The Ramsey Show - Make Hard Decisions Now So Future You Can Win

Starting point is 00:00:02 Brought to you by the Every Dollar app. Start budgeting for free today. Normal is broke and common sense is weird, so we're here to help you transform your life. From the Ramsey Network in the Fair Wins Credit Union Studio, this is The Ramsey Show. I'm Dave Ramsey, Dr. John Deloney, Ph.D. in counseling, Ramsey personality, number one bestselling author,

Starting point is 00:00:32 host of the Dr. John Deloney Show, and regular driver of cars, is my co-host today. Is there anything you don't do? I'm just saying after that introduction. If you ask my wife, there's a lot I don't do. Phone number here, AAA 825-5-2-2-25. Thanks for hanging out with us, America. We're glad you're here.

Starting point is 00:00:49 Candice is in Spokane, Washington. Hi, Candice, how are you? Good, how are you? Better than I deserve. What's up? Hey, so we have roughly $75,000 to $100,000 of debt. About 25 to $30,000 is credit card debt. and I believe the rest is in a car loan.

Starting point is 00:01:10 And then we outright own our home. And it is we could sell on the market today for about $850 to $900,000. It was an inherited home. So I was just curious if that is a direction we should take. No. My husband, Nate, no, okay. No. You sell the car.

Starting point is 00:01:31 Okay. Or both of them. Okay. You bought stupid cars you can't afford. You didn't buy a stupid house. Yeah. So the car, I could sell the car. Good.

Starting point is 00:01:42 The blue book value on the car is about 30,000 privately sold, and then it's probably about 22 if you were to sell it just as, like, going to the dealer, and they would tell you how to the what? But the what? What do you owe? So we owe. We owe. Oh, I.

Starting point is 00:02:05 I'm sorry, you could sell it for 30. We owe 44. Oh, okay. So you're 14 in the hole on the car. Oh, God, that is stupid. Right. Okay. What kind of car is this?

Starting point is 00:02:14 This is a Volkswagen. It's a 2025 atlas. You just gave Dave an aneurysm. Okay. I'm not, I know, I know. It's ridiculous. I'm not, I'm definitely not opposed to selling the car. My only thing, the only thing is my husband, he makes a certain amount yearly.

Starting point is 00:02:35 And so we just have to be able to budget for that, for all of what, you know, the payments we have with his monthly income. I don't understand what you just said. It should be easier to do what you just said if you didn't have a car payment. Yes, it would be, but we still have monthly payments coming out outside of the car payment that add up monthly. and that would take. Go ahead. It would be easier to do that if you didn't have the car payment. Everything in your life is easier if you didn't have a car payment.

Starting point is 00:03:17 Okay. Is that not right? I mean, mathematically. Yes, that's correct. But what if you take the car payment out and you still are living beyond your means? What's your household income? So his, so it's a. about $4,000 a month that he brings home.

Starting point is 00:03:39 And that is, and then we have, our kids are in a school that we pay for. And it's a private Christian school. I think that costs roughly between the two of them. That's over $1,000 a month. So I think that's about $1,200 a month. And then we have like groceries. We have. My big concern for you guys is, is,

Starting point is 00:04:05 you're sitting on this big house with this evaluation that the internet gave you, right? But you've got symptoms. You've got illnesses underneath this. And we've seen this time and time again. You're going to sell this house and you're going to get a bunch of equity. You're going to pay off these cars. You're going to pay this off. And then your family is going to end up in another place.

Starting point is 00:04:32 And you all still haven't practiced living beneath you. your means. And so the issue will still be there. What you're dealing with is the math problem in front of you. Yeah. The thing I'm right, the thing I hear you saying and I don't, you're on the radio, so it's not fair to you because you're nervous and I don't want to pick on you, okay? But the way you're forming your sentences and talking about this, it's as if you guys buy things and make decisions about school tuition and these other things that as if the decision doesn't matter compared to your income. You have to make decisions within your income.

Starting point is 00:05:10 You can't, let's pretend the school tuition was $8,000 a month. You couldn't do it. Right. You just have to say, no, the kids are going to a public school. Right. Okay. And so, but that never entered Gerald's minds. You just said, I want to do this and I did it. And I want to buy a Volkswagen and I did it. And I want to do this and I put it on a credit card and I did it. And without any measuring back against the actual income to say, oh, wait a minute, we can't afford this. Okay. And you've got to learn that skill.

Starting point is 00:05:45 That's what John's saying. Otherwise, this debt will grow back and you will have lost a million dollar house. Right. And so what I would rather you do, if I were in your shoes, what would I do, having been broke myself when I was 28 because I was stupid, and I got a Ph.D. and D-U-M-B, so I know what this is, okay? And I know how scared it feels, and I know how to control and chaotic it feels. And so what I would rather the two of you do is to sit down and look at this and say, we have to make some hard choices. And the hard choices sound like we might need to sell both cars. We might need to put the kids in public schools and we might

Starting point is 00:06:22 need to work some extra jobs or some combination of those things to make this work and get ourselves out of debt and keep this fabulous property. Now, after you've done that and you've learned the skill, if you look up and say, this is a million-dollar house and I really don't like it, I might want to live in a different house that's $700,000 that I like and sell it and pay cash. I wouldn't mind that transaction, okay? But I want you two to deal with what got you here before you use the house as your get-out-of-debt free card.

Starting point is 00:06:57 Right. Is that fair? Because that helps you win 10 years from now. Yeah, for sure. And it sounds like there's conversations in your marriage that y'all haven't had because you've got this giant savings account called a really nice house that's paid for. Is that covering over everything kind of? Is that glossing over everything? No, yeah. I mean, I've been in a lot of prayer about it, and so I was just kind of speaking in council. and I think this answers my question. I think the two of you sitting down together and growing as a couple in your relationship

Starting point is 00:07:32 and putting some limits on your life that matches your income and making some tough decisions is going to be really good for the future version of you. Yes. That's what I want for you because we love you and we want you to win. And that's where we want you to go. And then kind of when I got all that going, if I still want to sell the house anyway, then whoop-ed-upy sell the house. Okay, it's just a stupid house. You can get into the house or everywhere, especially if you've got a million dollars in your hand. It's helpful. Yeah, Dave,

Starting point is 00:08:03 probably the most concerning part of the conversation that I feel like we were having more and more on the Ramsey show. We're seeing it more play out in political conversations is that if anybody has to make a choice based on reality, on this is how many dollars I make, that somehow that choice is unjust. That choice is unfair. It's not fair. And everybody is faced with making true, real choices. Yeah. And that's where freedom is found, man. We told our kids when they were growing up, fair is where the tilt-of-world and the cotton candy is. I ain't no fair, baby. Practical ways to save time and mental energy, especially during the summer when life gets busy.

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Starting point is 00:11:14 Hi, Michelle, how are you? I'm doing good. How are you? Better than I deserve. What's up? Started reading the Dave Ramsey books and listening to the podcast a few years ago. I called and other advice I heard changed my life. I did pay off all my consumer debt and all my customers.

Starting point is 00:11:32 credit cards, which actually I even am getting a little emotional about because I'm really proud of myself. Good for you. How much did you pay off? I would say probably around $10,000, but including all the interest, honestly, more like 12. Yeah. And what's your income? Yeah.

Starting point is 00:11:49 So that was the advice. What was your income? My income now is 110. When you were paying off the $12,000, what was your income? $110. Oh, okay. Okay, cool. And how long did it take you to do that?

Starting point is 00:12:05 Well, it's been the last nine months. Good for you. So, yep. And so my question is now it's just my student loans. I don't know if that's considered consumer debt. It is. I get, okay. Well, in that case, I apologize.

Starting point is 00:12:19 No, that's okay. No apology needed. No apology needed. How much do you own your student loans? 23,000. Cool. And I'm so proud of myself for getting all of the other stupid debt. that I racked up that I am having an adverse reaction where it's like I want to pay it off so

Starting point is 00:12:39 bad. But now my question is, can I save money at the same time? No. Do I need to go through this hell hole one more time? Let's go through the hell hole one more time. You're just not all the way through yet. You just got a finish. No. Yeah, that's all it is.

Starting point is 00:12:53 So you're still in the game. You just didn't know it. So just keep riding. If you're going through hell, keep riding. Are all $23,000? Is that one big giant loan or is it several small? smaller loans? It's four separate loans at 5.05%. Great. Just take each one of them, take the smallest one and knock it out as though it's a credit card. Okay. And then take that money and knock

Starting point is 00:13:15 out. That's not treat it like four credit cards. That's right. It's four. Yeah, smallest or the largest. So then what can I do for myself to reduce the anxiety and lack of sleep? Because I think just handling a small little bit of 12,000 for the last nine months, I didn't realize how much of an effect it was making on my heart and my relationship with my family. I actually, it's kind of shocking how numbing it is when you have credit card deaths and then you're like, but working your way through it should not be having an adverse effect on your relationship. It's the opposite. It should be giving you a sense of power.

Starting point is 00:13:50 The path through anxiety is through it. I'm actually having more anxiety because I did actually tell my family that I'm tackling this. And I even had a phone call two days ago with family and they're like, you really can't afford $400. for a Christmas flight. You really can't. Okay, so the anxiety is not about you paying off debt. Your anxiety, what money is doing, and we say this all the time on the show, money is just a symptom of a bigger issue.

Starting point is 00:14:13 The bigger issue is you're making $110 grand. You must be good at what you do. You're competent in your job. You're busting your butt to set yourself free financially. And yet, somebody else is still telling you when and where you're going to be on this particular day for this particular holiday to make their life better. Yes, that's exactly what's happening. That's the anxiety.

Starting point is 00:14:32 The anxiety doesn't come from money or debt reduction. It has nothing to do with money. It comes from your mother being a twerb. Yeah. Oh, okay. Well, actually, I didn't, maybe, thank you for this phone call. That's actually true. If I wrote down some notes, I probably could have probably logically broken it down.

Starting point is 00:14:49 No, no, no, no, no. You did fine. You did great. You did great. I'm proud of you. Yeah. I think you're doing better than you feel like you're doing, but I'm going to suggest, and John is suggesting that we assign the cause of the anxiety.

Starting point is 00:15:01 where it belongs, which is family pressures that are inappropriate and violating boundaries, rather than assigning the cause of the anxiety to the debt snowball. I see what you mean. Because 35 years of doing this most of the time, the debt snowball is tough because it requires sacrifice, not going out to eat, saying no to people that are pushy, all those kinds of things. But it gives you this sense of power over money, which has had a power over you your whole life, and for the first time you're telling your money what to do, and that is not anxiety-inducing. It's quite the opposite.

Starting point is 00:15:39 And the nerd word- When I'm on my own. Yes, when I'm on my own, I'm like, wow. Yeah. I'm proud of me. Look at me. Yeah. And you should be proud of you.

Starting point is 00:15:47 Yeah. So in that case, I need to maybe pray or take some notes, like how to have those conversations with family because that's exactly what's happening. Yeah. They are like, you make $110. Why are you worried about $20K? You can literally do that in a few months just, I really don't run my plans past people that have negative things to say about me.

Starting point is 00:16:08 Or who don't share my values. They don't get a vote. Okay. Oh, I understand what you're talking. You're talking about boundaries. Okay, I can do this. Okay, so I will set some boundaries and say, I need to. Let me tell you how to do this.

Starting point is 00:16:21 Let's talk about some verbiage, because this is a really good question. It's a great question. So it's, we're taking this call in August, okay, at the very beginning of August. I want you to sit down with yourself in a match. Imagine Christmas. And I want you to ask this question. How do you, Michelle, want Christmas to feel? You want to feel peaceful, joyful, fun, whatever.

