The Ramsey Show - Go Slow: Never Invest in What You Don’t Understand

Episode Date: February 26, 2025

📈 Are you on track with the Baby Steps? Get a Free Personalized Plan Dave Ramsey & Rachel Cruze answer your questions and discuss: "Are we actually ready to buy a home?" "What does generosity look like for us beyond the tithe?" "Where do we even begin investing?" "How is it considered ethical for people to own so many homes?" "My wife took out credit cards behind my back," "Would a wedding budget of $20,000 be unreasonable?" Support Our Sponsors: 🌱 Get 10% off your first month of BetterHelp ◎ Get 10% off Byrna product bundles and more! 🏥 Learn more about Christian Healthcare Ministries 🏡 Get started today with Churchill Mortgage 🔒 Get 20% off when you join DeleteMe 🏦 Go to FAIRWINDS Credit Union for an exclusive account bundle! 🥗 Save 15% on your first Field of Greens order with code RAMSEY ⛨ Find top Health Insurance Plans at Health Trust Financial 💸 To find out more about student loan refinancing, check out Laurel Road 💻 Visit NetSuite today to learn more 🗂️ Use promo code RAMSEY for 18% off at The Nokbox 💵 Learn more about Timothy Plan 🏛 Get started with YRefy or call 844-2-RAMSEY 🔐 Visit Zander Insurance for your free instant quote today! Next Steps 📱 Watch the full episode for free in the Ramsey Network app. 📞 Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET or click here! 🏖️ For help with investing, get connected with a SmartVestor Pro.  💵 Start your free budget today. Download the EveryDollar app! 📈 Get tickets to Investing Essentials and learn to invest with confidence. 📖 Preorder Build a business You Love today. 🪑 Check out Front Row Seat with Ken Coleman! Listen to more from Ramsey Network 🎙️ The Ramsey Show   🧠 The Dr. John Delony Show 🍸 Smart Money Happy Hour 💡 The Rachel Cruze Show 💸 The Ramsey Show Highlights 💰 George Kamel 🪑 Front Row Seat with Ken Coleman 📈 EntreLeadership Ramsey Solutions is a paid, non-client promoter of SmartVestor Pros.  Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show where we help people build wealth, do work that they love, and create actual amazing relationships. I'm Dave Ramsey, your host, Rachel Cruz, Ramsey personality, number one bestselling author, host of the Rachel Cruz Show, and my daughter is my co-host today. Open phones here at 888-825-5225. That's 888-825-5225. Marie's in Sacramento. How are you Marie? Hi I'm doing good thank you guys for taking my call.

Sure what's up? So me and my husband just finished up Baby Step 3D and we are buying our first home so we just put in an offer for a house that we really like. It was very reasonably priced. We have about 5% down that you guys recommend for the first home and in negotiations, they, the sellers weren't willing to give up their appliances. And so that was going to be an extra $3,000 cost. We have like the 5% down, a little bit extra for closing costs

in our emergency fund. And I'm not sure if that $3,000 should come from taking a little bit less down our emergency fund or if it's a sign that we're just not ready to buy a house yet. Okay, so it's not an emergency. Yeah. So it doesn't come from the emergency fund. That's an easy one, right? And I don't know if I go so far as it's just not assigned to not buy the house. What's your household income?

About $150,000. Which appliances? A little bit variable. dollars. Which appliances? Fridge and the washer and dryer. Where's the fridge? The house that you're in, are you renting? Yes we are. So you don't own the appliances there at all? No we do not. Okay. Okay. All right. Okay. You know, it feels like to me that you're buying a first house and this bump in the road scared you. And it makes you want to, it makes you kind of go, oh no, maybe I'm not ready. Because it's not, $3,000 when you make $120,000 a year shouldn't be, you know, we ought to be

able to figure out a workaround, right? Like we go get a refrigerator and we wait a month and a half or we get used washer and dryer and we figure it out where it's $2,000 or $1,500 to do all this. Or you buy a cheaper version of both and upgrade it a year from now or two years from now and throw it out I don't care but but the 3000 scared you that you were like we can't even cover $3,000 Can we own a home because the expenses? No, I was gonna say because the expenses of other things could be so much more I could see how that's like Intimidating where you think oh my gosh if $3,000 is throwing us off What if the roof something happened to the roof or the, you know,

the HVAC or something that's, that's seven times more than just this. Like, you got an emergency fund for that. Yeah, I know. But I'm just thinking of her thought process, like if how, how that can like make you stop and actually question like, oh my gosh, are we okay? So the contract is still under negotiation or you signed for it? It's still under negotiation or you signed for it? It's still in a negotiation. We offered like three thousand less than we had originally

Offered if they're not going to include the appliances that we're still waiting to hear back I think that since we're just at that five percent I think I'm just like nervous that your border your borderline. I mean, you're not you're not stroking a big check here You know, the other thing you could do is say, I don't have to buy this house. Yeah. And walk away and go buy a different house that has appliances with it and that fits your numbers. That's the thing. And so, you know, and the interesting thing happens when you walk away from negotiations, sometimes they suddenly give up the appliances. Like I'm not looting. What's the price range on the home?

It's $320. suddenly give up the appliances like I'm not looting what's the price range on the home it's 320 yeah so these idiots are gonna lose a three hundred and twenty thousand dollar sale on a house over three grand of used refrigerators don't know yet they've not come out but they're willing they're willing to put it on the line they're willing you know if I'm the agent I'm looking at these people and dope slapping them I I mean, you guys are nuts. You're gonna lose the whole deal over 320 grand. A 320 grand over a used refrigerator. You've gotta be kidding me. So that's dumb on the seller's part, honestly.

That's an easy. So then does that same logic go to Maria? I'd be like, you'd be dumb to walk away from a deal because of just a $3,000 appliances. No, listen, if you can't figure out what to put appliances in it and put down 5%, I'm gonna walk away and go do a different deal. I'm gonna pick out a different house.

And I'll bet you money, good money, that these people give up their used refrigerator. When you turn, yeah. And we could probably count on for it. you're a seller in the current real estate market in Sacramento freaking California and you walk away from a buyer standing there with money... yeah this is probably not gonna happen is what you're saying. Stupid on steroids. Yeah, no don't do... yeah I'm negotiating this I'm gonna play hard and just go with Street Fighter and say no. Or refund us $3,000. Here's our deal and it includes the appliances. We'll look for a house where we can get appliances because we were

taking that as a sign from God. I'm kidding. It's not. It's a used refrigerator. God doesn't use used refrigerators as a sign. It's not in the Bible, but it's not in second hesitations. But the, see what I'm saying? I mean, that's the thing. So yeah, that's. So your prediction is Maria's gonna come out okay? Or Maria's, because you think they're gonna say just we're gonna leave the alliances.

They're gonna cave like last week. Yeah, they're gonna. Okay. No, I'm like, yeah, they're gonna cave. Maria, call back in and see if Dave's right. Yeah, tell me, call back and tell me I'm wrong later. Because I could be catch. Marie, call back in and see if Dave's right. We like to play this game. Call back and tell me I'm wrong later, because I could be wrong. Sometimes I do that in a negotiation

and I'm shocked at how stupid the people on the other side are. It's like, you're gonna walk away from a $320,000 deal for a used refrigerator? It's not even $3,000. If you put it in- And a washer and dryer. Yeah, and a washer and dryer.

So what could you get for a used refrigerator and a washer and dryer at a garage sale? I mean, come on. Seven, eight hundred bucks maybe? So this is now, this is really dumb, but people are, people are that thing. So Marie, that's the way I'm looking at it. And I'm often wrong, but probably not on this one. Give it a shot.

