The Ramsey Show - Make A Plan Your Future Can Trust

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 and the Fairwinds Credit Union Studio, this is the Ramsey Show. I'm George Camel, joined by Dr. John Deloney. We're taking your calls at AAA 825-5-225. That's the only way to jump into the conversation. John is in Chicago up first. What's going on, John? Hey, good afternoon, gentlemen. Thanks for getting me on the line here. You bet, man. What's up?

Starting point is 00:00:40 Okay, so my wife and I, we are in Baby Step 3 and looking to the future, wanting to put our money in the best place for growth, but also security. And, you know, if you talk to anybody with the state of the world right now, confidence in the dollar. We're just wanting to, you know, to make sure that it's in a place that's not just going to evaporate, basically. So wondering, is it worth investing in the stock market instead of, tangible assets, let's say gold, silver, land, that sort of thing.

Starting point is 00:01:14 Great question, man. Thanks for asking that. I know that's in every internet news feed and lots of... Yeah, when you say everyone and like everyone believes this, are you seeing headlines, the social media scrolling, or is this people in your actual physical circles? It's more headlines, news feed. I think it's probably just coming. through pretty pretty heavily on what I'm seeing on on social media and yeah and who I talk to in my workplace that sort of thing so I I can speak george's man he's he is the investment guru I'm not but I can speak to the last I checked that the dollar is actually up in the short term strangely it has been pulled from the reserve bank on a percentage basis more than it has been

Starting point is 00:02:06 in the past, which says that the rest of the world is saying, we don't know if we can trust you guys, y'all owe a lot of money, like those kind of things. But the, even foreign currencies get, get converted to dollars at some point. So all that to say is, you're talking about such a structural, it's kind of like, how do we prepare if suddenly we all start breathing hydrogen instead of oxygen, right? Like, it's, it would be such a shift that, I, I, this is me personally, I don't have one penny in gold because if we switch from hydrogen to oxygen, I don't know what I would do with a bag of yellow rocks. You get what I'm saying? Right. I don't know that that would be the thing that saves me at that point because you're talking

Starting point is 00:02:55 about such a sea change. It would have to be cataclysmic and it would be. It would be. It simply would be. Right. If every country in the world stop taking the dollar, you're just, you're talking such a cataclysmic shift that it's like getting hit by a meteorite as one of my buddies who's works in banking once said he's like dude that's that's a meteorite situation and so but i do man i'm with you and when i feel all this instability all the uncertainty like i've long joked like that when i put money into my into mutual funds when i put it into retirement accounts i don't know if it's going to be there you know what i mean and that's just that's called risk right And when I've got kids, I've got my own, like, man, it, I often am checking in with George,

Starting point is 00:03:42 checking in with Dave, like, this is right, right? So that you're feeling, dude, I'm there with you. I get it, totally. And I think that's the risk part of investing. And whenever I'm looking at what could happen, honestly, the only thing, and it feels trite, George, the only thing I've got is to look back on history and say, here's how this has worked. And that's not always if, in fact, it's almost never a fail-proof safe, like a fail-safe way of looking at the future, but it's all I got. It's the tool I got, right? So there's two discussions here. One, the dollar's going to go to zero. The stock market will collapse. That's just not going to happen. So now we can talk about inflation. That's really what you're talking about. Hey, inflation.

Starting point is 00:04:25 Trying to beat inflation. Inflation is dead. You're right. We should not keep our money under a mattress. Let's put it somewhere that's going to grow. But now you're saying, I don't trust. the stock market, and that's a separate, deeper discussion. I still think investing in the stock market is worth it. In fact, that's the only place I invest. I own my primary home free and clear, and I have my money in retirement and outside of retirement in index funds and mutual funds. My life is that simple. I have great confidence. And the S&P 500, which is the benchmark for the U.S. stock market, top 500 companies, it's up 12.5% year to date. Even with everything happening in the world, I'm putting this in big air quotes, even with Warden, going on, inflation rampant, the U.S. economy just keeps on going. And will there be downturns?

Starting point is 00:05:10 1,000% yes. That's the ride on a roller coaster. Could there be a 25% dip? Sure, but you're not taking all your money out in a single year based on a dip. Right. So just ride the wave, man, because my money has grown exponentially in the stock market over the last, what, 12 years I've been investing. And so if you're not investing, you're extra screwed. The only way to beat inflation is to invest. But I would not do it in alternative assets and commodities like gold and crypto. I just personally don't do that. It's too volatile. If you're trying to reduce anxiety, that's not the play. Yeah. No, crypto has always been kind of a little suspect for me. It hasn't made a whole lot of sense. Gold. That's one thing. Well, hindsight is 2020. If you invested in

Starting point is 00:05:58 crypto in Bitcoin 15 years ago, you wouldn't be calling the show. You would own the building. So it's just, I wish I could go back and get Uber on day one. But, you know, I just dollar cost average into the stock market. Same amount every month out of every paycheck. And it's boring and it's slow, but I sleep better. And the other piece is just turn off the headlines. What good are they doing you at this point? That's the part.

Starting point is 00:06:20 And by the way, to branch off of George, I have but land. That's a thing for me. Deloni loves dirt. And I love dirt. Yeah. Some call my dirt bag, in fact. Quite a few people. That's hard to believe.

Starting point is 00:06:33 But I do like it. And I like to tell myself, no, it's for recreation, for kids. It's for my friends when they come up. But also, it's kind of a little, if it all goes down, I've got a place to go. Right. So like, but that's, I mean, I'm going to do that in the right way. I'm going to do that with cash, right? I'm going to do that after I've secured, like, that I've got my own emergency fund for

Starting point is 00:06:55 for things that I know are going to happen. Like the air conditioner is going to go out. I'm going to need a fridge, things like that. And I'll tell you, the way I've handled rightly or wrongly, the way I've handled the anxiety that you're expressing that George is talking about is I made a commitment when I started retirement funding. After a long conversation with the CFO of a big company back in Texas

Starting point is 00:07:19 when I was going to pull it all out and beat the market and do this and all that, is I'm going to put money in retirement and I'm not, I'm committed to the end of that ride. Kind of like going to Disneyland, getting on the roller coaster. I'm just not going to jump off of it. So if there's not an end of this thing and we all fly off into space and then crash to the ground, I got on, right? So I'm just not going to – I've committed. I'm putting it in there, and I'm not going to take it out.

Starting point is 00:07:50 So I'm just along for the ride now. That's encouraging. Yeah, we're – you know, we've had our fair share of time not having what we need. and want to make sure that our future set up for success. And the best way to do that seems to be the market. But yeah, no, I really appreciate it. And also like double click on that. The market, yes, long term,

Starting point is 00:08:20 but a way to quell anxiety in the present is to not owe anybody any money. And I know that sounds cheesy, because we're Ramsey, that's all we ever say. If you don't owe anybody anything, you don't have a house payment. I promise you the anxiety overall goes down. every single time. Yeah, you want to be on the right side of that.

Starting point is 00:08:36 Earning interest instead of paying it and you will sleep better at night. Congrats on making it to baby step three. Keep going, man. Okay, George, we hear from so many people that are trying to live out the Ramsey plan, right? They're getting out of debt and everything. But the hard thing is there's not many banks out there that actually support the way we teach people to handle money. Yeah, most banks, they don't want you to win with money. So they charge a bunch of nuisance fees. There's all this fine print. And worst of all, they are pushing debt products at you. nonstop. Yes, but the good thing is, is that Fair Wins isn't like most banks. They're not like the

Starting point is 00:09:22 other guys. They're not like the other guys. Yeah, they are not pushing debt. And they actually want you to win with the baby steps. And so what's great, too, is they created the smart bundle for Ramsey fans, which includes a high-yield savings account and no monthly fee checking. Which is huge, because it's rare to have a checking account tied to a high-yield savings account. You can get all of that with Fairwins. And for the nerds out there, you can have 10 different high-yield savings accounts for different goals. So you got your emergency fund, the car upgrade fund, the vacation fund, the world is your oyster. So beautiful. And check out the debit card, the new one. The live like no one else's debit card. It's so beautiful. We, that's a conversation starter. It's so good. Well, and when

Starting point is 00:10:01 you swipe or you tap, you know, every time you take it out of your wallet, you're remembering that you are living like no one else and you're being intentional with your money. I've been using Fairwinds for months and months now. I love their features, the app, the customer service. It is all so good and so aligned with the Ramsey Principles. Absolutely. So y'all, we both, Bank at Fairwinds, and we love their commitment to Ramsey values. So check it out. You can get that smart bundle. We're going to drop a link in the description, or you can go to fairwins.org slash Ramsey today. That's right. That's fairwins.org slash Ramsey, insured by the NCUA.

Starting point is 00:10:49 Sarah's in Tampa, Florida up next. Sarah, welcome to the Ramsey Show. Hey, guys. Thank you so much for taking my call. Sure. How can we help? So I have an issue with my mom. Last year, she lost. lost her job and sadly she has not been able to find work even though she's been trying, having interviews. The issue is that she will not change her spending habits. She won't budget.

Starting point is 00:11:14 She won't listen to any advice. Trying to help her is like pulling a mule out of concrete and my husband and I just don't know what to do. We've just kind of thrown up our hands and said, okay, she's just going to do whatever she wants to do and we just don't know what to do. Is there anything other than throwing your hands up that you think you could do? I feel like we've exhausted everything to try to help her. We've sat down with her.

Starting point is 00:11:41 Family members have sat down with her family friends. In the beginning of last year, she even did the financial piece, and that didn't change her spending habits even then when she had a job. We just don't know how to convince her to, like, change her spending habits to make her situation better. Her only income is her Social Security, and she goes into the negative every single time, and yet she's crying. She doesn't have money for gas and this. And it's like, well, if you'd stop getting your nails done and buying expensive groceries,

Starting point is 00:12:10 you would probably be able to have extra money. But she just, she won't listen. Does she have somebody, you or your siblings, does she have people bailing her out all the time? I think she has like a longtime friend that I think she has asked for money from here and there. She has asked to borrow money from us now and again. And then it's like, well, when I get my social security check, I'll pay you back. Did you all give it to her? You know, stuff like that.

Starting point is 00:12:42 We do only because we know that she does pay back when that check comes in. But that's the extent of it. What does she make? Her social security is like $1,588 a month somewhere around there. How does she pay rent or her mortgage? Um, she pays it with her social security check and everything else. Like, she's constantly in the negative. And, you know, she gets behind on her bills.

Starting point is 00:13:14 That's what I'm confused how she's even paying you back for money she borrowed. If she's in the negative every month just trying to cover her own bills. Yeah, because as soon as that check lands, like she'll pay us back the $40. We loaned her for gas money or whatever. And then, you know, we've even offered, like, we'll manage your bills for you. like, you know, just give us pathway. We'll take care of it, and she won't do it. Is she renting?

Starting point is 00:13:38 She lives with us. So she's going with us for the last four years. Well, you buried the lead there. So she's got free housing. Oh, I'm sorry. No, no, she does not. So she's not going to get, she's not going to be homeless. I'm just trying to figure out how do we just set her up to where she's got food, shelter,

Starting point is 00:13:54 utilities, transportation, and anything else is by the wayside. Because here's the path toward, like the starting line. for you and your husband not losing your own minds and your own marriage in this conflict is autonomy agency that's the nerd word you all two are in the driver's seat you all make the choices you all make the decisions and number two is choosing reality trafficking trafficking in here's what is real not what we hope not what we wish all that kind of stuff and so what you're telling me is she already lives with you no matter what you do she's not going to change And so the only people that you can change right now are you and your husband.

Starting point is 00:14:38 I mean, and you can't change him. You can change yourself. You can decide I'm going to show up as this person. The only thing I will ask you to do, I'll plead with you, is if you're going to give your mom money, A, don't ever loan it to her. Because that just, like, because then you start, even if you don't want to, you start eyeballing, oh, you went and did this. Oh, you went and did that. Or why'd you buy this? You owe me 40 bucks.

Starting point is 00:15:03 Like don't put yourself in that position or her. If you're going to give her 50 bucks, give her 50 bucks. And I think it's best done at the beginning of a, like you and your husband sit down and say, okay, here's reality. What are we going to contribute and how much, if any? And then you all sit down, clear as kind. You sit down with your mom and say, here's the new reality. We're going to give you $100 a month and you're going to live here and we're moving on.

