The Ramsey Show - If Nothing Changes Your Money Won't Change

Starting point is 00:00:02 Brought to you by the Every Dollar app. Start budgeting for free today. Normal is broke and common sense is weird, so we're here to help you transform your life. From the Ramsey Network in the Fairwinds Credit Union Studios, this is the Ramsey Show. I'm Dave Ramsey, your host, my co-host today, Rachel Cruz, number one best-selling author.

Starting point is 00:00:33 Go-host a smart money happy hour, Ramsey personality and my daughter. Open phones at AAA 8255-225. Ben is in Charlotte, North Carolina. Hi, Ben. How are you? Hey, Dave. How are you doing?

Starting point is 00:00:45 Better than I deserve. What's up? I was calling to get some input on combining finances with my wife. Seems, when we bring it up, it causes arguments. And I guess I can take the baby steps to becoming a team. So why does it cause an argument? I think just the I guess the oneness

Starting point is 00:01:17 not being in control of her finances for herself but combined as one I think that scares her a little bit yeah you don't she doesn't think she has a vote uh it's not that I think it's she's scared when we set up

Starting point is 00:01:39 because I've talked about doing a budget every month of possibly causing an argument if something doesn't go as plan. But I've reassured her that, no, that's not going to happen. Ben, how long have you been married? Right, two years. Okay. I don't think you're telling me everything. I mean, we've had plenty of conversations about it.

Starting point is 00:02:06 I've tried opening up about it. We have a joint account, and all my money goes. into that or our money, but her paycheck stays. Well, one of two things is going on. Either she's a selfish princess and she wants to control her own life and doesn't want any accountability for anything, or she doesn't trust you that she will have a vote in this process. Or that you're not going to misbehave with money.

Starting point is 00:02:31 Has there been anything in the past been of something that you've done that could have broken that trust? Not from our relationships side, but her childhood. her mom didn't, I guess. She took the selfish act when they got a divorce. So that kind of scares her. I'm sorry, she took the what? So she tried taking all of her dad's money.

Starting point is 00:03:02 The money? Yes. Okay. Yeah, but there's laws that dictate who gets what in a divorce. and if the reason we're not going to combine our finances is because I'm planning my divorce, we have other issues. We aren't planning a divorce. I'm just making assumptions.

Starting point is 00:03:28 I don't know definitively. Okay. Yeah. I don't either. So, you know, I don't know, you know, we're not sure why this lady doesn't want to do this other than her parents got a divorce when she was a kid. which is really not a reason to not combine finances with my current husband if I'm deeply in love and we have a high quality relationship that we both have a vote in and there's communication on and full transparency. Do you all—

Starting point is 00:03:59 Unless she thinks you're trying to control her or she is doing a bunch of crap that she doesn't want you to know about. Do you guys make a significant difference in salary, Ben? No, just she brings home around $3,500 every month. And I bring home around 4,000. Okay. Yeah. I don't know. I would, yeah, I would dig into more of her why, which I don't know if you've done that, of understanding.

Starting point is 00:04:28 If you have, you can't, you're having trouble verbalizing. Yeah. So I would figure out what is the, what is really going on with her of her hesitation and her refusal. And, yeah, depending on what's, I mean, those are two extremes on the, on the spectrum is what Dave laid out, which is true. So she falls on one end of the spectrum and not. And out of that, then, is what you're going to have to talk to her about and you guys together get a plan where you're both comfortable. And the why is the motivation is so that we can work together and have a oneness in our life. And our money is a tool that we use every day in our life.

Starting point is 00:05:05 And so when we see that as a household and we see that togetherness, it helps so many decisions and the logistics as well, like fall into place. So, yeah, I think you need to do some more digging bin on what's going on in her, her fears. And then you need to be able to verbalize that to her on why you're wanting to do money differently than you are now. And that's going to be important, too. Jack is in Houston. Hi, Jack. How are you? Hey, how are you all doing?

Starting point is 00:05:35 Better than I deserve. What's up? So I had a question. I'm young. I'm about 20. I have my own business. and I am also a full-time college student. I'm kind of trying to decide if it is better for me to invest in myself

Starting point is 00:05:51 than set a set amount to put into like savings or stock accounts. I know you have a rule of about like 15%, but for me, I'm about to transition to maybe, I guess another question would be, is it okay to go into debt for a business property? Kind of like a house as long as it's just that, like not like car spending or anything like that. I'm sorry, a house as a business property? What's that? No, I mean, if like if I took out a loan for a business property, would that be bad necessarily?

Starting point is 00:06:34 Yes, it would be bad. You're 20 years old. You're in college. It'd be really bad. It'd be dumb. Why would you saddle yourself with that? So what are you studying in school? Business management.

Starting point is 00:06:47 Okay. And when will you graduate? Two years from now, but I'm kind of already phasing out to possibly just not finishing my degree. I'm making about $100,000 a year, and I only work weekends. And so the amount of income I make for the time I... What are you doing? I build show trucks. You build what?

Starting point is 00:07:10 Like big lifted trucks, like audio assistance. systems, lifted trucks, et cetera. Are you bringing home 100,000, Jack? Is that, like, what you paid yourself, or is that what the business brought in? So I'm the sole owner. I only pay myself. That's what the business profited. But, I mean, there's taxes, and I still put money into, I put at least a $7,000 in my

Starting point is 00:07:34 Roth IRA. That's, like, my goal is I'll always do that. But I'm also, like, I have a lot of cash stacked up and no debt. And so I have a lot of cash that I'm like, hey, I could maybe get a $80,000 piece of property, build a $50,000 shop on it. I could pay for half up front. And would it be a bad idea to necessarily take out a loan on something that I'll own instead of renting? No, I would stay right where you are until you can pay cash for that. So just save up cash completely.

Starting point is 00:08:06 We own real estate that our businesses are in. We pay cash for it as we go. we move at the speed of cash, and that'll keep you from getting you're pinched later when something turns down in this business. I also think that if you're studying a good business curriculum, you're probably going to learn some things in the next two years that you will use in your business for the rest of your life. I have a four-year degree in business and finance, and I use some of the things I learned 40 years ago almost every day. Dave, we got a lot of calls on this show where life happens. One day someone's

Starting point is 00:09:05 healthy, they're working, providing for their family, and then a curveball hits. You know, we hear it all the time. A car accident, a cancer diagnosis, a heart attack, and suddenly everything changes. Yeah, and that's why you've always said that having term life insurance from Xander is essential, because it protects your family if the worst happens. Yeah, that's right. You need 10 to 12 times your income in coverage. No gimmicks, no whole life junk, just straightforward term life protection. But there's another piece that people often overlook, and that's long-term disability insurance. Yeah, it's important to understand the difference between them. Life insurance steps in when you die.

Starting point is 00:09:45 Disability insurance steps in while you're alive but can't work. So it replaces a large part of your income, so the bills still get paid while you get back on your feet. Now, if your employer gives you free disability insurance, great. Take it. If it's discounted there at a better price, take it. But if not, Zander can help you find the right plan, whether you're single or married, It's not optional. If you're going to be out of work for a while, then you need to make sure the money still showing up. And that's why Zander is our go-to. They make it super simple to get the right coverage at the best price, no pressure, no upselling.

Starting point is 00:10:18 I've trusted Jeff Zander and Zander insurance for over 25 years, and so is my family. So don't wait. It's fast. It's easy, and it could make all the difference. Go to Zander.com or call 800-356-42-82. to protect yourself, protect your income, protect your family. If you have a simple tax situation like you haven't had any major life changes or big investments, use Ramsey Smart Tax. It's really affordable. It makes filing super simple and it has built in support in case you need a little help.

Starting point is 00:10:56 Ramsey Smart Tax. Filing early means you get the best deals and you get that tax stress off your shoulders. So as soon as you get all your tax documents, go to Ramsey Solutions.com slash smart tax and file quickly, easily. and affordably. Oscar is with us in Orlando. Hi, Oscar. How are you? Hey, I'm doing good. How are you? Better than I deserve. What's up? That's good. So I currently have $2,000 in debt, me and my wife, that's her credit card debt. I also have, that one's at a 17% interest rate. I also have 3,053-ish at a 30% interest rate on one of my credit cards, and then $1,200 on another credit card at $0% interest rate, and $2,800 in collections currently. And I also have my watch car, which owes $10,000, and we currently are at 27% in search rate.

Starting point is 00:12:02 And I have $8,800 cash. And I want to know. You have how much cash? 8,800. Wow, okay. All right. So I don't know what I should do with it. Rather pay off the car because then I could pay it off within a month.

Starting point is 00:12:21 And we've been making payments on it for three years now. And we already gave $8,000 towards the original $13,000 debt towards it. So I kind of just want to get rid of it. that way I don't have those extra $500 I can put towards my savings and then pay off the other debt. So how old are you guys? I'm 20 and my wife's 21. Wow, okay. And what's your household income, sir?

Starting point is 00:12:50 Right now, my take home is $1,300 bi-weekly. Okay, all right. Say that how much again? That's $2,600 a month. Okay. Okay. Does your wife work? No. Why?

Starting point is 00:13:08 He's at home watching the kids. Oh, how many kids have you got? I got one. Okay, and $2,600 a month is your income? Correct. And you're working 40 hours? Yeah, sometimes 37, sometimes 40. Once I get my promotion, I'll be working 50, and then my income will jump up.

Starting point is 00:13:29 When is that? Because I just have a new job. That's probably in a job. about two more months. What are you doing, Oscar, for work? Manager, Shippoli. Okay. Because you're not making any money.

Starting point is 00:13:42 Yeah. All right. Are you guys able to pay rent? How much is your rent or mortgage? So currently, we're living with her parents. Oh, okay. Because my collections is on the other apartment I had when I used to sell cars. I used to make like $4,000 to $5,000 a month.

Starting point is 00:13:57 But I got another job. And I'm trying to, like, change my career path and just get more steadying. income. I don't mind if it's not steady if you're making twice what you're making now. Yeah. I didn't like it either. Oh, okay. There's that.

Starting point is 00:14:15 Yeah, the biggest thing. So have you kind of, I mean, just listening to your situation and your story, you're 20 years old with a baby, you live with her parents, you make $2,600 a month, and you apparently don't read anything before you see. sign debt because you've got some of the worst debt products on the planet. I mean, everything you had was north of 20%. Like, do you like to say, come over here, I like getting screwed? I mean, you like signed up for everything possible that was horrible.

Starting point is 00:14:48 How do you do that? So, no, so my credit cards that I got, I paid the rent from my last apartment that I had with it once I lost my job because there was a job that I had lined up that I didn't get. and that kind of messed me off, so I just used my credit card to pay it. And then as far as the car, I told her not to do it because I was working out of the car dealership and I was able to get her a better deal. But it was a real time. Yeah, I mean, like you guys need to figure out a different way of looking at life

Starting point is 00:15:22 so you don't sign up for anything ever that looks like this again. Because you're getting tattooed by everybody on the planet. I never saw anything like this. This is a mess. Okay, so the bad news is you don't make a lot of money and you've got some debt. The good news is $20,000 makes you debt free. Yeah. Completely debt free.