Give it a shot. Let us know how it turns out. Rachel's right. You can call back and take me to Task Clear. I lost my dream house because of you, Dave. You can do that. That's okay. That's alright. You can do that. It's perfectly legal. Open phones at 888-825-5225. Listen, the real estate market is moving. The activity level out there is probably 4x what it was four months ago and that's people

walking around kicking tires making offers but it's still not exactly a boom real estate economy if you're selling a house you don't walk away over $700 worth of appliance yeah but the but you you know in California for sure yeah and at RamseySolutions.com slash real estate we have the dashboard so it does it kind of gives you a pulse of exactly what's going on in the market. If you are in the market, if you're selling or buying, check it out. I do love this. Like the median price right now is $400,000.

And oh my gosh, $400,000 is the median price of a home right now. Days on the market, 73 days on the market. You know, it shows you right now what a fixed rate mortgage 15 years at 6.1 yeah here's the thing there's 829,000 houses on the market that's 25% more houses on the market right now than this time last year that's a big number that's a big inventory lift and so they're not going down in value but there's plenty to pick from so if you're a seller and you have a buyer standing there with cash, you sell the stupid house. You know, if you really want to sell your house, if you don't, don't put a sign in

the yard. I mean, come on. This is the Ramsey Show. You shouldn't own a gun you're not willing to shoot. In moments of self-defense, a Berna launcher lets you protect yourself in a non-lethal way. That's exactly why Berna launchers were created. Everyone, from parents and nurses to pastors and even special forces veterans, rely on Berna to protect themselves and their families. I own several Berna's myself. They look like guns, but they're

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other Berna products like safety alarms, defense sprays and body armor are also 10% off for our listeners. Just go to Berna.com slash Dave to learn more. That's B-Y-R-N-A dot com slash Dave. Thank you for joining us us America I'm Dave Ramsey your host Rachel Cruz Ramsey personality my daughter is my cohost today Des Moines Iowa is next Julia is with us. Hi Julia how are you? Hi Dave and Rachel how are you? Great how can we help? Well my husband and I have been working the Baby Steps plan for about nine years. And as of last year, we hit step seven.

Oh, congratulations. Woo-hoo! Thank you. We're mortgage free, we're debt free, everything. We are looking for mentorship and being outrageously generous. And I was just wondering if you had any book recommendations or how we do that. We tithe, but above and beyond that, we're just looking for a little bit of mentorship.

Good for you. Well done. That's a great question. So I'll just tell you what we do, Julia, I don't know if this is helpful at all. And I think there are some, yeah, there's some books out there, I think, when it comes to this idea of being generous. But from a tactical standpoint above the tithe, how Winston and I have done it, there are organizations that we align with and ones that are close to our heart, meaning there's one organization

we've given to for 15 years because it was an integral part of our story and we really believe in what they do. So we give there. There's been elements of different times in life where like, you know, foster care has been big on my heart and we've given to things towards that

or Winston's had things. So from the organizational standpoint, it is always fun to be able to support someone who's doing what you love and what you believe in. So we've done it that way. And then this year in January, we're doing something different. We're just adding in on the giving section

of our Everdollar app. We are putting, we put an amount of money every single month and we're forcing us, we're forcing each other, we're holding each other accountable to have that money be given away at some point in the month. So that could mean like a very generous tip

could be part of that money. It could go towards if we hear something of, you know, a friend's family member X, Y, and Z, and we're able to kind of just like anonymously give some money there. So we have found more energy in that honestly, because the organization giving is wonderful and it's a you know, it's great people just just do incredible things and with the Ramsey Foundation that we as a bigger Ramsey family are involved in, there's incredible organizations. But there's something about this joy for me

of seeing someone or intersecting your story with someone else and able to help kind of in the moment there and again, it could be anonymous or not. But giving room for those things to occur. And what that's done for me, Julia, is it's caused me in an everyday instance, just to be looking and I'm more aware of people because I'm like, okay, we have this money

that I wanna give. And I do, as a believer, I'm like, there's something spiritual about it where I'm like, okay, where's the Holy Spirit kind of nudging me here? And I've just found with giving, when you have a pulse on that and you're just interacting with that part of your soul,

if you will, it just creates a richer life where I feel like before we were a little bit tactical with our giving, like we gave our tithe and we'd give to an organization. But there's something about interacting with individuals on a day-to-day basis that, again, just that that's one element, one way to give. And I've enjoyed that.

I mean, we're only in February. It's only been two months of it, but there's, I don't know, there's just like this warmth to life there. It came alive again for us because sadly giving can get stale if you just have it on autopilot, right? So like part of this is interacting with the money you're giving to. So that's, that's what Winston and I do. But Dave and Sharon do it on a larger scale.

Well, but it's still the same. We budget a certain amount just for, and some of this we keep on the books and some of it we don't worry about as far as tax return goes, but just random acts of kindness. We just run into somebody and we want to always look across the restaurant and pick up the tab for a person in uniform. We always wanna do that. We always wanna catch somebody doing something we love and just participate in it, that kind of stuff. That's low budget, doesn't take a lot of money, but there's a lot of joy and it's a lot of fun.

And just, we look across and see one of our team members and is there with their spouse and we just end up picking up, of course I charge that back to the company, but that's an HR thing. But yeah, I may buy their dinner if they're lucky enough to land in the same restaurant I'll land in.

But anyway, just something like that, just catch people doing something right. And random acts of kindness, just catch somebody that, you know, where a few hundred dollars means a lot. And I've been in those situations and a lot of people out there have been. So you want to do that. But that's a smaller portion of dollars, but it's like Rachel said, it's very hands on,

it's a lot of joy in it. Random acts of kindness, we call it that. And it's just God money floating around looking for a place to land. And so then we, with the Ramsey Family Foundation, we do not give to like a bazillion different people $500, because that will drive you nuts doing the tax returns on it. So instead we pick just a few and really, really help them. And they're always something that is close to our heart. And many times we know the people involved

in the ministry. We know the character of the people involved. We know and the last thing I'll add to that that Rachel didn't bring up is that I learned many years ago because I was giving a lot and we've always been outrageously generous. It's part of our DNA and it's the most fun you'll have with money. So you're going to love this. I love this question. But anyway, I treat large gifts like we're talking about as if I was doing an investment into a company. If

I'm going to buy into that company, I'm going to know what their strengths and weaknesses are and I'm going to make sure that I'm not participating, I'm not enabling incompetence or bad behavior of some kind. To the extent I can tell, we don't do that. So for instance, we don't give to organizations and ministries that run debt. Well, duh. Of course Dave Ramsey is not going to pay a bank through a ministry. No. So if you're going to run debt, you're not going to be on our list of donations. We don't believe

in debt. We don't borrow money. We teach people not. How dumb would it be for us to take our generosity and give it to a bank through your ministry? Because you wanted to have a building for your ministry instead of being a renter. No, be a renter. So, you know, that's one of the things. And that upsets people sometimes, but oh well. I don't know why. It's kind of obvious to me. But anyway, so we do stuff that is consistent with us and we're looking for their operational excellence because if you're going to put X number of dollars in there, you're investing it, God's money into God's kingdom, God expects some excellence there.

