something in it, not $3.50. Okay, so you're barely going to get out by the skin of your teeth. Good.

At least you're going to get out. Yeah. Yeah. Okay. It's not as sweet as I thought it was a minute ago. I was confused, but you confused me. So there we go. But okay.

Yeah. All right. Yeah. We also have a rental property that we own, and I'm just curious if it would be wise to sell that and use that to not have debt, I guess. Yeah, I would love that. Sure. Yeah?

Sure. Because here, at the end of the story, you're going to have the money from that rental back in your hand, right? Yep. If you don't run up debt, instead use the rental money. So yeah, sell it. And that gets you out of this poopy mess again. And then lesson learned that all renovations are not quaint and fun and cute. As a matter of fact, most of them aren't.

They suck. I've done a bunch of them and there ain't no fun i'd rather build a house any day from the ground up than i would try to renovate an old piece of crap oh man it's awful it's just awful and so yeah man i was doing one over in one of the areas of town that's now cool you know the cool ends used to be the hood now it's cool yeah you know what i'm talking about and uh yeah that thing man every time we opened up a wall there was a whole nother problem money pit it's like yeah i mean it's just like god man they don't build them like they used to thank god you know it's just it was awful and so yeah you just i'm i i have no romance for historic renovations i call them hysteric renovations they're hysterical um anymore

after you're doing i did enough of them so you're telling me you don't like to watch fixer upper shows on hgtv oh that's just not even close to what really happens that's reality tv has so little reality in it that it is so scary but yeah yeah no i don't watch any of that i don't even watch tv but yeah that that's but still it's just the cute little oh it's cute yeah it's cute and you have no idea uh no thank you no thank you little ptsd folks yeah it's experiencing coming out just coming out. It's coming out right now on her behalf. It's a, yes, it's a sympathy, empathy fit.

You can absolutely feel having a sympathy, empathy fit right now for her with her as Vestas discovery. Yeah. Back when we used to kill ourselves trying to stay warm. Yeah. Uh, that was insulation is what they're dealing with there. Uh, okay. Liz is in Columbus, Ohio. Hi, Liz.

How are you? Hi, I'm so excited to talk to you guys. Thank you so much for taking my call. Sure. What's up? So my husband and I are in baby step two and the next loan that we're kind of chunking away at is my car loan. And in the month of May,

we're going to be able to make a $7,000 payment on it. And I'm kind of just wondering if I should stockpile the remaining balance of the loan, including that $7,000, because I went and looked at the loan, and if I paid off in one payment, they reduce it by like $2,000. So I was confused by that, and I just wanted to call in and see if you guys had any insight there. Give us a few more details. Wait a minute, that doesn't make sense. Yeah. And wait a minute, what's the interest rate on this loan?

So I called and asked, and they didn't give me a rate, but they said it's earning $3.22 in interest a day, which is so painful and horrible. They would not give you the interest rate? Yeah, but they told me how much it was interest a day, which is so painful and horrible. They would not give you the interest rate? Yeah, but they told me how much it was earning a day. No, but why won't they give you the interest rate? Because they're screwing you. That's why. 100%.

Yeah, you've got a very high interest rate because you have a bad contract called Rule of 72s. And, yeah, that thing is nasty bad or 78s or whatever it is it's uh it's got a prepayment penalty in it yeah that's what it's got and so what you're probably better off doing and you're gonna have to dig into this and learn some more about it but i think you need to pay it down to the last little bit and then take one hit on it because the prepayment penalty is calculated on the outstanding balance. So reduce the balance down to about $2,000 and then do $2,000 all at once. So I think they're telling you exactly backwards of what you need to do,

but that doesn't surprise me because they're screwing you. Yeah. Okay, cool. That makes a lot of sense. I'm pretty sure you had bad credit and bought a car you couldn't afford and they jacked the rate on you. Does that sound right yeah it was like a car lease when i was in college it was a horrible decision but i'm just cleaning it up and just moving on but yeah yeah get her done get her

done and get it get it knocked out as fast as you possibly can and yeah lump summit uh i mean throw as much at it as fast as you can but you need need to dig into it. You might want to just do one little lump at the end. Instead of like $500, make it like $2,000. And I think that might be the way to trick the math on the thing. But look into it and figure it out. They'll walk you through it once they figure out they're not able to screw you anymore. This is The Ramsey Show. Ken Coleman, Ramsey Personality, is my co-host today in the lobby of Ramsey Solutions.