Starting point is 00:16:45 And then I want you to go backwards to Thanksgiving. I want you to go backwards to the doldrums and the beauty of fall up there in Madison, where it's kind of cold, but also the leaves are changing all that. I want you to reverse engineer that. And then I want you to send an email to your family and say, here's what my holiday plans are going to be this year. I hope you like them. I hope you like them. And then here's the challenge with this. They may call you, they may write you back, something ugly. That is them coming up against the boundaries that you're setting given this season of your

Starting point is 00:17:19 life. And it's a season when you're trying to set yourself free. They're going to bang their head up against your boundaries and challenge you. They're going to probably say things about you. They're going to make judgments about you. And what they're doing, I want you to imagine them trying to yell at you from the other side of the fence. That makes a lot of sense. Do you what I'm saying? It's not going to be pain free. In fact, it will be painful.

Starting point is 00:17:43 But also. But it's also going to be very empowering. And you're going to see your anxiety drop. Yes. Okay. Anxiety comes from meeting someone's expectations you care about. I don't care about your expectations. Sets me free from anxiety.

Starting point is 00:17:56 And someone who says a line like, you make $110,000, you should be able to, that That's a line of immaturity. Would you agree, John? Yeah. That's an immature, emotionally immature person. Well, it's saying I'm going to come up with reasons why you have to do what I want you to do. Yeah. I mean, I was hosting a Christmas party the last three years, and I told them, I said this year, no, I'm not going to do it.

Starting point is 00:18:23 Yeah. So let me tell you what happened. I'll give you another, here's another real world example. We did this, okay? Sharon and I were broke. We were bankrupt. We lost everything. We could barely keep the lights on.

Starting point is 00:18:31 As a matter of fact, one week we didn't. Okay. And so she has this big, beautiful family, and they're all very generous and loving. They're sweet people. And she's got five brothers and sisters, and there's 13 grandkids, of which my three are three of the 13. And these people all gave each other a gift every Christmas. It's 92 gifts. I mean, it's crazy, right?

Starting point is 00:18:50 And so we sat down at Thanksgiving and we said, hey, guys, really sorry. We're broke. We're not buying everybody a gift this year. We would like to do name drawing, or we'll just opt. out and y'all just we'll just dodge christmas for one year because we're broke we can't do it and three of the other siblings said thank god somebody finally said it we need to do name drawing this is crazy and you know because i we raised our hands and we didn't ask them we told them we're not doing this this year we can't and it changed everything and they were not mad or mean

Starting point is 00:19:28 or weird and sometimes people are man or meat or weird but we just most the time they're not but that was the year in 1980 when the Reedy family Christmas changed. And it has been the same since we changed it. And it may change again someday because somebody else comes in with a vote, right? But for now, that's the vote. Her dad's 97 and this is still how we do Christmas. It's awesome. Just takes one family to have the hard conversation. Hey, this is Dr. John Deloney. Sleep is a huge deal to me because better sleep means better health. And if you've been losing, losing sleep or waking up, twisted up, and sore because of some old, thin, gross mattress that wasn't designed with you and mine, I want you to start caring more about your sleep

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Starting point is 00:21:49 Maddie, hey, Ron. How are you? Hey, afternoon, Dave. Pretty good. How you been? Better than I deserve. How can we help? Awesome. Well, my initial question was, I sent in a few weeks ago. It actually took minutes or remember what it was when Dawn contacted me. I'm 64, and I get a zillion spam calls a day about insurance and Medicare, you know. So it is, a guy contacted me about paying off my mortgage sooner.

Starting point is 00:22:16 And we have 19 years left on our 30. year loan and and he ran over some numbers honestly i don't remember all the numbers about how he could pay it off in six years and part of that plan which is a reason i sent the question to your your crew was uh my trusting somebody else to uh take all my money because that's the way they do it they want for every bit of my income and then they give you back enough money for what you think you owe and bills and they take the left over and uh he ran numbers and he said yeah we can pay your house off in six years. I couldn't say yes to that on the phone.

Starting point is 00:22:53 And I said, well, I need to think about that. And I thought maybe, I'm pretty sure you and your crew have probably heard of this happened with a few companies. Yeah, it's been going on for about 10, 15 years. It's a new version of an old scam. Oh, is that right? Yeah. Here's the deal, okay?

Starting point is 00:23:11 You owe what on your home? 85,000. Okay, let me tell you when your house will be paid off. when you give them $85,000. Yeah. Okay? There's no hack. And so if you give them $8,000 a month, it'll be done in 10 months, right?

Starting point is 00:23:33 If you give them $800 a month extra, it's not going to be done that fast. And so all they do with this is if they're, if they did it the way they claim they're going to do it, is they're going to make you live on substantially less than you make so that over six years, $85,000 is sent to your mortgage company. So if you would simply live on $85,000 less than you make over the next six years and send it to the mortgage company, you could do exactly the same thing they're doing. Minus whatever fee they're going to charge you. See what I'm saying?

Starting point is 00:24:06 Yeah. That concerned me. Yeah. So it's $10,000, $15,000 a year to do $85,000 in six years, right? Yeah. And so you're going to put $1,250 a month, X,000. on your mortgage, average, over the next six years, and it will be gone. That's the only way it goes away.

Starting point is 00:24:27 There is no trick, no smoke and mirrors, no man behind the curtain that magically makes some kind of a trick thing happen to the mortgage and makes it go away. It simply does not. When they receive $85,000 in addition to the interest that is owed to date, your mortgage will be paid off and not until. Agreed. Okay? And there's nobody that can change that.

Starting point is 00:24:50 There's no technique. There's no secret bull crap with some guy on the phone. And so a portion of these people, that's all they're doing. The other portion of these people is they steal all your money. They're complete scams. And I don't know which portion of this bucket this guy falls in. But in neither case, do I want you to do it? Because, Ron, you are smart enough to do the math and say,

Starting point is 00:25:14 how fast do I want to pay my mortgage off and divide that number of years into 85? and you will have your answer. And you have to cut your lifestyle to meet that number. And if you don't, you won't meet that number. And if you don't meet that number, you're still going to have a mortgage. It's that simple. That's what I wondered. If I could do the same thing myself, he tried to make it sound like I couldn't.

Starting point is 00:25:39 You can't. Like they had some type of mystery interest that he earned in a helock or something stupid. No, that's what they're doing. They're running it back and they're dumping all your money and they're borrowing your own money back and all that. That's the helox thing. and it does not work because the helic doesn't make the same interest rate as the mortgage. And so the whole thing is stupid. It's just a shell game.

Starting point is 00:26:00 There's still a P under one of the shells somewhere. Yeah. That's all it is. And so what I would do with people like that is I would run away from them because, A, there might be a scam completely. B, best cases, they're doing something weird that I can. could have done myself, but is not really magical. What's magical is when you send $85,000 to mortgage company, you won't have a mortgage anymore. And if that conversation inspired you to say, hey, I don't want to take 19 years to pay this off? Good. What if we figured out and did it in six or

Starting point is 00:26:37 even seven? Awesome. Well, if we do it in eight years, it's $10,500 a year. Yeah, pretty simple. Build that world up. Go knock it out. Okay. So if we do it in four years instead of eight years, it would be $20,000, $21,000. We can all do it right here, right? And so, and then divide that by 12 and start to put that in your monthly budget and smoke it. Yeah. That's it, man. That's what you do. And so you send it to a helock and then pulling it out of the hellock and doing some kind of dance and twirl around twice and pray for rain and, oh, crap. Always somebody looking, you know, but we all look for a shorter thing and there's just not one. It's like, you know, how do you build wealth? I'm sorry, guys.

Starting point is 00:27:20 I've been doing this 35 years. You live on less than you make. How do you lose weight? Eat, diet, exercise. Calories. Drink more water and raise your heart rate. It's called aerobic exercise. Yeah, sorry, Oprah.

Starting point is 00:27:37 No hack. I don't care how many books you sell. No hack. This is it. Less caloric intake, increase the burn. It's a simple physiological thing. It's a nightmare to do it, but it's easy. And it's easy to understand.

Starting point is 00:27:53 It's hard to do. Yeah, yeah. And building wealth is the same thing. The best way to get rich quick is don't. Get rich quick. That's the quickest way to get rich. I mean, and so. You just not come up with that line?

Starting point is 00:28:07 Oh, I've been using it for 20 years. I should have told it. I should have sat in front of you before. Yeah. Man. The best way to get rich quick is don't. I like that line. Annie is in Detroit.

Starting point is 00:28:17 Hey, Annie, what's up? Hey, how are you? Better than I deserve. How can I help? Good. I'm calling because my husband and I are expecting our second baby coming up here. And right now, I have an 18-month-old son, and I drive a Jeep Wrangler. So I'm looking to get a mini-van. This is fun. Is it a hard top?

Starting point is 00:28:39 It is, and it's a manual. Woo-hoo! I bet that gets cold come February. I think Jeep life has come to a haul. Right now our No little ducks on your dash anymore. Wow. Oh my gosh.

Starting point is 00:28:57 We have real little ducks now, so we're going to have to get rid of those. Yeah, I don't blame you. So what are you going to buy for? What are you going to buy when you sell the Jeep? So I want to get a minivan just because that is within our price range. My thought is that I will sell the Jeep Wrangler to then get a minivan. The Jeep is fully paid off. It's been paid off for about a year or two now.

Starting point is 00:29:17 and it's about worth 30,000. It's got 45,000 miles on it. Cool. So I don't put a lot of miles on it because I just have a pretty short commute to work. Yeah. So I'm wondering if I should continue to drive it as long as possible. No, it's sell the Jeep and buy a van. I mean, a $30,000 van is a pretty good van.

Starting point is 00:29:43 Yeah, that was my thought of just if the value on my Jeep would go down or not was my thought. Oh, yeah, it's going to go down. All cars go down in van. Especially jeeps. They're special that way. All cars go down in value. Anything with wheels and or a motor or a battery goes down in value. You don't think it goes down in value? Talk to those poor Tesla people that on a five-year-old one. Oh, my God, did they get killed? And so, yeah. But anyway, it's all of them go down in value. Even sweet little jeeps in Detroit. Yes, yes, yes, yes, yes, yes. No, you need, I would sell that thing and I buy me a, hey, it's that you've come into a new season of your life and your car should

Starting point is 00:30:20 reflect that. God, that's another good line, Dave. I'm full of him today. Dude, you brought like inner hip hop Dave today. He's like dropping bars. Yeah, you got a new world now, Annie. I'm serious. The little ducks are now in the back seat instead of on the dash.

Starting point is 00:30:37 And if you're, if that Jeep is, if you're a real Jeep person, it's part of your identity, I get it. It's the worst. No, no, no, no, no. It's not. Okay. Oh, man. I bought my son bought a Wrangler, 2000 something. when he was 16 and I bought it back from him when he went to college

Starting point is 00:30:55 and then I gave it back to him when he graduated from college. Yeah. And so that old, old, old, old Jeep is still in his garage. He loves that. He loves it. Yeah, he loves it. Once you're hooked on those. A Jeep person, you're a Jeep person.

Starting point is 00:31:05 That's it. Hey, get you a van, kiddo. And you can get you another Jeep later after the kids all leave. This show is sponsored by BetterHelp. Hey, my friends at BetterHelp just released their annual state of stigma report. It's full of all sorts of data about why so many people avoid getting help they need for their mental and emotional health challenges. And here's a data point that stood out to me.