Just like those that are faithful in little things will be given more to manage. And so it's not the diligent prosper, not the inept and incompetent. Yeah, and then I would also say, Julia, and something I feel like we've learned from you guys is as you guys go down this path, I know you're on Baby Steps,

you just got to Baby Step seven, but as you continue to build wealth, and I'm talking in the next decade or two, also with your giving, we've put ourselves in a position where we're not the largest giver, meaning that they are so dependent upon us to fund the ministry or what they're doing, because that puts you kind of in these like handcuffed positions where you feel bad that if something changes and you're like, oh yeah, we're going to give over here, then you feel like, we feel like we can't cause we're disrupting such a huge part of their

operating budget. And if it weren't for us, they wouldn't be here. So even from a percentage level, I would not want to be the largest donation that they get and that they're dependent upon you to continue their ministry. Like that just puts a, it puts a weird dynamic and pressure element to that too. So that's something to think about that. We had some friends that they ran into that and it was, it just gets messy. If you want to stop it, then you're like, oh my gosh, am I closing down a ministry? Cause I'm choosing not to give here anymore. So it's just another

filter to think through. If you'll do what you're doing right now and be intentional about the subject of generosity, like you're intentional about the subject of getting out of debt or you're intentional about the subject of investing. You'll do really good at it and you're gonna get great joy from it. What happens with some people when they get to generosity they just go, oh I'm just going to give it and it's all it's up to God to figure it out and like no no God gave it to you to manage and so it's not up to God to figure it out. So I think that person's going to misuse the money,

but it's gonna be between them and God. No, no, that's not how it works. You need to be a grownup. You can't be lazy on the generosity and really hardcore on the investing. So again, you don't wanna take the joy out of it, you don't wanna turn into a bureaucratic nightmare every time you give two dollars. No.

And that's why I like, you know, the setup of having kind of those three buckets, the tithe, the organizational that you know, and then just a little bit of that mind that we're talking about that you just have throughout the month that you're like, I just am going to be aware of people around me and when I feel this prompting, like, I get to bless them in that moment. It's kind of those three buckets that I like. That one ends up being dollar for dollar, by far my favorite. Oh, it is like...

But it's impossible to do that at scale as an individual. It's very hard. It'd be like your full-time job. That's all you did? You'd be like that guy on YouTube. That's a fun joke. You'd be giving him money all the time. That'd be neat. But yeah, I hadn't got that job yet. This is the Ramsey Show. Have you gotten one of those texts recently claiming to be the USPS with some sketchy

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product is businesses that have less than 500 team members. Small business is the American economy. Seventy-eight percent of Americans work for a small business. They don't work for the big boys. So those of you that are running businesses, you're giving jobs and food on the table and lights and water for people that work for you. You're good people, thank you. Some days the challenges pile up and that's why we wrote our new book, Build the Business You Love. I started this business over 30 almost 40 years ago now

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called Build a Business You Love. It's $29.99. It comes out April 15th. That's okay. We're going to show you the proven system. The book is called Build a Business You Love. It's $29.99. It comes out April 15th. It's my latest book. Could be my last. I don't know. You never know. And we get over $350 worth of stuff if you pre-order for $29.99 right now. And that includes instant access to the Entrez Leadership Hiring Playbook. How we hire and fire at Ramsey, in other words. Early access to the Entrez Leadership Hiring Playbook, how we hire and fire at Ramsey in other words, early access to the ebook, the enhanced audiobook, all kinds of goodies in other words. You can pre-order today at ramsesolutions.com slash store or if you're watching on YouTube or podcast click the link in the description. It'll put you right in there. If you're thinking about or you are running a business it's really good to know what the baby steps are. It's really good to

know the system to do that and that's what this is. Business is hard but it's also fun. It's also exciting. It's also an adventure and it's a much better adventure if you're driving from your home to Florida if you first know where Florida is. It's less adventurous and much more predictable outcome and good news is I'm already there I know what the road looks like so I can show you and that's what this is build a business you love thanks for hanging out with us sue is in Lexington Kentucky how are you sue I'm gonna know better than I deserve what's up in your world? Well, okay, so I'm 65 years old.

I only have $41,000 in retirement. I went through breast cancer. Sue, I'm having a real problem with your phone. Can you walk to a different place, please? It's breaking up. Or take it off speaker if it's on speaker. That helps. It's not on speaker. Is that better?

Little bit. Let's try again. You're how old? I'm 65. Okay, I'm gonna put you on hold hun and they're gonna pick up. We're gonna try to get you worked out so we can get you back on and understand you. I apologize. Belle is in Denver. Hi Belle. Welcome to the Ramsey Show. Hi. So nice to talk to you guys. You too. What's up? Hi, it's so nice to talk to you guys. You too.

What's up? So we bought a home in May of 2023 and my biggest goal has been to just pay off our home. I took your class when I was in high school, so about seven years ago, and it's stuck with me ever since. We are only $20,000 away from paying it off. Yeah Nice to make that payment Next month, how old are you guys 25?

I'm 24 my husband 31. Look at you. What's the house worth? We bought it for 340 and we had to do stuff to it, but it should be worth close to $500. So high school teachers, this is what happens when you teach this stuff in high school. This is your student. She's now 25 and she's got a half million dollar house that's $20,000 away from me and paid for. You're amazing. 24 years old.

Way to go. Cool, Bill. I love it. You know how weird you are, right? Yeah. How much do you guys make a year, Bell? How much do you guys make a year? Um, it really varies. Like right now we're sitting at 200 to 280 depending on our situation that we're in. That's for you guys. That's awesome. We're in a really unique situation like we're contractors for the state and it just depends on like how busy we are. Well congratulations. Okay a fast-forwarding pass bragging on you.

What's your question? How can we help? So I remember in the class that I took in high school, it was talking about mutual funds and if you start earlier, it's better long term than someone who starts later with a bigger initial investment. And I remember having a job, I was working at Wendy's at the time and I was like, okay, I'm going to start doing this when I'm 17. And I asked the teacher, where do I, how do I do this? What do I, what mutual funds do I look into? Um, she was just like, I don't know.

I'm like, you don't do this and you're a teacher. You're making 50,000 a year. Why don't you do this? She said, yeah, I was like, she didn't have any research resources for me me and I'm still in that place that I was when I was 17 and I still don't know what to do with... We're going to have a lot of extra money once the house is paid off. Rule number one investing is go slow. Rule number two is don't put money in anything you don't understand. See rule

number one, go slow until you understand it. Don't put money in something until you understand it. So this phone call means you're very wise. Congratulations. You're trying to resource some knowledge so that you know what to do. Very good Sue. And then what I would tell you to do is very simple. I want you to go to ramsysolutions.com today and click on Smart Vestor to find some of the mutual fund brokers that we recommend that we have vetted. And here's what you're looking for. We have vetted them for being experts and

for having the heart of a teacher. I want you to meet with two of them or more and find someone that teaches you something. You may connect emotionally, relationally, with one more than another one and that's the one you're looking for. You don't want someone that tells you what to do with your money and some people in the financial world are so stupid they think that's what they're supposed to do. They drop their glasses down on the end of their nose and speak down to you. If anyone ever does that around the subject of money, get away from them. Your job is to understand. Go slow, understand before you invest. And so you're meeting with the SmartVestor Pro

not to have them tell you what to do with your money, but to have them teach you how mutual funds work, how to select them, and then based on that teaching, here's some we might look at. And then you would buy some if you understand them and you look at them and you understand what you've learned. The good news is it's not really that complicated. that complicated. I mean like you're gonna sit down in an hour you're gonna have a real basic understanding and feel very confident and pretty competent about doing your first series of investments and go into it now before you get the house paid off because you want to interview these people you're gonna be spending the next decade with them. Yeah and if you want to. And just from a high level Belle what we teach is 15% of your income going into retirement.

So I know exactly the chart that you took. It was probably the Blake and Jack that shows you compound interest if you invest at 19 all the way to 65 versus someone that starts at 32 and invests to 65. And so what that is showing is compound interest, which you're going to get when you invest in things like mutual funds. But you're gonna do that within, first and foremost, retirement type funds. So a Roth IRA or a 401k, or you guys work for the government.

So maybe like a 403B situation. But 15% of your income should be going into retirement specific funds. Within those types of funds, of course, there will be mutual funds and all of that of how you're actually investing, but a SmartVest or Pro can walk through and be very specific with your situation too, which is helpful. But just know retirement is the one place you're going to be looking. So Roth IRAs, 403Bs, all of that, it's going to be really your first step into the process.

But congrats, Bell. It's awesome. Go slow enough to understand it before you do it. It's your job to manage your money. This is the Ramsey Show. Statistics show that half of Americans don't have enough life insurance, or they don't have any at all. I don't understand this, John.

