The Ramsey Show - Quit Trying To Calculate Your Way out of Debt!

Starting point is 00:00:00 Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. The phone number here is 888-825-5225. Number one best-selling author and host of The Dr. John Deloney Show. Ramsey personality Dr. John Deloney is my co-host today as we answer your questions about your life and about your money. Thank you for joining us. Anthony is with us in Canada to start this hour. Hi, Anthony, how are you? I'm good. How are you doing? Better than I deserve. What's up?

Starting point is 00:00:55 Hey, I got a question. So I have, I sold my rental properties as a bit of a, I was under the belief that it was a passive income, and it really wasn't, so we got out of it at the right time, I think. You mean you had to actively manage the rental property? Yeah. You mean the tenants don't just do what they're supposed to do all the time? I'm shocked. No, they were calling me. Yeah, and they wanted repairs done and stuff. Anthony, I just have to disagree with you. I've watched plenty of TikTok videos. I think you're out of line here. That was sarcasm, Anthony.

Starting point is 00:01:30 Passive income. I also wanted sarcasm. I'm glad you realized it. So you sold it, Anthony. I'm sorry. And go ahead. I also watched those TikTok videos, which got me into it. That's our point.

Starting point is 00:01:43 Yeah. Okay. I have, um, I, I have $240,000, um, coming in and, uh, I have fully stocked emergency fund. Uh, we're giving money. We have our, um, uh, like, uh, our, we call RESP for my kids' education. Uh, we're. We have no debt other than our mortgage, which we have $140,000 left. Wow. But we have been paying off. This year, we paid off $60,000. I think next year, we could probably pay off $50,000, $60,000. We're on track to pay it off.

Starting point is 00:02:21 But I could just pay it off tomorrow. Good. Do it. Do it. on track to pay it off but i could just pay it off tomorrow good and do it in the interesting do it but like okay so you're so focused right now i know what what are you what are you gonna do with the money if you don't uh invest it okay so it's like borrowing 140 000 on your house that's paid for to invest money? If you had a paid-for house, would you borrow $140,000 on it to go invest it? No. Same thing. Yeah, I just keep looking at, like, since we are so focused on the— If you're focused, pay it off.

Starting point is 00:03:03 Yeah. Pay it off. Yeah. Pay it off. So in 30 years, I keep doing, like, the compound interest calculator, and it will be a difference of, like, a million bucks. Yeah. Yeah. Is that on TikTok, too? Yeah.

Starting point is 00:03:18 Your compound interest calculator never met a millionaire. Because let me tell you how it works in the real world okay in the real world as we studied the largest study of millionaires ever done 10 167 of them none of them precisely zero said we became wealthy by borrowing on our home to invest vest and compound interest calculator zero zero zero not one the same number of millionaires that said they got rich with airline miles using their credit card zero not one the same number that said they got rich using whole life life insurance zero not one we couldn't find one anywhere that did that so that's the data that i'm using and so you i mean it's not even statistically significant it's zero it's not like oh it's 56 so some did and some did it's. None did what you're talking about doing. And so, yes, your compound interest calculator is there,

Starting point is 00:04:29 but what it's leaving out is risk, and what it's leaving out is the way you walk when you walk into work and you don't have a house payment. Your voice changes one octave when you don't have a house payment. It's called peace. And you will make different career decisions when you don't have any debt and you have different relationship issues when you don't have any debt. None of these are quantifiable in your calculator because the borrower is slave to the lender. Think about all the implications of slavery.

Starting point is 00:05:08 Only one implication of slavery is mathematical. All the rest are spiritual, physical, relational. Psychological, emotional. Breaking of the spirit. Think about that. And hold on. I wonder if, Dave, I wonder if he has created this new identity that he's a go-getter and he just can't picture himself some people create chaos because they don't know how to exist when it's peaceful now you have to learn i think he's honestly analyzing it like he did when he bought the

Starting point is 00:05:38 passive income okay he's just wrong he's just wrong like he was with the passive income it's just it's okay yeah i that's how i i've learned a lot of stuff when I was wrong. Sometimes I'm wrong, but not as much lately. James, will you clip that real quick? I used to be wrong a lot more, but I'm not wrong as much anymore. Because when I was wrong, it hurt, and I quit doing that wrong stuff. You know, I mean, it's like that. And for those of you listening, Anthony was making fun of it,

Starting point is 00:06:01 and we were too, in case you're missing the point on this. Anyone that tells you that real estate, and I own, I don't know, $600 million, $700 million worth of real estate. Anybody that tells you real estate is passive income is absolutely full of crap. There is nothing passive about owning real estate. If you want passive income, buy an S&P 500 index fund and set it and forget it. And you'll get checking, you know, the emails will come in and show you what you made. As a matter of fact, in the last 12 months, you would have made about 25%, which would have been a good run for you. It's been a nice run in the last 12 months.

Starting point is 00:06:41 But that's not normal. But I i mean you didn't have to do squat you didn't have to fix a leaky roof you didn't have to collect from somebody who lied you didn't have to analyze if the next guy moving in was lying you didn't have to do anything you just set it and forget it that's passive real estate is not there's, you can't have, you can't even have, I have a blank piece of ground, a piece of dirt. The neighbor texts in here last week and said, those storms that came through, some of your trees fell on my lot and knocked over my fence. I can't even have a piece of dirt that has no buildings that's passive. Even that is active. You know, there's just anything having you know so we got to send a guy over there with chainsaws because it's our responsibility

Starting point is 00:07:30 our stupid tree tore up his nice fence and so i bought a fence and some trees and so dead dead even that you know you can't yeah you can't make that up yeah it's just you know there's no way you can get to passive in real estate it's's great investing, but it's anything but passive. I own a bunch of it. I believe in real estate. Where does that story come from? I hear it everywhere. It's the same.