Starting point is 00:15:46 You need $20,000. And you have $8,800. So really, $10,000 makes you debt free. And you're only working 40 hours. So you need to be working in additional 40 hours starting right now. somewhere else in addition to what you have now. You need two more part-time jobs and you need to pile up some money so you can get out of your mother-in-law's house. Yeah, make it a goal, Oscar, to make an extra two grand a month, whether it's Uber Eats, like whatever it is,

Starting point is 00:16:17 that you're just doing something. I would list my debts smallest to largest and usually a 7,800 will clear off almost everything except the car and leave $1,000 in your emergency fund. and I would list these debts smallest to largest, so the 1,200's gone, the 2,000's gone, the 2,800's gone. I think the whole 3,000 is gone right at it. I'm going to knock out all of those, and all you got left is the car, and then $2,000 a month extra, and you start throwing everything you can at that car, maybe $3,000 a month at that car, and you'll be done in two or three, four, or five months, five months, max.

Starting point is 00:16:53 But you need to create some extra income until this Chipotle promotion comes along because you guys don't make any money. You're starving to death. Okay? And, but yeah, you could clean this up with the money you have in the bank, everything, but the car, and then go get three extra jobs and work like a crazy man. But the two of you need to look at each other and go, okay, we have done our last stupid thing.

Starting point is 00:17:22 We are not signing up for any more debt. We suck at picking out debt. I mean, 27% on a car. Good God. I mean, really. And we can't do this and survive. We're going to live at your mothers the rest of our life if we do this. So never again.

Starting point is 00:17:44 And next time I can't pay my rent, I just can't pay my rent. I don't put it on a credit card. We have to work with the landlord instead of the credit card company. You choose your poison. I don't, I don't, we don't borrow money anymore, Oscar. you guys have you've stepped in every bear trap known to man yeah and you guys are young but honestly I would sit down with her and look out in five years and say hey when we're 26 years old where do we want to be yeah what's a what's a dream scenario what kind of career do I want to be in what kind of

Starting point is 00:18:13 house or area of Orlando we want to live like start actually creating some of this like future thinking and that sometimes does help when there's like a crisis right there in the present right where you're like nope that's not getting us to where we want to be and so it helps you stop but If you're still on the line, Oscar, we'll have Christian pick up and get you Ken Coleman's book, find the work you're wired to do, and there's an assessment in the back. And it's very helpful just to start thinking through what you want your career to be so that you can up your income long term throughout your life. Yeah. If you're making $4,000 a month and you hate it, if you're not doing anything illegal or wrong or unethical, keep making $4,000 a month

Starting point is 00:18:53 until you find something making $5,000 a month that you like. You're not doing anything. You're You don't just go, I don't like doing this. I'm going to quit and move in with my mother-in-law. Bad choices. You keep working until you may have something to move to. You don't stop the income flow. And so, yeah, these are the mistakes you've made that have gotten you here. And so what you need to do is assess when I went broke all those years ago when I was 28,

Starting point is 00:19:20 I had to look and say, okay, what was the stupid but decisions I made? And there were plenty of them that put me in this situation. so I don't ever get back in this situation again. And that's all I'm telling you to do is the same thing I had to do. And you can do it. You can do it. But if you keep doing what you've been doing, you're going to keep getting what you've been getting, too. And quit trying to figure out the interest rates on these things other than stay away from them.

Starting point is 00:19:44 That's a good plan. So, wow. Well, just a lot of credit cards. And cut up all the credit cards tonight. You listed out three of them for us. Just get rid of them. Just say, we're going to do something totally different with our money. Yeah, we're going to be on debit cards and a budget on everything.

Starting point is 00:19:56 on every dollar. Christian will get you a copy of Ken's book because I don't think you chose Chipotle because it was your dream job. Cholet, you can't run out. However you say it. Apparently, you don't even need to go there. I don't know.

Starting point is 00:20:06 But I don't think you picked that place. I think you just fell into that instead of going, I always wanted to manage a restaurant. I don't think you said that out loud. This show is sponsored by BetterHelp. I am right here because some extraordinary women in my life,

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Starting point is 00:22:14 Good. How are you doing today? Better than I deserve. What's up? So I've been trying to help my mom get out of debt for the past three years. He wants to retire in three years. But you can't. They're kind of breaking up. Can you get where your phone is still and is working? Try again.

Starting point is 00:22:34 Yeah, I've been trying to help my mom get out of debt for three years, and she's retiring in three years as well, or she wants to, but I can't get her to become gazelle intense. Okay. She's broke and staring down the barrel of retiring broke, but won't fix it. Why? I have no clue. I've asked, and I've prodded, and I've tried to get her to see how skis. it could be retiring if nothing, but... How old are you?

Starting point is 00:23:09 I'm 25. How old is she? Turning 60 this year. Well, she's not going to retire at 63 because she's not going to have any money. Yeah, she thinks she has a pension plan, but that's... I've already looked and I've been helping her with her finances and I don't see it working for her for covering all her expenses and still her debt. How much debt does she have? Currently, 40,000 total.

Starting point is 00:23:37 Okay. What's it in? 20,000 in student loans, 16,000 in personal loans from credit cards, and then 4,000 in a remaining credit card. Okay. Did she go to school? The student loans, is that hers, or was it a Parent Plus loan? She was going to school, but she didn't finish her last class, and so these are just the remaining student loans from her own degree. Okay. So when you sit and say, Mom, this is serious, if you don't fix this, you're going to be up a creek without a paddle. What does she say? She kind of laughs it off.

Starting point is 00:24:15 Yeah. And we've gone through the baby steps. No, we haven't. You have. She hasn't done anything except laugh. Yes. Yeah, my wife and I, we've done it, and I tried using that as look at what we've kind of been. able to do. You could kind of live like this as well, but I don't know. It's not clicking.

Starting point is 00:24:38 Yeah, it's a hard reality when you realize you can't force people to do anything. You can't say the right thing well enough to get them to see this or that. I mean, like, there is a point in an adult's life that they have to make a decision on what they're going to do. And she's telling you through her decision making of what she's going to do. And so there's a part, Matt, that I hate to say it. I think you've done everything that you can possibly do to help her. I probably have one closing conversation. Mom, I'm not going to bring this up again unless you bring it up. If you need some help, if you want some coaching, fine.

Starting point is 00:25:12 I'm going to be giving you zero money when you're old. So you probably should figure this out. But I'm not going to beg you to do this stuff anymore. I want you to win with money more than you want to win with money. and I'm through talking to you about this and you laughing when I do it. So we're not going to talk about this subject anymore unless you call me and say, help me and I will help you by teaching you. I will never help you by giving you money, period.

Starting point is 00:25:43 And then end it. Just will drop it because you're not making any progress. You're beating your head against a rock. And she's not changing. She doesn't want your advice. And so one of the things I figured out when I started doing this show years, ago is I quit answering questions that people didn't ask. Yes.

Starting point is 00:26:05 You know? Yes, I know. I quit coming into someone's life and presenting myself as the answer to your questions. Yeah, that you're not asking. If you ask a question, I'll help you. I'm obligated then to answer your question, but I'm not going to just walk up to somebody randomly in my life and go, hey, that's stupid. I know.

Starting point is 00:26:26 But if you ask me, I'll tell you. That's stupid. I love you enough to tell you the truth. And what's frustrating, Matt, is what you've experienced, you and your wife at 25 of going through the baby steps in doing this and probably paying off dead and have an emergency fund and retirement. And you're seeing the progress and you look over at someone you love, like your mom, and you're like, you could be doing this exact same thing. And so the motivation is totally understandable where you're coming from. But you have to understand. The result is not, you have no control over that at all, at all. And so there's a part you have to live.

Starting point is 00:26:58 But you start winning it's something you want it for the people you love. 100% understand. But you can't make them do it. I know. I've got a friend that lost 100 pounds and his wife didn't. And he's frustrated with her and I'm like, dude, you know, that was you just a few years ago. So you decided, you had to make the decision. You have to make it.

Starting point is 00:27:16 You can't. Your wife's not going to lose weight because you want her to. She's going to lose weight when she wants to. Nobody got you to lose weight until you wanted to. Same thing. You got to make these choices. You can't. But he feels so.

Starting point is 00:27:28 much better and he feels his dignity coming back. He got, you know, his clothing fits, all this kind of stuff. And he wants that for somebody that he loves and he can't, but you can't make somebody else do want something. You can only, you can only present to them as what it's done for you. This is what's worked for me. You've done that. And then I would, I would have one closing conversation and say, I'm not going to bring this up again, but also be forewarned, I will not be writing you checks because I've tried to help you. And I'm not going to be writing you checks at any point in your life. It's not going to happen. So you should figure this out. This should scare you. Where you are is scary. And if it doesn't, I can't help you. If you want some coaching, some advice, I'll be happy

Starting point is 00:28:08 to show you what we did. I would be honored. I'd be excited to show you what we did. But I'm not going to bring it up again unless you do and just drop it. That's what I would do. And then move on to the next thing. You can't, you know, the problem with most of us is we love somebody. We see them doing something that's hurtful to themselves, and we want them to be healed more than they want to be healed. Yes. And we want them to have a quality, spiritual walk more than they want to. We want them to lose weight more than they want to. We want them to get out of debt more than they want to.

Starting point is 00:28:43 And that's not unusual. Most of us have had that experience. We want something for someone we love more than they want it. And you just kind of stand back and go, dad, gum, I just can't. Well, and it's a weird feeling too. This is always funny saying next to you saying this, but Matt as a 25-year-old is doing better financially than his mom. And when you become an adult and you start to outpace your parents in any level of life, that is a weird feeling. And so, Matt, you're kind of grappling with this like, I'm more of an adult.

Starting point is 00:29:14 I'm more, I'm like the parent in this situation, right, is how you're probably feeling. And that's a weird role reversal. And you don't have to do that. But that's part of growing up, too, is seeing that and being like, that feels so strange. But I feel like I've passed my parents in whatever the category is in life. And so that's part of adulthood too, Matt, with your mom, sadly. Yeah. That's just part of the thing. So. And I was trying to think what category if I passed you in, Dave, then I think. I think you've raised better kids than I did.

Starting point is 00:29:45 It's an insult toward me. Unbelievable. You're better parenting than I was. No. No. I laugh all the time, though, because sometimes my kids, if they say something to me, I've used this line multiple times. Every parenting experts probably be like, that's terrible. But I always am like, if I ever had said that to pop and me me growing up, fill in the blank what my consequences would have been. It would not have gone well for my health. I know. You all. Old school parents. Get away. Yeah, they do. We discipline. But also, y'all ran a tight ship growing up. Probably tighter than I do. yeah. It's so funny. There's all kinds of ways you've passed us up, Rachel. It's okay. It's all good. You just gave me an underhand pitch. I couldn't resist. It was T-ball. That's good. Yeah, the thing is, when you're trying to convince someone in your life that you care about, about all you can do is not tell them what they're doing wrong, instead just show them what you've done. And I can't tell you, you know, how many ways things you can do to fix your life, but I can say this is what I did, and I feel this way now. I had this experience. No one can take your experience away from you.

Starting point is 00:30:56 No. So just tell people your story. And in the marriage context, Dr. John Zoloni talks about this all the time when you're trying to get your spouse on board, use I statements versus you. Well, you're doing this. You're doing this. Yeah. So much about your story and what's going on inside of you is going to be the thing that's going to possibly move someone to a different action. But also, it puts the self-responsibility on you and not that you're trying to implement and change someone else. because at the end of the day, you're not going to be able to. If you're looking for a more budget-friendly way to save on medical costs and stay true to your values, Christian health care ministries is a great option to think about.

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Starting point is 00:32:48 Get started at CH Ministries.org slash budgets and use promo code Ramsey. That's CHMinistries.org slash budget and promo code Ramsey. Jimmy is in Atlanta. Hi, Jimmy. Welcome to the Ramsey Show. I appreciate you taking my call. Sure. What's up?