Starting point is 00:15:27 Or we're going to let you live here rent free because you're not kicking you in the street. Or your time here is over. You've got to live with your decision. Right. So you all get to where you're going to be, own your decisions, and then based in reality, and then move forward. Because right now what you're doing is you're banging your head up against a problem. And I can't think of few things other than the loss of somebody like through death or separation.

Starting point is 00:15:51 I can't think of many more things that are more heartbreaking than when somebody you love needs help and they won't accept your help. It's heartbreaking. It's heartbreaking. of grief. I would love to love my mom in this way and she refuses to allow it. So then after that point, all I can choose is who I'm going to be and what I'm going to do next. Right. Was there any agreement when she moved in of here's how this is going to go? Yes. So we sat down with her and we made a written agreement that the first year with us would, yeah, well, because she has decades long of bad spending habits. So the agreement was the first year,

Starting point is 00:16:32 would actually be rent-free. The deal was, though, we would have to manage her bills and help her get out of debt, which we did. We helped her, you know, with her money because she had a job. But, like, we made sure that her bills got paid on time, no car payment. So she doesn't have any debt. So that's good. But then after that first year, she would start paying rent and contributing to the household.

Starting point is 00:16:55 And so that was our written agreement. And she stuck to it. But, like I said, she lost her job a year ago, hasn't been able to find work. but she still gets her nails on. She still does streaming services. Just things that she doesn't need that. And so on the other side of her own situation. On the other side of any written agreement,

Starting point is 00:17:13 there has to be an or what. So what is y'all's or what? You're going to evict her? No. Okay. And listen, I wouldn't evict my mom either. So there's no shade here. I just want you to own like,

Starting point is 00:17:31 we had this plan, but we didn't think through the or what. and basically your mom's calling your bluff. They're not going to kick me out. And if you're not going to kick her out, then don't kick her out, but don't sit there and stew over. We have this agreement that she's not following because y'all didn't have the or what attached to that agreement. Yeah.

Starting point is 00:17:52 Yeah. And I, dude, I applaud you. You're a hero to me for even sitting down and getting a written agreement like in the first place. Most people never do that with their aging parents. So good for you. Are you guys in a good place financially? I mean, we do make good money, however, we do have debt of our own.

Starting point is 00:18:12 We are doing the snowball effect. My husband has two jobs. I'm trying to get a second job so we can pay down that rent. We would love to, and to be clear, too, we invited her to live with us when a situation became difficult for her. We felt that it was a biblical right thing to do. So that was why we even agreed for her to live with us in the first place. But we're trying to get our own debt paid off. We would love to get in the place financially where we could, so just support her so she could just live her life and not even have to worry about, I mean, she's 77.

Starting point is 00:18:46 She should be retired. Sure. But she doesn't have retirement. She doesn't have anything because of the decisions she's made throughout her life. We would love to be able to just support her, but we can't. So we're in the baby step number one. We're trying to snowball our debt working to jobs. And she knows all of this?

Starting point is 00:19:04 You've sat down and sat all of this to her. She understands the full situation. Yes, she does. And does she have her own debit card? How is she spending money? Does she have access to a credit card? I don't know if she has access to a credit card, but she does have her own debit card. Yeah.

Starting point is 00:19:20 Okay. I would make sure she doesn't have access to a credit card. That way we can limit the damage. And I would consider creating a situation where you give her, like, her envelope of her budget for the month with cash or your own debit card where you can control the funding of it so that she doesn't damage her own finances. That might be a good compromise where she still has some autonomy, but she's not going to go out there blowing her Social Security check every single month. So to be clear, we should kind of do it or else, you know, kind of situation with her to basically

Starting point is 00:19:51 force her hand because nothing she's done has allowed us to help her that way. And you can do that because she lives with you. You are holding some cards here. Yeah, it's either make peace with your situation and stop going to bed angry. That's a choice. Or, yeah, having or what? We're going to give you $50 at the beginning of a month and there will be no more money. Don't ask, right? And so you get to control what you do in this situation. And by the way, I hate this for you. I hate this for everyone involved. Hey, guys, it's Rachel Cruz. If you're working the baby steps, every major expense deserves a second look. And health care is one of the biggest expenses in most families' budgets. And that is why I recommend that you check out Christian healthcare ministries.

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Starting point is 00:21:14 goal. And your monthly cost isn't based on your medical history or where you live. Y'all, a lot of families find CHM gives them more room in the budget. That's why so many members say they're better with CHM. And right now, new members can receive a 50% credit towards their first month of membership. Go to CHMistries.org slash budget and use promo code Ramsey. That's CHministries.org slash budget and promo code Ramsey. James is in St. Louis up next. James, welcome to the show. How can we help? So I am wondering, I have nothing invested. I'm wondering if I should, 43 years old, and wondering if I should do a Roth IRA at this point or just an individual brokerage account.

Starting point is 00:22:15 Why are you using both of those options? Why the brokerage account? The thing I don't like about an IRA is I don't like not. being able to get to the money if I need it. Well, you're 43. What would you use the money for before you're 60? Well, it'd be one of those. Like, if I'd lose my job or something and need it, then I just want to have access to it, basically. Okay.

Starting point is 00:22:43 So in case of emergency, you'd want to have some cash. Can we build you an emergency fund that does that in a high-yield savings account? I currently have 10,000 saved. Okay. And I have no debt. Good. So what would be six months of expenses for you? Let's say you lost your job and for six months you couldn't find one.

Starting point is 00:23:08 I would need... I had that somewhere and I lost that. 20 grand, 30 grand? It would actually be the $10,000. would cover six months. That's not mathematically possible. Unless you have no house payment, no car payment. Right, I have no house payment.

Starting point is 00:23:35 Is the house paid off? Yes. Wow. Okay. So you're in a good spot then because you can invest as much as you want. What's your household income? It is $40,000. Okay.

Starting point is 00:23:50 So $40k a year. And how do you have a paid off house? I'm curious. I would be an inheritance. Okay. All right. So we recommend investing 15% until the house has paid off. But after that, you can invest even more.

Starting point is 00:24:07 So in your situation where you want to make up for lost time, I would be investing into a Roth IRA to start. And 15%, you'd be right there to max it out. So you can start with a Roth IRA. Do you have an employer retirement plan as well? I don't have one set up. They do offer one. Do you know what it is? But I don't. I don't know. Okay. So that's part of your homework.

Starting point is 00:24:32 Thing one is find out what your employer retirement plan is. They might have a Roth 401k option, and that'll just come right out of your paycheck before it hits your bank account. And I love that idea because you're sort of forcing the discipline. Okay. But a Roth IRA is a great option. That's not tied to your employer. You can just go open one. And if you want help with that, you can reach out. out to a smart vester pro at ramsysolutions.com to walk you through that. But the goal here is we want to have money when we can't work anymore with tax advantages. So the Roth is fantastic for that

Starting point is 00:25:02 because you're going to pay the taxes now, but then you won't pay taxes again. So think of that as net income in retirement. Okay. And I like that it's locked away until 60 plus because I don't want you robbing that brokerage account that was supposed to be for James's retirement, all because an emergency happened. So that's why I'm recommending you have a bigger emergency fund because all it takes is one or two things happening at once for you to blow 10K just like that. Yeah, that's my concern for you, brother, is having 10,000 bucks as your full emergency fund. Like, man, I had to replace my entire central air conditioning unit two months ago, maybe a month and a half ago. And it was way more than that. You know what I'm saying?

Starting point is 00:25:44 Like, just a roof or, like, man, getting some sort of cushion. What do you do for a living where you make $40,000? I'm at a Walmart distribution center. Okay. Is there any room for advancement there or for overtime to where you could just hit the gas for a year and get yourself a little more cushion across the board? Um, a little bit of overtime, but not really a lot. Okay. Is there an ability for you to do ride shopping?

Starting point is 00:26:14 in the evenings. Like, if you listen to the show, you hear these heroic stories of folks who just pause their life for 18 months and they work two jobs, three jobs, four jobs. They do janitorial work at the church on the weekends. Then they go drive ride share,

Starting point is 00:26:29 and then they work full-time, then they take whatever overtime they can get. But they just do it for a season, a short, maniacal sprint to get themselves out of this cycle of always being on the edge. to get some margin in your life, you know what I mean? Just some peace.

Starting point is 00:26:48 Okay. How much margin do you have currently every month? If I said, hey, after all the bills are paid, how much could you invest? I could do about 700 a month. Okay. Can I plug that into a calculator to show you what would happen if you invested that into a Roth IRA? Yes. All right.

Starting point is 00:27:13 So you're 43 right now. let's say you retire 67. Is that fair from your late start? Yes. Okay, $700 a month from the age of 43 to the age of 67. I'm going to go with a 10% annual rate of return. If you invest it well into mutual funds and index funds, that's what you'll see. I'm going to calculate.

Starting point is 00:27:31 You would have $832,000. And if that's in a Roth account, act like that's net income because you're not going to pay taxes on that. Pretty impressive? Okay. Considering you only put in $200,000 of that. over 600,000 was just compound growth. Now, let's say you could invest $1,000. Can we aim a little higher?

Starting point is 00:27:52 Yes. That would turn into $1.2 million almost. Now we're talking. Between that and Social Security, you might be able to retire with some dignity. So that will just help you kind of get in your head what it's going to take to retire at 67 as a millionaire. And it's very much possible,

Starting point is 00:28:08 but I want to dig into more of what do you want from life in the meantime. Are you single? Yes. Okay. So paint me a picture of James five years from now. If I could wave a magic wand, what does his life look like? I would be... Are you still single? Are you still doing the same job? Probably not doing the same job, but I would still be single, yes. Okay. So that's intentional. I'm not looking to start a family. So at least we have some homework on the career side. It sounds like there's something that you'd rather be doing that you haven't pursued yet. Is that fair? Yes. And what is that thing? Do you know? No. I have been trying to learn coding and iOS development. Okay. What do you've

Starting point is 00:29:06 been doing to learn? I have been doing online courses and trying to find mentors and stuff like that to teach how to do it. Cool. So that might be a future. We're five years from now, you're a software engineer, developer, making 80K. And as you can see, that would multiply the numbers here, as we say for retirement. So the more money you save, the more compound growth can take hold. And the longer time horizon you have, the more that will grow. So that's the simple factors of retirement.

Starting point is 00:29:37 The only time I'd recommend a brokerage account for that kind of flexibility you're talking about is if someone, let's say, wanted to retire at 55 and have a a sort of bridge to get them there. But in your case, I think you're going to need to be working past 60, and therefore I would take the tax advantages of that Roth account or even traditional account to make that happen. But, John, there's a lot here. A lot of people listening to the show feel like they have a late start. They're in their 30s, their 40s. They haven't invested yet. And I love this example from James to show you that you can still retire a millionaire, a million dollars in an account just by starting at 43 and putting in 700 bucks a month. Now, some people,

Starting point is 00:30:14 go, well, George, must be nice to have $700. Right. And I go, hey, add up your debt payments for me. Like, okay, that's car payments, 500. Student loans are another 400. The credit cards. Okay, we just found a thousand bucks right there that could be used for investing if we decided we're going to go hard at this debt, knock it out. Right. And, man, it feels so obtuse these days because it's so, it is hard out there, man. It is.

Starting point is 00:30:37 I just filled my truck up yesterday, and it put me in such a bad mood. Right? It was just, and I know you and your gas-free vehicle that drives a- I also have a minivan, John. Oh, minivan, nice. Yeah. So, man, I get it. And there's that old saying, like, conflict deferred is conflict amplified.

Starting point is 00:30:55 You're going to have to face the music now. Or at some point, you want to face it when there's some government entity saying, this is going to be your retirement home and your bed, and this is who you're going to share it with, whatever. That's going to come. Or I'm going to not buy this car. I'm going to not do this. I'm not going to have fancy pants things at 43, 47, 57. because I got a late start.

Starting point is 00:31:16 I'm going to do the small things now that are inconveniences, that are uncomfortable, so that I've got autonomy. At some point, you've got, that's coming. I'd rather own it as soon as possible and make whatever choices I have to make right now so that I'm in the driver's seat later. When you take your car to the shop, you're probably thinking two things. How much is this going to cost me and is it going to get done right? What you need is a mechanic who will give you transparent information,

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Starting point is 00:32:25 walk away knowing that your car and your wallet are taking care of. Schedule your service today and get 10% off your visit at C-B-A-C-com slash Ramsey or click the link in the description. That's C-B-A-C-com slash Ramsey. 10% off, up to a $250 value. See store for details. If you're wondering why we keep mentioning baby steps, one, two, three, four, five, six, seven, it's because they're the foundation of everything we teach. So if you're new here, start there. We'll drop a link in the description of this episode if you want to learn more about that framework. Jill is in Lincoln, Nebraska. Up next, what's going on, Joe?