Why don't people want to take care I don't understand this, John. Why don't people wanna take care of their family? They think they're not gonna die or something? Well, I used to be one of those guys, I didn't even think about it. And one of my buddies said, hey, the only reason to not have life insurance is if you hate your wife and kids.

And I immediately went and got term life insurance. That's a gut punch. For decades, Dave, I've sat across people who've lost a spouse, they've lost somebody important to them. Me too. And they don't know what to do next. Terrifying. You're gonna have a crisis here.

You know, you got two options while you're sitting and talking to a young widow. She's concerned about how she's gonna invest all this money properly and not mess this up, or she's concerned how she's gonna eat tomorrow. That's exactly right. These are the two options. It's saying I love you to your family. Term life insurance.

Jeff Zander and the team at Zander Insurance makes it easy and affordable. I've used them personally for 25 years. They're the only people I trust go to zander.com or call 800-356-4282 I'm Dave Ramsey your host Rachel Cruz Ramsey personalities my co-host Sue is back with us. Maybe we got our phones straightened out from Lexington. Hey Sue, can you hear me now? Yes, can you hear me? Absolutely, that's much better. Thank you. Wonderful, no problem. Okay, so I am 65 years old. I plan to work at least five more years

because I only have 41,000 in my retirement account. I have 40,000 plus give or take of debt, which I impulsively let a debt relief company take over for me. I realized now that was a mistake. And that should be resolved within three years of making payments to them. I also own a home, I mean I still owe $88,000 on my home. So I'm wondering if when I become eligible for Social Security in a year

and a half, should I, and I'm going to continue working, should I then just try to get my house paid off, double, double-triple my mortgage payments once my debt is gone obviously, just so that when I do stop working and I have to live on the small retirement that I have and my social security, at least I won't have a house payment. Is that the smartest way to go? It's not bad. Um, you're debt free at that point. And, um, what do you make? Uh, with my side hustle combined it's

between 80 and 90, just depends on the year. Okay, alright. Well what we would normally suggest is get out of debt first with the 40,000 which is what you're doing and I want you to accelerate that and do it faster than you're planning. Okay. I want you to live on beans and rice and let's not let's do this in two years instead of three. Start trying to figure out what would have to be true for me to do that. What would I have to get rid of? What would I have to do this? How much do you owe in

your car? My car is 13 years old. The car is not the problem. Okay. What's the 40,000 in debt? What was that on? An accumulation. I had cancer a few years ago and basically was out of work and had to live on credit cards here and there and it just added up and interest took over. So most of it's credit cards? Yes, 40,000 is credit card. It's all credit cards. Oh, it's all credit cards. Okay. Yeah, but it's all with that. Well, here's what I want you to do. I want you to work the debt consolidation company. I wish you weren't there, but it's all with that. Well, here's what I want you to do. I want you to work the debt consolidation company. I wish you weren't there, but you're there now. I want you to have them call.

I want you to save up piles of money and have them call the small one and see if they'll take a deal. Okay. Like 50% off or something and then knock them out and then out then save up some money and knock the next one out. And if they won't call them and offer them that, you call them and offer them that. So can I do that? Can I take it back from them? You don't have to take it back. You can just call them.

It's your debt. They'll always talk to you. Right, but does that mean I'll still owe the debt relief company? No, I mean you owe the debt relief company anyway. You prepaid them. They took all their money upfront. No, I'm paying them a thousand dollars a month. So I have three credit cards. You're gonna pay them a thousand dollars a month for 36 months.

That's thirty six thousand dollars. Well, that's handling one debt. I have other debt that they haven't, the small ones, they haven't touched yet. Did you hear me? You're going to pay them $1,000 a month for 36 months. That's $36,000. You only owe $40,000. Right. The other small credit cards, they haven't touched. No, honey. $36,000 would pay off your debt. Oh, you're not paying them that in fees. You're paying them that in total. Yes,'re not paying them that in fees you're paying them that in total and they're paying your debt. Yeah okay so you can save up the thousand dollars is not their fees so you pay the thousand anyway and you call up the smallest one if they won't do it and you offer them 50 cents on the dollar when you've got a little cash saved. Okay. Anyway that's how that's how we can

accelerate it then back to your question I want you to say 15% of a hundred thousand. I want you to say 15% of 100,000 I want you to say 15,000 hours a year into retirement as soon as the debt is paid off after the debts paid off While you put everything else you can find on the house But don't pay any extra on the house until the debt is gone Don't put anything into retirement until the debt is gone once that 40,000 is gone Then the first thing we're gonna do is put 15% into retirement and everything else we can scrape together goes onto the house. Okay, so I have a question about the retirement. If I'm 65, are there rules around how much you can put into a 401k?

No. Do I have to do retirement? You can put as much as you want to put in. Okay. And as much as anybody else can put in. You can do catch-up contributions too. You can do even more, but you don't need to do more. You just need to do 15,000 until you get your house paid off.

So what you're looking for though is you are looking for a Roth. A Roth, okay. Roth IRA, Roth 401k. That's what I want you to do. But none of this until you're out of debt. Then 15% and the rest of it towards the house. And here's the good news.

I think you're gonna have all this done, like by 71 it sounds like, if you do what we just talked about. And so you have a paid-for house and you're sitting with a hundred hundred fifty thousand bucks and you got Social Security. Not the best of all worlds but a whole lot better than some people we talked to. Mm-hmm for sure. Hope that helps you. Yeah that's the right way to go. Well done. Very well done. The Ramsey Show Question of the Day is brought to you by WhyRefi. When the payment on your defaulted private student loan is as much as some

mortgages, it's hard to get ahead. That's when WhyRefi can help. Refinancing to a low fixed rate loan built just for you. Find out more at yrefi.com slash Ramsey. That's the letter Y, r-e-f-y dot com slash Ramsey. Might not be in all states. Alright, today's question comes from Greg in New York. He said, how is it considered ethical for people to own so many houses? I'm just wondering how, as a Christian, this isn't seen as greed. Don't you know that buying up all these homes is what's causing it the housing shortage? You know what? Well actually Greg, let's just start with not the spiritual part but your economic understanding. That's not what's causing the housing shortage. Investors buying up houses is not causing the

housing shortage, okay? Period. So you're just wrong. Now that is it, can we stay on that for just a second? Because that is a thing going around, that these massive hedge funds or Blackstone, like all these, they're coming in and buying up. Well, they are, but they don't have a sole. That's right, okay, so. Hedge funds don't have a sole, so.

So, because an individual investor, right, for the average person out there who has maybe two or three rental homes, right, they're on baby steps out and they're doing it. They're not causing the thing. They're not causing the thing. But Blackstone, right? They're on baby steps and they're doing it. That's not causing- They're not causing the problems. But Blackstone, yeah, those guys are buying up houses. That's true.

And is that affecting the housing market at all? Cause that is- It probably is to some extent, but not as much as TikToks as it is. Yeah. Yeah. So, I mean, you really don't want your economic lessons on TikTok.

I'll just help you with that in general. But anyway- You're on TikTok though. I know, but that just proves that I'm lacking in judgment. But yeah, so anyway, yeah, that's the thing. Now, I own, I don't know, I don't even know, 15, 20 houses, and a bunch of commercial real estate as well.

How is that not greed? Because I don't own anything, Greg. I'm a Christian, and that means God owns it, and I'm managing it for him. So I guess you're calling God greedy now. Okay, so devil's advocate, what would you say if Greg was like, well Dave, why do you need so many houses? Why don't you just give all that extra money away?