Starting point is 00:33:20 I got some on the room, but I just turned 65 about two weeks ago. I've been self-employed most of my life, since I retired for last few. I own five houses that are paid for. except for mine. It still has about $175 dollars in four and a quarter. We have no debt to speak of. We have income approximately $100 a year. That doesn't include the rentals with the five houses. Two of the houses I've got to remodel completely, and I've already remodeled two out of my pocket. Total value of the properties are probably 2.2. I have just under

Starting point is 00:33:57 400k in a money market. And I've bought two houses. the last two I paid cash for, and I remodeled them out of my pocket. My question is, it's also on these DSCR loans, because I'm considered doing one of those. And we're mottled with it, too. Yeah. Well, I don't teach people to borrow money, Jimmy, because I have found that the fastest way to wealth is to get out of debt to stay out of debt,

Starting point is 00:34:26 and that's why you've worked so hard to be out of debt. and so you have 400K that you can do the remodel with. Yeah, but I've seen that going down from about seven to four, and I've got to the property. Because you've been doing remodels. Correct. And your net worth didn't go down. Your net worth went up because the value of the property went up because you remodeled it

Starting point is 00:34:49 by more than the cost of the remodel. Well, the last two houses, the $400,000 dollars I paid $120,000 and $1504. And I've got two more that I could possibly pick up, too, and that's why I was going to hang on to my cash. Yeah. And use one of these to remodel the other. I'm not going to tell you to go into debt to buy real estate. I'm not going to debt for anything. I own several hundred million dollars worth of real estate, and 100% of it is paid for, and we remodel 100% of it with cash or we don't do it.

Starting point is 00:35:19 And even if you were going to go into debt, the DSCR loan is not a good loan because it's a higher interest rate than a standard. line. Well, I've been quoted six and a half, six and three quarter. Yeah, it's a higher interest rate than a standard loan. That's what I just said, yeah. And so, yeah, it's not a good bargain. So why are you, why are you wanting to pay a subprime rate to borrow money when you have the cash in the bank to do the job? Absolutely not. I wouldn't do that. I kind of think you're going to, but you ask me, and I wouldn't do it. I would pay cash for the remodel, or I'd dump one of these properties and take the cash out of that and move it around. If some of these properties are not, fun and you would rather be in a different property, that's fine. I've got a couple up for sale now.

Starting point is 00:36:03 I'm going to do some 1031 zone. I do some tax deferred exchanges on some of the properties we've got to resituate some of our portfolio of real estate. You could do some of that, but definitely not going to borrow money. Definitely not. And you don't need to either, Jimmy. It's not like you don't have anything, right? I mean, it's not like it's, okay, well, we have no money. You have money. So just pause on buying a new property and use that to remod. and up the other ones or, yeah, or sell one. Or dump them and use that money to buy the other ones. I don't care.

Starting point is 00:36:35 But there's no way I would tell you to go into debt. It's not going to make your dreams come true. It's going to make your nightmarers come alive. Leah is with us in, Leah is with us in Cincinnati. Hi, Leah. How are you? I'm good. How are you?

Starting point is 00:36:50 Better than I deserve. What's up? Yes, so my husband and I, we have six-year-old boy girl twins. And when they were born, I cut back and I currently only work very part-time, and he's the breadwinner, and we have term life insurance, as you recommend, for his salary. But my little boy is profoundly autistic. So he requires lifelong care. If anything were to happen to me, should I also have a life insurance policy for the same amount that we have my husband's for? because he would have to take on that caretaker role,

Starting point is 00:37:32 and he would no longer be able to do the work that he does. Yes, all stay-at-home moms that do not create income should have life insurance on them to replace the duties that they have. Yours is accentuated with the autism situation. But still, just the same. When Sharon had little's at home, when Rachel was small, we had life insurance on Sharon because if something happens to Sharon, I got to bring Mary Poppins in so I can work and I have to pay her.

Starting point is 00:38:12 And so then you figure out what the actual marketplace value of a stay-at-home mom is because they do a lot. They tutor. They keep the home clean. They make supper. Laundry. Laundry. They do all this stuff. I mean, there's this huge number of things.

Starting point is 00:38:27 If you have to pay someone to do all of the. these things, you're going to find out that it's a, you know, it's a 40 or a $50,000 in your job. Would you have a special needs trust for him? Would you? Yeah, so we have all of that. We've got everything taken care of. Okay. Yeah, we have the only, we only have our mortgage. That's the only debt we have everything. We have set up the 529s because I have two other children as well. But my life insurance policy is only $25,000. Yeah, you need $500 on you. Okay. Or more.

Starting point is 00:39:00 I mean, maybe more. If you're healthy, Leah, and you're young, how old are you? I'm 36. Yeah. It will be so inexpensive. I almost would get it, I mean, I may be more. 500 would create a $50,000 income stream that would allow him to hire Mary Poppins to come in and help. I think you're in anymore.

Starting point is 00:39:20 But if you want to spend more than that or if you wanted to replace his income, then you would have that amount. and have him not working outside the home at all, which is probably not what's going to happen, but could be. He could be what's happening. You know, again, if everybody, if you're not overweight and you don't smoke, term life insurance is unbelievably cheap. Yeah, that's why Leah, I almost would just, just for out of safety, because it's not that much more expensive.

Starting point is 00:39:51 Get in touch with Xander and price it out, price out $500, price out a million, and just go, okay, what do I want? It's the cost of a pizza for you. It really is. It's Xanderinsurance.com. Just call them and we've been advertising for them for them for years. Yeah, you're great. People are blown away at how little life insurance costs.

Starting point is 00:40:10 And once you see how little it costs, it's like, why doesn't everybody have good life insurance to take care of their families if something happens to them? Yeah. So, yeah, you're very wise to ask that question. It's a very valid question. And by the way, it works for anyone who's got a stay-at-home situation. Yours has got an extra twist on it because of the extra challenges you guys have, but it doesn't invalidate the other ones either. So, yeah, do all of that, every bit of it.

Starting point is 00:40:39 Very cool stuff. Very cool. Open phones here at AAA 825-5-225. Jessica is in Kansas City. Right quick, Jessica, what's up? So I just filed my taxes for 2025, and we owe the IRS. about seven grand. Do you have seven grand?

Starting point is 00:41:01 We do not and we also have a baby on the way. Do you have any money? Yes, but we're saving that for like when I'm off work and not. No, honey, you owe the IRS. You don't get to choose between what you pay the IRS and then you figure out how to not do that. No way. You do not want them on you.

Starting point is 00:41:27 The penalties and the interest you're getting ready to take on make you wish you'd done a payday lender. No, no, no, no, no, no, no, no. So how much do you have saved for when you take time off? About $2,400. Okay. And what's your household income? It's about $120. And why did you miss your taxes that far?

Starting point is 00:41:55 They didn't. apparently I they went my job went off the new tax table I don't see that I could see like 3,000 being off but not that much so and I was just trusting that I was getting enough taken out and I didn't look at my pace so yeah so what I would do is pay whatever you have towards the towards the IRS and then I would pay the IRS off as fast as you possibly can, and then very quickly I would start stacking up money for you to take some time off. You make enough money to do all of that, but you're going to do nothing else. Don't talk to me about going out to eat and don't talk to me about vacations and don't talk to

Starting point is 00:42:41 me about a $10,000 nursery for the new baby. You have a freaking tax problem and a savings problem you've got to fix before you do any of that kind of stuff. When you've saved up and paid cash for a reliable used car, you want that thing to last. And the The best way to keep it running for the long haul is to take care of it with people you trust. That's why I'm proud to welcome Christian Brothers Automotive is the official auto repair partner of the Ramsey Show. At Christian Brothers, they treat you like family. You'll get digital vehicle inspections so you can see exactly what your technician sees, a complementary shuttle to keep you moving, and every repair is backed by their nationwide nice difference.

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Starting point is 00:44:40 author, and my daughter is my co-host today. Abby is with us in Oklahoma City. Hi, Abby, how are you? Better than I deserve. How are you? Better than I deserve. What's up? I know that you say bankruptcy is very, very bad, but I was wondering if there's any situations where it may be the only way out.

Starting point is 00:45:04 I am 34. I'm a single mom of two kids, and I am over $90,000 in debt, and I bring in about $64,000 a year, working three jobs. So I feel like I'm drowning and I've been doing the baby steps for like six months but really like going in deep with it seriously for about three months. And I just don't see like a way out. And I found out recently when I went to try and get out of my car loan that I'm $17,000 upside down. So I just don't know what to do. I'm sorry, you're scared. I'm very scared. I have a 13-year-old and a 1-year-old.

Starting point is 00:45:55 Wow. And my 1-year-old has very complex medical issues. So... The... How much do you owe on your car? 37,000. Okay. And so you bought a car that you can't afford, and it has made this whole thing happen.

Starting point is 00:46:15 Pretty much, yeah. My car loan is $850 a month. Oh, my gosh. Oh, my gosh. What is the rest of the debt, the other 50,000? So I have 30,000 student loans, 13,000 medical, 5,500 to my grandma, 2,200 in a payday loan when I was desperate, and I owe $2,300 to my lawyers. For what? Child support for my baby.

Starting point is 00:46:44 Is the child support coming in? Yes. Okay, good. We're just still going back and forth because he owes me. 26,000 in arrears. Do you think you'll get that? Yeah. You do.

Starting point is 00:46:57 Okay. When will that come? Do you know? Any time between the next 10 days and if we have to go to trial over it up to a year. But I will 100% get it. He has it. Oh, he has it. Okay.

Starting point is 00:47:15 He just doesn't want to give it. He wants to be told he has to give it. Okay. Well, we'll tell him. That's good. We can help him with that. All right, so you owe 37 on your car and someone told you your car is worth 20, like the dealer said that's what they would give you for it. I went to 13 different dealerships, and the highest I was quoted was 22.

Starting point is 00:47:38 Yeah, okay. Well, that's because they're all buying it at wholesale. Dealers do not pay retail for a car. They sell cars at retail, but they buy them at wholesale. And so who do you owe the 37,000 to? San Tander. What is that? It's a bank.

Starting point is 00:48:01 A local bank? No, it's one of those will finance anybody deals. So your interest rates 15%. 16.5%. Yeah, okay. I'm sorry. All right. And I tried, I had good credit when I got this loan,

Starting point is 00:48:17 so I don't really know what happened. I know what happened. You signed a loan that you shouldn't have signed. That's what happened. You screwed you. You allowed them to screw you. Oh, my gosh. You got taken to the cleaners.

Starting point is 00:48:30 I did. My engine was dying on my other car and I had a newborn baby and I went in and they saw a helpless person. Yeah, desperate. Yeah. Yeah. They got you. They got you coming and go. Yeah.

Starting point is 00:48:43 Okay. So, number one. The answer to your question is bankruptcy is not going to solve your problems, okay? Okay. Because the only way the car goes away and bankruptcy is if the car goes away. Right. Okay. And the student loans are not bankruptable.

Starting point is 00:49:03 Right. Okay. So that's the two of those things are most of the debt. Oh, and by the way, you're not going to bankrupt your granny either. No. Okay. So that's the time we had those three things together that you're not going to bankrupt, on or, you know, then you really haven't accomplished anything by filing bankruptcy because you're

Starting point is 00:49:25 going to have to pay the student loans and grandmother and you're going to get the car repoed, which you could do without bankruptcy. That's not a problem. Just quit paying it. They'll come get it. So it's okay to let it repo? Before you'd file bankruptcy, because you're going to lose it in bankruptcy anyway, right? Okay.