Starting point is 00:33:22 Hi, thanks for taking my call. Sure. My question is, how do I save for a large amount of money I will need to pay when my parents pass? Oh, tell us more. So we own a business together. I will inherit current value. It will be very. It will be the worth 3.8 that I will need to pay my siblings for a different part of it, which current value would be right at $2 million. So do I do life insurance on my parents? Do I put money in a stock or a CD? What's the best way going about saving for that when that time comes? Are they going to leave this business to you with the expectation that you disburse it equally

Starting point is 00:34:12 among the siblings? Are they going to leave it the worst case scenario? They leave it to quote unquote the kids? No. The will is written. Current values. So it's land or farmers. What my part of that is, current value is 3.8, but I need to purchase the rest for my siblings. Yeah, why do you have to buy them out? Because they don't have enough cash on hand to pay them closer to equal. If that happened today, I would owe $2 million. But if I couldn't. But it's locked inside of the land. It's not like, you know, can you pay them out of the profits of the business until they get there? Yeah, over 10 years. Are they going to be this kind of siblings that are banging on your door so I want my money right now? So here's, let me mention this, and then I'll see if I didn't want to answer.

Starting point is 00:35:16 If I was unable to come up with the $2 million to pay them, if I sold it, current value today, it's worth $3.7. Okay. So it's a farm. I would like to keep it together. I know this expense is coming, but I don't know how to, what's the best way to plan for that time? What are the profits generating from the farm? Because I have this conversation with some regularity now because of, especially in farming communities, and I've lived in two different farming communities. The land value has far exceeded the actual operating capital, the operating revenue of these farms.

Starting point is 00:36:01 And it just takes one kid to come bang on the door and say, I want my money now. Or what I've seen is it's a spouse or an ex-spouse. It says, I want my cash now. So it forces everybody's hand to either sell the property or come up with some tricky loans or a mess. How much on these two properties, like $6 million worth of farming land, how much money are you making every year? Let me put it this way. Do you have the money to save up $2 million as a buyout over the next five, 10 years, however long your parents are alive? Ten years, probably, yes.

Starting point is 00:36:36 If I just put it away, did not make any improvements to the farm. Five years, it would be close. I mean, I don't see another way around it. So do you think don't keep the money working for you? Put it in account that's earning interest. I put it in a high-yield savings account because you have a, you have, well, it depends on when your parents are going to pass. Are they in good health? Right.

Starting point is 00:37:07 They are. Okay. And how old are they? they are 72. So they could go to 92 plus at this point, if they're in good health at 72. Yep. Which means, does that mean your portion you have to pay out increases as the land appreciates? Yes.

Starting point is 00:37:28 And as the business grows? What I pay is based on the assessor evaluation on the land. So what if you owe them $10 million? Right. I don't know. You might not be able to save your way there. And even then, even if you got life insurance, it's going to be a moving target over time. True. If you got two million today and it's worth 10 million later on. So I would just have them restructure what's in the will so that you're not on the hook for this day one. Well, it sounds like you're on the hook because you don't want your siblings to sell that plot of land, right? No, I do not. Okay. It's part of the business that we help run.

Starting point is 00:38:13 Right. Pretty much what my parents thought was if I was given something valued at 3.8, I could get a loan easily for $2 million. But that's a loan if I could. And that's a good way to lose both plots. True. Yeah, let's take debt off the table as an option and explore some other ones. And that might mean you structure it differently. Even if you do owe them this money, maybe it's not day one.

Starting point is 00:38:41 Maybe it's, hey, we're going to pay this over five years after they pass. I'll pay this out, an equal installments. The earlier you structure that and have it written down so that they know that way, there's not somebody banging on your door a year or two. Like, give me my money and everybody's already, like, it's in the will. Like, this is going to get paid out over time off of earnings, not off of borrowed money. I'll tell you, I have a, like an ingrained in me experience of talking to an

Starting point is 00:39:08 aging farmer who wept in front of me. And you know what a big deal that is to have a old West Texas farmer crying in front of me because of the debt load because of the conversation he had with a banker saying, you have to do this and this and this and this to keep this property. And he realized he'd signed a soul away. Like, I'll never forget that. And so if you, and I know that debt just is crushing American farmers. If we tell people to sell their car and everything,

Starting point is 00:39:32 I'm just deeper roots than that. Please don't go into debt over a future, potential maybe situation. And this has got enough zeros on it. I wouldn't trust two goobers on a podcast. I would contact an estate attorney that has experience with agricultural and have them drop a structure that makes sense that's fair to everybody. Because currently, this is not fair to you to just owe that all of a sudden without

Starting point is 00:39:57 being able to liquidate anything in the business. And flipping around, would you borrow, if this plot happened to be next to your farm, would you borrow $2 million and buy it? Yeah. Okay. She loves this land, John. I'm not going to tear it out of her hands. Yeah.

Starting point is 00:40:18 So, I mean, you're going to do what you're going to do. I just hate the thought. How leveraged are you on your property? My part of the business is paid off. Okay. Are you asking my current network? Well, you're free and clear on your $3. Whatever million dollars portion of this business, right?

Starting point is 00:40:38 Okay. So that is the part he would be given. at that time. What I currently have of my own, me and my husband, is 3.3. Okay. So if I'm in your situation, I mean, it sounds, George and I, George gave me this, um, analogy off air about something else, but y'all, well, the Titanic sank. So you're in a boat and you see an iceberg coming.

Starting point is 00:41:02 And right now that icebergs evaluate at $2 million. You don't know when you're going to hit it, but you know it's coming at some point. You're debt free. You're operating your side of his business debt free. I would just say choosing reality. This thing's coming at us. I'm going to frantically save so that if and when the day comes, I can write each of my siblings a check.

Starting point is 00:41:23 And now we've just expanded our entire operation. We've doubled our operation. And it's ours. It's free and clear and it's ours. Have you talked to your siblings about this? Yes, we had a family meeting about it and what to expect. And yeah. And they're just like, hey, yeah, day one when mom and dad pass, we're going to get our share of this.

Starting point is 00:41:48 Yep. That was the expectation. Everyone agreed, including you? So from the date of the last passing parent, I have nine months to say yes or no, I don't want this. If I don't want this, it just goes to my siblings. And if I do want this, I currently owe the two, but it's worth of 3.7. So even if I had to sell it, it wouldn't, I need to make that purchase. Well, you can invest your way there and attempt that based on your income, but you might want to have a plan B in case you don't have all the money in full.

Starting point is 00:42:29 And in case this things appreciates, I would look at it from all the angles and talk to an estate planning attorney to help you structure that. If you own a business, you know what a pain it is to find the right people. You don't just want a warm body who can fulfill the basic job requirements. You want a go-getter who actually wants the job. Somebody bought in from day one. But finding that someone buried in your inbox with 500 other applications, that makes finding a needle in a haystack sound simple. Which is why I love what ZipRecruiter is doing for small businesses.

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Starting point is 00:43:43 So try it for free today at ZipRecruiter.com slash Ramsey or click the link in the description. That's ZipRecruiter.com slash Ramsey. Meet your match on ZipRecruiter. Welcome back to the Ramsey show in the Fairwinds Credit Union Studio. I'm George Camel, joined by Dr. John Deloney, taking your calls at AAA 825-5-225. Misty is in Boston up next. What's going on, Misty? Hi.

Starting point is 00:44:15 So I'm sorry by Sean a big shake. I'm a bit nervous. That's all right. Take your time. We're all good. Glad you're here. So I just need help, like what I need to do next step with my finance. And, you know, I just want to have a clear plan to pay off my debt. I made some stupid decision at a young age. So, yeah.

Starting point is 00:44:36 We all did, Misty. It's okay. It's okay. We all have our journeys. So how old are you now? So I just turned 24. and recently I lost my job in July and I also do like content creating so social media influencing on the side

Starting point is 00:44:53 although they don't know anything about my personal life except fashion stuff so I get brand deals it's you know obviously you don't their net is 30 to 60 to 90 days obviously you don't get paid right away but since I lost my job in July I've been you know getting brand deals throughout since July until October

Starting point is 00:45:11 and I haven't been able to get a job until recently I got a new job that's going to be paying me 24 an hour, but I will be working at a temporary job. They're all starting late. The temporary job's going to start in October 13, and the other one that's going to be permanent. It will be starting on November 2nd. And I have a lot of, you know, like, misdo bills.

Starting point is 00:45:35 And I also have a lot of debt with a lot of impulse spending and, you know, emotional spending. And also I don't even drive. and I have a car loan that I co-signed for my previous partner, my ex, and now it's in my hand, and now I'm trying to fix it to... I don't even know what to do. I don't even drive a car. Where's the car right now?

Starting point is 00:45:58 So the car is my current boyfriend. It's at his house, and I've been giving him money to fix it with whatever it needs, but, you know, he's been helping with other stuff. I'm confused. Whose car is it? It's my... So the car's under my name. But you said it's an X?

Starting point is 00:46:16 Yeah, so it's a cold sign, but I took the car back. Okay, so the car is technically in your possession. I'm saying, could you go sell this car today if you wanted to? So he didn't take care of the car. When I got the car back, the car, he had crashed the car. It didn't total. It's just the front, like where the fluids at, you need a new bumper and the seat inside and he smoked. So he kind of destroyed where the gears and stuff like that.

Starting point is 00:46:43 he asked on there. How much you owe on it? So on the car, I owe, now it's like $9,502. Okay. And what about your other credit cards from impulse spinning? Where are you at? So I have two credit cards, and I had, it's now at $16,179. Okay.

Starting point is 00:47:08 So you owe $25,000 in total, anything else? No, that is it. Okay. So one of the keys, and I'm talking calm on purpose, because I feel your sense of angst, as you're like starting to walk through this, it's so laden with emotions. This guy destroyed a thing. Y'all had a thing together. He blew it like all that, right? I get it. The path through for you, I want you to remember this statement. Facts are your friends. Okay. Because really what you have, you do have a lot of relational challenges, emotional issues, betrayal. All that is real and you're going to have to process that. But right now, you have to have. You have to process that. But right now, you have. an emergency math problem. Yeah. And the more we can focus on that, the more your body will sense itself getting back

Starting point is 00:47:53 in the driver's seat of its own life, even though you don't drive, right? Yeah. And so I don't, I personally don't think you can wait two more weeks to start a temp job. I think you've got to get on ride chair tonight. So I have

Starting point is 00:48:06 some other money coming in. Where? Which is good that's coming in. So I have brand deals. I know, I know. George and I both have brand deals, and we both know that those things come and go and, like, that's not stable. You know what I'm saying? When is it coming and how much is it?

Starting point is 00:48:21 So I have one that's coming in next week for $2,440, but I also put tax aside and I also put tides aside for 10% and then 20%. So it'll be left me wood around $1,952. Okay. And what's your next bills to pay? What are you behind on right now? I'm behind on my credit card bill. Okay. I'm behind my credit card bills and my utilities and the car loans.

Starting point is 00:48:53 And, yeah, that's the only thing. And then that's the thing I'm going to plan paying. So let's get current on utility bills. So the thing you need to focus on right now is just one thing at a time. Right now it's your four walls. That's food, shelter, utilities, transportation. So you get current under utilities. This is all about survival, right?

Starting point is 00:49:11 that's the base layer. Next, let's pay the car because that thing's going to get repoed if you miss a couple payments, and then you're going to be on the hook for the difference. They're going to sell it at auction and still come after you. You're going to sell it for a thousand bucks and you're going to owe $8 grand on a thing. You're not even holding. So then let's get current on that. That's your next A one.

Starting point is 00:49:30 Then we'll worry about the credit cards later. Those are the least worried about. I want you out of it and we'll get you out of it. But right now you need to just keep the lights on and keep that asset that you have in that car. And there's a phrase we use in the brand deal world, and that is mailbox money. You've heard that before? No. Okay.

Starting point is 00:49:49 It's just a check that comes, and you're happy when it comes. You just sort of woke up and money showed up. But you don't live on that. You have to have a job where you're earning income. And then when you get a check in the mail for two grand, awesome. It goes to debts. It goes to savings. It goes to that fancy guitar you wanted to buy.