Starting point is 00:07:53 It's the natural extension of the bull crap line that the renters are going to pay your payment. It's okay to borrow money because the renter will pay your payment. I'm going to let the renter pay it off for me note it's your payment and when the renter doesn't pay because he got put in jail for hitting his wife oh that's happened um yeah because he's not working now because he's doing 11 29 that'd be sitting in the local jail yeah guess what he doesn't pay guess what you gotta pay it anyway so that's when you find out it's your payment not the renter's payment it's not passive boys and girls it's good investment but it's not passive this is the ramsey show what does the future hold for business? Ask nine experts and you'll get ten different answers.

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Starting point is 00:09:56 It's free at netsuite.com slash Ramsey. Dr. John Deloney, Ramsey personality, is my co-host today. Thank you for being with us, America. Well, apparently enough of you people made enough noise out there that the folks here at Ramsey have officially lost their minds because I am now in the t-shirt business. I'm wearing one. Look at this. Look at this. Yeah. We have food at home. We have food at home. We have better than I deserve t-shirts and Yetis and hats.

Starting point is 00:10:31 We have live like no one else tumblers in case you want to tumble. If you carry that around, you will tumble over. It's so big. Some people carry around like a bathtub. I'm just saying. And they sweat shirts that say they're debt-free.-free the debt-free t sweatshirts are very cool and the materials all this super soft nice uh expensive um whatever t-shirt material it's not like your cheesy t-shirt at the at the booth in the flea market thing you know this is like the

Starting point is 00:11:02 good stuff so there it is you got a story you got to want a better better than i deserve hat and uh yeah maybe the worst uh pitch sales job that has ever been done i would like america if you have recently bought a shirt in a flea market and you are not happy with your purchase right into the show we'd love to hear from you holler right now and we'll get you a better than i deserve replacement and yeah i just if you got 20 bucks i would rather you buy like john's book because that'll change your life right there you have it or you bought my book and that'll change your life right but if you if you got money and you you want to say that you're debt free and uh better

Starting point is 00:11:43 than you deserve and you got food at home and that kind of stuff, we've got shirts that will help you do that. And all at ramseysolutions.com slash store. You can wear it while you're doing your side hustle to get out of debt. It just has, yeah. And you know what? And you could do like DoorDash and wear I've got food at home. That would be oxymoronic.

Starting point is 00:12:01 There you go. Yeah, that would be screwed up. Yeah, it would probably cost you. If you were a better than I deserve, now, I will tell you this. In the old days on the show, back when it was just talk radio, we had a bazillion people delivering pizzas. This was before DoorDash and all that stuff was there. And we'd say, go get a job delivering pizzas.

Starting point is 00:12:18 It's a great job. You can make $1,500 a month working four or five nights a week. And you still can, by the way, delivering pizzas. But we had the whole Ramsey tribe out there trained to say if the pizza guy or gal says how you doing better than i deserve that means they're working that side hustle to get out of debt you have to double their tip oh i like that it was like code it was tribal code let's bring that back i like that okay if they're wearing a better than i deserve hat if they're wearing the clothes you have to triple the tip they're wearing a better than i deserve hat if they're wearing the clothes you have to triple the tip if they just say better than i deserve you got to double it there you go

Starting point is 00:12:49 i like that there you go because you got to pay for their t-shirt that's it that's i like it now we got shouldn't be buying a here we go all right i'm wearing the shirt and it's comfortable that's all you need to know it is comfortable it's very they're very comfortable i can't wear them because that's like really weird that's, like, really weird. That'd be like wearing a shirt that says, my name is Dave and I'm great or something. I mean, if I wear a shirt with my own sayings on it, that's really horrible.

Starting point is 00:13:14 I just couldn't. I just can't. People go, oh, you're wearing your, oh, that's weird. Yeah. And I really wouldn't blame them. That would be accurate. Isabella is in San Diego. Hi, Isabella.

Starting point is 00:13:23 How are you? Hi, Dave. How are you guys? Better than we deserve. What's up? I was just wondering, um, my question essentially is, um, how do I, I'm just looking to see how I can get, use my extra income and set myself up for finance for the best financial future I can. I'm 22. I just graduated college last week, um, with a public health degree. So I'm 22. I just graduated college last week with a public health degree, so I'm really excited about that. And I rent here in San Diego, and as you know, it's super expensive. Did you get your big girl public health job? Not just yet. I currently serve on the weekends to help with my extra money, and then I'm working with the city, but it's still a minimum wage, you know, 35 hours. So where's the part where I'm excited about the degree? I know. Hopefully using it in the future.

Starting point is 00:14:26 I mean, it's the extended part of the degree that it does pay well, but it usually requires a master's. I'm hoping I could pay for that. I have no debt. I paid my mom helped me through college, and I paid half of it too. Good for you. Thank you. I would go get a job in the next six weeks in your field that will pay for your master's as a part of their benefits package.

Starting point is 00:14:50 Okay. And I was wondering, would I still keep the serving job just to help with the extra income? Because I have the goal of retiring on my 401K. I currently have three grand in that right now, but I'm just, I guess, a little nervous. You have zero debt? Zero debt. Okay. How much money do you have in savings?

Starting point is 00:15:12 $4,000 in cash and $4,000 in a savings account. Okay. All right. I want you to build an emergency fund of three to six months of expenses, in your case $10,000 or $15,000, that you don't touch for anything but emergencies. And then let's work on the career side of this equation where you're not making minimum wage and serving because that's not a plan when you're 30. Agreed?

Starting point is 00:15:34 Agreed. Yeah, the 30-year-old you needs the 22-year-old you to have a plan. And you've got the cart way before the horse right now. You've got to get a job. Yeah. You've got to get your income and then get settled into that 401k rhythm is a great thing to do and then start saving above your emergency fund for your first home purchase and you'll be well on your way to wealth building but it's going

Starting point is 00:15:55 to be dependent upon your income and if you think the field that you're in is going to require a master's go get one but let somebody else pay for it. Right. They do all the time. You say that like you don't believe me. Believe me, in your world, they do it all the time. I just get a little nervous because I feel like with a master's, my mom really wants me to do it now. She's like, we can budget for it.