Starting point is 00:31:48 More than three out of four Americans reported anxiety or depression symptoms just within the last few weeks. If that's you and you're carrying stress, anxiety, or depression, or symptoms of anxiety or depression, just talking to someone can help you more than you realize. I want you to contact my friends of BetterHelp. BetterHelp is an online therapy platform that matches you with one of their 30,000-plus licensed therapist based on your goal. goals and preferences. It's easy and it's super convenient and you can message your therapist

Starting point is 00:32:17 and schedule sessions right in the platform. And if the first therapist you're matched with isn't the right fit, you can switch at any time for no extra cost. Don't let stigma stand in the way of support. Visit betterhelp.com slash Ramsey and get 10% off. That's BetterHelp, help.com slash Ramsey. Rebecca is in Nashville. Wait a minute, no, it's not. I'm sorry, Blake is in Bismarck, North Dakota. I'll try that. Hey, Blake, what's up? Blake? Blake. I'll put you on hold, buddy. Now I'm going to try to go to Rebecca in Nashville. Hi, Rebecca. How are you? I'm good. How are you doing? Better than I deserve. What's up? A little pitch. You tell me if you approve, disapprove, or give me advice. Yes, I love this. So I'm 20 years old. I make.

Starting point is 00:33:33 $25,000 last year and paid off $13,000 in medical debt that I occurred in that year. So I am very happy with where I'm at financially. However, God has opened some doors for me and I am planning on attending flight school to become a pilot in the next several months. With that, I have also been offered a different position which works perfectly with my flight school schedule and everything else that I will be making $70,000 a year. So flight school, the way that I'm going to do it is going to cost about $75,000. It is go at my own pace so I can do it when I can, when I can afford to. So I'm on baby step four.

Starting point is 00:34:15 So I have no debt. My question is, what should I prioritize? Should I prioritize going through school debt free? Should I prioritize investing for retirement? Should I, you know, so I'll be making approximately 4,800 a month. How old are you? So I'm 20. You're amazing.

Starting point is 00:34:36 Well done. I mean, your skills, your skills of laying all of this out and thinking all this through are superior. Well done. Very well. I very much appreciate that. I've been listening to you for. I think you're going to be a safe pilot. I might fly with you.

Starting point is 00:34:50 Yeah, I would like to fly. I would like you to fly all of my planes. Yeah. I mean, because I want a pilot that thinks is clearly. So what we have found is the shortest distance between where you are and wealth is debt freedom. Okay. Your most powerful wealth building tool is your income. The best investment to create a higher income is usable, marketable education.

Starting point is 00:35:19 Okay. So in other words, your return on investment of pouring money into flight school is better than your return on investment. mutual funds. Okay. Does that make sense? Mathematically. Mathematically it is. Yeah.

Starting point is 00:35:34 Not philosophically. Really. Yeah. And that's what my thoughts were on it. I have only talked to like one other person and their advice seems a little bit crazy to me. So, you know, I recognize. If they're in flight school, they probably are a little crazy. No.

Starting point is 00:35:52 No, actually, they work in finance for a church. And what they told me to do was put everything. that I can into a high-eield savings and take out a student loan. Well, if they work in a church, they should try reading the Bible. Oh, shots fired. Where the borrower is slave to the lender. Yeah, no, it makes sense, and that was my thoughts on it. I just recognize that I've only lived 20 years of life and that I can learn from my

Starting point is 00:36:21 elders, so I wanted to make sure that I'm getting good advice on that. You definitely got a couple of elders here, no question about that. but the here's the thing you're going to have to pay the piper so at some point paying the piper requires a sacrifice and

Starting point is 00:36:37 what we're trying to suggest that you do at 20 are you married no okay so you're brilliant you're a hard worker you're unattached you're going to have to make a sacrifice there literally will not be another more perfect time in your life to make a sacrifice

Starting point is 00:36:54 than right now Yeah. I would rather you with time, with not going out to eat, whatever sacrifices you have to make to get this degree and to pay cash for it along the way, string it out until you can just keep funding it. Or here's the other option. You take out a student loan. You go to school. What's flight school? $75,000 plus interest. You're going to meet somebody because you're going to be number one on the market. Then you're going to want to go do this. You're going to at some point. you have to make the sacrifice. Yeah, and I don't want you having two kids at 30 paying off this loan. Yeah. Because you're not flying anymore right then. Yeah, and that's kind of my plan on it. And then one more question about that is I also, so of course, long term, I would love to get married.

Starting point is 00:37:43 I would love to have kids, all of those things. However, I'm not going to plan my life waiting around for somebody else to kind of show up. Good. Within four to five years, I want to be able to buy a house. house. So obviously first house at 24 is not going to be a million dollar house with all of the you know all the fancy things that nobody actually needs. So if I were to shoot for the $200,000 range in four years, 48 months, if I saved $833, that would give me a 20% down payment of $40,000 no, no, no, no, no. No, no. I would do that. I want you to go to fly. I want you to go to

Starting point is 00:38:25 school and pay for it. Okay. As fast as you can. Instead of doing this. Put all the money on flight school. You're trying to do a couple of humongous things all at the same time, and what you'll end up doing is some of them partway or nothing. Okay.

Starting point is 00:38:42 Pay cash for flight school as fast as you can. Become a pilot, increase your income, use that increased income to pile cash for your house. Okay. So just give it everything I got. Yep. Yes. Financially.

Starting point is 00:38:56 Cash flow. How long is flight school? As long as it takes. It's as long as it takes. So realistically, I could be done with it in like 18 months. And then because I'm doing everything that I can online right now and like learning theory before flying. Okay. So let's say this.

Starting point is 00:39:17 Let's say at 22, you double your income. You get your pilot's license and you make 150. and you don't have any debt. And you have no debt. By the time you're 24, when you want to buy this house, you'll have way more than $200,000 saved up. Yeah, that's true. Right.

Starting point is 00:39:33 And not one person will ever get to tell you what to do because you'll be in control of whatever you do next. Yeah, that makes sense. I think, I don't know, I'm just so scared of making a mistake that I'm going to pay for later that I just want to plan everything out. Let me free you. When you pay cash, you don't pay for it later. That's right.

Starting point is 00:39:50 And a hundred percent chance you're going to make mistakes. Let that one go. Let that one go. Just don't let one of them be that the aircraft is underfueled. Yes. Keep gas in and don't borrow any money. Those are two big ones. Yeah, yeah.

Starting point is 00:40:06 But like you're going to make mistakes. That's part of life. The fact that you at 20 are already asking for wisdom from multiple sources tells me. When you have more wisdom than most of those sources. Yes, you're so far ahead. Yes. God, if I was 20, my brain. didn't even work like that.

Starting point is 00:40:22 Looking for the next keg party. That's all, yeah. It's unbelievable, yeah. 20-year-old me had no concept of any of that. So you're going to do great. So I want you to have a realistic expectation of what this flight career is going to look like and what it's going to entail before you invest all the way into that. We haven't talked about that.

Starting point is 00:40:41 And I'm assuming you did that because you've done everything else pretty well in this conversation. But what does being a pilot mean to your life? how many hours a week are you working and what is your actual income year one two three four five because you're not going to get hired to fly seven 47s as soon as you get this degree as soon as you get through flight school she may not you make it 150 first year out she might not yeah she might not she might be making less than she could have doing a whole lot of other things okay yeah so um and so yeah that's why when you get on the commuter jets the little tiny ones going american airlines or something and you see the person on there and you think, how can a 12-year-old fly this?

Starting point is 00:41:22 That's who that is. They're right out of flight school. That's who that is. That's the cheapest possible pilot right then. So sweet little people, and I'm sure they're competent or American Airlines would not put ourselves at risk with them. However, for old people, when I look and I go, I have socks older than my pilot. Yeah, this scares me. I did that with a physician the other day.

Starting point is 00:41:41 I walked, I was like, Dr. What was like, Duky-Hauser? Yeah. Yeah. I was like, is this like a high school internship? We're like a couple of old man Muppets or something. I'm so old, I know. Not the old man Muppets. Yeah.

Starting point is 00:41:54 So work all that out so you know exactly what you're getting into. But I think you're going to do just fine and pay cash for your school. And as long as whatever you're studying has actual usable utility in the marketplace and causes your income to actually go up, it is a good investment and it is a better investment than a mutual fund. you, if you're smart and you look in the mirror and you pay cash for it and you buy education that's usable are more valuable than a mutual fund. Hey guys, it's Rachel Cruz. If you're working the baby steps, every major expense deserves a second look.

Starting point is 00:42:45 And health care is one of the biggest expenses in most families' budgets. And that is why I recommend that you check out Christian health care ministries. CHM isn't insurance. It's a health cost-sharing ministry. That means members help pay one another's medical bills, and they've been serving Christians since 1981. CHM programs start at just $115 a month. And here's why that matters.

Starting point is 00:43:10 If you are paying more than you need to for health care, that money could be going toward paying off debt, building your emergency fund, or reaching your next financial 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 real. 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 CHministries.org slash budget and use promo code Ramsey. That's CHministries.org slash budget and promo code Ramsey. Welcome back to the Ramsey show in the Fair Wands Credit Union Studio. Dr. John Deloney,

Starting point is 00:44:02 Ramsey personality is my co-host today. Michael's in San Diego. Hey, Michael, what's up. Hey, how you doing, Dave, John? I have a question. My wife and I are in debt about $95,000. $22,000 of that is 401k. $25,000 is for a car loan, a forerunner, we're paying. And $43,000 or $48,000 of that is credit card debt. And my question is, should we treat when it comes to like a plan of attack to get going, on the snowball and to pay all this off, should we treat the 401K as normal debt items and being that those are some of the lower balances and start paying those off first or hit the credit cards that are kind of clobbering us with interest every month? We're going to list our debts individually, not by category, individually smallest to largest. Out of all of these debts,

Starting point is 00:45:05 What is your smallest debt? I have two 401K loans and one of them is $8,000. That's the smallest. So your credit cards are larger than $8,000 each? Yeah, credit card is $1,000. The other one is $13,000. Okay. All right.

Starting point is 00:45:24 So $8,000 is your smallest debt? Correct. Wow. Okay. And it's a 401K loan. Yeah, I have two 401K loans out. 14, one for eight. Gotcha. Okay. And what's your household income?

Starting point is 00:45:40 I'm the only one that works. My wife's to stay-at-home mom. Gross income is 148,000 a year is what I bring home. You made a mess. I'm sorry, that's my gross. And my take-home $7,700 a month. And the $25,000 car, what's it worth? Probably, I would say on a, I would say around 25, if not, I mean, worst case, probably like just under 22, 20. Somewhere in that neighborhood. I reached out to, yeah, somewhere in that neighborhood, yeah. Okay. So, yeah, I'm going to look at that, and I'm going to, the big thing I want you to do here is

Starting point is 00:46:23 for you and your wife to sit down with the every dollar budget app tonight and go through and say, we have to reduce our life to beans and rice. no eating out, no vacations, no nothing. We have made a mess. We make $140,000 a year, and we're freaking broke. We have to change. And the two of you have this together realization and lean into, we're going to have to sacrifice to clean up the mess that we have made,

Starting point is 00:47:04 that we can get our lives back. We have given away our life a little bit at a time. One bad decision at a time. Yeah, and this is August is actually our first month using the every dollar app. Are you both looking at it? I am primarily, my wife is, yeah, I need to get her to wrap her head around it. That's what I was afraid of. I want you to wrap her head around it because we're getting ready to sell her car.