I'm managing money for God. That's my job. And I've done a good job. I've done a better job than Greg has done. And, okay. And that's why he thinks I'm greedy. Well this mindset, so this is an extreme, right, of 20 houses thing, but this is the same logic of,

well is it greedy to have more in your retirement than maybe you may not need right like listen if you got three bathroom If you got three bathrooms, you have three more than most people in the world Why are you not greedy if you have two cars you have two cars more than most people in the world if you make $38,000 a year you're in the top 1% of income earners in the world. How are you not greedy? Because amounts don't create greed. Greed is a spirit. It is not an amount. And, you know, if you want to be a communist, just be a communist.

Don't try to blame Christianity for it. Okay? If you want to be a socialist, just be a socialist. Don't try to blame Christianity for it. Okay, if you want to be a socialist just be a socialist don't try to blame Christianity for it. That's a form of heresy called Gnosticism that believes that the material is bad and anyone that has the material their soul is in jeopardy. The Gnostics taught that in the first century they were heretics. So if you want to do a little theological rabbit hole we can do that, but I love the rabbit holes Dave No, that's good. I think that's it though greed is not an amount. It's a spirit. That's it

That's it. And so and so hoarding is not an amount The difference in saving and hoarding is intent. Mm-hmm. It's not the thing You know it I have a collection of water skis, but I don't worship them. You know, it's their stinking water, scanty quarter skis on the wall. That's it. But that's not hoarding.

It's a collection because it's about the intent. This is the Ramsey show. This show is sponsored by BetterHelp. You've probably heard people talk about different kinds of flags in friendships and romantic relationships. Red flags, green flags, beige flags. Listen, it can be helpful to look for patterns or unsafe behaviors in potential relationships, but all those labels can distract

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to get 10% off your first month. That's BetterHelp, H-E-L-P dot com slash Ramsey Radio. 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, Rachel Cruz. Ramsey personality is my co-host today, number one bestselling author and my daughter Bobby is with us in Chicago Hey, Bobby, welcome to the Ramsey show Bobby for having me sure man, what's up?

So I'm 29 years old and back in 2023 after a harsh talk with my wife to manage her Spending we made the decision to get out of debt and we achieved that, uh, and 2025 was going to be our year that we were house shopping and going to buy our first house. And about a month and a half ago, I got a statement in the mail for some credit cards and found that my wife has pulled about three new credit cards in as max them out and we now accumulated some new debt.

She's always had a bit of a spending problem and I thought we got through it and we were pretty happy being debt-free She's not quite sure how we have this conversation again and how to make this thick and be on the journey of being debt-free and managing our money How much how much debt on the three cards?

How much debt on the three cards? From zero we've now accumulated a little over $3,000. Okay. And when you said, hey, I thought we were getting out of debt and saving for a house, and you ran up credit cards and you knew I hated debt and we had worked to get out of debt, and you did this and didn't't tell me what did she say? Well, she's pretty embarrassed but defensive. Her mother stole her identity at a very young age and she's never had great finances. We've did a lot to get her out of debt from. That was accumulated as she was eight years old with TV utility

bills cable bills all done by her mother but we did a lot to do that and she doesn't want to end up like her mother and she's very very very she she's 30 now okay how old are you 29 and how long have you been married? 8 years. Okay. I'll give you an observation of what I think I heard you saying and I want to play it back to you. Okay. I think you were using the words we and our when it was only you. I wanted to get out of debt so I talked to her about her spending and I got us out of debt so that I could buy us a house. I had a harsh conversation with her. I don't think she was involved in any of this emotionally.

I don't think she agreed with the decision. I think she went along with it because she's embarrassed and shamed about her handling of money. But I don't think as a grown up she stood up and said said I'm going to join hands with you and we are going to hit these goals. Instead I think she's been treated like a little girl again by you. That's the language you were using and I'm gonna play it back to you. Did you hear that? Yes I did. Absolutely. Yeah and you know when he said or when you said Bobby you know I had to have a harsh conversation with her about it.

And so, yeah, so I think the real question is number one, kind of what Dave was just proposing of, okay, so looking back now at the whole journey and what you guys have walked through the last few years with money, how has she been through that? And obviously not very on board. Um, or she has some, some major issues.

And, and honestly, the whole spending addiction world has really exploded in the like even more recent because of how easily it is to have access to whether it's to credit cards or you know shopping online all of it just like gambling addiction has gone up with sports betting and all of it so there's such this environment Bobby that she's having to honestly fight a bigger battle now today in 2025 than even in previous you know generations so my question would be to her is what's going on with her you know what what is it that's causing this to happen?

Because there, you know, we see it all the time that there is, you know, levels of really deep pain and the medicator is the spending. And so I'm curious and with her backstory of her mom and not trusting fully the adult in her life and the adult in her life used her completely and stole her identity to mismanage money on top of that, right? Like there's a lot there for her.

And so does she recognize any of that or is any of that in the conversation? Yes. Uh, you know, we, we sat down early on when we wanted to buy a car together and we will like to finance something and she didn't know anything about credit and all that. And that's where it was found. And she was very upset by that. And it came as far as she was actually arrested on felony charges or deceptive practice for a bad check written by her mother. And luckily you found not guilty.

And that's where the changing point in our lives were to get out of that. How long ago was all that? Her debt. How long ago was that? How long ago was that check thing? The check was made when she was 18 still in college. I mean when did this charge come? Charge came in 2021. Four years ago? Yeah. Okay, so this is four years in the past and apparently we've gotten mom off the stealing pattern. Mom's not stealing her identity anymore at least as far as we know, right? No, we're completely locked down with our identities. Good. Okay. So all of that's in the past. She didn't do anything wrong there.

She was a victim there. Then that changes gears when she runs up, Dad, in contrast to what you guys have talked about. And so Rachel's right. It could be an addictive behavior. It could be coming out of pain. It could be coming out of, you just controlled everything and she didn't have a vote and this was her only way to have a vote.

So she just ran off and did whatever the flip she wanted to do because you tell her everything to do and she doesn't, you know, she's saying, her little girl's saying, you're not the boss of me, I'll show you. And sometimes people react that way too. So because I think you told her what to do I don't think you got agreement there's a difference would you

agree with that Bobby I absolutely agree in a half-and-half scenario I know I can have that kind of tendency you have on the phone with us yes okay we heard it that's why that's where it's coming from. I'm not being mean to you. I'm just saying that, you know, there's a difference in getting people to buy into a vision and go forward. That's leadership. There's a difference in a leader and a boss. A boss has got a cattle prod and tells you what to do. It's a stick and no carrot. And that's in business, but it's also in ministry. It's a stick and no carrot and that's in business but it's also in ministry it's also in your marriage and so versus getting I'm gonna get

collaboration we're both going to sit down and talk about the pluses and minuses of debt we're gonna get we agree we're gonna get out of debt because it's the fastest way to build wealth we agree we're gonna get out of debt because we want to buy a house not Bobby wants to buy a house and he told her what to do so it could happen I kind of think that's what happened so I'm not blaming you for this she shouldn't have lied she shouldn't have deceived you under any circumstances that's wrong and so you guys probably need to sit down with a good marriage counselor ask them about a possibility

of a spending addiction but also let's get some different patterns to get agreement and sell a vision for the future the Bible says where there is no vision the people perish let's both buy into where we want to go not where you tell her we're going there's a difference this is the Ramsey show hey you guys I'm not a fan of the big banks and you probably already know which ones I mean. But I do like credit unions because they're non-profit organizations that focus on their members.