Starting point is 00:16:18 It's okay if it's a small load, but I don't know. Or just go get a job at the university. Why don't you go get a job at the university and let them pay for it now? I'm not suggesting waiting 10 years. I'm suggesting doing that in the next five or six weeks. I guess I never really looked into that. That's what you need to do, kiddo.

Starting point is 00:16:40 And you can get one in your field, but you can also go get a job at a local university and they'll have some sort of tuition reimbursement program, and then get yourself a master's there. And they'll get an employee that they get to keep for two to three years, and you'll get your master's degree paid off. It's a great win-win for everybody. And it doesn't need to be a big, fancy school. No. I mean, the cheapest possible school in your area that would hire you to mop the floors and give all their employees free tuition or

Starting point is 00:17:06 hire you to be a graduate assistant. Or a resident hall director. You get your housing taken care of too. And all this is going to come at a cost, but you end up with a master's degree in a public service field and you don't owe anybody any money. Then you can actually do real service without wondering where you're going to sleep. And you can start on it next week without having to budget out of your mom's stuff to pull it off. you need to be thinking about your career that way rather than i can't do my career until i get a master's instead integrate the getting of the master's into your career moves that's what we're saying and it really can be done kiddo i know i can tell from the way you your voice tone was that you didn't think it can be done but believe me john's got a phd in higher

Starting point is 00:17:43 ed i did it yeah oh you did it i did that oh yeah there's that one of the phds i worked at a university uh for my master's degree haven't paid for no i paid for the second one but my master's degree i worked at a university and they helped and then my the phd yeah it was largely taken care of with tuition reimbursement program at the university where i work so that's a pretty standard thing. And that actually happens, by the way, boys and girls out there in medical school too. There's MD, PhD programs that they're very hard to get in. But if you can do, for example, where you, again, work on campus,

Starting point is 00:18:19 you're a TA or a GA, and you're working grading papers and other stuff while you're doing your work. And, oh, you're not supposed to have a set list, and they'll do it. They'll do it. And they do it all the time while you work on this stuff. And that's the way a lot of people get postgraduate stuff paid for. It's excellent for undergrad, but not very many undergrads qualify for the actual work. Or if you have an associate's in nursing, your hospital may pay for you to get your bachelor's or help you to get your- Your RN.

Starting point is 00:18:54 Yeah, whatever you need. So it never hurts to ask that question or to really scour the earth, and you might have to move. You might have to work at a different school or work at a different hospital, whatever, but always ask that question. And you're thinking about the five year from now you. The alternative is wait tables and work minimum wage. And you and your mom scratch together enough nickels out of the corner of the couch to go get your master's and then start your life. I don't like that alternative. This is The Ramsey Show. we hide our true selves behind costumes and masks all the time we do this at work we do this around our friends we do this around our families we even do this when we look at ourselves in the mirror i know because i've been there multiple times in my life and it's the worst if you feel like you're

Starting point is 00:19:56 stuck hiding behind masks and costumes all the time if you find yourself hiding from your true self i want you to consider talking with a therapist. Therapy is a place where you can be honest, where you can talk to somebody else and reflect and learn, and you can accept all the parts of yourself over time and start living an authentic life. Masks and costumes should be for Halloween parties, not for our emotions and our true selves. And if you're considering therapy, try calling my friends at BetterHelp. BetterHelp is 100% online therapy. You can talk with your therapist anywhere, so it's convenient for you and your schedule.

Starting point is 00:20:33 Just fill out a short online survey and you'll be matched with a licensed therapist. Plus, you can switch therapist at any time for no additional cost. Take off the costumes and take off the mask with BetterHelp. Visit betterhelp.com slash Diloni to get 10% off your first month. no additional cost. Take off the costumes and take off the mask with BetterHelp. Visit betterhelp.com slash Deloney to get 10% off your first month. That's betterhelp.com slash Deloney.

Starting point is 00:20:55 Dr. John Deloney, Ramsey personality, is my co-host today. Come by and visit us anytime you'd like here at Ramsey. We're about 12 miles south of downtown Nashville in a wonderful town called Franklin, Tennessee. And the lobby is open to the public. We do this show on the glass from 1 to 4 Central Time, Monday through Friday. The homemade cookies and the coffee are on us

Starting point is 00:21:18 and so the place smells like Mama's Kitchen when you walk in, not corporate America. And so come in and hang out with us. We'd love to have you. And in the middle of that lobby is an official thing called the debt-free stage, and it's where people do their debt-free screams. Gregory and Emily are on it, which can only mean one thing, that they're here to do a debt-free scream.

Starting point is 00:21:37 Where do you guys live? Tampa, Florida. Welcome. Good to have you. Welcome to Nashville. And how much debt have you paid off? $225,000 in the last two years. Whoa.

Starting point is 00:21:48 Love it. And your range of income during that two years? It was around $220,000 to $250,000. Cool. What do you all do for a living? I'm a project manager, real estate development. And I'm a nurse. Very good.

Starting point is 00:22:01 Great careers. Well done. Fabulous income, $225,000. You got after it. Man, your ratios, you guys were on beans and rice. That's pretty serious. What was the $225,000? What did you pay off?

Starting point is 00:22:12 The house. Oh, I'm looking at weirdos. Paid for house. Love it. Way to go, you guys. Way to go. Excellent. So what in the world?

Starting point is 00:22:23 What's this house worth? Probably around $550,000. Very cool. And how much in your retirement accounts and nest egg just uh under 600 oh so i'm looking at baby steps millionaires too how old are you weirdos i just turned 43 wow i'm 40 all right and you're a millionaire and you don't have a house payment nothing that's what i mean by weird that's weird very weird so strange i love it so what happened why'd you decide to pay the house off well our story began in 2007 when i was traveling a lot for work listening to the radio hearing ramsey and uh and then 2010 i got the book i like, we got to read this book. I've been listening to this guy for years now. And Emily read the book. And then she's like, we got to sell the car.