Starting point is 00:47:33 Yeah, that one's my car. We own her Highlander. Highlander. What's her Highlander worth? I would assume anywhere from like 18 to 20 maybe. That one's paid off. Yeah, I don't care. Okay. Everything's on the block right now because everything that we've done up to this point has caused a mess and we've got to think about undoing a lot of it.

Starting point is 00:47:55 Yeah. And so if you had two $5,000 cars right now, I wouldn't be mad. Gotcha. Because you'd have no car payments and a bunch of money thrown at this debt. You've cut up your credit cards. and you're in attack mode. Now, I don't think you're going to do that tonight, but you're not going to do that dragging her

Starting point is 00:48:14 and whipping her over the head with every dollar app. She needs to join you in this adventure emotionally. Yeah, yeah. And honestly, Dave, she, her and I have both felt the weight of it, and we're going to, we actually just got the Together app. So we're putting in every, you know, foot forward. You're doing it all, man. I like it.

Starting point is 00:48:36 I'm proud of you. But I just want to make sure you do this the right way so you're able to finish it. Because you have a really hard two and a half years ahead of you. Really hard. How old are your kids? Five and seven. Yeah. Okay.

Starting point is 00:48:52 Let me tell you this. The greatest gift you can give those kids right now is to let them walk with you and your wife through this next two and a half years. Saying no, looking at prices on things, doing things for free outside. you live in one of the most beautiful places in the world. Y'all can do a lot of stuff outside that you don't have to pay for. But it's going to change your life. But your kids are going to get a ringside seat to feeling their house, feel less. You're going to end up selling one or both cars at some point in this journey, I think.

Starting point is 00:49:21 Yeah. Yeah. Okay. Now, back to your original question, because we've got one little final thing. 401K loans do not allow partial repayment. Correct. Yeah. They only give you a certain amount, okay?

Starting point is 00:49:36 And so what's your monthly payment on the $8,000 401k? That one is 181 times two. It's deducted out of my paycheck before I get it. Okay. So $360. $362. Okay. So if you were going to put an extra $500 on that per month, you can't.

Starting point is 00:49:57 You have to put it in a savings account until you get to $8,000 and pay it off in one fell swoop, which is not very psychologically satisfied. Right. As a matter of fact, it's a little bit dangerous that your very first debt, we're not actually going to pay it off. We're going to save up and pay it off. And that really bother, it scares me for you. You guys are going to have to be super disciplined to actually pull that off. That means you're going to have $6,000 in cash in an account and something's going to happen to the air conditioner. And you're going to go, no, no, that's 401k money. It's already gone. It's already spent. You have to pretend like it's not there. It's not for, Christmas and it's not to fix the broken tire. It's not there. It's gone. As if you had paid it on a debt and you've got to set it aside like that emotionally. And that's, man, it's hard to do. You might, it be easier to do it if you'd already done 10 other debts and you were used to this. But this is your very first one. It's $8,000. But you're going to get it pretty quick. I mean, you should get it in two or three months. It shouldn't take that long because you're

Starting point is 00:51:01 going to have to get after this to the tune of about $3,000 or $4,000 a month. That's, that's what going to have to do. And so let's put it at 4,000 and that means you're done with this in two months. That's not too bad. But that's selling stuff that maybe your wife has to pick up a part-time job. You pick up some side hustle. You pick up a part-time job. Whatever it takes. But the faster, the deeper you sacrifice and the faster you clean this up, Michael, the faster you guys are going to have an awesome life. And that's what we want for you. And this stuff is stolen your, it's stolen the life blood out of the arithmetic. Because when you pay all these stinking payments, you've got no money.

Starting point is 00:51:39 And you make $150,000 a year, man. I mean, that's incredible. And you're broke. That's so weird when you say that out loud like that. But I don't want to be there anymore if I'm you. And I think you're making the steps to get there. I want to make sure you take your wife with you and you follow this stuff exactly. And hey, if you get in the middle of this thing and you don't know what to do, call us back.

Starting point is 00:52:01 We'll help you. We're here. We're not going anywhere. 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? Those are the right questions to be asking.

Starting point is 00:52:54 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. Not at Zander Insurance.

Starting point is 00:53:19 They're not an insurance company. They're a broker that works for you. That means they'll shop and compare the top-term life companies to find the most competitive options on the coverage for your family. For almost 30 years, I've recommended Zander for straight answers, competitive rates, and coverage that actually protects your family. Call 800-356-4282 or go to zander.com for a quick and easy quote. That's zander.com. If your private school student loans are in default, then you've fallen so far behind that the loan is considered unpaid. Why refi might be able to help.

Starting point is 00:54:15 Why refi helps borrowers in tough situations explore low fixed rate refinancing options that fit your budget. If you want some help, go to why refi-fi-refi-refifes. dot com slash Ramsey, that's the letter Y-R-E-F-Y. Dot com slash Ramsey might not be in all states. John? Oh, sorry, I spaced on you, brother. Okay. I was making a note here.

Starting point is 00:54:40 All right, today's question comes from Peggy in California. My husband and I just paid our house off in San Diego, California. You don't get that line very often. No. So we are completely dead free. That's a lot of money. After we paid off the house, both our credit scores drastically dropped. For years, both my husband and I have been just a few points shy of a perfect score.

Starting point is 00:55:00 So why, after paying off the house, did the scores drop so drastically? This drop doesn't bother me so much, but my husband is almost obsessively bothered by the lowered score. I've explained that our scores don't matter since we don't intend on taking on any other loans. Is this logical or should I be more concerned about getting my score back up? Great question, Peggy. Okay. Okay. Well, the thing that has to be addressed here is that you and your husband were sold, like most Americans, a lie by the banking community. The lie is that your credit score is an indication that you're doing well financially.

Starting point is 00:55:44 That is a lie. And here's the reason that that is a lie. Your credit score is a score that is composed of an algorithm. The algorithm that creates the score has five pieces of input. The thing that creates your credit score is five different things. One is how much debt you have. Two is the type of debt that you have. Three is whether or not you have paid your debt on time exactly or early the whole time. Four is if you have any problems with debt. 100% of the math that creates a FICO score is how you interact with debt only.

Starting point is 00:56:37 So I could hand you a million dollars and your credit score does not change a point. And yet we would all agree that you were a million dollars better off. That's dumb. That we're using a FICO score as a measure of whether we're doing well financially or not. the only way your credit score changes ever is if you interact with debt differently, up or down. And so if you had a near perfect credit score, what that means is you've been borrowing a lot of money, paying it on time for a long time. That credit score being near perfect probably cost you hundreds of thousands of dollars in interest.

Starting point is 00:57:23 It's the only possible way to get an 800. mathematically. It's a math thing. It's not a philosophical question. It's a math thing. But the philosophical question is that these crooks at the banks have convinced everyone in America that if I have a high credit score that I'm somehow a smart person. No, it means you're actually a dumb person. It means you have given those crooks at the banks all of your freaking money to get a score that indicates nothing except I played kissy face with the bank. That's all it does. A hundred percent And so my FICO score, thank you Jesus, has been zero for a very long time. Why?

Starting point is 00:58:05 Because I don't borrow money at all ever, anywhere, of any kind, any time. The interest rate on my mortgage is zero because I don't have one. The interest rate on my credit cards is zero because I don't have one. And so I have zero FICO score. So here's how dumb the culture is. I'm a multimillionaire. I go down to the local apartment complex, the 26-year-old that works for a person five cities over, who's her corporate boss, Goober, has told her that she cannot rent someone an apartment at the apartment complex unless they have a good FICO score.

Starting point is 00:58:44 I have a zero FICO score. They won't rent me an apartment. I can write a check and buy the whole freaking complex, but I can't rent an apartment there. That's how dumb but and asinine the system is. So the measure that your husband should be concerned with is called net worth. Net worth is what you own minus what you owe. You own a really expensive house in San Diego and you owe nothing on it. You have an incredible net worth.

Starting point is 00:59:14 You should be dancing like Snoopy, nose up, feet moving, ears flopping. Yes, I am dead free. A freaking San Diego house. Baby, baby, baby. Hello. And I don't give a crap what the bank thinks. They're unhappy because you don't give them any more money. So your FICO score went down. That's how that works. So what I'm, my point is you've got to readjust what you're concerned about. Readjust what you're concerned about. I'm no longer concerned about my FICO score. I make fun of people with a big FICO score. I just did. That's one of my favorite moments I've ever had on this entire show. What's that? I could feel it on you. It was all. awesome. Why, that I'm that pissed about it? No, I have the same anger in my spirit, but I could have said it as clear as you just said it's perfect. It was perfect. Well, I've had 30 years of working

Starting point is 01:00:08 on it. Yes, it was perfect. The thing as a mental health guy that I can't stand is that I see so many people struggling to navigate this wild world we've created for ourselves and in some ways is being imposed on us. And the thing they are trying to hang on to is not freedom. The thing they are trying to hang on to is not peace. The thing they're trying to hang on to is not good relationships. It is this score. And I've seen friend after friend, after family member, taking call after call of people who are making decisions that are not only a net negative, but a net catastrophe for their life, for this one wildlife that we have to live, all in service to propping up this score. And it's so hard to unhaping up this score. And it's so hard to

Starting point is 01:00:56 hook from it. And so the thing I would challenge you guys on is y'all have to come up with a new identity because your identity has been. Biko's core. Forget how much money we make, forget that we live in one of the most beautiful places in the world, forget that we're crushing and paying off this house. Your identity has never been in peace. It's never been in freedom. It's been in this arbitrary number. That the bank gave you. Yeah, somebody imposed on you. You got a tattoo at Bank of America. Yeah. Congratulations. It's a bad idea. Congratulations. Yeah, it's a bad idea. So I echo Dave's sentiment, dance in the streets. You are free. You all get to decide what you do next. Not a bank, not a car dealership. You all do. You all have won. You have a paid off house in one of the most desirable places to live on the planet. You won. Celebrate that. Don't lament it. Don't mourn it. Yeah. And don't go take out a car loan to get your FICO score up.

Starting point is 01:01:44 Yeah. I mean, just think how madness that is. I mean, this is like, why do you get a FICO score? We should add that. Why do you tell an 18 year old to get a credit card? Oh, so they can get their FICO score up. Why? So they can get a car loan. Why? So they can get their FICO score up. Why? So they can get a mortgage. Why? So they can get another mortgage. Why? It's like a dog chasing its tail. I think we should have a like a little thing in the every dollar app that says this is how much you paid this month for that score. Ooh. Because if you like I had never considered that until you just said that. Is that a high. a high FICO score, a high credit rating cost you lots and lots and lots of money. It does.

Starting point is 01:02:26 An interest. There's no possible other way. So we got this. It's impossible to create a FICO score without paying it. We have this self-imposed. This is even more rich, Dave. This is worse than a car lease

Starting point is 01:02:38 where they have a depreciating asset that they rent to me for a year and they charge me for every mile I go over and then I give it back to him in perfect condition and then they sell it. So they just offloaded the depreciation. or the depreciation to me. This is a better move where somebody created a score.

Starting point is 01:02:53 Yeah. And then they create a fee that you pay me so I can give you this score. And that fee is all these interest payments you're going to make to me over the next. And me and my friends over the next 5, 10, 15, 20, 35 years of your life. And get this. The name of the organization is Fair, Isaac. Incredible. It's rich.