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log on to Fairwinds and do anything you could do at a physical location. So go to fairwinds.org slash Ramsey to learn more and while you're there look at the combined checking and savings account bundle they created just for Ramsey fans to help you take control of your finances. That's fairwinds, F-A-I-R-W-I-N-D-S dot org slash Ramsey. I think we'd all agree that it's a lot harder to run a race if you don't know where the finish line is. But nearly half of all Americans have no idea how much money they'll need to retire with dignity. If you're ready to stop hoping for the best

and start planning for your future, then check out the SmartVestor program. A SmartVestor Pro can teach you everything you need to know to get in the driver's seat of your own financial future. Connect with a pro at ramsysolutions.com slash SmartVestor. Ramsey Solutions is a paid non-client promoter of participating pros. Learn more at ramsysolutions.com slash Smart Vester. Are you staying on track with the baby steps? Well take a quick quiz to check your progress and receive a personalized plan just for you. Simply head to the show notes and click in the

link titled are you on track with the baby steps? You take a quick quiz and we'll tell you exactly where you are. Oh, and we'll start to tell you what some of your next steps are. Hey, Riley is with us in Jacksonville, Florida. Hi Riley, welcome to the Ramsey Show. Hi, thank you for having me. So here's my question. What a budget of 20,000 be unreasonable as a college student?

A budget for what? For 20,000. 20,000 dollars to do what? To get married, to have a wedding. Oh, a wedding. Oh, your wedding budget. Yes. Oh, cool.

Oh, well congratulations. Yeah, when you getting married? We're hoping to get married by 2027. We kind of have to, to be stationed together as naval officers since we're both commissioning after 2028. All right. So you got like two years. Two years?

Yes. But you guys are in college, so you're thinking about getting married after or something? Is that? So we have to get married right before we graduate since we're both in NROPC. Our requirement is that we commission straight out of graduation. You graduate May of 27? Yes. Okay.

So we have to be married that summer because it'd be kind of hard to plan a wedding when we're away from home. Sure. Okay. Yeah and I was just wondering what the why you guys are waiting but you're in school so you're gonna wait till you're toward the end of school. Yes that's right. So basically two years. Okay and while you're in school are you earning an income? We are, he's earning more than I am. I'm currently just getting a stipend so that's about $250 a month. It'll increase slowly so by my senior year I'll be getting $400 a month. He's getting that as well and working. I think his annual income he's trying to hit under $15,000

just so that he can stay under a certain tax bracket for his parents. Are you guys paying for the wedding? Yes. So, him and I will be paying for the wedding, but my parents are going to be giving another 5K by the time I get to my junior year. Will you guys have $20,000 saved? Oh yeah, absolutely. Currently, we both have combined a little over $30,000.

Saved? Like, total. Where'd you get that money? Not just for the wedding. The numbers you gave me don't equal that. Where'd you get that money? So that's just from savings throughout my lifetime. I'm a huge saver. Okay, so you have $30,000 saved today, which is your total life savings.

You're going to add a little bit to that, but you're not making much money. I mean, you're making $3,000 or $4,000 a year. For two years, okay? And you're eating during that time. So, you know, you've got, you're not going to have, you're not going to do a bunch of addition to this 30,000 bucks. So the answer to your question is, is $20,000 too much to spend on a wedding? The answer is no. The answer is always relative to, if you've got $200,000 and you make $300,000 a year, $20,000 wedding is perfectly reasonable. If you have $30,000 to your name and you're going to spend two-thirds of your net worth on your wedding, that's probably too much.

What's going to be your income when both of you come out as commissioned officers? We'll both be making about straight out I think it's about 90,000 each. Yes. Okay good. So now we're talking about somebody making a hundred and eighty thousand dollars a year fresh out of school and they've got thirty thousand dollars to their name do they spend twenty of that on the wedding But the good news is you're used to living on nothing and so you could probably save 20,000 in three months once you're making 180. Agreed? Yes. That's 15,000 a month. Follow me? So yeah, I mean, what I would say is this, okay? The average house, the average wedding in America today is 28,000. The average household income, 78,000.

So it's about a third of your income is the average, is one way of measuring it. That's the average. Now, do you want to be above average or below average on your spending? That's up to you. Anywhere in there. Pay cash, number one. Just listening to your story, I think I would say, yes, I'm gonna have a $20,000 wedding, but I'm gonna do it with new money that I make after graduation.

Well, they have to get married before graduation, is what she's saying. Before you have any income. Is that right, Riley? Or will you guys be working? You did say that. You did, I'm lost, okay. My plan just fell apart.

Okay, so Riley, here's a question. I don't know, just trying to get creative here. Could you guys go get married, have your family, have a great fun dinner out, and that be the quote-unquote marriage, right? You got married, and then six months later you guys be stationed away. I'm just trying to think, is there a way to do a really beautiful, nice wedding that you really want? A celebration. Yeah, and it be a few months later. And that's what I thought as well.

The only concern is we have no clue of knowing our timeline. So it could, if we do that, we could get married by chance three years later, depending on both of our deployments. Yeah. Oh, like having the wedding, because you guys could be deployed pretty quickly. Yes, yeah, that's what we're talking about. I hear what you're saying. Yeah, yeah.

Yeah, but if you're married, do they separate you on deployment? So, our deployments could be at different times. They try to keep us on the same base, but since we're both college students and under the program, there is a chance that for a year or two that we would be on different bases. Hmm, okay. All right. But we're trying to prevent it as quick as possible. Thanks for your service to the country.

Okay, if you spend $20,000 and you have 30,000 and you have basically no income and you get married and two months later you start making $180,000 a year, that is dangerous but it's not completely suicidal because you're spending most all of your money and you don't have any money. You follow me? But you're getting ready to start this huge income unless something really goes sideways.

So yeah, I would not spend a dollar more than that and I would push that as close to my $180,000 income starting as is reasonable. Okay? I realize you've got to do it before the income starts, right? Yes, sir. Okay. But I want to push it right up next to it. Because I don't want the gap between you having $10,000 and sitting around, you only have $10,000 left, you're married and it's six months later and you still got no income we don't want that game that's a bad game you follow me okay that's what we're looking for it I just

I just don't want you living on the edge kiddo life's too short I agree you know that was my call you're a saver you don't you don't want to live on the edge yeah yeah so I mean like if you guys get, if you do the wedding in June and you graduate and your income starts in July or August, I'm fine with that. You follow me? I'm not fine, I don't love it, but it, but at least you're not completely stinking burnt.

You don't have four kids and you're trying to like, you know, keep a household running. Like you guys can, you guys can do it. Yeah, and you got this, and then you guys got a pinky swear and spit shake with each other. We're not doing nothing until we build up a big old emergency fund,

because I assume you have zero debt, right? Yeah, absolutely no debt. Okay, that's what, I started this whole conversation with that assumption, but yeah, I think you're on track, and here's the good news Riley, you're gonna be okay because you're thinking about it, and because you're a saver, which means you're concerned about overextending

because your nature is that. Where Rachel is a spender, I'm a spender, our nature is woo hoo! Let's go buy it! And we have to guard against that nature to be wise and not get up over our skis and fall on our face. So I think because you're asking the question, that tells me you're probably gonna be okay. Because you're a saver, you're probably gonna be okay. If your fiance's on board with those two things.

And I'll say this too, that the income is pretty guaranteed. It's not like, oh, we're going into sales and I think we're gonna be making X, Y, and Z. Like it's a, you know the salary ahead of time. It's laid out pretty black and white. You know what's going on. You're moving straight in the officer corps. Yeah.

That predictability is helpful in this scenario too, Riley. So sharp, sharp young people serving, serving the country. I know. Thank you guys so much for that. Very cool. And congrats. Have fun planning it and everything. It's going to be exciting.

Very cool. This is the Ramsey show. Taking care of your health doesn't have to cost a fortune that's why field of greens is in my house field of greens is made from fruits and veggies selected by doctors to support your heart liver kidneys and metabolism and here's the best part they're so confident your doctor will notice your improved health they offer a money-back guarantee no questions asked. Try today and get 15% off at www.fieldofgreens.com. Hey guys, our two-night virtual event, Investing Essentials,

is almost here. There's a lot of confusion out there about building wealth. So George Campbell and I are breaking it down and teaching you how to invest with confidence. You'll learn how to maximize your 401k and mutual funds. Plus I'll be sharing my personal playbook for real estate. But hurry, time's running out. Investing Essentials is March 4th and 5th. Tickets start at $199. Grab yours today at ramsesolutions.com slash events. In the lobby of Ramsey Solutions is the debt free stage and if you're standing on it, it usually means one thing that you're debt free and that's where Patrick and Chelsea are. Hey guys, how are you? Hi.