Starting point is 00:49:43 I just didn't know if that was. Have you just Kelly? I don't want you to do that. That's not my suggestion. But before we file bankruptcy, my point is bankruptcy is not doing anything for you. Right. Because the car, the student loans, and grandma, you know, so you end up bankrupting on $2,000 worth of stuff or something here. That's silly.

Starting point is 00:50:03 No, we're not going to do that. All right. But let's try to get you out of this mess. So, you know, I'm going to look up on Kelly Blue Book, KBB.com, what private sale is on that car. and you're going to find it's more like 28,000, but you're still 10,000 in the hole. You're not 17 in the hole, but you're probably 10. And I don't doubt, what kind of car is it? 24 Ford Edge.

Starting point is 00:50:28 Oh, geez. Okay. Boy, do they get you. Sold you a piece of crap car on top of it. But anyway. Hey, this is not a Chevy. Oh, it's just awful. No, there's a lot of shettys that are better than that.

Starting point is 00:50:44 I had. Anyway, the, yeah, so we need to get rid of the car. Let's try to figure out how we can sell it to an individual for 25, 28, something like that. Then where are we going to come up with a 10 difference? Any ideas? I'm praying that this check comes in. Any ideas? Yeah.

Starting point is 00:51:03 I've just been hanging on to getting that payment. So if that comes in, you sell the car the next day and you write a check for the difference. Yep. And then you free up. Okay. almost $900 a month. Yeah, and that takes care of that. And then you use some of the money to buy you a $5,000 or a $6,000 car that you pay cash for.

Starting point is 00:51:21 Okay. And your student loans are on hardship deferral anyway. You're not paying them right now anyway, right? I've been paying like $50 a month on them. Yeah, I wouldn't. I'd call them up and put them on hardship deferral. Let's just put them on hardship for six months and let's work on some of this other stuff. So, but we need to, the primary thing we've got to do is figure out of the way to get out of this car sooner rather than later.

Starting point is 00:51:44 So if it's going to be a year, I don't want you driving this car a year. It's going to be a year before you get the child support money. So if you're not going to get the child support money anytime soon, then we've got to find $10,000. Any other places you can get it? I mean, I could go into more debt with my grandmother. I just don't want to. No, I don't want to do that.

Starting point is 00:52:07 Any chance you could borrow $5,000, $10,000 from the credit union? No. Your credit shot. Because your credit's done. I lost my job when I was seven months pregnant. and I couldn't get another one until recently, and so I used my entire savings, everything, and so my credit is now not great.

Starting point is 00:52:28 Okay, Abby, you're not bankrupt. I don't know how much pain you're going to be in with this car before you get out of it, but that's going to be the answer, and that's the way through, because the car is the problem. You hang on, I'm going to have Christian pick up. I'm going to get you with one of our financial counselors,

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Starting point is 00:54:51 Ashley is in Dallas. Hi, Ashley. How are you? I'm good. How are you doing? Good. How can we help? So my husband is a business owner and when we got married, I signed a prenuptial agreement, you know, saying what's his is his and what's mine is mine. Since then I've had our daughter, I'm a stay-at-home mom, and I get told, you know, this is not mine. I don't have any staying the finances. I don't know how much money we're making or if we're making any at all. and but I get asked to do paperwork to do this for the business do this and this but I am not included in the said business. What do you mean paperwork?

Starting point is 00:55:41 Whenever something needs paid, it's they put it on me like you need to call and pay these bills or you need to get this insurance updated or can you constantly I'm getting told to do work for free basically. Okay. Well, you're obviously not okay with this situation, so what has happened to make progress so that it's not this way anymore? I assume you've had a discussion with your husband, like, I'm not okay with this. Well, in the beginning, I didn't have anything to do with any of the stories at all. I wasn't helping with anything. I just kind of stayed home with our daughter. Or not at the time we didn't have her daughter, but I just kind of stayed home when I was pregnant and when we had our daughter. But over time, I'm getting drag into it. I'm being asked to do a lot of stuff.

Starting point is 00:56:34 When I get asked, can I be added into anything in the business? So I have financial security for myself or if I can know any of the details about the bank accounts or anything like that, I'm told no. That this is not my business. And it's theirs and it's not mine. Okay, outside. It's whose? Theirs. My husband and his partner.

Starting point is 00:56:59 Oh, okay. outside of the business, Ashley, do you have access to money at home? Do you know what's sitting in your... I'm giving money to pay bills. There is never money put in our personal checking account, everything. They use money from the business checking account for everything, which I do not have access to. To pay your home bills, your husband is functioning out of the business account. Yes.

Starting point is 00:57:27 Do you like some sketchies going on? No. No. I mean, it's a small business. It's nothing big. They have a few locations for it. Your husband's kind of a jerk. Do you agree?

Starting point is 00:57:39 Yes. Okay. Probably work on that ends first. Yeah, like when prenuptials are involved, at what point, because I know when you all say, like, when you get married, everything's supposed to be confined, at what point is a prenuptial in that, like, in a disagreement? that? Well, here's the thing. It has nothing to do with the prenuptial. A prenuptial dictates what happens at divorce. It doesn't dictate what happens during the marriage.

Starting point is 00:58:16 Okay. It just says upon divorce, he gets his business. You don't get it. That's all it says. Okay. But a prenuptial is not a thing that says, okay, you are now a woman that's not allowed to any questions about her husband's business. That's not what a prenuptial does. It's not how it functions. Okay. So he had you do a prenuptial because he's a jerk, not because he owns anything of substance.

Starting point is 00:58:48 Okay. And so he doesn't own enough for this business is not that big a deal. It's not nearly as big a deal as he thinks he is. He's, you know, so, you know, you, you know, you, you, you, you, you, you, you, you, you, you, you, you, You don't have a prenuptial problem and you don't have a financial problem. You have a desperately bad marriage problem. So should I leave? Because at this point, it's getting very questionable because it's putting too much on my mental toll.

Starting point is 00:59:19 Yeah. No, I'm not telling you to leave. I'm telling you to work on your marriage. But quit defining it as a prenuptial problem or he's got a control problem at the office. No, he's got problems. and we need to be in marriage counseling, working on him treating his wife and child better. Okay.

Starting point is 00:59:41 Because, number one, from a business perspective, we coach 10,000 small businesses, we tell every one of them do not pay any personal bills out of your business account, ever. It's bad business. It's bad accounting. Your home electric bill is not deductible as a business expense, And so you should not be paying it out of your business account.

Starting point is 01:00:03 You take money from the business that's profitable, home, and you pay home bills with that. That's just good business practices. So he's not real good at business either. And you're not signing your name personally to anything, Ashley, are you? No. Good. He just wants her to do some of the accounting work. I know.

Starting point is 01:00:26 I've just listened to too many podcasts. Yeah. I hear you. Well, there's money of hours, yeah. No, that too, but money being sent in the Caymans and Ashley's names on it, and then the law comes after her. That's just what I didn't want. I went extreme for a second. But she seems clueless.

Starting point is 01:00:39 You seem clueless in what's going on because you have no information. So I just want you sign it stuff because they're telling you to. Like for instance, if you sign, if he's not filing his taxes properly and you sign the joint return. You're on the line. You just signed up for the tax problem. Yeah, we filed separately this tax season. Yeah. And the season before that?

Starting point is 01:01:00 Before that, we did not file together. I don't think we've only... How long if I've been married? We've only been married one year. Okay. But we've been together three or four years. Ashley, you have a tremendous marriage problem, hon. That's what you've got.

Starting point is 01:01:17 And we're not able to work on that in this setting effectively. We're not able to help you with that, but we can just help you identify that. So the situation you have, you're not crazy. weird and it's wrong. I can tell you that, just as a dad, just as a grandpa. If you're my daughter, as a husband, you know, as a friend, I would tell you to go to a marriage counselor. You need to go see a pastor, see a marriage counselor. And I don't end, I don't tell people to end marriages on this type of thing alone. But if this is the way you're going to be treated for the next 20 years, yeah, you shouldn't be there if there's no change. I would not, I would not ask someone to be an

Starting point is 01:01:59 abusive, toxic environment for 20 years. And I'm not going to tell you to do that. And that's what this is. This is abusive, toxic environment. So, and you don't have to be a rocket scientist to figure that out. You already knew that. But what I would do is say, I'm going to a marriage counselor. Are you coming? Because I'm considering ending this marriage. I'm not going to be treated this way anymore. So, and then go to a marriage counselor, even if he doesn't come and get some coaching and have someone in that kind of a setting, not some, not a couple people on a podcast telling you to leave your husband. We're not, we're not going to sign up for that responsibility. You should sit down with someone that guides you through this and gives him every chance to

Starting point is 01:02:47 turn around before you end this. And then you systematically bring it to an end at some point if there's zero change and zero hope that it's ever going to be any different. Yeah, because the picture of health in exactly what you're explaining, like we have friends and he does real estate deals and she helps and does the books. But they pay, you know, like they pay a salary out of their company to them. And she doesn't necessarily get it because they're keeping stuff in the business and all of it. But like they see it as one. Like we are a household.

Starting point is 01:03:19 And when we make money out of the business, it goes into the home. and whether you choose to quote unquote get paid or not, it doesn't matter because you guys are bringing home and income together that you're both in on, you're both working out of the same account, you're both doing this together. And so there's a healthy way to do everything you've just explained. You guys are just doing it completely backwards and the way you're being treated is just horrific, actually, from what you've told us. I hope a counselor can help God get a hold of his heart because the heart that he has right now and the way it calls you to sign a pre-up says, I like my business more than that.

Starting point is 01:03:52 than I like Ashley. That's what he's told you on the front end. And you went, oh, I'm okay with that. And you signed up. And I'm not okay with that. And you aren't okay with it anymore either. So I wouldn't marry a guy who likes his business more than likes me. Owning a business can be a heavy load.

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Starting point is 01:05:14 inventory issues, spotting cash flow problems in real time, and catching risks before they hit. So you're not just closing the books faster. You're making decisions confidently. And when your numbers are right, that takes a lot of pressure off your shoulders. And yeah, switching systems is a big move. But NetSuite's sweet success process gets you up and running fast. Go to NetSuite.com slash Ramsey for a free product tour and to schedule time with a net suite rep. That's netsuite.com slash Ramsey. Samantha is in Cincinnati. Hi, Samantha.

Starting point is 01:06:12 How are you? Hi, Dave. I'm good. How are you? Better than I deserve. What's up? I have a boyfriend. We have a one-year-old.

Starting point is 01:06:25 And it's always, when I make more money, we'll save more money. But now he's making three times the income that he was. And we're still not saving. I mean, money burns a hole in his pocket. It's gone as soon as he gets it. So I just don't know what you or how to help. because I filed bankruptcy. So we did not get married.

Starting point is 01:06:50 I mean, honestly, taxes, insurance. I get state insurance for the kids. And then I know, like, they'll count his income towards the bankruptcy. So we were trying to pay that off before we considered it. I'm sorry. You're in a bankruptcy now? Yeah, I'm in a chapter 13, where I pay it. back. Yeah. And how long have you been in the chapter 13? Maybe like six months. Okay. And how much money do you owe?

Starting point is 01:07:26 I think it's like, I think it went down to like 47,000 that I'm paying back. Okay. And how much do you make? So I had a high risk pregnancy and took off work and I just actually started back. How are you paying a bankruptcy? He pays it. So that's what he didn't file bankruptcy. Yeah, so he gives me the money for it. Oh, he gives you the money so you can pay it. Yeah. Okay.