Starting point is 00:23:11 Oh. Way to go, Emily. I was like, I'm not selling my car. Sorry I made you read the book. And then six months later, I read the book. And she overheard me talking to my mom saying, we're selling the car. And she's like, what do you mean we're selling the car? That was my idea six months ago.

Starting point is 00:23:31 She's right. It was her idea. I like it. So that started the whole process. Right. And we had about $100,000 in debt that we paid off within two years back then. And we've been working the steps over the last 13 years. And the last two years we we knocked

Starting point is 00:23:46 out the house. Yeah that's about the typical timeline although y'all are a little younger than normal but typically it takes people somewhere around 10 years to do the whole plan and that's debt free then build your emergency fund then be putting 15 percent away then pay on the house extra and then knocked out the house really fast. You leaned into the house, though. These numbers are not, you sacrificed to do this quick. And the kids' college fund, they're set. So, I mean, we got, this is generational.

Starting point is 00:24:16 Wow. Way to go, y'all. What sparked this in you the last two years to pay your house off? We've been on the plan, and we said we just need to focus and uh focused intensity and times god equals momentum and we just made it happen i love it very cool well congratulations you two thank you how's it feel to not have a payment in the world i mean millionaires are 40 pretty amazing it's crazy i mean you did this i mean no everybody knows there's too much inflation everybody knows the stock market's crazy. Everybody knows, everybody knows, everybody knows it can't be done.

Starting point is 00:24:48 But you did it. I'm so impressed. Well done. You swam upstream in a culture full of toxic negativity. That's right. Way to go, you guys. What's it like going to work with your fellow nurses who are still paying back their school loans 25 years after taking them out? It's crazy.

Starting point is 00:25:04 Yeah. You got to get them to sell the car all right so what's the biggest fight y'all got in over the last decade as y'all were navigating this so when we first started um we were always going out to eat and then she's like well we can't go out to eat because there's no more money i'm like what do you mean there's no more money we have you know this was before we started the plan. And that's when we were like, we're fighting over money. We need to get serious. And I think it was over food, honestly.

Starting point is 00:25:37 Over you wanting to go out to eat is what it was. Yeah, that's what it was. Let's get right down to it. The guy whose idea was to sell the car after his wife had the idea that's the most typical husband thing it really is you guys are so fun way to go i'm proud of you thank you who was cheering you on our kids our kids our parents family so you had some good support then anybody Anybody call you crazy? Everybody. Everybody.

Starting point is 00:26:07 All those broke people. If broke people are making fun of your financial plan, boys and girls, you are on track. So I'll just tell you how that works. Way to go, y'all. Way to go. If you are sitting down at a table with a couple who's just turned 33 and 30,

Starting point is 00:26:24 and they're starting to fight about dinners they're starting to fight about stress they're starting to fight about what soccer league little timmy's going to play and what would you tell them i would ask them if they think there's a problem because if they don't think there's a problem then there's no problem i think that's been a lot for us when we've been talking to people over the years. If they don't think there's a problem and that they just want to live in that cycle on the hamster wheel, then they're never going to be able to change. So I think it's a hard issue maybe.

Starting point is 00:26:59 And if they look at you and say, yeah, we're ready to change, can you help? What would you tell them? What's the most important thing that they could do? Get on a budget live act your wage there you go live on less than you make a concept congress can't grasp way to go you guys wow very impressive very impressive very impressive cool cool cool so the book that was the whole thing total money makeover book and just listen to the radio that's right yeah we we just started doing the envelopes and uh paying everything with cash and what else do we do that's pretty simple

Starting point is 00:27:36 it's just pretty simple i mean there's nothing complicated here is there i think that's the biggest problem with it is it's too simple people that are way too smart think that it's too there must be a uh you know must be a shortcut shortcut there's no shortcut yeah no shortcut to any place it's worth going beverly seals said way to go good job guys all right hey we've got a couple of years of uh every dollar uh subscription for you pay for your every dollar budgeting since budgeting is a big deal to you all. And you can either use them or pass them around to get somebody else started. However you want to do our gift for you to say thank you for coming all the way from Tampa, Florida to do your debt-free scream. Gregory and Emily, Tampa, Florida.

Starting point is 00:28:20 Ten years later, the last two years they paid off 225 000 net worth approaching one and a half million dollars at 40 years old following the baby steps there it is ladies and gentlemen it's not any harder it's not any easier than that it's harder than doing it the other way but it's easier than doing it the other way you You guys, count it down. Let's hear a debt-free scream. Three, two, one. Glory to God, we're debt-free! Yeah! That's how it's done, ladies and gentlemen.

Starting point is 00:29:01 That's how they do it in Tampa, Florida. I'm going to put a note down. There's got to be a psychological construct and maybe some of my fellow nerds can write into the in the show um leave leave a comment but there has to be some sort of psychological path that we feel like the more complex it is the more right it must be oh yeah um and if it's just too easy, then it's just too easy. We're going to, we're going to pass on that. Actually, I was working through the content for the investing essential seminar that George and I are doing tomorrow night and the next night.

Starting point is 00:29:33 And one of the principles I'm going to tell folks is that in studying and hanging out with people with, you know, five, 10, 20, $30 million net worths. The thing that has always kind of taken me aback is how primitive and simple their investing is. It's so simple. Yeah. They have no desire to be complicated. And I think that's how they got all their money. It's the same with people who are physically fit, who have great marriages. It's usually pretty simple.

Starting point is 00:29:58 Yeah. It's pretty simple. Like, be nice. Be kind. Exercise. Eat less. Be nice. Eat less.