Hey Dave. How are you? Welcome. Where do you all live? Louisville, Kentucky. All right. Well, welcome to Nashville. And how much debt have you two paid off? 250,000. All right.

How long did that take? Just over five years. Good for you. And your range of income during that time? Started around 150 and up to 280. Good for you. What do y'all do for a living? We're small business owners.

We own a franchise, a security franchise, and we just started a consulting business on the side. Very good. So you're killin' it. Yes, trying to. Congratulations. Very good. Amazing. So you're killin' it. Yes, trying to. Congratulations. Well done.

So five years, 250,000, did you guys pay off your house? We did. Look at that weirdos! Couple of weirdos, I love it. How old are you two? I'm 39. And I'm 37. All right, mid-30s, late-30s, I like it.

What's this house worth? Probably about 550 good for you, and how much in your retirement accounts? 360 okay bumping up on me well what you own a business too, so you are millionaires. Yes, baby step millionaires way to go Well done. Okay, how does this story start? How in the world do two people like you become weirdos by the time you're 40? Well done. Also, we've always kind of lived by your principles,

avoided consumer debt. When we started our business, I had the same mindset, stay away from debt as much as we can. We moved cross country from San Diego from my previous job in federal law enforcement, started our security company from scratch, working long days, long hours, I think it was seven months in the beginning where I didn't have a day off. She's at home with the kids just fully supporting us and yeah, we make a great team and we're

so thankful for the position we're in now. So security as in like alarm systems and cameras? More security guards, you know, for apartment complexes, Walmart, that kind of thing. So you're utilizing your law enforcement background. Yes. Okay, I got it. So smart, so smart.

Oh, very good. Yeah, that's a big deal. Yeah, recession resistant is like what we like to call it. What'd you say? Recession resistant. Ah! Definitely. So good, so good.

Yeah, actually recession can cause it. It's true. It's fun. How many kids do you guys have? We have two. Okay, how old are they? Luke is five and Ryan is three. Okay.

So they're keeping us young. Man, so you had babies during kind of all of this. I mean at least the second one during this process. Yeah. Starting a business and leaning on the debt. No stress. No big deal. No big deal. No big deal.

Just lean in for five years, get it done. Get it done, well done. So how did you connect up to this Ramsey stuff? So we've listened to the show for years. I've always, like I said, lived kind of by the principles. No consumer debt. We just really wanted to get rid of this mortgage as fast as we can.

I hated seeing the amount of interest that we're sending to the bank just for them to lend us some money. So our goal was to pay it off by 40 and we achieved it by a little over a year. So it was great to set that goal. Yeah, I'm a little closer. Yeah.

Yeah. She's got three years. By the time he got old. Yeah, okay, good. Very cool. So where'd you come from in California, San Diego? Uh-huh. Okay, so when you moved to Louisville

and you buy this house, you had to go, oh, this is so cheap. I can pay this off. That had to be part of the emotion. Yeah, the difference in the real estate markets are pretty significant. Obviously our house has gone up a little bit since 2020 and the last few years.

But yeah, just being able to pay off the loan where we have no debt is just, there's so much peace behind that, we love it. The grass feels different. It does feel different. It does. And the other thing, small business people are the only ones that grasp this, because you're in sales every day,

and you have, you know, the weight is off your shoulders, and you suddenly start making different and better business decisions. Because, you know, when you're early in business, you'll take any client. And now the problem clients, you're like, yeah, I think you need to go see my competitor. You're high maintenance.

I think I'll let you work for somebody else, yeah. Yeah. You're not as desperate when everything's done. Right. You end up making more money. Because everything's just because everything's just peaceful and it's a weird thing. So way to go you guys, I'm so proud of you. Well done you guys. Okay, so in this process, because you guys started with, I mean I think no consumer debt

anyways because you guys have been following this for a while. So when the five years kind of began, was it that hey we're making more money, we're just not going to increase lifestyle and we're throwing extra at it? Like, what was your plan of action? For people listening that are like, okay, that's our next big step, did you feel like you were still in tents? Or do you feel like, no, we were able to like,

live and breathe, but we just didn't up our lifestyle majorly, what did that look like for you guys? I'd say we did increase our lifestyle some, but not nearly as much as we could have. And I mean, we also finished our basement, we had a new roof that we put on the house. So lots of expenses that we were still having to live. But we didn't really have extravagant lifestyle.

We did take a nice trip when we finally did pay off the house. So we went to the Maldives. So that was our celebration trip. But yeah, we're just thankful to be able to be in this position. You're making 150 to 280 and you average 50,000 a year for five years. So you were able to do some stuff position. You're making 150 to 280 and you average 50,000 a year

for five years. So you were able to do some stuff. There's wiggle room in there. That's the proper way to do it, so very well done. Who was cheering you on, anybody? Yeah, I would say our friends and family have always been huge cheerleaders in each other. Working together is not for everyone, married couples, but feel like we we make a great team and we kind of

Offset each other and yeah, we've been I've when he started he worked seven months straight. Like he said no days off No, he worked nights He worked during the day during doing sales and I just was tried to be there to be the the grounding person Because I also had a full-time job. So I was also supporting us with my full-time job so yeah we we we cheer each other on too. So what do you tell people that are listening what's the key to being almost 40 years old you now have a paid-for home it's worth 550 and zero debt of any kind and including the value of your business having that worth well in excess of a million dollars.

What do you tell people the key to doing that by 40 is? I would say just do something. You know, get control of the person behind the mirror because the person in the mirror, you know, most of it's your behavior and if you can get control and spend less than you make, you know, get on a written budget, you can set goals and achieve them sooner than you think. And of course discipline, just being living like you, like no one else.

Like you say, we always kind of repeat that to each other. Like we wanna live like no one else. So that later we can live and give like no one else and here you stand. You did it. Wow. How's it feel to not have a payment in the world? It's amazing. It feels great. It feels great. Yeah, I know a side note so you always talk about how the grass feels different you know walk through your grass barefoot so the day that you know we made the final payment on the house I decided I'm gonna walk through the grass barefoot. You actually did it. I did.

We did get 10 inches of snow on that day. So. I'm doing it, I'm doing it. Yep, so after I shoveled the driveway, I took off my boots and went for a quick little brisk walk in the grass. In the snow, in the snow. It did feel different for sure.

Because it's cold! Yep. Wow, that's hilarious. You could have waited until spring, man, really? No. It's kind of like an intense cold plunge. You were tired for that moment. That's right, you did, you did.

Oh man, you guys are amazing. We got across colds here. Good job, man, that's fun, well done. Very proud of you guys, you're excellent. Excellent weirdos, very cool. All right, Patrick and Chelsea, not even 40, along with Luke and Brian, whose family tree has been completely changed.

Oh, they're here, they're here, they're here. Oh, they're with us! I didn't see them, they were here. I didn't know they were here. Oh, buddy. Look at them. Oh man, how great. Oh, you guys.

You guys have no idea how great their life is, because their mom and dad are heroes. You completely changed everything for them and those grandkids that'll come from them. Excellent stuff, very good stuff. Patrick and Chelsea, Luke and Ryan, Louisville, Kentucky, 250,000 paid off, housing everything in five years, now with a net worth in excess of a million dollars,

Baby Step Millionaires at 39 and 37. Count it down, let's hear it, debt free scream. Three, two, one. We're debt free. Yeah. Yeah. Yeah. Yeah.

Yeah. Yeah. They did it. Ah. I heard Luke, Luke did good. I love it. He's ready, man. Oh, so sweet. It's, Luke did good. I love it, he's ready man. Oh, so sweet.