Starting point is 00:50:06 Whatever. It's mailbox money, but we're not just going to sit around twiddling our thumbs waiting for it. You have to go be hyper proactive. So when does your rent do? So my rent due this month and it's, well, I have credits towards it. So it's $1,194 because I overpaid the last one. Okay. So my rent due this month is $1,194 and $82, which I'm planning to use the money I have. I'm thinking I'm not going to take the tax out in the, 10% out yet and I'll do that with the next brand deals instead. I would not recommend that.

Starting point is 00:50:46 That's a recipe for waking up with a $10,000 tax bill. And more importantly, it's another sign that you're not, you're not living in alignment with your values. And if tithing is an important value for yours, let's live within our values because you've lived outside of them and you find yourself in a mess, fair? Yeah. So I would take that $2,000 check, pay my rent,

Starting point is 00:51:05 make sure my rent is paid, make sure I've got heat for this Boston winter that's coming. I got lights on, and then we're going to start worrying about the other things. Is that fair? Right. Have you ever done a budget, Misty, where you actually put this on paper or in an app? So I've done it before, but I wasn't taking it seriously. Are you ready to take it seriously? Yes, I am.

Starting point is 00:51:28 Okay, good. I'm going to help you take it seriously. I'm going to give you our every dollar premium app. It's on the house if you'll actually use it. And in that app, here's what you're going to find in the onboarding process. It's going to actually help you with personalized recommendations to create more margin. Margin is what you're looking for here. The gap between what you make and what you spend and that whatever's left over, we can throw with the debt. So that will help

Starting point is 00:51:48 you do that. You're going to list your income at the very top. Then all of your expenses, four walls come first. We talked about that. Then minimum payments on the debts. Then we can figure out how much we actually have left over if there's anything to throw with the debts. You're going to list those debts smallest to largest, balances, not the interest rates. Every dollar would do that for you. You're just going to tack the little one. Make minimum payments on the rest. Focus on one at a time, smallest balance first, the next smallest, the next smallest. And if you can go make 50, 60, 70, 80 grand this year, you can pay off 25K in no time. Then you can worry about the car later if you can't sell it right now because of all of its issues. But you need money,

Starting point is 00:52:24 so go start earning today, today. If you've ever been really sick or been the caregiver to somebody who was, you know how broken the health care system can be. Man, nothing is easy. finding the right doctor, sitting on hold for hours, or, gosh, trying to understand co-pays and treatment plans and weird medical terms that no one really explains and so much paperwork. But what if you had someone to do all of that for you? Someone to take the burden off your shoulders. Solace Health pairs patients with a personal advocate whose entire job is to fight for you. And these advocates are covered by insurance nationwide.

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Starting point is 00:53:48 They'll fight the system so you don't have to. Go to solacehealth.com slash Ramsey or click the link in the description. description. Checking your eligibility only takes about two minutes. That's S-O-L-A-C-E-Health.com slash Ramsey. You must be 18 or older, and remember, advocates do not provide medical or legal advice. We're headed to Portland, Maine up next. Renee joins us there. What's going on, Renee? Hi, good afternoon. How are you doing? I will. So here's my question. My husband and I are very blessed. We've been married for 26 years and we are still very much in love. Gross. Gross. Yay. I love it. I love it. His insane work ethic has allowed me to stay home and raise our four

Starting point is 00:54:51 children, which has just been an absolute dream. I took care of the kids. He took care of all of the making of our money and managing our finances and our retirement. Recently, I went back to work. now that the kids are grown. And last week, a coworker was asking a question about a new withholding from the paychecks at our company because of a new benefit company that we're working with. And she asked a question about my paycheck, like, was I seeing this withholding? And when I told her, I've never actually seen my pay subs. My husband gets them and takes care of everything.

Starting point is 00:55:31 She got very concerned for me. And every day she's been telling me I'm in a vulnerable position. he has too much power. So my question is, is it okay for the one person I trust more than anyone in the world to be 100% in charge of our money, or am I being a little irresponsible? I agree with your coworker, but not for the reason that she is stating. Yeah. So can I get dark for a second? Is that okay? Okay. I've had multiple like count on two hands, not one, times when I've sat with young, all the way to old widows whose husband just passed away.

Starting point is 00:56:19 Yeah. And there's a particular haunting look in their eyes when they say, I have no idea where anything is. I don't know where the banks are. I don't know where our money's invested. I don't know what the insurance is. I even had one woman who was amazing. Her husband was a friend of mine. he was a colleague of mine and probably 30 years older than me.

Starting point is 00:56:38 Great guy literally just passed away, like suddenly. And she said, I know we have tons of money, but I need groceries today. And waiting for disbursements, insurance checks, all that. Like she didn't know how to get cash because he always just took care of it all. He always just made sure everything was taken care of. And so I do think you're in a very vulnerable position. Yes, like the nature of my job and George's job is, We get call after call of people saying, I super trusted my partner, and then I found out all the secret stuff.

Starting point is 00:57:10 Let's don't even go there with you. It's a matter of safety, quite honestly. If something happened to him, what would you do? Yeah, what would you do? You don't know the logins, the account numbers? We do have files with all of the account numbers and passwords that he gives me, and we keep it updated, but I've actually never logged on to see them because they're raising kids. And he's busy working. Let me tell you what me and my wife do.

Starting point is 00:57:36 And I won't tell you to do anything that we don't do. Once a year, we get together. And in our house, my wife is the one who actually hits send on the bills, right? Like she gets the electronic bills. She makes the payments, all that kind of stuff. All of our money's in one checking account. And I mess with all of the retirement investments and taxes and all that kind of stuff. Once a year, we get together.

Starting point is 00:57:57 We make sure our documents, what you have is what we have is a document that says, here's all the logins, here's all the passwords, here's the insurance logins, all that stuff. So if one of us just drops dead, we got, we each got that form, but also we go an extra step. And I pull up, here's the retirement accounts, here's the cash accounts, here's what we have. And here's our total net worth. And I actually, I'm a nerd. So I get, I have a friend of mine who's Ramsey Real Estate Pro and she runs comps for me. I just want to be able to say, here's our net worth today.

Starting point is 00:58:26 And then we walk through, here's how much it cost to operate the house this year, from lights to like to water. bill, all that kind of stuff. But I just, for me and for her, I want everyone to know where everything is and what state everything is in. And I have access to that information. Yeah, but you don't have a partnership. Right. And so there's. And I was also wondering if I'm kind of being a bad wife. Like, I don't know how big of a job or how stressful it is to manage all of the money. He does it wonderfully. I'm not going to call you a bad wife, but I'm going to tell you that yes. It is an extraordinary burden to carry it all. Yes. So can you be curious tonight and say, hey, can you walk me through the financial stuff? You've been carrying so much

Starting point is 00:59:15 for so long. And I'm just curious how this all works. I know I have access. And I just I just had a, yeah, an epiphany that one of us is just going to fall over one day. And I'll Right, and nobody wants to think about that, but 100% of us are going to die. Have y'all done a will together? Do you know where all that stuff is? Yes, we go to the lawyer every couple years and make sure it's updated. So even you knowing, hey, where's our money? What are the accounts? What's our net worth? Like, do you have also some real estate holdings that I don't, not that I don't know about them in an untrustworthy way, but I just wouldn't know. You know what I mean? Man, I think this is a way to bring y'all really close together.

Starting point is 00:59:58 And I will tell you right now, again, going dark for just a second, if he says no, that is a red flag. Okay. Well, I mean, he's listening right now. Oh, good. So I'm sure we're going to be doing that. Yeah. So far, it doesn't sound like he's doing anything malicious. It sounds like you just don't care.

Starting point is 01:00:14 And so they're like, ah, I'm good. He's got it covered. But it's wise to have him explain what's going on in the pay stub. Explain to me what taxes are taken out, what are where retirement's going, what am I invested in? I think it would actually bond you as a couple if you both. had that purview, and I think he'd appreciate it, because he wants to nerd out on this stuff with you, but you've let him know, I don't really care. Right. And it may have been that y'all's marital arrangement is he has no idea what dentists your kids have gone to. And when their school

Starting point is 01:00:42 schedules and there's something about sharing that stuff, even if one of you manages it day in and day out, man, there's just power and knowing we're both on the same team all the way through. They'll have it. Great question, Renee. Brandy's up next and Little Rock. How can we help Brandy? Hey, so I'm in a little bit of a pickle. I've done the every dollar. Long story short, I had everything set this year to pay everything off but my house. I was going to be debt free on all of my debts. And I am trying to figure out how to re-budget with not knowing what my income is

Starting point is 01:01:27 and increasing my hours at my part-time job, and I'm still falling short. I'm like $200 over my budget. Okay. Are you working – so you're working part-time right now? Yes. Okay. Are you single? The part-time job, yes.

Starting point is 01:01:44 Okay. What about your part-time job? So I had the part-time job to pay off debt. That's what I got it for. and now it is my primary source of income, but I can't... What happened to the full-time job? I got let-go. What were you making doing that?

Starting point is 01:02:08 Doing that, I was making about $2,400 a month. Okay, and now what are you making with a part-time job? Well, I haven't increased my hour, so it's $800 a month. And what are your bills every month? I did not add all of them up How long ago did you get laid off, Brandy? I got laid off in June. In June, okay.

Starting point is 01:02:33 Are you scrambling, like, mad to find a second job? I've applied to over 100 jobs since June, and before that, over 200 jobs before that since 2024. Okay. What kind of work were you doing? I was just not an entry, level, but I was in banking, just your basic banker. Okay.

Starting point is 01:02:58 And you want to get back to that? Is that the goal? No. I want to stay in banking. I just don't want to do the role that I was in. But, again, that's not the only thing that I've been applying for so that I'm not limiting myself in just one field because I'm open to learn. Well, for now, it's going to be just covering the basics.

Starting point is 01:03:20 You might need to just make minimum payments on the debts. and those four walls come first. And that's your food, your housing costs, your transportation. So can you make at least enough to cover that for the next month if you just hustle and do three jobs? It would depend on the job because I'm physically limited. Well, currently your life depends on it. And so we need to find work that you can do to bring enough income to at least cover the bills. And that just means the debt journey might be a little bit delayed.

Starting point is 01:03:49 But every dollar is going to be your path forward. That is the facts. That's what you need on paper to make this work. I wish you knew the best. Let me tell you what I get asked all the time. When should I get term life insurance? How much do I need? Is it affordable?

Starting point is 01:04:20 Those are the right questions to be asking. So let's take a quick review. The fact is, term life isn't a baby step. So if anyone is dependent on your income, you need to have 10 to 12 times your income in life insurance. Now, and most people are surprised by how affordable term life really is. even if you're not in perfect health. Look, I understand the hesitation since most insurance companies make it more of a hassle than it needs to be.

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Starting point is 01:05:16 quote. That's zander.com. John, I'm already starting my packing list for the Live Like No One Else Cruise. It's happening March 14 through the 21st, 2027. That's seven nights in the Western Caribbean with Dave and all of us Ramsey personalities and about I don't know, 2,600 awesome Ramsey fans who have become

Starting point is 01:05:44 debt-free and we want to celebrate that. And so this kind of is a milestone marker for so many people. If you've paid off all the debt but the house or even the house included, this cruise is for you. Come celebrate with us. All inclusive pricing starts at $2,100 a passenger. That includes your cabin, food, entertainment, taxes, tips, all in there. So click the link in the show notes or go to ramsysolutions.com slash events to book your cabin. It's going to be a good time.

Starting point is 01:06:09 Calvin is in Minneapolis up next. Calvin, welcome to the show. Hi, how's it going? Good. How are you? better than I deserve. We love to hear that. My question is, should I lower investing from the 15% and make it 8% so I can save up a down payment on the house or pay the house off because of how much I already have invested?

Starting point is 01:06:34 So you don't currently own a home? No, but this is a question for the future when I get there because it'll be about a year from now. So one year from now, you're currently investing 15%? Well, right now I am paying out the debt, which is about 15 grand, but I'm putting $3,000 a month towards that. Oh, so this is a ways away. You're in Baby Step 2, and you're looking at Baby Step 7. Yeah, I'm trying to plan for the future here. Okay. Well, here's what I would say. In Baby Step 2, you're only focused on the debt, of course. Then we get the emergency fund in Baby Step 3, 3 to 6 months of expenses.