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Starting point is 01:04:59 A.I. slash Ramsey. That's netsuite.a.ai slash Ramsey. One of the biggest mistakes people make is thinking they can skip having a will because they're like young or healthy or they don't own anything or whatever. Hey, a will, everybody dies. A will helps protect your family. It gives clear instructions that can keep your loved ones from having to guess what you wanted during a difficult time. If you're ready to create one, go to mama bearlegal.com. And if you're not sure where to start, text quiz to us, quiz, at 33, 789. And we'll help you figure out whether you need an attorney or whether Mama Bear Legal Form has a standard form that will walk you right through it very inexpensively.

Starting point is 01:06:05 But everyone that is 18 years older, older needs a will, period. Period. It's not expensive and it doesn't take up your whole life to put it together. And it does not increase your chances of dying. I don't want to do a will. I might die. You're going to die. We just don't know when. And by the way, this isn't just an ad for us. When I left Texas and I moved to Tennessee, there was a gap because I had to get a new will. The people I called was Mom and Bear Wills. Just to make sure I had a will, my wife had a will, so that in this transition time before we had to go sit down with the estate planner and do all that nonsense, like that we were, my kids were taken care of. Like, that's who, this is who I called in my house. So they're good folks, man.

Starting point is 01:06:49 And it's easy. Yeah, it was so simple. It's really not. It's not, it's not, you know, it's like, signing all these papers is troublesome. If it's on talk, you sign it takes about 45 seconds. Yeah. I mean, click, click, click, click. Now, if you want to read it all and go to sleep three times, it takes some time.

Starting point is 01:07:06 But, I mean, and you need to read your will over. I don't mean that. But I'm talking about it, this is not, it's not a cumbersome process. It's very set up, mamabearlegal.com. Megan is in Hartford, Connecticut. Hi, Megan. Welcome to the Ramsey Show. Hi, my husband and I are a long-time listeners and doer, so we're excited to talk to you guys.

Starting point is 01:07:24 Well, thank you. How can we help? So we wanted to know how do we capitalize on our budget when our income comes in like little by little daily versus like a regular weekly or biweekly like lump sum? Should we take money from our emergency fund to kind of build up our account that way? It doesn't continuously get low? No. We don't do that one. So what is your income on an annual basis? On an annual, it's about 80,000. Okay, so we don't have a shortage of income. It's just wacky.

Starting point is 01:07:59 Exactly. It's coming in from 14 places and 14 directions, and it's just hard to keep up with. It feels like that. We own an LLC, and my husband is a pianist and private music instructor, and so he has about 35 students, so it kind of comes in this student. stay or 10th or Thursday. Oh, wait a minute, wait a minute, wait a minute, wait a minute. That is not your budget. That's the business's budget.

Starting point is 01:08:21 That's the problem. Okay, so let's stop. Yeah. So what he needs to do is the LLC needs its own checking account. We do have that. And a hundred per, wait a minute, stop, 100% of the fees that he receives go into that checking account. Nothing comes out of that checking account that's not a business expense other than paying

Starting point is 01:08:44 him. Okay? So if he buys supplies for the business, it comes out of that checking account. You don't buy groceries out of the LLC account. So that account should have some buildup. If every time I sold a book, I tried to put it in my budget, I would lose my mind. Instead, it goes into the business account here at Ramsey. And then once a month, you don't want to do that that often. You want to do it twice a month in your situation maybe. But once a month, we run a profit and loss statement on this business, and I know how much I made, right? So you need to collect all these little sources of income, all these little students, and throw them into one account. Other than his piano business, do you have an income? Yes. So the 80,000 is the piano business, but he also has a W-2 and a 1099 as well.

Starting point is 01:09:41 What's the 1099? That's about 10,000 annually. What is it? Oh, sorry. He's a music director at our church. Okay. All right. So that's self-employed income as well.

Starting point is 01:09:55 Honestly, what I would do is just throw that into the LLC when it comes in. Okay. Now, when we look at the LLC and you look at it every two weeks and you say there's, I don't know, I'll make up a number, $5,000 in the account, How much do I need to leave in the account to keep the LLC operating? $1,000, so we can pull $4,000 out. When we pull money out of the LLC to bring it home, maybe once every two weeks, you pull out a fourth of that amount and set it aside for taxes because you're supposed to be doing quarterly estimates on this LLC with the IRS.

Starting point is 01:10:36 So if I'm pulling out $4,000, I'm going to write a check to me for $3,000 and put it in my personal account and use that for my every dollar budget. I'm going to take $1,000, and I'm going to put it in a separate savings account named taxes. And then once a quarter, I'm going to have the money to pay my quarterly estimate taxes, and I won't get behind with the IRS. Okay. So three or four different pieces moving here. Number one, we're going to put all the money in the LLC. Once every two weeks, we're going to pull money out of the LLC, whatever, and leave a small amount in there just enough to operate, because it doesn't cost him a lot to operate this.

Starting point is 01:11:13 Oh, no, not at all. Yeah, and so we just leave, you know, leave 500 bucks in there or whatever, pull everything else out and bring it home, a fourth of which goes away for withholding on yourself as if you were a W-2, okay, so that you got the money to do your quarterly interest, then that amount goes into your taxes. And that's going to be a fairly steady flow of income for your every dollar budget because he usually has approximately the same students every month.

Starting point is 01:11:43 Yes, yes. So it's going to be a fairly predictable on a monthly basis then or a biweekly basis. And that's how you'll use your every dollar budget. So the problem is you're running your business out of your hip pocket, and that will drive you crazy. And it's hard to run the business that way well. It's hard to keep your taxes paid well, and you get into all kinds of other stuff. So just open a separate checking account for the LLC, run the business as if it was someone else's business, and you're that true to the income and the expenses,

Starting point is 01:12:14 and then when you get ready to bring home the profit, you calculate how much you need to leave in there. Would you run, and I guess this is just for W2 folks, but I'm thinking back to when I was a professor, when I was at working higher ed, I'd have my W2 because I've had my home-based university, but I would teach classes at other places, and I would get 1099s from some of those places.

Starting point is 01:12:35 Would you run the W-2 straight into the family checking account? Yes, yes, yes. Because that taxes have already been pulled. out of that that one's a completely different subject okay but the 1099s it's easier you got to pull taxes out of it no I think you're right I like that so the way to pull taxes out of it in her case is to form an LLC all at once but if you're doing three little side hustles in their 1099 they're not a lot of money I wouldn't screw with all this I just set some money inside in your in a sinking fund for taxes and your every dollar budget but I mean if you're you know you're doing you do four other

Starting point is 01:13:05 side hustle gigs or something sure freelance things that that's not a big thing but where you've got a she's got like 25 or 30 students. Yeah. I mean, this drive you nuts. Yeah, because that's 25 or 30 Venmos or checks all dumping in there every other week or every other couple days plus the 10th. So, yeah, keeping it in one place, that seems to be pretty simple because you would always have one place to look for all the numbers. And the side benefit of all this, too, not only is your tax is paid, but the other benefit is now you actually have some numbers to look at to see how the business is doing. There you go.

Starting point is 01:13:34 You can actually look at what's called a profit and loss statement then and go, oh, this business is making this much profit. and but when you mix it in with the groceries you can't tell do you find businesses when they do this and they've either been drawing a salary or not what's most common they realize oh this business is not doing as well as we thought or it's doing way better than we thought um i find both okay find both usually though there'll be a hint when they call here like i can't figure out how to do this we keep running out of money the business isn't doing well it's not doing as great but in her case heard the abundance in the way she asked the question. Yeah. And I'm like, oh, they're got plenty of money. So what's your income? Oh, 80,000. Okay, there's the answer. Business is already doing okay.

Starting point is 01:14:19 That's $80,000 worth of piano lessons. That's pretty dead gun good. And so, you know, that's what can happen there. What I find more often than either one of those questions is they're not paying their taxes and they get in trouble. Yep. You look up and you got a $20,000 tax bill from the IRS and you got no money set aside and you didn't pay your quarterly estimates, which will get you an extra penalty. Yeah. Hey, what's up guys, it's Jade. This back to school season, everybody's looking for ways to save money. But here's the thing.

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Starting point is 01:15:47 looking for ways to stretch your budget as the kids are going back to school, don't let a high phone bill eat up your money that you need for something else. Go to BoostMobile.com slash Ramsey and make the switch today. That's boostmobile.com slash Ramsey. $25 forever requires customers to remain active on Boost Mobile Unlimited Plan. Antonio or Antonia is with us, if I've got that right, in Baton Rouge. Is it Antonia? Antonio. Yes, everyone calls me Tony.

Starting point is 01:16:37 I got close. All right. How can I help? Well, my day side hustle has over the last eight years grown into a business that turns over about a million dollars. Whoa. It seems great, but it seems to cause as much to run it as it does make. I worry that I'm not doing anything right, and we are surviving, not thriving.

Starting point is 01:16:59 Hmm. Okay. I need your help. Okay. And how many team members do you have? 21 part-time. Mm-hmm. Two of us are full-time.

Starting point is 01:17:12 Well, I'm all the time, but you know what that's it. Yeah, you're all the time. And who's the other one? Your husband? No. He has a real job, bless him. He, it's marketing and scheduler. Okay.

Starting point is 01:17:28 And why are all the people part-time? Because the kind of, we specialize employing women who want to work while they've got children at home. So we offer 30 hours a week, 9 to 3.30 so that they can put their kids on the school buses and be home when they. Why? Why does that serve your business? I understand it serves their problem, but how does that help you? Three kinds of, we do cleaning. So we do residential cleaning.

Starting point is 01:18:00 Oh, okay. A tired cleaner doesn't make a good cleaner. Okay. So also families have their children coming off the school buses, so they kind of want us gone as well. Okay. Do you have a good accounting system? We use QuickBooks. Yeah, do you have a good accounting system?

Starting point is 01:18:16 Do you know what's going on with the money? Like, can you tell me, if you brought in a million dollars gross revenue, What was your net taxable income last year? Well, I know what we made after it was 67, so that was after taxes and everything else. That's what we supposedly had in the bank. Yeah, I know. Okay. So do you have, so one of two problems is all there could be.

Starting point is 01:18:45 One is you're underpriced versus what your labor cost is, or your administrative something on the side. that has nothing to do with the cleaning has gotten out of control. Like you're spending a whole bunch of money on ads or something's gotten out of control. I think we're just not paying attention because I'm still busy working in the business. And I, you know, we need something. We go get it. I mean, trust me, when you clean toilets for a living, you're free.

Starting point is 01:19:14 I don't think you're, I know you're working hard. I wasn't questioning that. But there's a thing. I'm going to send you a copy of my latest book called Building a Business You love. It's the five stages of business. The first stage of business is the treadmill stage where you run, run, run, run, run, run, and that's you. Yes. You're stuck. It's chaotic. It's out of control. It's rewarding because there's a lot of energy going out, a lot of energy going in. A lot of stuff is happening. But when you get home at night, you flop back on the couch, your spouse says, what'd you do today?

Starting point is 01:19:45 And you say, I have no idea. Right? Have you in my house? Yeah, no, that's standard. It's what I did when I started. It's what everyone does when they start. But you've got to get off the treadmill stage. So here's the couple of things you have to do off the treadmill stage. Thing one is your time management of you. Okay. You have to get above this business and look down on it rather than being overwhelmed by it. Right. The waves are crashing in on you and I want you to climb up in the life guard tower and look down on the waves. Yes, sir. And that requires some time management and setting aside some time for you to be running the business instead of the business running you. Right.

Starting point is 01:20:30 There's a book called E-myth by Michael Gerber that I read 25 or 35 years ago, and it's an incredible book. Michael became a friend later, and the thesis of the E-Mith is to learn to work on your business, not just in your business. Gotcha. And that's what you're not doing. You're just working at. This business is running you.