It's great. So good. This is the Ramsey Show. Running a business is freaking hard. It's easy to get caught up in the daily challenges and fears that keep you stuck. That's why I want you to reserve your copy of our new book, Build a Business You Love,

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now. Build a Business You Love, the essential guide for every business owner like you that wants to grow yourself, lead your team, and scale your business. To reserve your copy go to ramsysolutions.com slash store ramsysolutions.com slash store. Rachel Cruz, Ramsey Personality is my co-host today. Open phones at 8 8 2 5 5 2 2 5 investing when I say the word some of you are immediately intimidated Dave I can't invest I don't know what that even means it scares me oh I understand and the good news is it's not as complicated as some of the goobers in the financial world make it

sound it's as if they you need to the goobers in the financial world make it sound. It's as if they need to use $10 words so they can charge you a commission. So we teach investing where everyone can understand it and do it because everyone should understand it and do it. And we're going to go even deeper for you super nerds. We're going to do our investing essentials virtual event March 4th and 5th next week. Tickets start at $199. Now this is two nights, it's a two night event. The first night is several hours, a couple of hours plus on investing of all kinds. The

second night we're going to teach primarily on real estate. And I'm going to open up how I've learned to do real estate investing in detail and it is nerdville. If you're having trouble sleeping, you'll not have any trouble after this. I'll put you straight to sleep. It's really nerdville. But if you nerd out on this stuff like I do, if you like doing the spreadsheets and the math and so forth, you will love this event, Investing Essentials. Both nights are going to be where everybody can understand it. I'm kidding around, but it's really stuff I don't get into much. It's only the second time I've ever taught this much depth on

real estate investing, and I own several hundred million dollars worth of real estate. So several hundred million dollars worth. So we're gonna get into that. It's not a theory. I actually freaking do this stuff, okay? And I'm not teaching you to do something and then I go do something different. This is what I do and then you can do it or not do it. It's up to you. So get your tickets at ramsesolutions.com slash events and click the link in the show notes if you're tuning in on podcast or YouTube. This is a great, you guys did this event last year and it and people.

It's the only time we've ever done it was last year. They loved it, loved it. So honestly it really is. It's a great deep dive into the subject. Oh and George Camel is like, he's nerding out from now on. He is, this is like, this is like his, his special spiritual gift. It's like his hobby. It's what he likes to do.

George, get a life. He is really enjoying this. It's really, he's going to, and he's really good at it. It's going to be, he's going to, his part will probably be better than mine, but it's pretty incredible. All right. Uh, Sarah's in Philadelphia. Hi, Sarah.

How are you? I'm good. How are you guys? Better than I deserve. How can we help? Okay. So I fell for the lovely money trap of taking out a lot of student loans and I had 85,000

in my name and 50 were through parents plus loans to my parents now I did tell my parents of course I would help them pay off whatever they put into their name so I've been working really hard for the past eight years and I paid off all of the two loans that were in my name. Um, so I have no debt legally in my name. Um, but when I went to tell my parents about it, like, Hey, I'm, I know I've been throwing money at you guys for this every month, but I'm really going to start to focus on it.

They kind of told me that they combined my loans and my siblings parent plus loans that they took out for them into one big student loans pot so I am kind of I was kind of shocked that they said that because I've been paying towards it and instead of paying towards mine I've kind've been paying towards it and instead of paying towards mine I've kind of been paying towards everybody's. No. So now I'm like. No.

No. No. And at a point where like I don't know what to do. How much more should I pay them for it? No, you did not make an obliga- Okay, number one, stop. Number one, you don't have any legal obligation at all. You do have a moral obligation because you promised to pay your part, but you did not promise to pay your siblings part, correct? Correct. Okay, so how old are you? I'm 29. Okay, how much have you paid towards the loan

that your parents have? I've paid almost the full amount of it like the four interest I've been giving them a thousand dollars a month for like eight almost eight years okay a thousand dollars a month for eight years is that what you said yeah okay so why would a sixty thousand dollar loan not be gone? The interest rates were high. What were the interest rates? They were at like seven to eight percent per loan and it was two different loans. Is the thousand dollars a month steady for eight years? Yes. Yes. That's correct.

And you know what the original balance was, right? Yeah. Okay. Alright. So, and you're how old again? 29. Okay. Are you married? No. Okay. Do you have an investment advisor? Uh, no. Okay. Alright. Because it's a simple math math. It's a financial calculator. I don't have one laying in front of me. I could almost do it on the air, but probably not. because it's a simple math math, it's a financial calculator. I don't have one laying in front of me. Could almost do it on the air, but probably not.

But we could simply say, all right, $60,000 at 7% and $1,000 on that. What would be the remaining balance after eight years? I think it's gonna be zero. I know it's coming pretty close, which is why I mentioned it, like, I'm just gonna pay directly as well. And so I don't owe you anymore, Mom and Dad.

I've fulfilled my obligation. How did they respond Sarah? Cause they know how much you've been paying and, and, and did they say, oh yeah, yeah, your terms almost up or like what you've given us, or was that pushed back to you kind of just like drop the bomb show, like, oh, well, this happened, you know, like to make our, the payment slower. We've a few years ago it doesn't matter yeah but did they acknowledge the amount of money you've already paid them they

did but now it's like they're treating it like it's different like a one big one yeah okay so mom that's a relationship issue so mom and dad here's the deal I did not promise to pay anyone else's loans I promised to pay mine mine was $60,000 at 7% and with $1,000 a month for 8 years, the remaining balance would be zero or would be X. And so I have $2,600 more to go and then I'm not paying you anymore. I've met my obligation to you. The fact that you chose to consolidate it for a smaller debt and my brother has chose not to pay his does not affect my deal with you yeah that's pretty much that's pretty much the exact scenario of my siblings need to not

being able to pay theirs right now so you just need to get real clear you number one you need to get the exact math done. And I can't do that for you right now. And have it visual. Have it on a sheet of paper. Like here's exactly. Go online and you can print it out, okay? You can just go online and find a calculator online and put in six or seven percent, $60,000

and $1,000 a month for eight years and what is the balance? And you can do it online. And probably about 45 seconds, if I was smart I could do it right now but I'm not so I used to keep a financial calculator here on the desk in the old days but it's I think your balance is going to be zero because you're gonna be up over $90,000 you paid in including interest that

should be at zero okay because we're talking about 45, you know, 96 months that you paid in, about $96,000 you paid in, and 7% interest. So you're probably have overpaid, but I wouldn't worry about it if you've overpaid relationally. But I would just say I paid in $96,000 including interest. That means I don't know anymore Sorry mom and dad the rest of its on you and bro. I Did my party I did my part, but you can use the actual math and show it to them

Yeah, and please say bro. Yeah Since I made a bad dad joke No, no, no. Sarah, is this gonna be a hard conversation or do you like when you have the math and you lay everything out, do you have the type of relationship that you feel? Are they gonna understand this? Yeah, how's that gonna go?

Oh God, I think it's gonna be a tough conversation. Oh man. Only because like they've done a lot of other things for me, you know? Yeah, they changed your diaper but you don't have to pay them for that. That's called being a parent. Right. Now they fed you, but you don't have to pay them for that.

That's called being a parent. So this is a, this is a mess they have made. And they're very lucky, honestly, as parent plus holders, that Sarah actually has paid $96,000. 90% of the time I take this phone call, it's the parent griping because the kid has never paid a dime after they promised they would. And they're stuck with a big old hairy Parent Plus loan.

But in this case, mom and dad are the ones that stepped in it. Well done, Sarah. And they got some on their shoe. Morally, you've done everything to the T. You don't have to do anymore. You're free. I wouldn't do anymore. You don't owe anymore.

But run the numbers to be 100% sure. This is the Ramsey Show. Thanks for watching!