On the debt-free stage, Ryan and Courtney are with us. Hey, guys. How are you? Good. Good. Where do you all live? Northeast of Champaign, Illinois. Oh, fun.

Welcome to Nashville. Good to have you. And how much debt have you guys paid? $133,000. Wow. How long did that take? About 35 months. Good for you. And your range of income during that time? We started around $115,000 and we've ended about $170,000. Excellent job. Very good, guys. Love it, love it, love it. What kind of debt was the $133,000? One credit card, one truck, and our mortgage. Yay! No mortgage! Looking at weirdos. Weird people have paid for houses.

That's so weird. I love you. Excellent job. What's this house worth? We just had it appraised a couple weeks ago. It appraised at $420,000. Love it. And how much in your nest eggs in your 401ks and retirement?

Well, we both have pensions. I work for the state of Illinois. He works for the county that we live in. And then we have around $60,000 in Roth IRAs. And then we have around $40,000 in 529s. Excellent. Excellent. So you're over half a million net worth.

Way to go. Congratulations, y'all. Whoop, whoop, whoop, whoop, whoop. Yeah. All right. Tell us the story. What happened 35 months ago? Three years ago, something changed?

Well, my husband is a sheriff's deputy and he has many other talents as well. And so I had always hoped that he would just kind of do 20 years and get his pension and move on to something different. And he always said, well, I can't draw my pension until I'm 50. So I'm going to work until I'm 50. But law enforcement got a little crazy in 2020. Heard the rumor. Yeah. And so one day he called me on my way to work and he just said, I'm done. I don't want to do this anymore.

I'm going to do 20 years and I'm going to be done. Wow. And my first thought was, I'm so glad that he finally came to his senses. Wow. But at the same time, oh, crap, how do I tell him if we owe money on a truck and a credit card, he's not going to be able to do that. And so that day I just decided I'm going to make it so that he doesn't have any excuses when that date gets there.

He can retire. He can retire with dignity, and he can do whatever he wants to do. Mm-hmm. So you just said we're going to get out of debt then. I did. he can retire, he can retire with dignity, and he can do whatever he wants to do. So you just said we're going to get out of debt then? I did, and he was initially not on board. It took a couple days and some tears, but I got him there. Okay, all right. And how did you connect up with all this Ramsey stuff? I actually found it through the minimal mom, Dawn.

I was watching a video of hers, and she was talking about the debt-free screams and so i i have about a 30 minute 30 minute commute to work and so i pulled him up on my way home and listened to him finished up the next morning and i sent the link to him and he called me and said is this a joke and i was like no we can do this why not and so i sat down that day when I got to work and just immediately wrote everything down in a little red book that I still keep all my information in and we did a budget about 6 a.m. a couple days later I said we're gonna do this before the kids are up and it's quiet we didn't have any battles took us about an hour we got everything together and we just stuck to the plan.

Wow. Yes. Well, we were in agreement. We need to do this and game on. Yes. And then here you sit 35 months later. Now, did you hit your 20-year? September of this year.

Yeah, coming up fast. Yes, it is. Oh, wow. Wow. Okay. What was the reason for the bump in income? It was a pretty nice little bump here. He got a really good raise last year. The county gave them their wages. About a 25% raise. Yeah. And then I got raises along the way too.

And also I teach court, I'm a court reporter and I teach court reporting online. So that was an extra job that I picked up. Nice. And for about three years, we owned a small business that we just sold in December. Oh wow. We were both working and he also does IT on the side. So, like I said, he's very talented. So we had a lot of streams of incomes come in. That's awesome. So they jacked your income up. They're trying to retain the officers. Yes, they are.