Starting point is 01:20:49 You're not running it. Yes. But you, and the only reason is this is because you become. successful. Right. But the way to level up and take it to the next stage is start to hire some full-time people who help you run and organize the business and iron the wrinkles out, get the chaos calm down, and let's get this pricing structure right where we're charging enough to justify the monthly or the hourly rate of these moms that you're employing. Right. And by the way, I think it's very cool that you're able to put those people that need a job to work.

Starting point is 01:21:23 That's very neat. And you're going to get a good supply of good human beings with what you're doing there. I think that's cool. And go ahead. We try and pay as much in 30 hours as someone could get in a dead end job in 40 hours. Well, they're working their tail ends off, and that's very cool. But then you need to charge the customer enough that you make money. $67,000 on a million sucks.

Starting point is 01:21:49 Yes. Okay. It needs to be 250,000 on a million. I feel like Rick Moranis feeding themselves to order the plant. And, Antonio, let me tell you this. The last university I was at before I came to work here, I did a performance evaluation before I left the university a few months before, is my annual review. I had one needs improvement.

Starting point is 01:22:14 Can I tell you what it is? Go for it. My supervisor, a guy I have high respect for, good man, he said, you have to stop running into every burning building. And I said, what do you mean? And he said, you're the leader of all of these folks. You have people that run into burning buildings now. I need you back here looking at the entire operation while something's happening. Yeah, one of the symptoms of the treadmill is you're a fireman. That's right. And here's the thing. My identity was shaped by I'll run into any burning

Starting point is 01:22:49 building. Right. And I had to change my identity to, I'm going to love the people running into those buildings well and make sure they're all right. And that was a switch for me, right? It's called leadership. Yeah. And so you probably love the activity, the action, getting there, even scrubbing a toilet every now and then. You like meeting with those women, right? You love that. That's not your job anymore. No. Now your job is making sure this whole ship keeps going. Yeah. So you're at a normal metamorphosis of a business. But you're going to stay there and you're going to kill yourself and you're going to burn out if you don't level up.

Starting point is 01:23:23 Because while you can get to the treadmill stage, you cannot maintain it indefinitely. You cannot run on this treadmill the way you're running five years from now and make $67,000 on a million. You're going to hit a wall. You're going to mess up. Something's going to lose $67,000, and you're going to wish you'd never done this thing. So you've got to level up, get above it, put some administrative things in place, some leadership things in place, iron the,

Starting point is 01:23:45 the wrinkles out, get the P&L going, and raise your stinking prices. And let's get this thing going. I'd rather you make $950,000 instead of a million and go ahead and make about $200,000 profit on that. That'd make me a lot happier. I'm not worried about your gross. I'm worried about your net. This is not a hobby. Net is what matters. And if out of the kindness of your heart, and that's really what this is, you want to take care of a certain type of employee, which you've selected, I love it and you have in your head, I'm going to pay them 40 hours wages for 30 hours of week. You're allowed to do that as a boss, but if you go out of business, all of them are unemployed. And so sometimes saying, I would love to be able to pay them 40 hours for only 30 hours, but I can

Starting point is 01:24:33 do 31 hours instead of 30 because I need to keep this whole thing moving. Sometimes the longer term lens on this is I've got to think of all of us keeping this thing going, not what I can do right the second. Does that make sense? It could be, and it could be that what happens oftentimes when we're coaching small businesses, we find this, and I remember this, when you're, when you need revenue, you take everybody. Yeah. And so you end up with these high maintenance customers that 2% of your customers burn up 98% of your energy because they're idiots. Oh, so her getting above the business and looking down might be, I'm going to, I'm going to fire 10 clients. Well, the way I'm going to fire them is I'm going to raise my prices. Ah, okay. Yeah.

Starting point is 01:25:13 Because the juice ain't worth the squeeze for this guy. He's driving me nuts. And those 10% might. But when you're first building, you're like, I have to take everybody. I got it. But all business is good business. And that's not true. Because 2% of the public should be institutionalized.

Starting point is 01:25:29 And so, you know, you just have to look and go, there's 2% of you people. I don't want as customers. Y'all drive me nuts. 2% is pretty generous. Yeah, that's pretty nice. Well, it's what we called them. We used to call them 2%. There's a great comedian who said,

Starting point is 01:25:43 I don't buy the employment rates in this country. I guarantee you, he's like, I travel the country. 96% of this country is not employable. About 15%. Welcome back to the Ramsey Show in the Fair Winds Credit Union Studio. Dr. John Deloney is my co-host today. I'm Dave Ramsey. Michelle is in Los Angeles.

Starting point is 01:26:29 Hi, Michelle. How are you? Hi, Dave and John. I'm good. How are you? Better than we deserve. What's up? I first just want to say,

Starting point is 01:26:38 thank you for your ministry. You've really changed my outlook on money, and I appreciate it so much. Thank you. I'm right to my question. My husband and I have a daughter. She's five. She has autism. She's not exactly severe, but she's still considered nonverbal at this point. She's pretty awesome. She's made a lot of progress in the last two years, but I was wondering, in addition to following the baby steps, what are some steps we can take to help plan for her financial future? I know you mentioned special needs trust just in segments I'd listened to, but I was wondering if you could elaborate on that. Sure.

Starting point is 01:27:12 And what you would do if you woke up in my shoes. Sure. Well, first and foremost, there's only one or a couple of little moves that you're going to make that are different. Everything else is the best and the highest and best thing you can do is just become wealthy using the baby steps because then that wealth can be left to her to take care of her. It's that simple. Right.

Starting point is 01:27:36 Okay. Now, a special needs trust needs to be a part of your will, and the special needs trust will be formed upon the death of both you and your husband. Okay. So that takes care of the child in the event of the death of the parents, okay? And this child is, the difference is the child's not going to need care until 18. She's maybe, we don't know yet, but she might need care her whole life. Right.

Starting point is 01:28:00 That's the tricky part. We just don't really know yet. Yeah. Yeah. So I've got a really, really good friend I had lunch with today who has a 35-year-old Downs son who lives with them and will his whole life. And he's a wonderful guy. But he's going to be with mom and dad his whole life. And so he has set up a trust like we're talking about. Okay. Now, special needs trust activates upon the death of both of the parents. It's not formed until then. And then money needs to be in that trust that the income off of that investment will take care of this child. for life. Okay. Okay. So as an example, let's just make up a number, okay?

Starting point is 01:28:39 We want to make sure that $80,000 is going to go to this child a year to take care of them. I just made up a number. That might be too much. It might not be enough, okay? But if we needed that, then we need a million dollars to go into investments. Because that's 8% on a million dollars. And if the million dollars is invested in mutual funds and it's making 12 and you're pulling off eight, it will run forever, infinite.

Starting point is 01:29:06 Right. Because you're not pulling off as much. You're not touching the principle. Okay? You're just pulling off 8% and it's making 12 on average, okay? The golden age. Yeah, exactly. Same thing we talk about with your retirement and other things, but this has to run in

Starting point is 01:29:20 perpetuation because it has to run the length of the child's life, not just until they're 18, okay, and not just until the spouse dies. That's not what we're dealing with. So this has to run a lot longer, so it has to be very secure. So until you have a million dollars in mutual funds to leave into the trust, you buy term life insurance. Okay, we did that. That the beneficiary is the special needs trust. Oh, okay.

Starting point is 01:29:51 And you give the, okay, name the, you can give the child's name. We'll call her Ann. Okay, so Anne's trust is the special needs, and special needs trust is the beneficiary of a million-dollar term life policy until I have a million dollars to put in there. Okay. And you'll have a million dollars somebody to put in there. Do I need a lawyer to set up a special needs trust? I'm sorry?

Starting point is 01:30:12 Do I need a lawyer to set up a special needs trust? You can do it at Mama Bear legal forms if you want, or you can get a lawyer to do it. But again, you're not actually setting it up. You're setting up for it to be set up if both of you die. Oh, okay. It only starts when both of you die. Okay. And then the next...

Starting point is 01:30:34 That makes sense, actually. I'm glad I called. Now, the next piece of it then is you have to name a trustee that's going to manage the money, and in the trust you can dictate how the money is to be managed. So we had a similar thing for our children when they were minors that expired when they were no longer minors, okay? Called it just a family trust. Upon our death, the family trust was going to be formed, and I named the trustee to manage the money, And in that trust, I said it's to be invested in the four types of mutual funds that we talk about on Ramsey, okay?

Starting point is 01:31:08 And I had term life insurance funding it until I had enough money to fund it, and then I canceled the term life insurance because there's that much money in my 401K or whatever, all right? Right. And so if you've got a million dollars in your 401k, you can name the beneficiary on your 401K, actually to be the secondary beneficiary. The primary beneficiary would be your spouse. the secondary beneficiary upon the death of you and your spouse would be Anne's trust. Okay, so first husband, then... Yeah, because you don't... Until both of you die, there is no special needs trust.

Starting point is 01:31:45 It doesn't exist. It's just authorized. Okay. And that's all. And so... But the trick is funding it with term life until you can fund it with real money out of your retirement or whatever else you want to. Because honestly, if you have three other children, and we're going to call her is going to get all the money until Ann has enough money before the kids get any.

Starting point is 01:32:11 The other kids get any. And that's fair. That's fair. Because they're able to go earn their life, earn a living, and we're going to take care of their sister. Right. That's fine. That makes sense. Yeah.

Starting point is 01:32:27 We don't have to give everybody a third and not have enough. That's not okay. you know that's not what we're doing so um anyway but all of this activates upon both of your deaths so by term life insurance name the name of her trust as the beneficiary pick a trustee in the trust tell the trustee what you want the money how you want it invested otherwise they'll put it in a stupid CD yeah yeah no CD and then then it's going to eat your lunch it's going to eat itself out from the inside okay because it won't have enough money coming in to take care of her all right And so you've got to be invested at a good enough rate that you can pull off the amount that you're planning to pull off.

Starting point is 01:33:06 Okay. So set that up. And then the secondary piece is who's going to be her guardian. It doesn't have to be the same person that's watching the money. As a matter of fact, it's kind of cool if it's not the same person. Okay. I hadn't thought about that. Okay.

Starting point is 01:33:21 If the caretaker also has the purse string, sometimes it gets weird. Yeah, messy. Yeah. Yeah. They start justifying and rationalizing and all these things. And so we had an aunt and uncle. We had an aunt and uncle that would take care of our minor children. And then we had another person that was going to take care of the money.

Starting point is 01:33:41 And they were directed to send that aunt and uncle effectively child support out of the money. Oh. Okay? Every month. And so the guardian has a guaranteed income to take care of Anne. Okay. And they don't have to worry about investing. just got to take her hand.

Starting point is 01:34:01 Okay. That makes sense. Yeah. You're a great mom. Yeah. Oh, thank you. The number of people that even think about how to do this stuff is really close to zero. I'm very proud of you. Congratulations. But it does activate a different parenting gear when you have one that needs some extra help. Yeah.