Starting point is 01:08:01 So why didn't you get married? Because he's giving you the money for the bankruptcy anyway, as if you were married. I think more so he's worried about them taking, because they take it if you make over so much. Like, you know, they tell you if you make over, like, forever and they take anything. if he doesn't file only if you file. You're in a bankruptcy and you need to get out of the bankruptcy and get it paid off, and he makes enough money to do that. You shouldn't have been in bankruptcy to start with.

Starting point is 01:08:38 Yeah. Okay. You got bad advice. And he's looking for an excuse to not get tied into this. So you said kids. I thought you had one kid with him. I do. I have one kid with him. I have, and I have a kid prior. Okay. And is that child with you full-time, Samantha, both?

Starting point is 01:09:02 Yeah, I have both full-time. How old are they? 11 and 1. Okay. All right. Well, so the answer to your, the reason I'm asking all these questions is the answer to your question is that when you are married, your husband and the husband and wife joined together and they do life together and they clean up debts together and that that way they don't they don't have a reason to they don't have the freedom to blow the money because we have a mess to clean up and so right now he's acting like he's dating you not having children with you which is way different.

Starting point is 01:09:50 Right. I mean, if you said my boyfriend who I date, not who I have kids with, but a guy that I date is blowing some of his newfound income, I would say, well, you have a boyfriend that's irresponsible. Oh, darn. But you don't have a boyfriend. You have a husband in everything except legally. Right. Yeah.

Starting point is 01:10:14 But I'm nervous. I feel nervous to get married because I, Well, if he's not worth marrying, he's not worth living with and doing life with. Yeah, I guess that's true. Because it's the same stinking thing. The only difference is you put a piece of paper in place, and then we decided we're going to be two grownups that do life together. How would you recommend helping?

Starting point is 01:10:41 Yeah, I would recommend that the two of you start seeing a couple's counselor and make plans to get married and then make plans for the two of you to combine your finances and get your bankruptcy dismissed and clear those debts working together and raising these two children together and build a beautiful life together over the next 10 years. But right now there's this disconnect in his brain between his responsibilities and his realities. He's acting out. He got a huge raise and he goes and blows it all. He's acting like a single guy.

Starting point is 01:11:20 Dude ain't single anymore, honey. Right. But the hard thing is there's no major leverage to pull because he's not married. You know what you mean? Exactly. That's the messiness of doing this. And here's the problem. Here's the problem.

Starting point is 01:11:36 The number of couples that do what y'all are trying to do that succeed financially and relationally is very close to zero. The data is in. The statistics on shacking up and playing house are horrendous. It does not work. The number of people who become millionaires shacking up is almost zero. It's almost zero. And not even the money piece, the relational piece, Samantha.

Starting point is 01:11:59 You know, like, it's just because there's no, he doesn't have to commit to anything. He could choose tomorrow to walk out and there's no legal revocations. Except possibly some palimony. I mean, child support. Child support, yeah. But, yeah. And you'd have to go after that in a weird way because it's not a divorce and not a breakup. So I think the two of you need to sit down and go, okay,

Starting point is 01:12:20 we've been acting like a couple of 16-year-olds in heat, and we're going to have to change that. We're going to have to actually be two grown-ups now and go and build a grown-up adult-like life where we are responsible to and for each other and two and for these children. Yeah, I was going to say, and there's a part, too, of like, we've created a human together. We don't have a choice on whether we're going to choose to be adults or not. We have a child in this world. So we made that decision when we chose to do this. three X rays, which you used to make, and your wife sits in bankruptcy. These are not even things that should come out of someone's mouth.

Starting point is 01:12:59 But it does because of the arrangement you all have allowed yourself to get into. And so what I would advise you is to go see a couples counselor and start working through some of these issues and sometime in the next 30 days, go see a judge or a pastor and get married. And then let's put our finances together. Let's put our incomes together. Let's put our problems together. And let's put our dreams together. And let's go live this life in a prosperous and fun, wealthy, healthy, relational way.

Starting point is 01:13:30 And these children are going to grow up in a much better situation then. And they're going to be much more functional. Yeah. Unless he's just a horrible person. If he is, why are you there? That's right. Then you got to call it, Samantha. Then go the other way.

Starting point is 01:13:43 Yes, yes. But I didn't hear of that. All I heard is an irresponsible child. No, I know, I know. She's got three kids. Yeah, that's what I heard. Yeah. So, bless your heart.

Starting point is 01:13:54 I mean, but that's what I would tell you to do. And so I went places you didn't think you were going to go. You thought I was going to tell him how to straighten up and not overspend. But the him's not, him overspending is a symptom of the situation you all put yourself in with the choices you've made. And so that's what I would tell you is to fix that. Because, again, the data on millionaires, and 89. percent of them, nine out of ten millionaires, did not become millionaires because of inheritance, which means they did it. And so you study how they live, what their habits are,

Starting point is 01:14:26 what their processes are if you want to be one of them. Okay. And one of the things that keeps coming up over and over and over again is we saw almost zero. I mean, there was less than four percent were not married. And we're living with someone they weren't married to. They're all married and 84% of them that are married, some of them were single, but 84% of them that were married said, I have a cooperative, aligned, goal-setting spouse that works with me, not against me. And that's how we got here. Yep. We didn't get here by dragging a princess or dragging an irresponsible 16-year-old little boy

Starting point is 01:15:07 along the way against his will. We didn't get to millionaire doing that. And so the data is in on this. It's ridiculous. The net worth of a single lady that's shacked up as compared to the net worth of a lady that's married at 35 years old is 13 times less. That's the data. We wish we could get to every call and every question here on the show. And if you have a money question and you want an answer for your situation, here's a quick easy way to do it.

Starting point is 01:16:20 go to our website ramsysolutions.com and click on ask ramsie. Ask ramsi is our free AI tool that's built and trained by proven Ramsey principles. See, if you don't know how AI works, AI is going to regurgitate, spit back out what it has in it. So it's only as good as the data set that's entered into it. And so if AI is researching everything in the entire web, it's got a bunch of junk in it. But if A.m. AI has only been fed the diet that you wanted to eat, it's going to spit back out what you have fed it. And so all of the last three years of shows, us answering questions, are dumped into this tool. All the books we've written are dumped into this tool. All the financial peace university lessons are dumped into this tool. And so it has every article on ramsysolutions.com. All of our articles that we've written. So all of the knowledge base that you hear us putting forth here on the air is dumped into this tool.

Starting point is 01:17:19 and then AI answers the question. It's almost as smart aleck as I am. It's crazy. It's not quite. Actually, I want to add a little sarcasm to it. You probably could say, answer this like Dave would, and I bet it would. Probably get in your face then, yeah, probably bust on you. I love you well, yeah.

Starting point is 01:17:35 Ask your question today at Ramsey Solutions.com. It's completely free. Check ask Ramsey. Ramsey Solutions.com. You're going to love this tool. By the way, it's very popular. A lot of people using it. All right.

Starting point is 01:17:47 Jason is in Atlanta. Jason, how are you? Great. How we go? Better than we deserve, sir. How can we help? Well, about eight months ago, me and my wife decided we wanted her to be a stay-at-home mom. And that's about the same time that we heard about the baby steps and started listening to your podcast. And so far, we've paid off about $53,000 in debt. Good for you.

Starting point is 01:18:09 We have about $8,000. Way to go. Nice. But my wife's a teacher, and when she quits in May, they're telling us that we can take. her retirement out with no penalty because she's no longer an employee, but we also can't put any money back into her retirement. That's not true. No, no, no, no.

Starting point is 01:18:28 Stop, stop. That's not true. You misunderstood what they said or they were just in error, one of the two. You cannot take your retirement out with no penalty. You can take your retirement out without them withholding, but the IRS has a penalty. Okay, yeah, just paying taxes on it. Yeah, and 10 percent. penalty.

Starting point is 01:18:49 Oh, okay. Yeah, taxes and 10%. So no, we're not going to do that. How much has she got in her retirement? Probably 10,000. Oh, not much. Okay. Well, basically, if you cash that money out and use it,

Starting point is 01:19:02 it's going to hit you about 40%. 30% tax bracket plus a 10% penalty. So it's kind of like borrowing $10,000 at 40% interest. Oh, wow. Yeah, wouldn't recommend it. So we should just move that to my retirement. No, I'll just move it to an IRA with a SmartVestor Pro, get on Ramsey Solutions and find SmartVestor Pro in your area and roll it. Anytime you leave a company, we tell you to roll your retirement into an IRA so you can control it and pick some good mutual funds.

Starting point is 01:19:32 So you have $8,000 left and you've already paid off $53,000 and you've got until May to finish up? Yes, sir. Way to go, man. You've done so good. Well done, y'all. What do you make? $1.70. Oh, okay.

Starting point is 01:19:46 So you guys can live on your income and finish up the $8,000, right? Yeah. Okay. Good, good. Way to go, man. What do you do for a living? Oh, my mom, my lineman. Oh, wow, good for you.

Starting point is 01:19:59 Excellent career. Excellent. Okay, cool. And so how many babies have you got? We got two along the way. All right. So you're going to be home with three babies. Very cool.

Starting point is 01:20:11 And she's been a teacher, but she now wants to be home with the babies. That's awesome, man. Yes, she. And you're bringing home the bacon as a lineman, and so y'all can afford to do that. And you cleaned up the $53,000. Great job. Proud of you, man. Go get them, Hero.

Starting point is 01:20:27 Yeah, just knock the $8,000 out and roll the $10,000 over into an IRA. We don't want to give the government half of it just because it's a small amount. I still, if it's $100,000, you'd really never do it. But at $10,000, you're like, well, whatever. But it's still $4,000 you're giving up for no apparent reason. So, no, I would roll that and... Just let it grow. Into an IRA and let it grow.

Starting point is 01:20:49 Very, very good question. And again, congratulations. I'm proud of you. Tanya's in Richmond, Virginia. Hi, Tanya. How are you? Hi, Dave. Hey, guys.

Starting point is 01:20:59 Hi. What's up? Hey. So, I am a mother of three, and I have a faith-driven entrepreneur. I am a faith-driven entrepreneur, and I have a business that's a baby. So she's only about two years old. I am a concierge therapist. And I am trying to figure out.

Starting point is 01:21:18 My question is, is how do I continue to grow my business successfully with also trying to get out of debt personally? I feel like I'm using my business money a little too much for our personal debt. Our. You're married. Yes, sir. And what is his income? So he works for the business. the government and he makes approximately about 70,000 a year.

Starting point is 01:21:46 Cool. And what are you making profit on your concierge therapy business? So last year was my second year and profit was approximately around 34,000. Not so much. Okay. And so is just like a concierge medical where you're getting an annual or a monthly fee and then you're just like on call as their therapist? Yes.

Starting point is 01:22:10 So what I do is I do fitness and wellness. So I go to people's homes, so I don't have the brick and mortar, so I don't have a lot of overhead. Oh, that's the concierge part. That's the concierge. Yeah. Okay. Okay. So, all right.

Starting point is 01:22:23 And so where are you getting your clients? Word of mouth, I do a lot of networking. Like, I network all the time. I have been doing my best to grind. Like I said, I want to be the steuer of what's given me. Yeah, and that's awesome. And so how would having more money expand? that part of the business? How would the business grow if you had more money in the business?