Starting point is 01:07:08 Then you're in Baby Step 3B. That's where you would begin saving a down payment. And this is a choose your own adventure. Some people choose to invest not. thing during that time and just save up a down payment aggressively for one or two years. Some people choose to invest 15% or maybe you split the difference. Take the match from your employer and put the rest towards the down payment fund. So what's your plan for that? Well, I already have about 200,000 in investments. So my, that's kind of where this question stems from is because I already have that much in at such a young age, should I lower that percentage and actually try to hammer all this stuff out? How old are you?

Starting point is 01:07:46 19. Oh, wow. How'd you get 200 grand in retirement at 19? Unfortunately, an inheritance. Oh. Someone passed away, huh? Yeah. Okay, so this wasn't like earned wealth that you saved up and invested?

Starting point is 01:08:01 No. Okay. Well, here's what I would tell you. Investing is a muscle. And right now, even though you may not quote unquote need it, again, we don't know what the future holds. I would be flexing that muscle to go, I'm a guy who invests, consistently, no matter what's going on, no matter what my income is, I'm comfortable putting that money away and living on what's left. Sure.

Starting point is 01:08:21 Now, you might do that after Baby Step 3B. So that could be, you just save up aggressively for that down payment. What's your income? About $120,000 a year on my full-time and then I have a part-time. Amazing. Well done, dude. What do you do for a living at 19? I'm a conductor, trains.

Starting point is 01:08:40 Nice. Fantastic. Okay. So you're saying you're going to be debt-fiant. free in a couple of months? Yeah, that's the plan. A couple more months. You have the emergency fund? I have a starter one. I'm going to build that one up.

Starting point is 01:08:55 Okay, so by, I don't know, spring, you're going to be starting to save up the down payment? Yes. And then by summer of 2028, you're hoping to buy a home? That's correct. Okay. Nice. I would continue investing 15% of whatever your income is until that house is paid off. I would not lower it to eight. I know you have a good starting point. with that 200 grand, but I think that muscle's too important to not let it atrophy by going,

Starting point is 01:09:19 well, I could invest less. I can go down to eight. I think there's something very wise about investing no matter what. And if you have too much money in retirement later on down the road, you can call back and send me hate mail. I'm fine with that. And I'll, I'll tell you this, Calvin, there was a year that my wife and I unplugged investing because we were so close to paying our house off that we just went, we basically babysept to the house. And, and four, five, and six. And like, but we were well into the process. Do you what I'm saying?

Starting point is 01:09:52 Yeah. And so just doing it as a way of life over five, ten, 15 years, man, future you is going to pay the price for having no investments out there. But as a momentary pause in action to aggressively do something else, that's what I did in my house. But it's just not a good long. term. You're talking to two guys who hate mortgages, probably more than anyone in this building. So we are all for you aggressively paying it off. But in that case, here's what I did, Calvin. I kept investing 15%

Starting point is 01:10:25 and I found other ways to pay off the house faster. Ooh, George is better than me. So all that to say, I'm better than John. And I would encourage you to do the same. Because what you have working for you is amazing work ethic and skill. And so just put that to good use and invest the whole time. And on top of that. If you want to pay it off faster, I think you're going to find a way because you're going to make more money over time, right? Yeah. Yep, every year you get 8% raise. And once you pay off the debt and have the emergency fund, all that margin can now go towards the down payment. Once you have the mortgage, now we can apply that extra to the principal on

Starting point is 01:10:58 the mortgage. So my guess is you're going to be debt-free before you're 30. Can we all agree on that? I hope so, yeah. Just make that the goal. And you will be so far, you're already so far ahead of America as a whole, let alone 19-year-olds. So, man, if you can just stay out of debt and you take on that mortgage, 15-year fixed rate and more than a quarter of your take-home pay, and then make a plan. Say, I'm going to knock this out in seven years. And it will also impact the size of the house you buy it at 20 or 21, right? If you're reducing the amount you are investing and it will feel like, who I've got a bunch of extra money, I can qualify for a bigger house. Like, just stay on the track, man.

Starting point is 01:11:36 Stay on the track. I'd rather you have a be 30 and have a paid-off house that's a little bit smaller, a little bit more, that it's yours. It's yours at 30, man. Then you're way ahead of the game. Crushing it. Brandon is in Louisville, Kentucky. What's going on, Brandon? You there?

Starting point is 01:11:52 Hey. Yes, sir. What's going on? So my question is, I've accumulated debt. I'm a recovering gambling addict. Been cleaned for seven months, work in a program. Congratulations, Tommy. Congratulations.

Starting point is 01:12:06 Awesome. Thank you. And, you know, that's one of the biggest steps. But currently on a $15,000, IRS payment plan over the next couple years and also about 30,000 in credit card debt. My wife wants separate accounts because she says she doesn't trust me with the money. And just trying to figure out the best way to attack all this, you know, while maintaining on the course. How long is she going to, do you have a plan for reunification there financially or is this just indefinite?

Starting point is 01:12:43 So hopefully we're kind of going through a trial separation right now. You know, everything still is joint. I'm staying with my mom. Oh, so it's not just your money that's separated. It's your marriage is separated. Yes. And so I'm going back and forth. I'm going back and forth to our house, you know, a couple nights a week to spend it with the kids.

Starting point is 01:13:07 Okay. Without, you know, we don't want to put their lives upside down. Well, let me say this. their lives already are upside down, and the quicker y'all can own that and manage the upside-downness instead of pretending. How, um, what are the parameters of this separation?

Starting point is 01:13:23 So honestly, we're just kind of, just going with, like, going with the flow. You know, it sounds weird, but our kids have kind of gotten the routine.

Starting point is 01:13:32 Okay. And so we're trying to keep it consistent with, with our house, you know, letting them stay in the house. Sure. So, here's that I want to,

Starting point is 01:13:40 I want to really encourage you, okay? Yeah. When you do a separation, put some parameters on it. And here's what I mean. In 30 days, we're going to go have lunch together. In 60 days, we're going to X, Y, or Z. Because if you don't, what ends up happening is one or both of you are seeking this thing called, It Feels Right.

Starting point is 01:14:02 And it's really difficult for that. You end up making feeling-based, emotion-based decisions, and you don't end up coming back together in a way that both of you are very clear. about what coming back together actually means. You miss each other so bad, you just throw a caution to the wind, or she continues to feel not safe, not trustworthy, whatever, and you get further and further and further apart. And really a separation then just becomes a feelings-based trial divorce.

Starting point is 01:14:30 And so you brother got to, if you're out on your own and you're separated right now, live in your mom's house, George, tell me if I'm wrong, like, bro, you've got one plan and that is to work three jobs, four jobs, five jobs, work exhaustively, because you've got some debts to pay off ASAP. You're doing this debt snowball on your own, and I would attack that IRS debt first because they can really screw up your life, garnish your wages. So I would just go ahead and knock that out. Maniacal. Then work on the credit cards. And depending on your income, this might take a year, two years in the middle of the storm you're already in. But man, stay on the path. Way to go. If you're waiting for rates to drop before you buy a home,

Starting point is 01:15:24 here's what nobody tells you. When rates fall, every buyer who's been sitting on the sidelines makes their move at the same time you do. That means more competition, higher prices, bidding wars, all that. That's why I tell people to talk to Churchill mortgage before they do anything else. Churchill gives you a strategy so you're not at the mercy of the market. They can show you what you can afford, not just what the bank will approve. And with their certified homebuyer program, your financing is completely secured before you shop, which means when rates drop and everyone rushes in, you're already ahead of the crowd. You're not scrambling. You're not scrambling. for pre-approval while the house goes to someone else. My husband and I bought both of our homes with

Starting point is 01:16:04 Churchill and having a real strategy, not just a rate we were waiting for, made us ready when it really mattered. So start your search with Churchill. Click the link in the description or go to Churchillmortgage.com slash Ramsey offer for an exclusive Ramsey audience offer. Churchillmortgage.com slash Ramsey offer. Our question of the day is brought to you by Ask Ramsey, your free AI money that provides personalized money answers based on Ramsey principles. Check it out at ramsysolutions.com slash ask Ramsey. All right, today's question comes from Eddie in Montana. Eddie writes, I love sinking funds. Nerd. I've only heard that sentence from one other person, and that's you, George. I submitted this question. I love sinking funds, but I'm worried I started them too soon.

Starting point is 01:17:07 When a major car repair came up before my emergency fund was fully funded, I drained several sinking funds to avoid debt, and now I feel broke again. Should I have a fully funded emergency fund before starting sinking funds? Woof. Good question, man. Yeah, sinking funds happen regardless of your baby step. Now, you don't want to go overboard and have like 48 sinking funds while you're trying to pay off debt. You want the margin to go toward the debt. But things like car maintenance and repairs, like you know you're going to have to get new tires, you know you have to get an oil change. Let's set that money aside every month so that it's there when we need it. Now, you would have major car repair come up, so that's a little bit different. You're going to feel broke. And luckily,

Starting point is 01:17:47 you avoid a debt. Right. So even if you drain these sinking funds, you did the right thing by not going into debt and using other money, even if you have to replenish those sinking funds later. So just know it's going to get easier. Once you're out of debt with a fully funded emergency fund and you have those sinking funds building, you're not going to feel broke anymore. So right now, you feel broke because you are kind of broke. That's sort of the game when you're a baby step two. I would have told them to save up and get an emergency fund and then start saving for things like a new car or a new boat or whatever.

Starting point is 01:18:18 But I guess a sinking fund can also be for, I'm going to need new tires this year. I know that, right? So to me it depends on what's the nature of a sinking fund. Is it for... It's not for emergencies. A new car someday? Or is it I'm going to need tires?

Starting point is 01:18:34 Because for me, I'll just put that in my budget, but I guess that's technically a sinking fund. Yeah, it just depends on if it's a big business. like a $1,200 insurance bill that's paid annually. Well, you don't want to just try to cash flow that in the month that happens. A lot of people can't do that. Sure. So what you do is put $100 bucks aside.

Starting point is 01:18:48 Every month, you can transfer it to savings. You can let a build in checking. It depends on the way you like it. And that way you have that money ready to go. So the sinking funds and emergency fund are sort of yin and yang to me of we know this is coming and we don't know what's coming. But where people get in with sinking funds is they'll have a car with 150,000 miles on it and they'll say, I know this is going to crash someday.

Starting point is 01:19:08 And so I want to start a sinking fund now. And I would say in that situation, you need to get emergency fund because your refrigerator can drop tomorrow. Yeah, that fully funded emergency fund is the priority. And if something happens in the meantime where you would have had a sinking fund, it's okay to use some of that if it's a true emergency. But again, if you know you're going to need a new car, let's just save up for that car and not call it an emergency. But that's a good question. I wonder if we even need to get more sophisticated with classifying sinking funds, one for like you said insurance you know it's coming every year um it's basically if you couldn't cash flow this in a

Starting point is 01:19:44 given month right then let's create a sinking fund for it but you know it's coming october 15th you got to pay your life insurance bill or your car insurance bill for the for the six months or for the year whatever um that to me is different than a sinking fund for a vacation that's coming in two years or one year or a uh i don't know what a further down the road expenses yeah not everything has to be if it's 10 years away we don't have to worry about it right now sure, but you can do the math based on your household income and your margin to decide how much can I put toward this while still hitting all my other financial goals and staying on the baby steps. And also, man, I know we've got to get to the next call. I want to double

Starting point is 01:20:19 click on this because you said something that's really important and it's just good for people to remember. Man, I remember these days so much and, I mean, I still have them now, but not at the same acuity. And what he just mentioned here, it's so frustrating to finally pay off your last credit card and then start saving money and then immediately something happens and you feel like you just went back and that you're now you're like he said I feel broke again I just want to cheer you on for a second a yes you feel broke again because you're back to zero margin true and this is exactly why you saved money so you wouldn't go all the way back imagine if you didn't have that right have to go knock on the door of a creditor and say will you save me um so it is

Starting point is 01:21:08 super frustrating. The feelings of frustration are right, good, and this is exactly why you save money because not if, but when things are going to hit and they always will hit. And that emergency fund, I call it the never going to debt again insurance policy. That's really what it is. It's a dramatic way to. I like it. It's a long acronym, but it's, it doesn't ever ring to it. We're working on the marketing. We'll come up with a catchier name for it. All right, Laura is in New York City, New York up next. What's going on, Laura? Hi, thank you so much for taking my call. I started listening to you guys about two weeks ago,

Starting point is 01:21:42 so I'm so grateful to be able to have the opportunity to talk to you guys. Welcome to the cult, Laura. We're glad you're here. Get some input. Thank you. Okay, so a little backstory. I'm 27. My partner's 26.