Starting point is 00:30:03 Yeah. Yeah. It's hard. It's hard. Yeah. This is the Ramsey Show. One of the questions I get all the time is, which life insurance company should I use for my term life policy? A valid question since there are hundreds of companies out there

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Starting point is 00:31:02 Call them at 800-356-4282 or visit zander.com for instant online quotes. Dr. John Deloney Ramsey personality is my co-host today. Thank you for joining us America. Open phones at 888-825-5225. Corey is with us in Washington, DC. Hi, Corey. How are you? Hi,

Starting point is 00:31:28 I'm well, thanks. How are you better than I deserve? What's up? I am trying to figure out how to get out of a stuck situation. I'm living. Um, I went through a divorce, which was a really terrible relationship and jumped into my,

Starting point is 00:31:43 um, mother's home. Um home for the time being, which has been way too long now. And in the process, I came into her home with $50,000 in credit card debt and a car loan, which I've since paid off. You paid off all the credit card debt and the car both? Yes. Way to go.

Starting point is 00:32:04 How long have you been there i have been here for six years oh so i paid that off and i've saved i i and i went back to school um all in that time and got a decent job and now make three times the amount that i was what are you making started my job now i make 118 why are you making? When I first started my job. Now I make $118,000. Why are you still there? Because this market here, I started looking in 2020 for homes. I've been outbid several times by like $40,000. How old are you? 45.

Starting point is 00:32:39 Okay. Why have you not gone and just rented something? You're debt-free and you make $120,000 a year. You can rent can rent something yeah the rentals around here for a three bedroom i have three kids and myself for a three bedroom it's about three thousand dollars a month so at that point i thought i was just throwing away money um my income has gone up each year pretty substantially um so i keep feeling like i'm chasing the carrot i get to like a point where I could potentially make it work. And then the, you know, the rents go up and the mortgage, the prices on the houses go up. And of course the interest rates are up. So I feel like I can never just

Starting point is 00:33:17 get a grasp on something that I can actually move comfortably into. So now I'm trying to figure out, do I just put everything on hold as far as trying to buy a home? No, the secret to happiness is lower expectations. You're trying to move into a neighborhood in an area that your income does not allow you to do. Understood.

Starting point is 00:33:40 And you probably won't be able to catch that carrot. And I don't want you being 55 and living with your mother. I don't want your children graduating from high school living with their grandmother. Yeah, and that's the other thing. I have nothing saved up for them to go to school. Yeah, but the point is that you have painted yourself a world where you have decided that you are trapped by housing prices and rental prices.

Starting point is 00:34:07 Okay. And you're not. So I get paid biweekly, and I get paid about $2,600. Again, my income just went up in January. I was getting paid several hundred less per month last year and the year before. So with that, what can I afford? Because I keep looking at all these other bills. If I understood you right, you're debt-free, and you have how much saved?

Starting point is 00:34:42 It's close to $60,000. And you make $118,000 a year and you have three children. Did I understand all of that right? Yes. And you did all of that in six years coming out of a broken, toxic, horrible marriage. I'm so proud of you. And you got a degree. You're freaking amazing. Well done. Well done. You've really accomplished a lot here. And the thing I think I'm hearing, and I might be wrong, Corey, but I think I'm hearing that probably in the marriage and definitely with mom, the home that you're living in were both nicer than the home that you can afford now, and you're having trouble with that.

Starting point is 00:35:25 Probably, yeah. I've definitely looked at lowering, you know, some of my living, you know, what I'm used to. Yeah. The home that your mom is in now, did you grow up in that home? No. Okay. So the home you grew up in was not as nice as the home that you're currently staying

Starting point is 00:35:43 in. No. And you're not damaged because of that? Yeah. I mean, this house is okay. It's not, like, fantastic or anything like that. Could you afford to buy it if it was on the market? No.

Starting point is 00:35:56 Okay. That's the point. Your childhood home, though, you might, and your children will not be damaged if they move into a home that's not something off of the real estate channel on, you know, being redone by Chip and Joanna. Okay. So I want you to get your toe in the water in some a stellar piece of property that lines up with all of your wants but does cover your needs. But I think you've set your – I think the reason you're chasing the carrot

Starting point is 00:36:39 is you set the carrot pretty far out on the stick. And I'm going to pull the carrot back in and grab ahold of it and take a bite out of it. think it's probably both and it's it's moved the carrot out and the housing market has gotten tough especially in dc i'm not saying it's not tough but i'm saying the way she can enter the market making 120 000 a year with a 60 000 down payment is probably not i mean dc is super expensive right you're going to be outside of dc you're not you're not buying a place you're not buying a place in dc proper you're not buying a place in um la or san francisco you know that used to be when you made a hundred thousand dollars a year you'd made it but not anymore right and not with housing prices being what they are and so you're in a market where uh your expectations were based on based on your

Starting point is 00:37:27 fabulous progress that you've made i'm very proud of you but it may mean that you go somewhere else and i dave i this is like a a thing i want to be emphatic about there's going to be things you want to give your kids like she even mentioned i don't even have any college savings i don't have this i don't have this your kids you want to give your kids. Like she even mentioned, I don't even have any college savings. I don't have this. I don't have this. Your kids can share a room. Your kids can put themselves through college.

Starting point is 00:37:51 Your kids can do so much. What her kids have that I don't think she has recognized yet is they have a mom. Who's a warrior. Who is extraordinary. Yes. The greatest gift my parents gave me was not college. They didn't have the money to pay for college.

Starting point is 00:38:04 It wasn't a car. It wasn't any of those things. It was, I had two parents that always scratched and clawed and both of them had midlife career changes and I watched them flourish. And lo and behold, this opportunity came up when I had a career and I had the courage to go do something else. And I had the work ethic and all this stuff. That's what she's given her kids. and it's not something you can buy. It's something you witness. And so go get a town home if that's all you can afford and two of your kids can share rooms and they're going to be fine because they've got an incredible mom who loves them and they're watching you blaze a path. That's the greatest gift you can give your kids. It just is. All the other stuff's gravy. The number of people that shared a bedroom with a sibling that ended up in counseling because of that alone is zero.