Starting point is 01:22:48 Because you're not spending money, you're spending hustle. Yes. My goal is to eventually get a brick and mortar. So I would love to grow the business financially so that eventually I can't get a brick and mortar. Yeah, but you asked if I'm taking all the money out of the business to pay debt, I feel like I'm not growing the business. But you're not growing the business with any money costs. You're growing the business with your sweat. Oh. Yeah, that's true.

Starting point is 01:23:20 So you're not starving the business growth due to the money coming out to pay debts at home, but you're just not making much. I mean, $34,000, you're not making any money yet. You need to be making three times that to start being, to justify being a therapist, right? Yes, sir. Yeah, so I assume you're licensed? Yes, I am licensed, but I don't, I do private pay. I don't take.

Starting point is 01:23:45 Yeah, I understand, but you and I know marriage counselors that make $150,000 a year. Yes. Okay. All right. And so that's my point. You know, if you have a unique take on this and I love the nuance of it. I think it's cool. Tanya, is there, because you said you have three kids, do you have the time to have more clients and that's their problem is that you're not getting more clients?

Starting point is 01:24:07 Yes, that's exactly. Okay. I do have the time. Yes. Okay. And how much debt do you guys have at home? So we did have a home that we have about two grand. I think we own about 210 on that.

Starting point is 01:24:24 And we did actually just take a HELOC out to pay off to consolidate the debt for my student loans because the interest rates were extremely high. And I felt like every year I was just paying off interest and I wasn't able to actually pay off the student loans. We did combine a few of our credit cards. And what you've discovered now is you can't borrow your way. out of debt. So, ouch. Yeah. So you're going to have to earn your way out. And so this is, you're going to,

Starting point is 01:24:51 if you're going to create more income, you're going to have to arrange your life in such a way that it allows for that. And, and so I would love for you to be booked up enough that you're making $100,000 instead of $34. And then you're not calling me because you're, you're starting to plow through this debt then that's been consolidated. You're starting to see a way through it. But, you know, so what you're dealing with is you've got three. three kids and $103,000 income and a pile of debt. And you're underutilized in terms of what you could be making in the marketplace. But because there's not much overhead, I'm okay with that 34 saying, okay, all my work is going to go for us to pay this and then his is going to go to debt.

Starting point is 01:25:31 Like, you don't even mean like you can kind of slice it that way. Yeah, but she needs to be making 100. She needs to be making more. Yeah, but she said it feels like it's all going to the debt and the expenses. But that's okay because you're at least paying off debt. Exactly. Which is helping. Exactly.

Starting point is 01:25:43 It's not costing your business. other things are. Welcome back to the Ramsey Show in the Fair Wins Credit Union Studio. I'm Dave Ramsey, Rachel Cruz, Ramsey Personality, number one bestselling author, and my daughter is my co-host today. Michael is in Little Rock. Hi, Michael. How are you?

Starting point is 01:26:24 Good. How are you all doing? It's a pleasure to speak with you all. You too, sir. How can we help? Well, I am a 24-year-old father of one. I've got a fiancé that's a stay-at-home mom. When I was born, I was born with some disabilities.

Starting point is 01:26:38 due to the medical, and I actually sued a Fed company that caused these issues, you would say, and that settlement pays out in two months, and I'm really lost on where to start. It's about $400,000 total that I will be getting. Wow. And I think my main question is, should I immediately clear any debt and use my income to build wealth? The data tells us that that's the most, sure way to build wealth. The downside of that is the guy in your mirror. You have to follow through. So if you blow them, I mean, if you pay off all the debt and you don't take care of your income and use it to build wealth, then you're going to have just blown the money, right? Yes, you're very sure. Well, then can I ask you. How much debt do you have?

Starting point is 01:27:34 $400,000. Oh, debt is roughly $70,000, and that's between cars and medical bills only. Okay. I don't do the whole credit card schemes. I think that's all just a scam. Okay. So when are you getting married? We haven't set a date in stone yet due to this trustee payout. Why?

Starting point is 01:27:56 What's the trustee payout have to do with getting married? I'm not really sure, honestly. It kind of comes to do we want to spend money on a wedding? Do we just want to elope? I want to elope. My wife wants, well, my fiance wants to have a wedding, so we're kind of stuck between the two. Yeah. You're having a wedding.

Starting point is 01:28:19 That's what everyone's been saying. Yeah, you lose. You lose. So how much are we going to spend on the wedding? I didn't want to spend over 8,500. Okay. What is the nature of your disability? I was born with bilateral club feet at birth, and I've had over 32 surgeries.

Starting point is 01:28:41 on my legs. How are you doing now? It's a struggle, PT twice a week, exercise, but it's definitely something that I... What do you do for work, Michael? I'm a lot manager for a car dealership,

Starting point is 01:28:57 so my job's pretty laid back. Okay, so what do you make? I make 1850 an hour, and I don't make less than 45 hours a week. Okay. And you're able to live on that? In a way, yes, comfortably no. Right. So what's your long-term career plan?

Starting point is 01:29:21 I am very big on wanting to start investments. I'm not sure where to start with that. I've looking to mutual friends. That's not a career plan. That's investing. What's your career plan? I think my career plan is to stay in a dealership life, potentially in a financial role. Okay. So I want you to start moving towards. something that doubles or triples your income on purpose. And I don't know what that is exactly. Dealership life is fine. I have no issue with that at all. There's a lot of money in the car business. And a lot of people make a good living, a great living in the car business. But I want you to start thinking about, okay, what's the 32-year-old version of you look like?

Starting point is 01:30:08 Because you've got a 10-year-old and a wife at that point. Right, yes, sir. And 1850, you ain't going to cut it. And my fear is that you think this $400,000 you invest in, you're just going to live off of it the rest of your life. And that just wouldn't be good for you, Michael. What I want to do is create – and it's not enough. What I want to do is create a life where you don't need this money. And then the money will explode and do fabulously for you. But create a life where you don't need this money.

Starting point is 01:30:36 And that involves getting married and spending – I think you're going to spend $20,000 on your wedding, not $8,500. Oh, God, don't say that. No, that's way less than the average, by the way. But maybe 15. I don't care. But you two put together a budget between 10 and 20 that you can both agree to and set that money aside out of this money. You pay off the rest of your debt out of this money. And I want you to also think about is there a class or a certification I need to take to move towards what I need to become to be a great dad, a great husband at 31 years old that makes a lot more than 1850 an hour?

Starting point is 01:31:13 Okay. Awesome. I, for another, would you immediately max out your off account if you were handed $400,000 today? Yes. And I would immediately pay off all those debts and I would immediately set aside $15,000 or so for a wedding. And then I would build a life that doesn't need this money other than that and just let the money grow. So, and I sit down with a smart investor pro and learn about mutual fund investing. But mutual fund investing is not a career and $300,000 will not produce enough for you guys to live on.

Starting point is 01:31:44 So it sounds like a lot of money because you've never had that much money, but it's not going to create enough money for you to get the life I want you to have. Not yet. It will in 10 or 15 years. So if we can leave 300 of the 400 alone, which is about what it sounds like we're going to be doing, okay? If we leave 300 of the 400 alone and put that in investing, including a Roth IRA and some good mutual funds,

Starting point is 01:32:11 in seven years, that'll be 600 and 14, years, it'll be a million two. And so when you're 35 years old, you'll have a million dollars in that account. If you keep your stinking hands off of it, because you build a life without the money. You build an income, a career track without the money that feeds your family, and then you let this thing do, let this money go over here and cook. So money is not microwavable, but it is, does really good in the crock pot. And so that's what we're setting up here, is let it leave it alone, let it cook. And, but if you, if you keep screwing around and buying cars, you can't afford and putting

Starting point is 01:32:51 them all payments. Or you can't afford, but you just buy them. Yeah. Well, you pay cash for whatever car you buy. Yeah, but if he takes that 300 and starts going on vacation, buying cars and living off of it, it'll be gone. It'll be gone to 20 minutes. Yeah.

Starting point is 01:33:01 And it won't have doubled if you take the interest off of it. That's right. If you take the income off of it, you don't let it alone. Pretend like you don't have this money and it will set your life up and your children's life up and your grandchildren's life up. But you're going to have to leave it alone and go have a life of your own and build out the career side of things. So hang on, I'm going to send you a copy of finding the work you're wired to do by Ken Coleman. It's got a great career assessment in it to get you to thinking.

Starting point is 01:33:27 And you and your fiancé, get the wedding planned and get married. You have babies, get married and start your life off. Do the stuff that the data tells us is going to cause you to succeed. And Michael, go sit down with the SmartVestor Pro. Don't go to someone who's explaining stuff that you don't understand and put it. put it in a boring mutual fund or an index fund or something. But like, look, make sure what you're putting that money into is boring, has a good track record. And again, just setting it aside.

Starting point is 01:33:55 Don't talk to someone. It's like, oh, you can invest in this business over here and do this and that and that and that. Bitcoin and I'll make sure you lose all of it. Put it in something boring with a great track record and leave it alone. I'm telling you, that's going to be your best. That's going to be your best bet. And then you get to look up at 50. You got a couple million in there at that point.

Starting point is 01:34:13 you're like, well, what do we want to do with our lives? 50, it'll be 10 million. Then you get to make some great decisions. But don't let 24-year-old Michael do that now. Just wait. And you're very wise to ask this question. And you've got a whole lot more of an answer than you were looking for. You spend hours researching before making a major purchase like a home or car,

Starting point is 01:35:00 but it's also a good idea to put in the work searching for the right insurance coverage. To protect your biggest assets, I recommend using Ramsey, trusted pros. Whether you're looking for car, home, or any other type of insurance, Ramsey trusted providers have been coached and vetted to serve you like we would. Find what you need at ramsysolutions dot com slash insurance. Cassandra is in Raleigh, North Carolina. Hey Cassandra, what's up? Hi, Dave. Hi, Rachel. My husband and I are finally combining our finances. Yay. There's a couple charges that we're not quite sure where to put them in our budget. And my initial thought was to put them straight into what would be our personal funds,

Starting point is 01:36:06 but I'm unsure if that's good, and I want to set a strong foundation for the future. Good for you. So I'd love your opinion on that. Thank you for phrasing that that way. What is the category? So the categories are like a subscription to a deodorant company. An alcohol budget for my husband. For me, I set aside a little bit of money a month to go out with my mentor or my

Starting point is 01:36:40 co-workers or my boss for drinks or for coffee or something to kind of be there with my co-workers and build relationships. essentially you could you could just have an individual line item for each one of those things and just call them what they are that's fine and we are agreeing to the deodorant budget we are agreeing to the mentor budget and coffee budget we are agreeing that you know you're we're allocating this much for you to have a cocktail after work or whatever it is that he's doing and we're agreeing to that and do it very individually And or you could do what you're talking about, and that is just increase your personal by that much, and you just take care of that within your personal. He could in his, quote, his fund money, and you could in your fund money, right? Either one's fine. Here's what's interesting. Here's what we did as an example at our house that ended up being weird.

Starting point is 01:37:39 we originally separated food and restaurants and I recommend that when you start when you start budgeting yeah groceries and restaurants because otherwise you'll go to the restaurant and eat your groceries yeah and you want to be money for the grocery store okay so we separated them initially after doing it for several years we got disciplined enough that we were able to just call it food and forget it but when we first started we needed the individual detail. We still keep it separate. You do.

Starting point is 01:38:13 Okay. That's good. Yeah. Nothing wrong with that. That's what I was going to say. And then we have, Cassandra, I don't know if you all have other subscriptions. We have a subscription line item in our budget that like Disney Plus, Amazon, like these things drop in. Yeah, but that's not deodorant.