Yeah. It's still hard to do. Yeah. Do they know that you're out? They have a general idea, yes. I have not given any paperwork on it. I need another job. If they happen to be watching YouTube, I'm just saying.

The cat is out of the bag. Way to go, guys. How does it feel to not have a payment in the world? Not a house or anything. It feels awesome. It is a great feeling. Just free. How old are y'all?

Go ahead. I'm 39. I'm 45. Okay. Very good. Very good. And you're free.'re free yes we are already a half million dollar net worth and you're going to be millionaires in no time way to go you guys and Ryan's actually currently recovering from a neck surgery that he had to have back in March and

so he's on temporary disability through the department for that and you know like we told our kids on the way here that if our circumstances financially had been different, it would really be a struggle. But now it's just an inconvenience. It's not the end of the world. Yeah. Amen. Well, congratulations, guys.

Who was cheering you guys along? Anybody? Not really. I mean, our parents knew that we were doing it, and our kids knew that we were doing it. They were not happy about the grocery budget, but we got through it. It a rough in the law enforcement community they're um they're against this kind of thing being debt free why do you think that is i'm not sure everyone wants

the best looking truck and the best looking house and they don't care what it takes so but here you are completely free. Yes, definitely. Way to go, guys. Way to go. What do you tell people the secret to getting out of debt is? I think being on the same page and just coming up with a plan and just sticking to it no matter what. You can't make excuses. You just got to stick to it. At times it's hard, but it's the ultimate goal that you're going for. What do you think the hardest thing was? For me, it was paying off the mortgage because no matter, it seemed like I was, we were throwing so much money at it

and I would call every few months and say, you know, what's the balance? And they would tell me and I'd be like, that's still so much money. But then I got to the point where I started thinking of it like, well, some people owe that on a car. And, you know, also like Dr. John Deloney says, you start looking at that new front number. And so when it got below 100, I was like, okay, now we're getting somewhere.

Yeah, now we can feel it. Yes. Now the momentum is coming. Yep. And then I would always text him like, this is the new balance. These are the payments we made. This is what the balance is. And so just cheering each other along too.

Yeah, you got to see that progress. You got to feel you feel stuck you quit yes yeah so way to go you guys very proud of you all right bring the kiddos up what are their names and ages briley is 15 she gets her driver's license at the end of the month all right ace and wyatt are twins and they're 11 all right right. Very fun. Very cool. Well, good to have you guys. We're so proud of you. Beautiful family. You're amazing. What you've done is inspiring. And so now you're one of those debt-free screams or in a minute you will be. Yes. Yeah. Well done. We've got a couple of years of one year subscription to every dollar premium. We'll give them to you in a few minutes and you can use one, give one to a friend and pass them along them along who knows you might even convert one of those law enforcement guys you never know i hope so we're hoping i love it so well done all right ryan and courtney briley ace and wyatt

from champaign illinois 133 000 paid off house and everything 35 months making 115 to 170 count it down let's hear a debt-free scream three two one way to go you guys congratulations very very well done you know there's something uh i think sometimes the career piece that's why you you know what you do with careers makes so much difference the career piece when it gets tied up and something comes along it shakes you in your career and certainly that happened a lot of different people around pandemic time but law enforcement's faced a whole different set of issues um and you go wait a minute this doesn't i know and then you gotta go okay what's gotta be true and she said what's gotta be true is we gotta get out of debt and then you go okay how are we gonna do that well now we're gonna you know here we go with the ramsey stuff and those crazy ramsey people sudden suddenly start sounding sane and and then

you watch about a hundred debt-free screams and then you go, I want to be one of those when I grow up. And then 30 months, 35 months later, not even three years later, house and everything is gone from the moment of being shook to there. Yeah. And for a lot of people listening that are feeling stuck professionally, the key to getting out many times is getting free financially. And in this case, this is exhibit A. If I get financial margin where I can actually breathe and move and actually get qualified to do something. So sometimes it's getting your financial house in order that will allow you to actually make that pivot. And this is a classic example. Thank you for your service,