Starting point is 01:21:53 We both separated from active duty in 2023. We've been long distance for a year and a half. And in November, I'll be moving across the country, and we're finally moving in together. He will be paying like 70% to 80% of the bills while I pay off my debt. since I am in baby step number two. He was able to secure his big boy job right after getting out of the military. And right now I'm using the GI Bill for flight school.

Starting point is 01:22:17 I'm still in the reserves and trying to work part time to pay off on my debt. And I guess my question here is, as far as moving in, like I know most callers here are married and already have combined assets and joint accounts. So as far as moving in, like I want us to budget together. He has no debt. And even if, you know, we keep our money separate, I just want him to get on the right path since he has the advantage and the leverage to do so. But I want us to budget together and I want him to invest for his future and eventually it'll be our future.

Starting point is 01:22:46 But how do I navigate this as a girlfriend and not a wife without coming off as controlling and overstepping? I mean, I cannot recommend enough. And I'm talking to you like you're my sister right now, okay? Yes, y'all are taking this quote unquote next step in your relationship. and yet y'all have chosen to do that all that's your decision but keep your finances separate your money and his and if you want to encourage him to like begin thinking about the future and saving money and not borrowing money and and following ramsie ramsie principles the best way you can influence him is by living it out but what i've what we see time and time again i i've i've we see time again

Starting point is 01:23:36 I've seen personally time and time again is people are dating, they move in together, they start splitting everything, and God forbid, and I would never wish this on you, but something goes awry, and people have joined accounts as though they are married, and there's no legal protection for you if there's a separation. And what that means is he may have paid off all of your debts, and then you'll break up, and he's like, hey, I want money back, or vice versa. You've helped pay rent, and you pay out it way into his mortgage, that his name is on the deed and you say, well, I want some money, and there's no legal protection. There's no legal separation protection for you. Right. So we actually don't plan on combining assets, I mean,

Starting point is 01:24:16 combining any money. We don't plan on doing that. I just meant more so like us living together, like, hey, let's have a budget on how much we should be spending, you know, with our money separately, how much we should be spending on this. And we're actually going to be renting. So he doesn't own anything yet. But if it's, if it's like we're splitting groceries, then it's, it's kind of going to be a split budget. You guys are still going to do your own budget. but you're going to then split the food bills that come in. So I wouldn't combine our budget and say this is our household budget. It's just going to be, all right, I'm allocating 200 bucks to food.

Starting point is 01:24:47 He's allocating 200 bucks to food. So we got 400 to spend overall. Tell me this. My wife has, thank God over the years, even when she was my girlfriend, was like, I'm thinking about when we were in college and we were dating. And she was like, hey, here's an idea. You could study for that exam and actually pass it. I'm not going to go out with you tonight because I'm studying.

Starting point is 01:25:06 and I was like, oh, because I could study. What is it about the conversation that you think he's going to blow you off? That makes you feel like he's going to think you're controlling. If you sit down and say, hey, this matters to me. So actually, as someone with debt and someone who made financial mistakes in my early 20s, I see him as someone who lives so simply has no debt that I'm like, wow, you could be maximizing your money. And he makes over six figures. He lives simply and his money is just sitting in saving.

Starting point is 01:25:34 So it's not even like. So he doesn't invest. to do more for himself. No. He has he told, well, I brought this up to him and what he said was, I don't really like the idea of money just coming out of my account without me like seeing it or knowing. I'd rather do it myself. I totally get that impulse. So I've been thought, yeah, and I, so I've been slowly talking to him about this like planting the Dave Ramsey seed like every, every couple of days. What do you think about this? We're going to send you, we're going to send you both the financial piece digital course, okay? And you can, you can tell him, hang on the line here,

Starting point is 01:26:05 we'll send you a link to it. You can tell him, I want to watch this together. And let Dave, me, George, and others, and Rachel, and those on the videos teach you. Here's why the principals work over time and in the short term. And here's the piece that you can bring to your future self by doing hard things now. I think that's going to be the best thing. And tell him, I want to watch this together. Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. I'm George Camel. John Deloney is next to me. And we're taking your calls at AAA 825. two two, five. James is in Atlanta up next. James, welcome to the show. Oh, what's up guys? Hey, how are y'all doing today? Thank you for taking my call. I'm a big fan of the show. Thank you. How can we help?

Starting point is 01:26:54 Yeah. Yeah, man. So, well, my question is really, how can I get a mortgage? How can my wife and I get a mortgage when we don't have a credit score? So a little bit of background. I'm 29. My wife is 27. I left my W-2 job to start a business last year, and my wife left her job to take care of our little one, our little son. And so, you know, we've been going through the process now of trying to get a loan. My income is going to be right at $250,000 this year, and our net worth is, you know, a couple hundred grand. And right now the brokers are telling us, and the mortgage lenders are telling us we can't get a loan because we don't have credit cards and we don't really have any accredited score. So we don't really have any debt to date. And so I'm trying to figure out why I'm such a bad candidate for a mortgage when I feel like we're in a great financial position. So I would just love to get some advice. I love it, man. Well, you guys are crushing it. I'm so proud of you. Just hearing your numbers and your story is so impressive. How long have you been making this kind of money?

Starting point is 01:27:58 It's been probably about the last two years, two and a half years. Fantastic. And just so you know, you're talking to two guys who have both got mortgages with individuals. indeterminate credit scores. So you've just, you've been barking up the wrong tree, as they say. There are lenders that do this, and the ones that don't do it act like you are an alien from a different planet. So they don't know what to do except follow the broken system that they know, which is, can I just put your information in and pop up a credit score to then grant you the loan? So what you're looking for is something called a no score loan, and it's a process called manual

Starting point is 01:28:29 underwriting. Have you heard of that? I have heard of it. I don't know much about it. Okay. So what it does, you know, back in the day, I'm talking like, 1987. They didn't have credit scores. So what you had to do was go to the bank, and you had a relationship with that bank, and they looked at all your numbers, your tax returns, your income, all of that, your utility bills, can you pay your bills on time? And they would grant you the loan. So it's a similar process. They look for proof of payments. They're going to look for verification of income. For you being self-employed, it's going to be

Starting point is 01:28:59 even more important. So they're going to pull your tax returns. Do you guys rent right now? Yes, we rent. Do you have at least 12 months of documented on-time? payments for rent? Absolutely. Great. Do you have 12-month history of checking and savings statements? Yeah, for sure. Do you have proof that you pay your phone bills and utility bills on time?

Starting point is 01:29:21 Insurance payments on time? Of course. Do you have a solid down payment? Yes. Yeah, we have a good down payment. Ding, ding. So if you do this on a 15-year fixed rate where the mortgage is no more than a quarter of your take-home pay, how much house can that buy you today or at the time you want to buy the?

Starting point is 01:29:38 house. Yeah, I mean, we should be able to get at least, you know, 300, 350,000 at that rate. Amazing. How much do you have saved right now for the house just on its own without your emergency fund? So you're telling me I don't have to rent and take out more credit cards to get your loans? No. If you just, I just gave you the actual checklist that they would walk you through if you

Starting point is 01:30:00 called up Churchill mortgage today, which are the people that we've recommend in the space because they specialize in these no-score loans while other lenders and even really state agents have no clue how to do this or they just don't. And James, listen to me. I got a no-score mortgage from Churchill while sitting in this seat. Okay? It's possible because I've done it. And it's not because John's special, although he is very special. It's just because they're willing to go through the work. And most lenders just don't want to do it because it is manual. It's not automated through a credit score. So as long as you check those boxes, a lot of people call and say, whoa, I didn't know. Well, yeah, you need on-time rental history. You need proof of

Starting point is 01:30:38 income that's stable. You need proof that you've paid other bills on time. But as long as you have that and you choose a good fixed rate mortgage with a solid down payment, you're going to be a great candidate for this. Great candidate. I should be able to get 40 or 50,000 to put down. That's awesome, man. Way to go. Yeah. So call up Churchill, and here's what they'll do. They'll pre-approve you. And that will get you through the process to where when you actually want to go buy that house, it's going to be so much easier than starting from scratch. So call them up or jump on Churchillmorgage.com. and get in touch with them, man. Great question.

Starting point is 01:31:10 I'm inspired by him. Good for you for crushing it in your personal business, man. Yeah, way to get punished for just not playing a stupid game of a credit score. Where you pay off your debt and your score goes down. That makes sense. I think people are on something as big as a home purchase, especially for a first-time home buyer. I think it's a shock to people, not only about the credit score thing,

Starting point is 01:31:31 but it's a shock that nobody cares about you. You are a number in an algorithm. in a spreadsheet. And if you don't meet, if you meet this number, here you go. If you don't meet, and it's like, no, no, no, I'm a guy. I'm clearly doing a great job. I've got a good marriage. Don't care. What's that number? I'm going to plug you into a formula. And I don't know. It surprises me still that it's so, it's behind the scenes, even though the commercials have smiling people and they're all shaking your hand. No, but they don't care. They just want a number to plug into a number to plug into a number. And my experience with Churchill, it's, yes,

Starting point is 01:32:08 sponsor the show, but my personal experience is they're real people and they listen to me and they say, I need this form, I need this piece of paper, let me see this but they're great, they work with me, they're humans, they treat me like a human, so I love it. And a lot of people think, well, it's going to take me so much more time, it's going to be so much more expensive and that's a bunch of hoopla, because it's not true.

Starting point is 01:32:27 It's really not that much work. If you find someone who knows what they're doing. And who will actually do it and treat you like a human and not a number. The other pushback I find funny is people they get mad at us because they go, wait, once you get a mortgage, you're going to have a credit score. So what was the point? And I'm going,

Starting point is 01:32:41 the point wasn't the goal of a zero credit score. The point was to opt out of a broken financial system where you have to stay in debt and keep all of your credit accounts open to quote unquote win. Right.

Starting point is 01:32:52 So it's kind of like saying, I'm going to drive the speed limit. Well, that police officer over there just gunned me. Yeah, but that's between him and his, like, I'm not playing the game. I'm not worried about getting a ticket because I'm, you know what I mean?

Starting point is 01:33:05 it's like somebody's going to be scoring you over here. They can knock their lights out. I'm not going to, I'm not participating in that. That's right. And if you follow our plan, you're going to pay off your mortgage early, and then your credit score will soon disappear once again. So that's what happened to me. Again.

Starting point is 01:33:19 And now I don't have to think about it. I don't have to download a stupid app to keep up with my credit score to then get mad and confused as to why it's going up or down. It just doesn't matter. And I still get great insurance rates. People also complain about that, John, they say, well, without a credit score, you're not going to be able to get a job. I'm like, no, they're pulling your credit report when you get a job, not your credit score,

Starting point is 01:33:38 and that's to make sure that you don't have a bankruptcy or you don't have bad debts because they don't want to take that on. That's a risk for them. So that's what they're looking for. And so all the angles are like, well, it's going to affect all these parts of your life. I'm going, it doesn't. And I would love to have a candidate who's coming to work for me that if I happen to work for a place that pulled credit score, because I'm going to put you in a job with high responsibility where

Starting point is 01:34:04 I need to see if you can manage stuff. And the business decides to pull your credit port as part of their fact finding on that. And I was to say, hey, you have a zero score. Tell me about that. And the candidate smiled and said, yeah, 10 years ago, I decided I don't want anyone to tell me what to do financially. And so I don't owe anybody any money. Oh, yeah. I would hire that guy on the spot.

Starting point is 01:34:25 That's right. On the last one we get is renting an apartment. And having actually done this multiple times with multiple apartments, some of them corporate complexes, some of them landlords, all they really want to know is can you pay? Do you actually have the income? And are you a criminal? Outside of that, you might have a slightly higher deposit that you'll get back once you move out. But it was such a nothing burger after everyone told me you'll never be able to live anywhere without a credit score. You'll rue the day. I'm alive to tell the tale, guys. 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.

Starting point is 01:35:27 Now you can get that same kind of help any time 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. It's fast, simple, and free to use. Go to Ramsey Solutions.com and try Ask Ramsey today. That's Ramsey Solutions.com. If you found value in the conversations we're having today, pass it along. Sharing the show is one of the biggest ways you can help us grow.