Starting point is 00:38:49 There's a lot of kids. I'm telling you right now. I just had this conversation this weekend in Utah with the behavior services team. There's a lot of people in counseling because they have never shared a room. They've never had to negotiate anything other than whatever they want, whenever they want it. And then they go to college or then they get married and their whole universe explodes because somebody else has a different opinion about something. Because somebody said, oh, the axis of the world does not run through the top of your little head. Who knew? I've talked to every residence hall director on planet Earth that I've ever met.

Starting point is 00:39:19 And I've always asked them just privately, shared rooms or single rooms? I've never had one say the right thing to do developmentally for a college kid is to share a room i can't sell it anymore because these kids are coming from their own bedrooms their own bathrooms and their own whirlpool tub so i have to make these single ones but if it was if i was the king for a day you mean there's not a skylight everybody has to to share a room can we get the sushi delivered to our dorm room? No. Yes. Kids can share rooms. They're so resilient, especially when you have a mom like that.

Starting point is 00:39:49 So move outside of town. You've given them a gift, Corey. They can change schools. It's okay. It's okay. You've given them a gift by stepping out of a horrible situation and then standing knee-deep in that manure and flourishing. Yeah, it's amazing.

Starting point is 00:40:04 And using that as fertilizer and have grown and grown and grown and grown. I'm so proud of you. standing knee deep in that manure and flourishing. It's amazing. And using that as fertilizer and have grown and grown and grown and grown. I'm so proud of you. You're an amazing lady. I think your real estate is just, I think your problem is unrealistic expectations with your numbers. So that's going to mean you either, that you change probably the neighborhood you've been looking in, whether it be for buying or for renting.

Starting point is 00:40:25 And it may be a long commute. It may mean a complete move. It may mean a lot of other things. And that's not to say I think that Washington, D.C., real estate is cheap. It's quite the opposite. It's basically crazy. This is The Ramsey Show. Live from the headquarters of Ramsey Solutions,'s the ramsey show where we help people build

Starting point is 00:40:50 wealth do work that they love and create actual amazing relationships the phone number is 888-825-5225 dr john deloney number one best-selling author and host of the Dr. John Deloney Show, is my co-host today. Open phones at 888-825-5225. That's 888-825-5225. Penny is with us. Penny is in Phoenix, Arizona. Hi, Penny.

Starting point is 00:41:23 How are you? I'm okay. How are you? Better than I deserve. What's up? I listen to you on occasion, and I hear a lot about how you encourage couples and spouses to combine their incomes, and that's one of the better ways to build wealth is when you have your spouse with you you're combined everything and I'm feeling very emotional and discouraged I'm 54 and I make 50,000 a year and I just don't have a spouse and so I feel very afraid. Are you afraid of the money? Are you afraid of growing old alone? Like what,

Starting point is 00:42:13 where's that fear rest or is that all of it? It's, I love the job I do, but I'm afraid I'm not going to have money for retirement. And I apologize. No, don't apologize. Is that fear real? I mean, like, have you looked at the math problem of it all? Well, I'm hoping you can tell me that I'm overreacting.

Starting point is 00:42:39 I don't think I am. So I rent an apartment. It's about $1,700 a month. Before that, I was just renting rooms at Airbnbs. What do you do for a living? I'm in human resources. Human resources. Doing what? Yes.

Starting point is 00:42:58 Onboarding. Okay. And you make $50,000 a year, and you're 54 years old. Yes. And you're single. Have you ever been married? Yes, I've been married, divorced for a decade. Okay, all right.

Starting point is 00:43:12 I had money. No, let me go back a step, though, in the way you came on the air, and I want to make sure. When we're talking with couples, we think it's imperative that couples combine their finances. We are not saying it is imperative to be married to build wealth there are lots of very accomplished single ladies and gentlemen that build wealth on their own um it's what we're talking about is a marriage issue of combining your finances when you're married but but when you're single and it does not prohibit you

Starting point is 00:43:46 from becoming wealthy. Okay. Okay. So let's just take that off the table. We never said that. But it, I mean, I've just been talking to you for a moment. So I, you know, I don't know you inside and out. It kind of feels like that you're still really hurting from the divorce. Am I wrong? Yeah I am. Like your heart was broken and there's not been a lot of healing in 10 years. That's true okay all right because i'm trying to find out i mean you're you're really sad about that and i understand that and i don't blame you i would be sad too if because i told sharon if she leaves i'm going with her so um but um because i don't think i could do it you know know, she said, you know, if I die, you'll be dead in a month. So it's like she didn't think I could find the way to the refrigerator.

Starting point is 00:44:49 But, yeah, so I understand, you know, I get I'm poking fun not at you but at myself, but I get how what you've been through is very hard for you, okay? But the answer to your overall concern is can you prosper on $50,000 as a single lady in Phoenix, Arizona, paying $1,700 rent? Yes. You can retire with dignity. That is the answer to your question. Mathematically, you can. If you made $100,000, would it be better?

Starting point is 00:45:24 Yes. If you made $200,000 thousand would it be better yes if you made two hundred thousand would it be even better yes okay but you know or if you married someone who made three hundred thousand would it be even better yes mathematically all of those are facts but that doesn't mean that the normal progression of you doing onboarding in HR and moving up the ladder in an HR field, studying, becoming very proficient, very self-confident, healing from your broken heart, having square shoulders, a nice smile, and a square jaw, and sticking your nose into stuff and making a difference in this world. You will make a lot more money over time doing all of that.

Starting point is 00:46:04 And during that time, you will be a lot more money over time doing all of that. And during that time, you will be investing in saving and you can become, you can build a large enough nest egg to be okay. But I think I hear under this just this hurt that might be holding you back on a couple of those areas. Am I, am I, is that, am I, I'm just feeling this with my heart, okay? No, that's true. I think I've come to that realization over the past couple years, and I have been grieving that whole relationship, so I'm acknowledging that, yes, but then I still go back to the math of wanting to buy a home, and I couldn't qualify for enough in a different area.