Starting point is 01:38:26 Well, it's a subscription. I know. But I mean. I would count it as a subscription. Okay. It's just an Amazon button. I mean, that's almost, that's almost in like food and toiletries. I testify not putting too much in my personal.

Starting point is 01:38:39 I try to avoid to spin and I allocated it elsewhere. My point is it might be a good exercise to just make them line items for the first year. And then over time, you'll go, okay, I get comfortable with just melding them all together. So what we have ended up doing is we used to have a bazillion line items and ours are now very broad buckets. Okay. Because, but I've been doing it 35 years. Okay. So, you know, it's different, right?

Starting point is 01:39:09 But when we first started, we needed like the emotional shock of looking down and seeing my mentor coffees cost that much or his drink, his, after his happy hour costs that much, you know, and he needs to see that and go, yeah, and you need to see that. And it's good for everybody to get all that. So I would run it out as just individual line items, and you can do that in every dollar. You can add customized line items very easily, just because, just for visibility. And it's just kind of a reminder. I spend that on alcohol. I spend that on deodorant. You know, and it's just, that's okay if you do that.

Starting point is 01:39:51 I'm not griping at you about any of that. But I think the line item is just like staring you down every month and going, making you make a value choice. Is that really how I want to live? Is that really who I want to be? Yeah. And you might decide, I'm spending too much. Or I'm not spending enough on that. Yeah. Yeah. And then if you feel comfortable with it, then I would probably lump anytime we go out to a restaurant, even if it is for coworkers or if he goes out with friends for lunch or whatever. We just dump everything into the restaurant category. Like if we go out to a restaurant, that's where it is, regardless of reason. And then I'd probably move, yeah, a deodorant subscription to your personal line item. That's what you're choosing. Later on. Later on. Yeah, yeah. So that's probably where I would go. But for the first, yeah, a couple months, six months. Maybe the first year. As detailed as you can be, I think it is just a good rhythm to be in to be able to see

Starting point is 01:40:38 those charges and just see, okay, that is, that's the transaction for that. It kind of, folks, for those of you thinking about this, because we're talking to all of you out there, not just her. It kind of falls in the same place in your brain that doing the budget at all. When you wrote down everything, you're like, holy crud. Yeah, yeah. You know. And so that's the thing you want to have happen.

Starting point is 01:41:02 But you'll feel like you got a raise when you do a detailed monthly budget before the month begins and you tell every dollar what to do before the month begins. You always feel like you got a raise because you always have this experience of we spend what? Yep. And we don't have to do that. We can lower that category. That's ridiculous. And you also have the experience of where's all this money going?

Starting point is 01:41:24 I mean, the chaos and the disorganization in our life is eating half our salary. And so you have that experience. and the shock effect of that starts to modify your behavior where now you're controlling your life and your money instead of your life and your money controlling you. And this is a, what she's talking about is a brilliant question because it's, not only did she phrase it properly, I want to lay the right foundation, but she's recognizing that I'm setting new grooves in my brain. I'm setting new rhythms in my thinking and the way my behavior is acting, acting out in this.

Starting point is 01:41:59 and so I want to be careful how I do that. That was our indirect comment, but it was a great comment. So really good question, Cassandra. Thank you for doing that. I appreciate you calling. Rose is in Phoenix. Hi, Rose. How are you?

Starting point is 01:42:14 I'm fine, Dave and Rachel. I appreciate you listening to me and answering my questions. Sure. How can we help? Okay, well, just quick scenario. I'm 72. My sister, whom I live with, is 70. We share our property together.

Starting point is 01:42:30 Uh, she has, uh, my sister has owned this property. She's the one who initially bought it like 30 years ago. I have moved on to this property and been here for about the last 10, 11 years. Um, uh, I mentioned to her at the beginning of the year that, uh, this year that I was thinking about paying off half of the mortgage because I've been saving and saving. I've been listening to you for several years, Dave and you guys, I appreciate you so much. Um, but basically she got mad at me. for doing that and claiming that I did it behind her back. She also had the flu about last month.

Starting point is 01:43:10 Sometimes she was sick for three weeks. She's self-employed. I'm retired. I do get my Social Security, and I do get a patient. The house is in both of your names. Correct, yes. So why did she not want you to pay off? Why did she not want you to pay off half the mortgage?

Starting point is 01:43:25 She claims that I paid the mortgage off. This is in early February, the first, second to the fifth, while she was sick of the flu, and that I took advantage, she says, of her being ill and doing this without consulting with her. And I said to her, well, Teresa, you're my sister, but you're not my parent. You're not a spouse. And you're not my boss. Does it harm her in some way? I'm sorry?

Starting point is 01:43:53 Is it going to harm her in some way? way? No, my gosh, Rachel. We went from $237,305 down to, we're now down, well, we both paid our half of the mortgage February the 1st, of course, excuse me, March the 1st. So with that payment, which our monthly payment is $1,510.4 cents a month. So we split that in half. So now our mortgage is down to come April 1st. Our current mortgage pay. or total is. So I don't understand why she's mad. How is she hurt?

Starting point is 01:44:31 How did she hurt? Well, she's mad because, well, okay, I forgot to make that point. She, when she talked with me the other day about this, she said, now me paying off half the mortgage is screwing up her getting a trust placed on our entire property. Now she can only do half of a trust. Is there such a thing? It's half a trust. This is, and I said to her, is that what you're?

Starting point is 01:44:55 attorney told you. No, there's no such thing as a trust on a property that you don't own all of. She can't put this property into trust. She doesn't own it all. Even if there was a mortgage or not a mortgage. Doesn't screw it up at all. So she's got bad information. And she's just so she's mad about something she doesn't even understand.

Starting point is 01:45:14 No reason to be mad. But it is weird you're continuing to pay the payment when you don't owe your half anymore. Hello. Hey guys, Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now, you can get that same kind of help anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help.

Starting point is 01:45:56 It's fast, simple, and free. free to use. Go to Ramsey Solutions.com and try Ask Ramsey today. That's Ramsey Solutions.com. If you're working the baby steps, the best and fastest way to do it is by following the Ramsey plan and every dollar will guide you right through that. More than just a budgeting app, the plan is built into every dollar. You can track your progress, get personalized recommendations and coaching for your

Starting point is 01:46:39 situation. It'll help you free up more money and work the plan faster. which means you're going to get out of debt, build wealth faster, be aligned with your spouse faster, which means you're going to get out of debt and build wealth faster. You see how this is working now, right? Start every dollar for free by downloading it in the app store or Google Play. Donnie is in Richmond, Virginia.

Starting point is 01:47:02 Hi, Donnie, how are you? Good. How's going, Dave? Better than I deserve. What's up? So my question is I started a side hustle about 13 months. months ago with my son, basically a TikTok shop. It's done pretty well, in my opinion.

Starting point is 01:47:19 I'm kind of thinking about leaving my job. My wife's saying, hey, go all in, do this full time. Sounds crazy to me to, like I said, leave my career to do a TikTok shop. I'm sorry, what is a TikTok shop? So TikTok is, I'm sure you've heard of the apps. I know TikTok, but I don't know what a TikTok shop is. Gotcha, gotcha, gotcha. So it's a marketplace on TikTok where we go live and we sell.

Starting point is 01:47:43 things to other individuals. We sell sports cards. Oh, okay, I got you. Okay, so selling things on eBay or selling things on Facebook Marketplace or selling things on TikTok. I got you. Okay, and what are you selling? We're selling sports cards. So we do live selling, so we'll open the cards for people. They buy them, and then we open them on the screen for everybody. And everyone is excited. We had a big card. Gotcha. Okay. And what are you making? So last year was our first year, really hitting it hard. We did it every night. about $200,000 and $60,000 of that I gave to my son. Profit?

Starting point is 01:48:19 Profit, yes, profit. And overall revenue was over $700,000. Okay, so you had $500,000 invested in the cards? And other things, yeah, we could probably be a little more efficient this year. It was our first time. We didn't really know we were doing, so we had to buy things a couple times, didn't really know exactly. But, yeah, mostly cards. The cards are very expensive.

Starting point is 01:48:37 But, yeah, you're buying them and sell, I mean, you're buying them for $500 and selling them. for 700 and profiting 200. So your cost of goods sold was 500K. Does that sound right? Roughly, yes. Okay. And what do you make at your day job? About 100,000.

Starting point is 01:48:53 Okay. So you made twice as much at this as net profit as you did at your day job? Correct. And you did it at night. But I'm guessing at night is when you do this, right? Well, there's people on there doing this all day long. Yeah, but I'm thinking prime time. is prime time.

Starting point is 01:49:13 Well, it is, but at the same time, that's old school thinking. It is, it really is, because when I see them all during the day, they're doing just as well during the day. I see people doing, you know, having six or seven of these guys streaming at a time all day long. But I was with you. Prime time seems like nighttime,

Starting point is 01:49:30 but it seems like when I go in the mornings on the weekends is also prime time. Okay, all right. I don't know. I've never done it, so I just was guessing. Okay. What kind of job do you have? What's your career? So I work in finance.

Starting point is 01:49:46 Okay. Well, that's pretty vague. What do you do? So I do, I work for a military contractor company. We do DOD work during the day. Okay. Cool. So how hard would it be to replace that if TikTok falls up? I mean, I wouldn't think very hard.

Starting point is 01:50:03 I was a blue collar worker in my former life. So if I needed to go back to work and do something, I think I could probably do pretty much anything. and get a job. Okay. I would do it. Really? Yeah, definitely. Okay.

Starting point is 01:50:19 You have a year track record. There's no reason to think it's not projected into the future reasonably. I think you'll make 300 or 400, not 200. But with the caveat always, with the social media world, as you know, Donnie, I'm like, it's ever-changing. AI is changing everything. It's just knowing that this may not, it may be long term. I pray it is for you. No, it won't be.

Starting point is 01:50:40 will not be around in five years. You understand? This will sunset. And so be watching for the next way that people are selling stuff. Okay. This is a very cutting edge early adopter process that a small percentage of the population is participating in and even knows about for that matter. Overall, okay.

Starting point is 01:51:04 Now, it's not like a mainstream thing. like you walk into a 57-year-old or 67-year-old grandmother. She's not going to even know what you're talking about, right? And so it's not mainstream. And because it's technology and social media-based, a hundred percent chance it's going to change dramatically between now and five years. So be looking for the next way to do something similar or just close the thing up when it's done. Don't be looking up.

Starting point is 01:51:36 going, oh, well, what happened to my business? Well, it changed. You can 100%. Because, I mean, think about five years ago, nobody could spell TikTok. Yep. And it feels like 20 minutes ago, the Internet wasn't even real. Very true. And so it's not.

Starting point is 01:51:56 So it's just some caution, but do it. Yeah. But if I had based the things that we do at Ramsey on a single platform, we would be out of business. Makes sense. And we're trying to pivot to other avenues. What not is reached out to us eBay Live. It's just a matter of, I don't have the time to do it unless I leave my main job. Yeah, I would be, I would be investigating eBay Live. I'd be investigating anybody that's doing something similar where you're on multiple platforms accomplishing the same kind of tasks. Okay. And that way, you're not married to one platform. And when it has an issue, you know, like there was a moment in time that,

Starting point is 01:52:36 TikTok was completely in jeopardy of shutting down all the way. Like the U.S. government shut it down, right? And so, you don't want that to happen and be standing on one leg. Exactly. Yep. Nope, 100%. So, yeah, as long as you keep that kind of a mindset in your business acumen, then, yeah, go make $300K for the next two years while you're discovering the next thing to do.