Starting point is 01:36:15 So hit the like button, the share button, text a link to a friend. You never know who this show could help. We appreciate it. Sarah is in Sacramento up next. Sarah, welcome to the show. Hi, thanks for having me. Absolutely. How can John and I help?

Starting point is 01:36:32 So my husband and I are on different pages about using our investment that we have in crypto to pay off our mortgage. Wow. Now, he does agree that he would like to use it eventually, but he would like to wait for it because he believes it's going to grow exponentially and it's too volatile for me. And so I would rather pay it off now and have some peace of mind. How much does he have in Bitcoin? Enough to pay off our mortgage plus them.

Starting point is 01:37:08 Wow. So we're talking hundreds of thousands of dollars? Mm-hmm. What did he pay for all that Bitcoin? That's part of the issue. I don't know exactly what his base price was, but he, you know, the tax hit that we'll get on it. So part of my question today was, because I don't know if him and I will get on the same page right now, but if there's any strategies with the tax hit that we'll get, Is that what he's actually worried about? Well, he's worried about that, and also he believes that it's going to keep growing,

Starting point is 01:37:48 and so he'd rather wait for it to grow more, so he has to sell off less. Then why would you ever sell it? If it's going to grow indefinitely. Because that means your tax bill is going to grow, too. I know. I understand, and I agree. Here's the, so what is your main goal here? Is your main goal to pay your house off?

Starting point is 01:38:07 or is your main goal to get out of that that's your that's your that's your main goal that's well my yeah that's what i thought this was for to like um like if if we if we were successful at paying our house off with this investment that would need like that would be sufficient for me okay so i i think that's the place to start because the bitcoin is the is the proxy war here it's the third rail and it's not really about the Bitcoin it's not really about the tax strategy he has a thing that's not yours that he's not including you on that was y'alls

Starting point is 01:38:46 and now it's become his and the thing beneath the thing is I want to not have a mortgage I want to feel safety and security in my home so if you need to keep this precious thing and by the way I own zero Bitcoin not one shred and do I wish I could go back in time and buy a whole bunch at nothing

Starting point is 01:39:02 of course I do and I also didn't get into Beanie Babies and NFTs and all these other things. You throw enough darts backwards. One's going to hit. Great. And it could go up a 5 trillion percent. And it could go to zero because it's always going to have to be traded for actual money at some point. Right. But that's neither here and or there. I have crypto friends. I've got Bitcoin friends. And dude, there is, there's just that conversation is just a ship that sailed. The real conversation in your home is, I want the peace and security of having a paid off home.

Starting point is 01:39:37 If you don't want to use this, A, we need to talk about our shared vision for what retirement looks like and our shared vision for the future. But I want us to come up with a plan right now for how we're going to pay off the mortgage and one year, two year, five years, 10 years, et cetera. Because that's going to force you both to the table and say, okay, we're going to take separate job. We're going to take extra jobs.

Starting point is 01:39:59 We're going to have to knock on vacations, whatever. How much sacrifice is he willing to make to hold on to this precious Bitcoin thing, right? So at the current rate, if you didn't sell any Bitcoin, how quickly are you guys going to pay off the house? Oh, a long time. So are you even making extra payments on the principal right now? No. And why is that? Is there no margin?

Starting point is 01:40:26 We're paying off some other... We're paying off a car. Oh, okay. You got other consumer debt. Yeah, so we have a little... Not much. We have like $20,000. That's a lot to a little guy like me, but you guys are rolling.

Starting point is 01:40:41 Okay, so $20,000 a car, any other day? No. Okay. Do you have an emergency fund? We have about $5,000 in the bank, otherwise everything else is wrapped up in crypto. Like no retirement? No. His is in there, mine is a pension.

Starting point is 01:41:02 Okay, let's use real numbers here. How much do you have in crypto? We're not going to come steal it, I promise. I wouldn't know. how. Like today's value might be 600. How much of your net worth is in crypto? All of it.

Starting point is 01:41:17 Oh, sister. I'm scared for you. Yeah, dude. I know, exactly. This man is addicted to this. This is greed at this point. Sell off a piece of it. Mm-hmm.

Starting point is 01:41:31 To clear everything. If this was a single stock in a company, wouldn't it worry you? Yeah. Yeah. And companies actually produce something like revenue and products and services and stuff. That's the scary part. I'm not anti-crypto. I'm not anti-Bitcoin, but it leads to situations like this, which then makes me anti-Bitcoin. Because people get so much tunnel vision, they put all of their eggs in that basket going, you're an idiot if you don't believe in this, like it's Santa Claus or something. And so you guys need to have a whole different conversation. This is not about paying off the house. this is about legitimate safety and security and diversification. Yeah, you're incredibly vulnerable.

Starting point is 01:42:11 I mean, Bitcoin went down like 50% in the last 12 months. Like, it took a huge nose dive and it's recovered a little bit, but that's frightening to have half your net worth disappeared because a bunch of dudes decided I'm a little spooked. I know. Yeah, exactly my point. So have you had the conversation, I don't feel safe in this house? He knows that it's too volatile for me to stomach. No, no, no, no.

Starting point is 01:42:37 That's not what I said. Have you looked at your husband across the table and said, I'm scared for my safety? I don't feel safe in this relationship because we are 100% leveraged on a very speculative thing. No. Okay. Let's clear as kind. Let's sit down and say, I'm scared.

Starting point is 01:42:57 And I want you to hear me say you're choosing to have a scared wife. over this speculative thing you got. Mm-hmm. Right? And that's like, I need you to own that as my husband. Mm-hmm. And as a husband, if my wife comes and says she's scared about anything, it stopped the presses for me.

Starting point is 01:43:23 Even if I don't agree with it. If I, there's no boogeyman outside, if she says I'm scared about what's outside, you better believe I'm getting a flashlight and I'm going outside. Right? Yeah. But don't tell yourself, well, he already knows or he think, be very clear. Because you got 600 grand.

Starting point is 01:43:40 I mean, how much would clear your mortgage? Four. Four. Plus your 20K car loan. Plus let's fill the emergency fund. And so how much would we have to sell to make this happen? 500 of the six? Well, with capital gains, you're probably to get rid of all of it.

Starting point is 01:43:58 And he's unwilling to do that. I don't think he's going to do any of this. I think he's made up his mind. That's tough. Yeah, for right now, he has. And that, but here, here's the things here, that's not going to change. Because if he makes more, he's going to say, see, I told you so, we have more, and also, it's going to be a bigger tax it, so let's just leave it alone. So let's just leave it alone. And then what? And then if it goes down 50% again, it's going to be like, well, we've got to write it out.

Starting point is 01:44:26 You can't retire off of this because you don't know what's going to happen with it. And he refuses to sell any of it. Is he still buying more? No. Okay. No. What's your household income? Take home is 170 a year Fantastic Do you guys have kids? Yeah We have three

Starting point is 01:44:44 Mm-hmm And you're both working full-time? Correct Okay Yeah I hate this for you Because you'll have a get-out-jail-free card I know You'll have one

Starting point is 01:44:55 Yeah This is some golden handcuffs If I've ever seen them Yeah, it's just You were so close to security and safety That it just boggles my mind But again, I think there is a level of selfishness and greed that comes along with anything this speculative,

Starting point is 01:45:10 anything that's done this well in a short period of time, that I don't know that a conversation is going to convince him. You might need a third party. You might need to go to some counseling to get to the bottom of it, but this conversation is not about Bitcoin. Well, and that's what I say, if it's about I need safety and security and you're withholding that from me, and he says, I don't care, that's the foundational problem. That's the smoking gun. Listen, your home is your most expensive asset, and now you're ready to do. to sell fast and for a lot of money. But in this whack-a-doodle real estate market, one mistake could cost you tens of thousands of dollars. This ain't amateur hour. You need a pro in your corner, someone who knows how to

Starting point is 01:46:13 price your home right, market it well, and negotiate the best deal. That's where a Ramsey-trusted real estate agent comes in. To find one near you, go to Ramsey Solutions.com slash agent. That's ramsysysolutions.com slash agent. Everyone needs insurance, but it can be hard trying to find who aren't just looking to make a buck and agents who know their stuff. But Ramsey trusted insurance pros are vetted and coached to make sure they're market experts who have your best interests at heart. So go to Ramsey Solutions.com slash coverage to find the type of insurance you're looking for and connect with a Ramsey trusted agent.

Starting point is 01:47:01 Alonzo is in Chicago up next. What's going on, Alonzo? Good afternoon, you guys. How you doing? We're doing great. What's up, man? Okay. I was reaching up because I'm currently a college student.

Starting point is 01:47:16 I'm 19 years old. And my first year of college, I decided I wanted to start a business, and I started selling a cologne perfume. I made enough money for me to, well, I made enough money thinking I could buy a new car, which is what I did. Unfortunately, I fell into that. I succumbed to that, oh, I deserve it. I heard you mentioned in the previous video, like, you know, like just keep grinding.

Starting point is 01:47:41 And I bought a new car. Right now, the car payment is about $759 per month. The insurance is $180. And then my phone bill. So my every month expense is $1,000 and $1,011. I'm currently in the space where I'm trying to figure out whether I should continuously pay this or voluntarily give the car up. I did complete baby step one.

Starting point is 01:48:09 I used the car every day. for DoorDash and landscaping and also to still do more perfume business here in college. But it's causing a lot of stress because I have that feeling where I have to work every single day on top of school. I'm a full-time, you know, college students. So, like, it's kind of, it's a little bit stressful when I'm trying to figure out whether I should continue down this road or pivot now and, you know, pursue something else. Yeah. So, dude, A, I'm so glad you're recognizing this at 19. I didn't recognize this until I was way older than you. So you're ahead of the game, just knowing like, oh, I don't ever want to be in this situation again.

Starting point is 01:48:46 And stress is real, man. I've made dumb car purchases, too, so I'm right here with you. What's the car worth? I took it to a dealership. They overcharged me about $5,000 on the car because I was young. He was moving fast. So he said, I'm about $5,000 in negative equity. He said they were willing to give me about $20,000 for the car.

Starting point is 01:49:10 Is this the same dealership you bought it from? No, this is the same Honda, but not the same dealership, though. So if a dealer is telling you you're five under, my guess is you could sell it on Facebook Marketplace and basically walk away even. Have you looked up the private party value? The dealerships are going to lowball you every time because they got to make their profit. So if you go to Kelly Blue Book and look at personal sale and you're a hustler, you know how to sell, do. That's what you do for a living, so you're good at this.

Starting point is 01:49:44 I can almost guarantee you, if they're just telling you you're 5 under, you can get real close, if not even Stephen. Get somebody to buy this car from you, take it off your hand. You take care of it. I know you do, and you can walk away, man. Okay. So you said Kelly Blue Book. I haven't heard of that. KBB.com. It's basically

Starting point is 01:50:02 the one publication that everyone goes to for the price of a used car, a new car, and it's got little meter on it that says, like, what kind of condition is the car in, and it has a dealer trade in value, a dealer for sale value, but also has a private sale value. And that's the one you want, because you're going to get more for it, but it's also more hassle, because you've got to sell it yourself instead of just dropping it off of the dealership. But your best way out of this is not a repo, whether it's a voluntary or involuntary, because here's what happens, Alonzo. They're not just going to get you out of the loan.

Starting point is 01:50:35 You're going to be on the hook for the difference. It's called a deficiency balance. They're going to go sell that card auction for $10,000, and you're still going to be on the for the other 10. So it doesn't actually solve your problems. What would solve it is coming up with the difference. So whether that's your savings or even a personal loan from a credit union, if you can come up with the difference to clear the title and get rid of that car, that'll free up that payment, the insurance, and get you breathing again.

Starting point is 01:51:00 And if you listen to the show very much or seen our videos, you know that we are like one of our main reasons for existing is helping people get out of debt. But I'm okay if you go down to a local credit union and show them how, hard you're working, all this. And let's say you are able to find a buyer for 24 and you owe 25 for getting a small loan for a thousand bucks, the difference, plus $3,000 so you can buy yourself do just an embarrassing sophomore and college car to get you to and from and always worried it's going to break down on you. And now you've got $4,000 to pay off and you can hustle up some business because you don't mind grinding. You can do that and be out of this thing in no time.