Starting point is 00:46:54 Phoenix market's expensive. Unless you had a big downstroke, you're going to be driving from the outskirts to get a property cheap enough to do that on 50k that's going to be tough yes sir i looked even on the outskirts on yeah it's going to be tough where i'd be driving an hour well you can't drive north because it gets more expensive when you go north right going south out of phoenix i mean okay yeah yeah don't don't head towards anything like a red rock stay away from those. They're very expensive. What is it about Phoenix where you feel like you're stuck?

Starting point is 00:47:30 Why do you have to stay there? Actually, I would love to be in the South, but I have two children. They're actually going to be seniors in a week. They'll be finishing their junior year, so So they have one more year of high school. So I really don't want to do anything. And then they're going to be going away to college and you're going to be by yourself. You're going to be all by yourself.

Starting point is 00:47:54 Yeah, and they're going to go somewhere. Hold on, hold on, hold on, hold on. You're about to get left again. Yes. And your body has a GPS pin and the time i got left last time and it sounded every alarm you got my son said he will go wherever i want to go as long as he can get a job because that son learned that his job is to make sure mom is okay because nobody else was and that's not his job. Right. Right? And, hey, Mom, you're allowed to be sad.

Starting point is 00:48:30 My son's about to graduate, and I laugh as I use that word. He's about to be done with eighth grade. And if I think about it for 30 seconds, I'll get all choked up. Right. Right? You're not crazy. You're not broken. There's nothing wrong with you.

Starting point is 00:48:44 Hey, we're going to do two things, okay? One is I'm going to put you into Financial Peace University so you can get your handle around the math. And two is I'm going to send you a copy of John's book, Building a Non-Anxious Life, because there's several of the points in that book that are exactly where you're sitting. And it's going to be very helpful to you. You will read it in two days when you get it, I promise you. If you don't, you're messing up. And I'm going to give it all to you as our gift.

Starting point is 00:49:06 You're going to be okay, Penny. It's going to be better than it feels like. You're a good mom. This is The Ramsey Show. Dr. John Deloney, Ramsey personality, is my co-host today. Open phones at 888-825-5225. Proverbs says, hope deferred makes the heart sick. When you don't have hope, it's a sickness of heart. And the odd thing is, the proverb continues, it says, but when desire comes, it is the tree of life. So the answer to hopelessness is a desire.

Starting point is 00:49:57 And really what you end up is you end up figuring out what the core cause of your loss of hope is. And then you get into it. If the actual thing is math, then you look at the math if the actual thing is a a wound that is that is real then you got to look at that wound and and that may be causing you to not see the math like our last caller yeah the only the only way to healing is through the pain um i i have a friend who just um had the just the heartbreaking misfortune of losing a child. And I'll remember a line he told me at the memorial service forever. He said, most people spend their entire life doing everything they can to go around and avoid pain. And he looked at me and said, I didn't get that choice. And so him and his wife held hands and walked directly through it.

Starting point is 00:50:46 And that's the only way to healing. So, yeah, you're right. Hopeless hope is always on the other side. And that's why you have to have people in your life who've gone before you. And you might not be able to see it in the darkness, but you can hear their voice. You can see their tiny little light. And I'm just going to keep going that way because that's where it is. And sometimes it's math is an odd way i mean yeah okay if i save a hundred dollars a month at this

Starting point is 00:51:09 age i'm gonna have x yeah and x is okay and sometimes it's 10 years out yeah i remember having a my heart stopped and when i did the math and was like it's 10 years i'm gonna be okay at this current dollar amount at this current saving rate that's a scary thing but that's the path let's go yeah then game on that's right game. Let's go. Yeah, then game on. That's right. Game on. Yeah. The old country song, if you're going through hell, keep on going.

Starting point is 00:51:29 Keep on going. That's it. Keep on going. Today's question comes from Isaac in Minnesota. All right, Isaac writes, how do we promote the baby steps to the friends and family when it feels like we cheated the process? A small inheritance propelled us into baby steps four, five, and six,

Starting point is 00:51:46 and it feels like we got a get-out-of-jail-free card. We've been hustling in baby step two for two years with our only consumer debt being credit cards. We paid off 10K while cash-flowing our first baby and some car repairs. We budget every month, live below our means, and buy things at the speed of cash, but it feels like we cheated. Does an inheritance undermine the value of our financial testimony? I don't think so.

Starting point is 00:52:16 The thing is this. You only have one story. It's yours. Your story. That's it. And really nobody can take that away from you and this isn't like a catastrophe olympics that whoever has the worst situation wins yeah the goal is that people get become free and y'all got free yeah that's the story you have to go through bankruptcy in

Starting point is 00:52:38 order to learn the lessons that i learned going through bankruptcy no uh do you have to go through drug rehab to figure out heroin's bad for you no maybe the testimony is you were doing smart stuff and god blessed it i mean maybe the testimony is you were walking along and it turns out you're walking on a moving sidewalk and god was pushing along under you while you were doing the right stuff because when you're faithful in the little things you'll be given more to manage remember that one that's the testimony so uh i can tell you that there's a whole lot of stuff that um as we have built um incredible wealth over the last 40 years um and built an incredible business that i look back and I go, I'm really sure I didn't do that by myself.