Starting point is 01:53:00 Okay. And bank all of it. Don't spend it. And that's what I've been trying to do with just put it all to the side. That was my other caveat is, do I pay off my house or do I keep just loading up the bank account? Yeah. That's very cool, Donnie. It's very interesting.

Starting point is 01:53:16 And good for you. He goes from blue collar to finance at the DOD to TikTok entrepreneur. This guy's flexible. It's good. He's flexible, man. He's able to do just about anything. So, yeah, that's the good thing. Yeah, and so you don't ever want to base your career or business idea on something that probably has a fairly short shelf life without having a plan for moving on to the next thing.

Starting point is 01:53:42 But, man, what a great cool. I'm glad you're making so much money. That's awesomeness. Very neat. Chris is in Roanoke. Hi, Chris. How are you? I'm good, Dave.

Starting point is 01:53:51 How are you? Better than I deserve. How can we help? Well, we've ended up, unfortunately, in Baby Steps, says, and now we have 529 accounts that we don't really need. We're able to cash flow to college. And we're debating what to do. Don't cash flow the college.

Starting point is 01:54:07 Use the 529s. And then if we want to do additional investing for the kids, we should just do that on the side. Yeah. Yeah, I mean, but use the 529s for college. It gets the money out of there. That is cash flowing it. And then use the cash that you're going to use for college to do if you want to build an account to the side, just an Utma, Uniform Transfer to Miners Act, which is simply a mutual fund in the kids' name.

Starting point is 01:54:30 and then they can buy houses and weddings and stuff with that without having any issues of the 529. But don't cash flow college and trap 529 money. Well, I've asked the kids about it. They're both in college now. One of them was interested in leaving the 529 intact to use it to pay for his kids college, and I didn't know how good an idea that would be.

Starting point is 01:54:52 No, I wouldn't do that. And then the other one wanted to, we talked about putting half of it in a, a raw IRA and put in the other half just in a brokerage account. They're both, you know, they're not minors. They're college students now. And we can certainly pull out the same amount equal to their tuition and then just use that for anything, really, I suppose.

Starting point is 01:55:15 Yeah. Yeah, but that's using it. I mean, so, I mean, we get the money out of the 529 is the answer to your question. And then whatever you guys want to choose to do with that money and how you want. If there's leftover, he can use the rest for the kids or you. Yeah. But I would rather have a pile of cash for your son's kids in mutual funds that's not in a 529 than have it in a 529 because I don't know what 20 years is going to do to 529s. When I talk to people on the Ramsey show, 90% of the problems I hear come down to one thing, not having a plan.

Starting point is 01:56:18 They're not living on a budget. They have no idea where their money's going. Money is just happening to them instead of them happening to their money. And guys, that is so normal. but it doesn't have to be normal for you. And that's why I want you to go download our Every Dollar budget app. Every dollar not only helps you tell your money where to go with a budget, it also builds a plan to free up extra money so you can pay debt off faster and start building wealth.

Starting point is 01:56:45 And the best part, your plan is completely personalized to your life. It's the same advice that you would get if you call the show. And it's right in your pocket. So don't keep living at normal. Go download the Every Dollar Act. app, answer a few questions, and get your plan today. Our scripture of the day, Luke 1428, suppose one of you wants to build a tower. Won't you sit down first and estimate the cost to see if you have enough money to complete it?

Starting point is 01:57:25 Mitch Albem said, one half of knowing what you want is knowing what you must give up before you get it. Oh, there it is. Our question of the day is brought to you by why refi. student loans are in default, and it's knocked you off track. This is how you reset. Why Refi works with borrowers that other lenders won't work with, helping you refinance defaulted private student loans with low fixed rates, so you can get back on the plan and move forward, visit yrefi.com slash Ramsey. That's the letter Y-R-E-F-Y.com slash Ramsey might not be in all states.

Starting point is 01:57:58 Today's question comes from Joe in Pennsylvania. I lease a new car every three to four years, because I'm retired and I don't want to deal with brakes or tires or any other maintenance issues. I'm not hurting for money and can afford to pay cash for a new car if I wanted to own one, but I don't. So what's your opinion on having a lease in my situation instead of a paid off car? A lease is the most expensive way to operate a vehicle mathematically. Period. You're getting screwed. And so if you simply don't, you want to buy it, you want to keep a vehicle.

Starting point is 01:58:34 new enough car that you never have to buy a set of tires or buy a set of brakes, then you're just going to be trading cars every time that you need to do that every three to four years and pay cash for your cars. That's going to be the least expensive way to do this because the lease is capitalized on MSRP, meaning those stupid payments that you're paying are based on the full sticker of the car. But if you walk in and buy a brand new car, and I'm assuming you have a million or more and I can afford to do that. And you're going to walk in by a brand new car. You can buy them at invoice or 500 over invoice or 1,500 over invoice if it's a premium

Starting point is 01:59:10 vehicle. And so you're getting the best possible buy, paying cash. And, but, yeah, you got money to throw away is what you're saying. Yeah. And you're throwing a lot of it away. A lot of it. It's just being wasteful at that point. Yeah.

Starting point is 01:59:29 But if you've got $10 million, I don't know, we don't know your net worth or your income. You just said you got plenty of money and we have to take your word for that. I'm not sure I believe you. But anyway, because usually people that have plenty of money don't think this way. It's usually like broke people. I think this way. But anyways, no, don't lease it. If you got $10 million and you want to waste some money so you never buy brakes or tires,

Starting point is 01:59:54 then buy a new car ever so often and pay cash for it. and you'll get a better deal. Do what? I said, it's just so funny to me. Like the brakes and tires thing. It would be one thing of like, hey, I'm a car person and I love new cars and my thing is cars and I just want to buy a new one every four years and drive something new. But I don't want to deal with the maintenance.

Starting point is 02:00:11 A part of me is like, I don't think that's the truth. I don't know. Like that's just like a funny. I'd rather him be like, I just like cars. It's not what people say that are wealthy usually. It's just not. It's not. Well, if you're that wealthy, you just have someone to go and take your car in and do it for you.

Starting point is 02:00:27 Hello. Just call my guy. Yeah. All right. John is in Reno. Hey, John, what's up? Hi, Dave. Hi, Rachel.

Starting point is 02:00:36 Thank you so much for taking my call. It's a real pleasure. Long time listener, first time caller. I'm looking for some Papa Dave advice on if a pre-nub makes sense for my situation. Maybe I give you a little bit of background. I'm 28 years old. I've been dating the fiancé that I love to death for five years now, and we got engaged last year.

Starting point is 02:00:57 and we have a wedding scheduled for next summer in June. Awesome. And yeah, yeah, definitely awesome. I know a previous call that you said that there's a, it only seems to make sense that there's a significant gap. And the past times I've heard when you guys are discussing it, it's usually like someone that has a million dollars, and the other person has like 100,000.

Starting point is 02:01:17 So my situation is I have $230,000 of a net worth, and she doesn't have, she has zero, no debt, I have no debt. and um no you don't need a pre-up okay she's worth she's worth a quarter million okay i think she's been hanging around five years yeah yeah that's fair um and then yeah i think the reason outside of like that gap like i was contemplating like the idea that like i like that we would both know like the terms of if we were to like end the marriage and something bad like that was to happen Well, you do know the terms. The laws have set them in place. Typically, the judge is going to split the baby in half.

Starting point is 02:02:03 Oh, my gosh. What a horrible example. It's from the Bible. It's from Solomon. Okay? Look it up. All right. Anyway, the, oh, my gosh. It's an old saying. Rachel, you're okay. You're okay. Calm down. down. I know. I just feels very Moses. Anyway, you're going to turn whatever, whatever net worth you guys have grown together and your life together is going to be split down the middle. That's the terms typically. Okay.

Starting point is 02:02:30 With rare exceptions, with rare exceptions. And your 230 is not enough to tip the scales that much. She may out earn you through the next 10 years. And so, you know, that could come up that way too. So, no, I wouldn't in this case. I want you to fight for working together, fight for alignment, fight for shared goals and vision and serving each other and having a wonderful marriage and never worrying about whether we have to split this down the middle again.

Starting point is 02:03:05 Okay. Okay. Thank you. Thank you. Yep. All right. Good question. All right, Rachel.

Starting point is 02:03:12 You don't know the Bible story? Well, apparently not. Okay. It feels very Moses. So, well, Solomon, the wisest man. Yes, I got that. He wrote proverbs. He was sitting in judgment and a lady brought her baby up and two women were fighting about which child it was.

Starting point is 02:03:27 And he said, well, just cut the baby in half. Oh, and whichever one the mom said. Okay. Yeah. And whichever one the mother was. That feels like an old. Agreed and said. And so the saying is split the baby.

Starting point is 02:03:38 That's where it comes from. And the mom. The real mom says. No one literally splits a baby, Rachel. I know. I know. I know. I know.

Starting point is 02:03:44 But it's just such a, just a sad. I don't know. Oh, my gosh. There's no show like when Rachel's on. I don't like it. I don't like it. Paul's in Philadelphia. Hey, Paul.

Starting point is 02:04:01 Solomon. Hey, Dave and Rachel. How's it going? Great. We're short on time. Go straight to your question, boss. We'll make it easy. So, mom died last year of 55.

Starting point is 02:04:12 I'm 28. She left about half a million dollars in debt. That's 30K business debt, $200,000 mortgage, $180,000 in medical debt. from a heart attack. 50,000 in personal debt. Well, she also left the business. The business is a home care business, non-medical, you know, not nurses or anything, just caregivers coming in to take care of grandma.

Starting point is 02:04:36 Yeah. Business makes about $800,000 a year. Profit? 47% I wish. Now, 47% gross profit. What's a net profit? Yeah, it's not, net's under 50K. Oh, it's not worth screwing with.

Starting point is 02:04:52 Okay. you're going through a million dollars to get to 50K? Oh my God, what a horrible thing. All right. I know. Can you sell it? From the business I'm in, that's, yeah, that's a question. Do I sell it now?

Starting point is 02:05:05 Yes. You know, walk away. Yes. If somebody will buy it. And here's the thing. Here's the thing. You're not liable for her debts. Her estate is liable for her debts.

Starting point is 02:05:19 And if her estate does not have a positive net worth, her debts are not going to get paid. So she didn't leave you $180,000 in debt. She left that in her estate. Now, if the business brings a million dollars, then you've got to pay off her debts out of the million dollars before you get anything. So what you own stands good for what you owe when you die.

Starting point is 02:05:45 Assets minus liabilities is your net worth. You do not inherit debt. Did you know that? So even with the business, yeah, I mean, well, I think the issue. If the business has a positive value, then, yeah, you're going to have to use that value to first clear up her debts, which would include her medical bills. Okay. But if it does not have a positive value, you are not personally responsible. Yeah, right.

Starting point is 02:06:17 I got that. Okay. But you think it's a smart thing to... Get out of it. You don't want it. You wouldn't go up and buy that business. You have any idea what you can get for it? probably four to 500,000.

Starting point is 02:06:29 Good. And that'll clear up, that'll clear up all of our debts, right? Yep. That's the plan. Yeah, that's exactly what I'd do. I got rid of two headaches, creditors and a business I didn't want, that doesn't make any money. This is all happening for me. I like it.

Starting point is 02:06:44 That puts this hour of the Ramsey show and 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.

The Ramsey Show - If Nothing Changes Your Money Won't Change

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