Starting point is 01:34:22 Yeah. Powerful stuff. Hey, guys, Rachel Cruz here, and I love summer. There is more fun on the calendar. lender, more time with your people, and way more chances to make memories. But you know what else there's more of? Spending. Oh, between the extra groceries and gas and camp fees and family trips, it all starts to add up so fast. And before you know it, money stress starts to steal the fun out of everything. And that is why I love the every dollar budget app, because it helps you plan your money,

Starting point is 01:35:33 track your spending, and find more margin in your budget so that you can put extra cash towards the goals that matter most. Enjoy your summer without the money stress. Download the every dollar app in the app store or Google Play and start for free today. Well, we wish we could get to every call and question here on the show, but we can't. If you got a money question and you want an answer for your situation, head on over to our website. Use Ask Ramsey. Ask Ramsey is our free AI tool that is built and trained only on Ramsey content and principles. It is not a lot. It is not polluted by TikTok or Reddit. It has actual common sense in there from one of us. Three years of this show, dumped in there, transcripts. All the books we've written dumped in there. All the thousands of articles on

Starting point is 01:36:42 our website, on different money issues, all dumped in there. It can answer your question in a uniquely Ramsey way and no one else can. And it's free. If you want to ask your question from Ask Ramsey, the awesome free AI tool loaded with only Ramsey answers. You can do that at Ramsey Solutions or you can click the link in the description. Go check it out. It's pretty stinking cool. The only thing I do want them to get it where it's a little more smart. I got a little more sarcasm.

Starting point is 01:37:12 Yeah, I think they've dialed that back a bit. Yeah, but it just doesn't feel like me. Oh, it's not just me. You should be able to push a button. Like, who do you want to respond to your answer? You know, my brightest technology invention is I think you should be able to change Siri's voice to your wife's voice. Why?

Starting point is 01:37:32 So when you're getting directions going down the road, it feels authentic. No. I like a gentle British woman saying, encouraging me to turn, not my wife grabbing the side of the car going, turn! They're the same thing. You're nuts. Brenda's in Houston. Hey, Brenda, what's up? Hi, how are y'all doing?

Starting point is 01:37:56 Way better than we deserve. How can we help? We have four married adult children, and one of our daughters wants little to do with us anymore, and she has asked us not to contact her. Why? I'm not sure. Yeah, you are. I'm not sure if she's, well, I think she blames us for some stuff. there was some abuse in her marriage and she's getting divorced and it's now there now there's

Starting point is 01:38:26 blaming us. Okay. All right. So I don't know. I don't know what I was going on there. Gotcha. I understand. So anyway, our hope is that she will want to be part of our family again.

Starting point is 01:38:39 And so we're revising our wills. And I wish is that she would get her portion of the inheritance. But right now, I don't want to give her anything because she's. pretty much less. So my question is, do we put conditions that she would need to meet to access her portion of the inheritance? I don't want to write her out, but I do want some conditions on it, and I don't want her siblings to have to decide. No, I would not have them deciding anything. No.

Starting point is 01:39:10 That's not fair. It's not fair to them. Correct. They become the bad guy then, and she's good at naming other people as bad guys. We already know that. So I think I want to reframe the discussion. Okay. This feels like that she lost her birthright.

Starting point is 01:39:29 And that is not the case because what you decide to do with the money that you own, you are in zero way, ethically, morally, or spiritually obligated to leave it to your children. It's your money. they have zero moral, ethical, or spiritual rights to your money. All of them, not just the one that's astray. Okay. Let's start with that. They don't have any rights.

Starting point is 01:40:03 Okay. So you're not able to punish them, and this feels like your feelings are hurt, and they should be hurt. I hear the pain in your voice, and they should be pain there, because an adult kid who's misbehaving at this level, it hurts for their mom and their dad. And I don't want you to do this out of emotion or punishment. Instead, what I would do and what I have done with our will is that I am not leaving you my money to, because you're entitled to it. I'm leaving it to you because I think you're the best possible manager of God's

Starting point is 01:40:45 provision. And if the way that you treat your siblings or the way you treat your parents is an indicator that you're not a person of character, then you are disqualified as someone who I'm going to leave God's money to to manage. I'm managing it for God. I don't think God wants me to let his money be managed by someone who's out of control. That's not punishment. That's stewardship. Correct. And that's a different. an emotion. It's reacting out of a different set of emotions. So it could be that, let's say, the kid was doing heroin. Okay? Well, you can't leave a heroin addict, a million dollars. It'll kill them because they will go buy a whole bunch of heroin and overdose. Correct. So we're doing

Starting point is 01:41:36 them a favor. It's an act of love to not leave someone who's got character issues a big pile of money because it magnifies their character issues. Okay. And so it's not like, well, you don't call me at Christmas time and you never call me on Mother's Day, so I'm cutting you out of the will. That's a way different discussion. And I really wouldn't frame it that way in your mind for your mental health. I would just say, I'm leaving the money to the people that I can trust are going to manage it in a way that I will be proud of. And someday, if you're back in our lives, we'll change the will again. But I wouldn't leave any provision for her to be back in until you put her back in while you're alive.

Starting point is 01:42:26 That just sounds wrong. Why? It sounds wrong to you because you think she's entitled to money. I don't think she's entitled to a freaking dime. And I don't think your other three kids are entitled to a freaking dime. It's your choice. They're not entitled. You're operating from a framework that you're morally reprehensible if you don't leave your

Starting point is 01:42:48 children money. That is not true. Now, I actually am leaving. my kids almost all of our money. But they're all functioning, high functioning, spiritual character-filled people. Okay, so am I hearing you correct where I don't put her in it at all? I would not put her in it at all until she changes and then I would change the will.

Starting point is 01:43:14 Okay. Because otherwise someone else is going to have to administer your punishment after you're gone. What if it was more like she had to have a job, She had to be doing the baby steps where it wasn't really a character thing. It's a character thing when you cut your parents out. Yes. And then you want their money.

Starting point is 01:43:35 I agree. I agree. You know, if you won't talk to me, you lose the right to my money. Hello. Yeah. That's pretty simple. For me to leave you money and you won't talk to me is a fairly inconsistent construction. I mean, that's just, that's weird.

Starting point is 01:43:53 But you have a broken heart as a mother. I do. And I don't want you to function from that broken heart. I want you to reset the framework on this. John, help me here, please. Yeah, the only thing I would add is I think it's important for you and for your husband to be reflective. When your daughter said, I'm going through this bad divorce, and for whatever reason, let's frame it negatively because we're going to be on your side on this call. She's just kind of spun out, and she's trying to blame anybody and everybody for her misfortune and her broken relationship.

Starting point is 01:44:24 and she said, I don't want to be all in my life. This is all your fault. I'm out. In that pain and heartbreak, if your first thought to reestablish your footing was, well, then I'm taking you out of my will.

Starting point is 01:44:37 I'm going to find a way to hurt you back. As a parent, I would challenge both of us on that impulse. You get what I'm saying? Because what that impulse is, the impulse to try to go feel big and strong again, like to regain our footing, it's all that's doing.

Starting point is 01:44:55 is taking a giant step over the chasm that is grief, that my daughter doesn't want to have a relationship with me right now for whatever reason. Yeah, you're hurry. But Dave's right. If you gave all of your money to a local homeless shelter that you, like your kids couldn't say, my parents are terrible people. They could say, oh, we really wanted that money or we were hoping to get it, sure. But you'd be doing what you wanted to do with your money.

Starting point is 01:45:24 And so Dave's right, you're not in debt to your kids, right? And if you want to set stipulations for who gets your money, you get to do that. Yep. Hey, guys, Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now, you can get that same kind of help anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles. use on the show. Whether you're making a decision or just want something explained,

Starting point is 01:46:18 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. So one of the icons on one of the national treasures on the stage of history that developed what we now call the self-improvement movement or whatever, whatever, motivational speakers. One of the very first that received rock star status was a guy named Zig Ziglar. And if you never heard Zig Ziglar, you should look him up immediately and start watching and listening to Zig Zigler. If you're my age, he was, you know, the equivalent literally of the Beatles, but in that world, you know, it was absolutely incredible.

Starting point is 01:47:23 And many years ago, my friend, a guy who became my friend, Tom Ziegler, picked up the phone and called Nashville living in Dallas and said, hey, I don't know if you guys have ever heard of Zig Ziegler, but he and my mom listened to the Dave Ramsey show every day. And if Dave's ever down here, they'd like to have dinner with him. And I'm like, I'll be there tomorrow. And because to get to meet, you know, this iconic figure was incredible. So we went down and I think you were with us. I'm pretty sure, and one of your sisters and your mom was with us, and we go to this little Italian joint in a strip center. Yes. And it was Zieg's favorite restaurant.

Starting point is 01:47:59 It wasn't much of a restaurant. No, it was mom and dad loved that place. Actually, the food was good. It was not fancy. You would not know that that was a place to go. No, no, it was not the place to go. And I wouldn't have thought it would have been where I would have met a childhood icon. And that began a friendship between Tom and I and I and your sisters and I.

Starting point is 01:48:19 and because I had been following his material since I was young. Mom and Dad were in the real estate business growing up. And then I had the pleasure of interviewing Zig about 20 years ago, long form, when he turned 80, on one of our stages. And we taped that. And I hadn't watched it in almost 20 years. And I pulled it up and watched it knowing you guys were coming up here. And it still sings. The old hits, they still play.

Starting point is 01:48:46 Right. You know, truth never changes. Yeah. It's pretty incredible. So Tom and his sister's got in touch with me, and Zig's 100th birthday, he passed away a few years ago. His 100th birthday is coming up this fall, and they ask if we could use the Ramsey Events Center to have a huge event with a lot of speakers, a lot of today's best speakers. Brian Bafini and I are among them that are going to be speaking at this event, October the 16th. And we're furnishing the venue, and the Ziegler organization is doing the event, of course.

Starting point is 01:49:18 But it's absolutely going to be incredible. We're excited about it, Tom. Thanks for helping us. Thanks for letting us be the host. I guess, by the way you're saying it. What a blessing. We've got 13 speakers who've had a huge impact in their own right. And they all have one thing in common.

Starting point is 01:49:34 And that is that Zig Zigler, his message, his philosophy, inspired them in some way to go into their market and make a difference. And so that's what we're going to be talking about. Well, I've stole so many of his sayings. And I used to credit him. And then I quit at some point. And I thought they were mine. And, but then the others, I actually do remember most of them is his, but I have to go back and I go, I forgot that that was his. And it's just, I had listened to his tapes over and over and over and over again.

Starting point is 01:49:59 It was just ingrained into my brain to say that phrase, absolutely incredible. So if you've ever heard of the power positive thinking or goal setting or salesmanship, see you at the top was his largest book. It was absolutely incredible. And again, we're honored to have this event here. I did have our team pull a couple of clips from that 20-year-old interview. It's only the constant student who is preparing for the future. By the time you get out of college, the information that you learned is obsolete because the world is moving too fast. That's what he said 20 years ago.

Starting point is 01:50:35 Boy, how much more is that for that. That's prophetic now. Yeah. Fire that clip. Let's watch it. The educated person of today is prepared for a world that no longer. exist. It's only the constant student who is preparing for the future. Say that again. It's only the constant student who is preparing for the future. You've got to keep on learning.

Starting point is 01:51:01 Incidentally, that also dramatically increases your creativity because the more you know about anything, then you learn something brand new about it. All of a sudden, they're a creative idea comes out of that. And when that happens, that's when you're valued to your family and to yourself and to the company that's working you or employing you really grows. Constant learning. And he did. He always had a book.

Starting point is 01:51:31 And he used to say, one of his funny sayings that I have quoted him on is he said, I get up every morning, I read the Bible, read the newspaper, so I can tell what both sides are doing. Every day. And he said, I always take notes. And one of the most intimidating things was I had about 6,000 people in an arena in Dallas, and he and Ms. Jean came to the event, and he sat in the third row while I'm speaking for several hours and took notes. Took notes. The Zig Ziglar.