Starting point is 01:51:41 Could you get by without a car for now? Definitely. Oh, cool. That's even better. I do use it. I don't really use it for personal. You're using it to make money to pay the payment, which is insane as it sounds, right?

Starting point is 01:52:00 Who's the lender? Who do you owe the loan to? So I owe the loan to executor. Okay. And I want to ask a question because I know you said to sell it. So I put about 22,000 miles on it. and I just got glass That's great

Starting point is 01:52:16 That's nothing Okay I mean that's basically a new car That's great man And it's a Honda you said It's a Honda I made sure they got You know

Starting point is 01:52:26 Oil change and everything Oh man Yeah Honda a 22,000 miles Is a brand new Honda That car's gonna last Somebody And great resale value

Starting point is 01:52:34 On those cars Great resale value So you got this man You got the work ethic Please don't let it repo Keep making the payments Keep up with the payments no matter what it takes, but the goal is come up with the difference that's owed, and then you can sell this thing outright.

Starting point is 01:52:48 You go to KBB.com. And Alonzo, can we make a commitment together? Yes, definitely. Like, I hear promise in you, okay? I don't know a lot of 19-year-olds that are going to school full-time and also work in multiple side hustles. And the stress you feel opening your eyes before you feed yourself, before you clothe yourself, you owe the world a thousand plus bucks a month, right? That's stress. let's make a commitment now.

Starting point is 01:53:13 You're too valuable to the world that my kids are inheriting, okay? I need guys like you out there, grinding, pushing, and changing the world for the better. Make a commitment now. I will never be owned by somebody else again. I'm never going to borrow money again. I would never be on. I'm running this down by the way. But I would never, ever, ever in this world, be owned by somebody else.

Starting point is 01:53:37 There you go. Because essentially, like you said, it's not about the money. It's about the time. That's it. And the piece, man, you're 19. And I know this isn't cool to say. I want you to enjoy college too, right? Exactly right.

Starting point is 01:53:50 I want you to be able to go on a date and not be having to work seven jobs to pay for the car that's just get you more jobs, right? Exactly. Yeah, get on KBB, get that thing sold, man. And if you have to borrow a tiny amount of money from a local credit union to cover the difference between what you owe and what they're going to pay you, great. And get that thing paid off ASAP. and you be in the control of your life for the rest of your life. It's good. It's an honor to talk to you, brother.

Starting point is 01:54:17 I appreciate you guys much, and please keep doing what you guys are doing, and I'll be proudly listening to the show later on today. That's all that I love it. Can I also ask, who's buying perfume? I'm just most impressed that you're able to sell perfume and Cologne in 2026, man-to-man. Dude, he's on college campus. Those guys smell terrible. They don't bathe.

Starting point is 01:54:34 Best place on earth. I came down here and struck a gold mine. Yes. It's about how you pitch it to the people. Do you buy it like wholesale and it's just sitting in the trunk of your car? Or do you make it in your bathtub? No, you know it's so crazy. I have a strategic method of marketing.

Starting point is 01:54:49 So I have like a bandana. It looks like an army of bullets, but it's not. People get confused all the time. And they be like, bro, what is that on your chest? And that's how I get them most of the times. I walk around like that. Oh, you got like a visual cue that gets them talking. And now you got a conversation starter.

Starting point is 01:55:04 I agree. Dude, you're going to crush in sales, Alonzo. I don't know what you're in school for, but you may want to just drop out and go full-time sales. You got it. And yeah, George, few places where you're going to find more people in one area that don't bathe regularly than in a dude's dorm.

Starting point is 01:55:22 Desperately looking for a date. Yes. And now Alonzo's smelling good over here. They're going, what are you wearing, dude? And they're ready to move away from Axe Body Sprayer or whatever to Cologne. That's what's up. Good job, Alonzo. Before we go, give us your best Cologne right now.

Starting point is 01:55:37 What's the one that's in? The best cologne is Kenneth Cole Black. All right. You can never go wrong. Listen, that's from a cool guy, John, so now I know what to go buy. Here's what's so funny. I can almost guarantee between breaks, George is going to be online buying Kenneth Cole Black. Your boy's going to be Googling.

Starting point is 01:55:53 I might buy from Alonzo at this point. I feel like he deserves the sale. Way to go, man. You got this. Call us back if you need anything else. People ask me all the time. George, what's your number one money-saving hack? I'm glad you asked.

Starting point is 01:56:35 Nothing makes me happier than helping another frugal friend. So here's the hack. get on a budget. Seriously, how are you supposed to save money if you don't know how much you're spending in the first place? And that's what makes the every dollar budgeting app a game changer. With every dollar, you'll get a clear picture of your spending, and from there, it's easy to see where you can get more intentional, cut back, and save more money. How much money are we talking? Well, the average every dollar budgeter frees up $395 in their very first budget. And if you ask me, I think you're way above average. So, why are you still listening to me? Go download every dollar for free

Starting point is 01:57:08 and start saving more money right now. Our scripture and quote of the day, we've got Ecclesiastes 5 versus 4 and 5. When you make a vow to God, do not delay to fulfill it. He has no pleasure in fools. Fulfill your vow. It is better to not make a vow than to make one and not fulfill it. Mark Twain said,

Starting point is 01:57:41 Never argue with stupid people. They will drag you down to their level and then beat you with experience. That's awesome. That's a good one. Grace is in Detroit up next. Grace, welcome to the Ramsey Show. Hi, thank you for having me. What's up?

Starting point is 01:57:58 So my fiance and I have been engaged for four years, and we have two children, and we are trying to navigate through paying off our individual debts and keeping things separate until we're married, while also trying to handle medical expenses for one of our children and saving for a wedding. So I'm looking for some advice on how we can work through. the current debt and our financial responsibilities while also paying for a debt-free future when we also have some financial distrust involved in our relationship.

Starting point is 01:58:29 Holy moly. That's a lot going on. Tell me about the financial distrust. Yeah. So about three years ago, I discovered that my fiancé had accumulated almost $20,000 of debt from a period of time that he was off of work. The field that he's in sometimes has influxes. And thankfully he's moved on from that job.

Starting point is 01:58:50 But that really caused like a huge amount of distrust in our relationship when it comes to the financial security of our future. Sure. So we spent a lot of time working through that almost two years, actually, where we got to a point where, you know, bills were being paid on time. I felt like we were establishing a savings again. I got a little lax in some of the accountability on the financial side. And then I actually found out about six months ago that he had gotten into gambling. And some of those debt payments on his side had kind of gone to the side because he had started gambling with the extra money that he had. So we're kind of facing just this, you know, additional lack of trust that I thought we had resolved.

Starting point is 01:59:32 And I'm thankful that there's transparency now, but it doesn't necessarily take away the hurt that comes from that distrust that happened again. So the words I use here, Grace, I'll own them, is financial infidelity. Okay. He's cheated on you twice. Yeah. And this time, it wasn't just scrambling to cover debts and to pay for dinners with credit cards. This time he went a professional route. Right. Right. And so I don't want you to gloss over. Like, it shakes the foundation of your relationship. Yeah. 100%. All right. And so getting on the same page with money here, that, That to me is a, like, if you're looking at a picture of an iceberg floating in the water, that's above water. Below water, you have to ask yourself about, are you with somebody? Have you created humans with somebody that simply is more interested in doing what they want to do when they want to do it? Or dealing with their own demons and not interested in building a life with you. Because it sounds like, like, even the words you use, like, I got lax in my accountability.

Starting point is 02:00:43 You're not as mom. You're his fiance. Yeah. Right. And his not making bad decisions is not your fault because you weren't checking every, every, you know, every balance statement and every, you know what I mean? Like you have to have somebody you can anchor into. Yeah. And so I mean, I'm worried about, tell me about being engaged for four years. Yeah. So that actually is one of the biggest reasons that the engagement has lasted so long. So I found out about the debt about a year and a half after we got engaged initially. And that was just like way too big of a setback for me to be like, yes, let's move forward.

Starting point is 02:01:27 Let's continue planning. At that point, you know, we hadn't even gotten to the point of selecting a venue or any of the vendors for a wedding. So that was like our biggest setback. And the other thing that really contributes to that is one of our kids has a pretty complex medical diagnosis. And so just the emotional side of that, a lot of our time and attention has gone towards, you know, our child's care. So it's kind of just been put on the back burner, which I hate to say, but, you know, the wedding and getting married, like for us, it was just like, how do you come up with enough money or planning or, you know, emotional capacity to even think about getting married when you have so many other things that you're also trying to juggle. Yeah. And then obviously the distrust added onto that.

Starting point is 02:02:11 I mean, you're talking about marriage as though it is the party, as though it is a celebration. Yeah. Right? And that's different than I want legal protection for me and my children. And if you say you're in to the point that we've made multiple kids, then let's go on the courthouse. We'll have a party later. We can't afford a party right now. Great.

Starting point is 02:02:32 That's jillions of couples take that route. That's all good. Or we're going to have a tiny little ceremony with some friends. I've married somebody in my yard. right like you can do it the man i don't want to pile up on this guy because he's not on the phone i don't like talking about people when they're on the phone but but how dare you take borrowed money and go gambling with it when you have a special needs kid that you're struggling to pay for how dare you kind of dad does that right right and if if you're my daughter if you're my sister i would tell you to

Starting point is 02:03:07 run from this guy and i know that's it's easier said than done because you got kids with them you got but how dare you do that forget forget him not honoring his fiancee you have a special needs kid what are you doing yeah you know what i mean yeah i do and i think that's where a lot of my you know anger around it comes from um is like not necessarily the betrayal to me which obviously hurts but it's like i've as a mom always worked to protect my kids um and one of my kids is actually from a prior relationship, you know, when I was young. And so it almost hurts more also because like that was a position he chose to step into. Like he chose to step into a parent position before we even had our child together. So it almost feels like kind of a double slap in the face.

Starting point is 02:03:54 Totally. But also, man, you and I could talk for two hours on this. Here's the thing. I don't think your challenge right now is getting on the same page financially. The challenge for you is do I want to continue to pursue a long-term relationship with somebody that is willing to lie to my face, put me and my special needs kids at risk, and who is then going to take that and add to it the potential for addiction that George and I see are destroying men's lives and families all over this country in real time. Yeah. So it's not, we're not at the, hey, how do we budget together? We're at the, you have to do some soul searching and say, I'm going to call this thing. Or here is the 100% ironclide path for you to regain trust with me and for what this

Starting point is 02:04:46 is going to look like going forward. And I can't be your mom and I'm not going to be your accountant. I'm going to be your partner in this thing. Otherwise, otherwise, you know what I mean? It's never going to work out that way. Yeah. Where is he out with a gambling addiction? Yeah. So after he had come clean about it, because actually he came to me and said like, hey, this is going on me really heavy, which was a really big step for him. We together sat down and ended up blocking him from like all of the sites. There's the way you can go in where if you reenable it, you have to wait a year before you start depositing money.

Starting point is 02:05:18 So it was all like online gambling. Has he gone to gamblers anonymous? Is he seeking treatment? So that is something that he's working on. There's a service that his employer offers that he's doing for that. So yeah, he got to a point where, you know, he admitted that it was a problem. He recognizes that it's an, it's an. addiction. But yeah, it's like the step after that I think I'm struggling with because, you know,

Starting point is 02:05:42 I very much am the type of person that doesn't want to stay in a relationship that's very unhealthy for me that could impact, you know, my financial security in the future. You say that, and I say this with all love of my heart. You say that as a declaration, but you've done it for five years. Right. Yeah, I hear you. And so you're the one that has to look at the mirror and say, what am I worth, what's the safety of my kids' worth, and what's the path to that worth. Yeah. And then if you want to, if this guy's all up, dude, I wouldn't, I wouldn't do this job if I didn't believe in redemption. I wouldn't, right? I believe, I sat with people who've changed everything and it's why I do this job. But man, oh man, oh man. Yeah. You're in a

Starting point is 02:06:25 vulnerable, vulnerable spot. And you know that. You wouldn't be calling. Right now, it's keeping the finances separate. You attack your debts. Make sure all the bills are paid. Make sure the kids are okay. and make sure, I mean, to the best of your ability, that he's doing what he says he's doing. Right. That's all you can do right now, until you guys get to the point where you can tackle finances and goals and life together.

Starting point is 02:06:48 And continue to give him a clear path about what earning trust looks like. That puts this hour of the Ramsey show in the books. 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 - Make A Plan Your Future Can Trust

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