by the way. You're a great American and excited about your future my friend amen very cool this is the ramsey show our scripture of the day proverbs 16 32 better to be patient than powerful better to have self control than to conquer a city albert einstein said we cannot solve our problems with the same thinking we used when we created them. Thanks for being here, America. Dalton is with us in Austin, Texas. Hey, Dalton, welcome to the Ramsey Show. Hi, Dave. How's it going? Better than I deserve. How can I help? Well, I'm self-employed, and I was doing really good financially. I'd gotten debt-free almost, besides the mortgage. And then I got six-figure income one year, and I got kind of, I lost my humbleness, and I got into a lot of debt.

And now I can't even hardly feed my family, just trying to make the minimum payments. What kind of debt have you got? So we have 220 in mortgage, 36 in car, 18.5 in American Express business credit card, $16,500 in a trailer that I use for work, and about $10,000 on a personal loan, about $6,000 on several other credit cards that are personal debt, and about $5,000 in truck repair, like a high interest, like on-site loan that they give you there. What are you making? So my income is varied week to week. It's between $1,100 and $4,500 a week.

What are you going to make this year in total dollars, net profit, taxable income? So I switched fields, so this is going to be my first year in this field so why did you switch fields you were making a hundred thousand dollars a year uh because it completely it completely dried up and uh what were you doing uh so i was in construction i had a construction company and uh i had lended a house, and I had built a house. And then right after that house, I took on all this debt. I'm sorry, construction in Austin, Texas dried up?

No, it didn't. Oh, for me. For me, yeah. No, it didn't. Why did it dry up for you? I mean. I stopped getting calls. It's a boom town.

I was getting calls left and right. Well, I mean, did you not build well, or did you not do the work good, or what? I think what happened was while I was building this house, I wasn't available to all my other customers. Oh, you built yourself a house and you quit working? No, I built it for a customer, but it was for one customer. So you got overextended. You got overextended.

Yeah, for that like three months, I was only focused on that one customer. And before that, you were doing just repairs, handyman stuff? Yes, sir. Yes, sir. And now what have you switched to now? So now I'm driving truck, hauling rock, and I took out from my retirement, and I bought the truck outright, so I own the truck. How old are you?

32. Okay. All right. Well, okay. You're saying you're having trouble paying your bills is what you're asking. Okay. What do you make in driving the rock truck? $1,100 to $4,500 4500 okay so that is the numbers that's the new numbers okay why is that fluctuating so much uh we're heavily dependent on the rain and other variables uh and then some loads pay more

than other loads uh so it's it's just really kind of all over the place. The money is really good and better than I've made anywhere else, but it's not dependable. All right, so let me ask you this silly question. This may be silly. Is that meaning that there are times where you have time on your hands because there's no rock to transport? Not necessarily.

So some of the loads that you have to take just don't pay very well. But you're busy all the time. But the phones ring in and you've got stuff to haul all the time. For the most part, yes, sir, except for the weekends. Well, the weekends you need to be working, my friend. A lot. Yes, I still try to do handyman jobs on the weekends and construction jobs on the weekends.

There's no try. I mean, in Austin, Texas, you were successful before. If you trace the story you just gave us, you were really crushing it when you were doing handyman jobs, smaller projects where you could be flexible and move and be a little bit more, you could pivot, you could do that. You got all locked up in that house, and you had to ignore everybody, and that turned off the spigot of business, correct?

Exactly. All right, and I would go back to where I had success before, and I would learn something from this and go, I am a lot more nimble when I'm doing a bathroom here, a kitchen there, a fence, backyard fence there. I would be making money, and I'd be working like crazy. You need income, my friend. And the $36,000 car?