Starting point is 01:51:56 I mean, that's like you playing guitar in front of Peter Frampton, okay? Yeah, and he's taking pictures of God. And he's watching how you do it. Yeah, I move my hands. I can't even breathe up there. I'm like, The Zig Zig Zig. I just, won't you come up here and do this? I mean, it was incredible.

Starting point is 01:52:10 And so humble and fun. a man of faith and bold with his faith. He told me one night we were laughing and cutting up. He said, Dave, you know, he said, people ask me what I would be if I wasn't a Baptist. And I said, well, what was that? And he said, I'd be ashamed. It was so awesome. All right, let's play this next one because I think this was even more germane about people skills.

Starting point is 01:52:37 Because it's still 20 years ago he's saying this. And in the middle of AI, listen to this quote. In today's high-tech environment, out there in the marketplace, what do you think are the most important skills that people need to be able to win? I believe regardless of what your profession is and what you're doing, I believe with all my heart that your people skills take front and center beyond any doubt at all about it. If you can get along with people, and when I'm talking about that, I'm talking about it, I'm talking about it in the market. marketplace, but I'm also talking about the home and in the community because 80% of all the counseling is because of relationship difficulties, you know, parent, child, teacher, student, husband, wife, and so forth. And in the marketplace and in the community, how many of us have

Starting point is 01:53:35 enough friends? How many of us really are cognizant of the fact that we need people if we're going to be a complete person ourselves. John, that's right up. That's singing your tune. I mean, I was just reading an article this morning about a business in California that is the managing owner is AI. It's an AI agent. And it has human employees, but it's an AI agent. And when my son, who's 16, sits down and says, dad, like, are there going to be any jobs for me?

Starting point is 01:54:08 What do I study in college? The thing I always come back to is what Zig just said 20 years ago. If you can connect with people and you can help people exhale when they're in your presence, when you're a net joy to human beings, that's the best shot you got. Absolutely. I asked AI a question. I said, imagine if 10 years from now robots and AI can do everything better than humans can when it comes to work. What should we start teaching our kids today so they can thrive 10 years from now?

Starting point is 01:54:38 And it's this wisdom that Ramsey teaches that Zig Zigler taught. really, it's just truth paraphrased from God's word. In a way, I heard a great saying, you know, great preachers, they tell a timeless message in a timely way. And people need wisdom now. They need truth now. There's a lot of knowledge on AI, but there's not wisdom. And the truth is hidden, right? And the people skills, the ability to connect with humans so that that wisdom can be transferred is, it's vital for anything. And, you know, one of the things that, uh, The technology generation struggles with is relational issues. That's right.

Starting point is 01:55:16 And loneliness that goes whether they're disconnected. And so solving those two things for you. If you're 23, you know, I can teach you a lot of stuff, but if I can teach you to work with people, you'll be okay. Yeah. Yep. And you teach your character, you'll be okay. And teach you to have friends, like John talks about all the time. You know, there's this loneliness epidemic we have in our culture today.

Starting point is 01:55:36 And, you know, pushing that aside. And I just blew my mind when I'm watching that and going, that's 20-year-old information. and he was 80 sitting there doing that. That's crazy. Tom, honor to call you, my friend, and we're looking forward to October the 16th. How do they get tickets right quick? Go to Ziegler100.com, and we've got a special.

Starting point is 01:55:58 We've got a Ramsey code. So you put in Ramsey 50 when you go to Ziegler100.com, and it will save you $50. And if you get the general admission ticket, your spouse comes for free. So we're doing that for all of our Ramsey listeners. So buy one, get one free. Check it out.

Starting point is 01:56:14 Ziegler 100.com. What's up, guys? It's Jade Warshot. Listen, summer spending adds up so fast between vacations and road trips and camp fees and events and all the extra gas and grocery runs. Money can get tight before you know it.

Starting point is 01:56:48 To really get your money under control and keep it that way, you're going to need a plan. And that's what you'll get with the every dollar budget app. It helps you track your spending, free up cash to put toward debt and savings, and it's the simplest way to make a plan for your money before the month begins. So no more wondering where your money's going. You're telling it where to go.

Starting point is 01:57:08 Download every dollar in the app store or Google Play and start for free today. Our scripture of the day, Proverbs 1611, adjust balance and scales are the lords. All the weights in the bag are his work. Les Brown says wanting something is not enough. You must be hungry for it. Your motivation must be absolutely. compelling in order to overcome the obstacles that will invariably come your way. I remember watching his videos back when we watched Zig's too and he'd say,

Starting point is 01:57:52 yeah, I've got to be hungry. You got to be hungry. He's a lot of fun. Dude, that guy, I would have loved to have seen him live. Zig. Zig and. Well, Les is alive. Oh, he is?

Starting point is 01:58:04 Yeah. Does he still do events? Yeah, yeah. They're out there somewhere. I mean, he's got to be in his 80s. I need to catch a Les Brown event. Yeah, he actually did an introduction for me one time when I was. I was in LA.

Starting point is 01:58:13 Yeah. Yeah. He was, and he was married to somebody like some famous artist at some point. It was amazing. But anyway, he had a great career and Les was fun. He was part of that old group, though, was Zig, that whole gang.

Starting point is 01:58:27 Tony is with us in Detroit, Michigan. Hey, Tony, what's up? Hey, Dave, what's going on? Thanks for taking my call. Sure. So I'm on a baby step one with no savings. I live at home. My parents, I have about $47,000 in debt.

Starting point is 01:58:41 I have a video production company business, and that income is not consistent or enough. I work at a game overnight. My question is, should I get a second job for steady income or focus on landing better contracts? How old are you? Oh, 28. Okay. How long have you been working the video business? It's been about two, maybe two years.

Starting point is 01:59:10 And what will be your income from the video business net profit taxable for the year? For this year or for like... For this year, for 2026. When we end the year and I look at your books and I say, here's what you spent and here's what you made and there's your net profit. What's it going to say? It's going to be under under 10K. Last year we did... Under 10K?

Starting point is 01:59:36 Yeah. I did 56,000 last year. and then this year is just like, this year is pretty much like, it's not, it's not going great this year. Okay. Well, you definitely knew a new job. Not a second job. This is, this is at best a side hustle. I mean, it's $10,000.

Starting point is 01:59:58 That's $800 a month. That's starvation. Yeah. I mean, you know that, right? I'm not telling you something you didn't understand. That's not light. The light's not coming on. You already knew this, right?

Starting point is 02:00:08 Yeah, I just thought that. I just figured, you know, I did great last year. What did you make last year in profit? Well, it was low, but I just knew I could make it was the thing. You know, I started it. I was like, okay, I can make it, but I didn't profit a ton. You haven't made it. What is this?

Starting point is 02:00:36 If you were a business unit at Ramsey, we would close you. Right. What is this dream? of being a small business owner, of being a videographer, what is this dream costing you in terms of living any sort of semblance of a good life? You have no income and you live with your parents. Yeah. You're stressed.

Starting point is 02:01:01 You're exhausted. Yeah. You look in the mirror and you don't feel proud of who you see staring back at you. It's costing you everything, brother. I want you to keep working on this dream, but meantime, I want you. to earn a full-time 28-year-old person's income of $70,000 a year during the day. And I want you to work on this dream at night and on weekends until you get it figured out because you don't have it figured out yet how to make money out of this.

Starting point is 02:01:26 I don't know enough about the business to say, do these three things and suddenly you'll be profitable. I don't, I wouldn't be stupid to step into that. But I can tell you that the video world, anything that produces audio or video, or written content has dramatically changed in the last 24 months, and it's going to change a thousand percent more in the next 24 months. Because as you know, Tony, and I don't know as much about it as you do, but the technology is moving so fast and getting so cheap, so quick, the stuff that we used to pay $40,000

Starting point is 02:02:05 for a camera to produce, you can do with an iPhone now. And we do. around here. We've got some $40,000 cameras and we've got some iPhones. And we've got some $2,500 cameras that are better than the $40,000 cameras because that stuff is moving that fast. And so I'm the guy writing the checks. It's the only part of the business I understand. But, you know, it is moving in this current world. It's a technology-based business. And, you know, the big discussion among the filmmakers and all the all our video people all through the building right now is how much of Odyssey was done you know and it's the biggest thing out there and how much of it was done

Starting point is 02:02:51 high quality film but on the cheap it's scary yeah wild and so um and it's busting out i mean it's but all kinds of records at the box office so um i don't know what i'm talking about except i do know i'm talking to a 28 year old guy who's been making 10 000 dollars and lives with his mom yeah and so i you've got to change that for your sake. And then can you go back and start again and reset in a different technology viewpoint and what it is you're trying to provide? And what is the service you're providing? Is it now antiquated? Because if it's five years old, it's antiquated. Or if what you really want to do is to make movies or to make short films and you want to stay in this business, you might have to start

Starting point is 02:03:40 filming weddings or you might have to start filming birthday parties or you might like it it it's you're going to have to expand this picture of what you want to do to make an income yeah you don't have the um you know micro and i talk about this all the time you can't just follow your passion no it's one of the worst pieces of vice is follow your passion you end up doing exactly where tony is that's the you don't want to follow your passion okay you've got to use some stinking common sense about this and so because your dream will turn into a nightmare because you look up and you're up and and I go, where'd that five years of my life go? And what could I've done with that time, the lost opportunity of that time and all that stuff?

Starting point is 02:04:18 Daniel is with us in Jackson, Mississippi. Hey, Daniel, what's up? Hey, y'all, thank you for taking my call. It's such an honor to get to talk to you, too. When I went through Financial Peace University, I was a loan officer, so that was an entire vibe. I just wanted to put that out there. I'm so sorry, the planet's a banker. I don't think even Deloney could save me from that by.

Starting point is 02:04:41 No, man. My best friend in the world is a banker, and we go round and around. So I'm glad you're here, man. How can we help? So, I have one question in three parts, if that makes sense. So my two-year-old daughter through Christmas birthday, baby shower before she was born, has accumulated $700 total. So my wife and I want to know what should we do with this money, A,

Starting point is 02:05:06 when should we give it to her, part B, and then part C, how do we teach a child about me? Because we have no idea how to do that with a child. So I kind of wanted to ask those three questions as part of the one bigger question. I'm short on time, so I'm going to machine gun you. But I'm going to send you a copy of Rachel and I's book, her first number one bestseller called Smart Money, Smart Kids, that answers your questions, okay? But there's four things you've got to teach a kid.

Starting point is 02:05:34 And there's the same four things adults have to do. They have to learn to work, save, give, and enjoy money. And they should always be doing all four, age appropriately. When you're two, we don't send you to the salt mines. But we will ask you to pick up two toys. We pick up 18 and we call you the best room cleaner on the planet. That's when you're two. But you still associate work and you get a dollar when the room is clean.

Starting point is 02:06:04 You still associate work with money. And I meet 52-year-olds who don't associate work with money yet. So work, spend, save, and give. That's the thing. And Rachel always says, and she said it in that book, more is caught than taught. If you suck with handling money, you're out of control. Your money is chaotic.

Starting point is 02:06:23 You guys fight about money. Money's going to be a source of pain for this child. But if mom and dad are in control, they live a disciplined life, they enjoy money, they save money, they give money, and the child witnesses all of that. and witnesses, cooperation between mom and dad, the child will grow up to do what they saw. And the proof of that is every time you open your mouth towards your child today, your father comes out of your mouth.

Starting point is 02:06:48 Happens to every one of us. That puts this hour of the Ramsey show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.

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