Yes, sir. What is that? I'm trying to get rid of it. I bought it for the company, and after I built that house, I told my wife, you know, I'm big time now, and I need a professional-looking car, professional-looking vehicle. And she told me that that was not smart. She's a smart woman.

She's very smart, and I should listen to her more. Sell the car. What's the house worth? The house is worth about $480, and we owe $220. So here's the solution. Here's your motivator. You want to get motivated, here you go. You either get your butt in gear and get your income up to clean up this mess,

or you're going to have to sell your house. One of the two. Well, that was one of the questions that I had, too. This house is too small for our family because we have five kids and this is a three-bedroom house it's really a two-bedroom house that we made into a three-bedroom house um would it be wise to just try and sell the house and get into something a little bit further out in the country if you go down in cost yeah yeah so that's what i don't use this as you know the way you set all that up it sounded

like you're going to go up no no we can't go up we need to go up in space but down and but down in cost range yeah yeah if you if you go from a five hundred thousand dollar house to a three hundred thousand dollar house you can free up some money to clean up this mess. Yeah. And you sell the stupid car. Yeah. Yeah. How do you do that with a family though? Like, I'm not sure how to sell the house and keep my, cause it's, it's very hard to show a house when you have five kids running around. No, it's not. They make their bed and you all get in the truck car and leave when the agent comes to

show it. It's so true. I did it with three kids and two dogs. I the agent comes to show it. It's so true. I did it with three kids and two dogs. I don't want to hear it. You can do it. My house is being shown right now as we speak. And the dog and the wife left for the agent to come. That's how life works, dude.

Yeah, you get your crap together. Okay. You know, because the family needs to get out of this mess. Now, more importantly, though, I don't want you to sell this house and feel like you straighten everything up because you still have this wandering mess of a career that you've got to get dialed in i think you fell backward into this rock truck thing uh because you were scared not because it was a plan and i don't think you i don't think this is what you want to do 10 years from now i i don't think it's your career i don't think this is what you want to do 10 years from now. I don't think it's your career.

I don't think you said, you know, this is what I want to do. I want to drive a rock truck for the next 10 years. I think you just jumped into it because you heard you could make some money and you were so hungry and scared. So you need to be rethinking about where you want to be with a business or with your career or both over the next 10 years and what are the steps to get to that? And that would be your Ken Coleman answer. Well, it's giving me a assessment to get clear assessment in this book,

find the work you're wired to do, but he may need to, at this point, Dave, consider going into work for some contractor. And maybe if he can really pull some good money right now and then do stuff on the side, you know, I'd be looking to upgrade that salary quickly with your skillset. I know this. This is a published fact. You can Google this and get 20 articles on this. There is a massive shortage right now for carpenters in America, and it pays a premium. And if you can show up on time and not be on drugs or DUIs and actually sling a hammer and do it quickly, you can crush

it as a carpenter. Now, that's a fact. Yeah. And that's just one piece of the action. That's just one piece. Yeah. And so, same thing's true. I mean, we've got people in entree leadership that are making $300 a year as handymen.

Electricians and plumbers. Or handymen. I mean, they've just got a handyman service. That's all they do. That's right. And they just go and do small jobs, small jobs, small jobs, and they bid them nice with a nice margin. Do stuff for rich people they don't want to do. Get you a leaf blower.

Rich people are afraid of leaves. You know, it's like, it's the sound of prosperity. Right there, that's it. So that kind of stuff. That's really good. I've never heard that. I'm stealing that one, too.

That puts us in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. Dr. John Deloney here. Mental and emotional health challenges, broken relationships, it's all just part of life, but they don't have to define you. The Dr. John Deloney Show is here to help.

It's a caller-driven podcast where you can get practical advice on dealing with anxiety, loneliness, depression, relationship challenges, your kids, and so much more. Listen to questions from our callers, or if you're walking through a tough situation and need some help, give me a call. You were never meant to do life alone, and that's what this podcast is all about. Follow along on Apple, Spotify, YouTube, or the Ramsey Network app. Remember, you're worth being well.