Starting point is 00:53:28 It's not like fake humility or something or humble brag. It's more like I'm intelligent enough to know I'm not that bright. You know, I mean, like you're smart enough to know, Isaac in Minnesota, that you didn't do this by yourself but that doesn't destroy the fact that you were doing smart things along the way and and somebody in your family did something smart because they could leave you an inheritance you come from some one of y'all comes from a somebody who is a saver i don't think rachel has a bad financial testimony and she's never been in debt well so this is a this is a cultural virus dave and here's what it

Starting point is 00:54:07 is okay we are not allowed to celebrate if you celebrate if something good happens you're bragging then you're a jerk you're have some sort of privilege that nobody else has you have some sort of something that isn't fair the only thing we're allowed to talk about in our culture is when things go bad. Wow. I have this. Oh, I've got this. Tony Robbins says our greatest addiction as a culture is to problems.

Starting point is 00:54:33 Nobody's allowed to walk into a room and say, dude, my weekend was actually pretty good. My kids are healthy. And the air conditioner worked. Because then you leave the room and they're like, but if you come in the room and you say, man, can you believe it out there?

Starting point is 00:54:44 He's so real everybody thinks you're so authentic and real authentic and we have to have a space that's why whenever i tell people about making friends you gotta have people you tell the hard stuff to but you gotta have people you just call and celebrate with you know i i hadn't thought about that but one of the things very interesting i'll i'll i'm i have a group of guys that i get with once a month and they're, and they're all successful. Some of them are uber successful. There's 14 of us, and all of us have been married one time and are still married, except for two guys.

Starting point is 00:55:19 Two guys have been through a divorce and are remarried. Three, one's now currently single, gone through a divorce, so threeried okay uh three once now currently single gone through a divorce so three out of 14 okay but i've been with these guys for 15 years and one of the rules in that group is ever ever so often not every month when we get together but not over three or four months i stop everything and all the joke telling and all the cutting up and carrying on that we do and say all right everybody tell me something good going on this is a place where we celebrate that's right and even those guys who are studs who are very successful most of them some of them very very successful it's the only place they can celebrate because they're not allowed to anywhere they're not allowed to anywhere else i never thought about that because

Starting point is 00:55:58 it's we treasure that time all of us guys do because i can't even get up and go hey you know only time i can do something is a humble brag for marketing purposes right around here but but uh we we just got done with entree and there was it was super successful there's nobody that you dave can go hey can i just high five you i i knocked this one out of the park it went great our team just killed this yeah we did great the best leadership event in the world right now but who do you tell that to right you can't say anything. I'll tell you one of the greatest moments of friendship of my life. It's easily in the top five.

Starting point is 00:56:31 When my first book went number one, I had a buddy that I called. And I said, hey, man, I just need to say this out loud to a friend. You and I talked, me and my mom, me and my wife. But I didn't want to call. I called him. And he paused and he paused and he cheered so loud he's like I've known you for 30 you've been trying you've been working so hard congratulations and then he goes hey man well I got you my bank just sold and he ended up telling

Starting point is 00:56:58 I was like no no you can't lose your job you're the most stable friend I have and so he walked me through a really hard season he was in and my win did not come at the expense of his loss he was super happy for me and I could be happy and sit in the crap with him that's what friends do that's so healthy right so if you got a group of friends and family they should cheer you they know that you want to get out of debt and that um you got a small inheritance could they that should be the greatest moment that they're all celebrating with you. If you call the show and you tell me what you just told me right here, I'm going to cheer for you. That's right.

Starting point is 00:57:31 We're going to be heartbroken that you lost somebody, and we're going to cheer for you. 100% of the time, yay. And how do you honor the person that left you the inheritance? By doing something smart with it, which is what you did. And so did you cheat, to use your words? No. No, you did not cheat. You did not steal.

Starting point is 00:57:49 Stop apologizing. You did not lie. You didn't cheat. I mean, you got a blessing. And, you know, and you have a responsibility that comes with that blessing, and that is to continue to do smart things with it. If you piss it away yeah you should be regretful you should have problems with that but when you're doing smart

Starting point is 00:58:11 things with it uh you didn't cheat so solomon king solomon built the temple for the people of Israel with his father's money. It was inherited money. Did that diminish his testimony? Nope. Gone down in history as the guy that built the temple. This is The Ramsey Show. I know it's hard for you people to grasp, but I have a very large and dominant inner nerd. I know you think it's all cool, Dave, and Dave's cool and all this, but he actually,

Starting point is 00:58:53 when you get right down to it, is an unbelievable deep nerd. Absolutely. Nerds out. I'm pretty sure they got that, Dave. Mathematics. Pretty sure they got that day mathematics um pretty sure they got that you think they already knew that okay no one has ever been at home but like man that guy's real cool i gotta see real cool g cover gq coming up i'm just saying but no never never happening nope not happening dads are us uh papa dave rs but anyway nike i have had fun me and my inner nerd my dominant inner nerd self, and George. George is a big-time nerd. George is a bigger nerd than I realized. So George and I have been working on this content and building out with our content team the arc,

Starting point is 00:59:36 the teaching arc, so that the message is clear and deliverable on investing, Dave Ramsey's investing essentials. And truthfully, we were going through the walkthrough a while ago, and this is just nerd fun. It's nerd fun. If you're not a nerd, you're going to go to sleep. You're going to get a headache. But if you've got an inner nerd,

Starting point is 00:59:59 you're going to love this Investing Essentials thing I'm doing tomorrow night and the next night. Two hours on Tuesday night, the 21st. two hours on Tuesday night, the 22nd, and we're going through all the real estate stuff, nerding out. We're going through all the mutual fund stuff and all the investment principles that the very wealthy people that I know and run around with and me use, not some broke kid in his mother's basement on TikTok. This is like real people that have money that do investing and here's how they do it it's 199 bucks it's two tuesday night wednesday night

Starting point is 01:00:32 this week 21 22 may um nerdville that's it dave ramsey's investing essentials i actually we were literally going through the walkthrough about two hours ago on some of the material, and I was told these guys, I said, we need to put up a disclaimer. I am not responsible for people falling asleep during this. Yeah, if you are out of Xanax or Ambien, go ahead and buy this. But the nerds, they're out to sleep. Nerds, they'll be caffeinated up. They'll be leaning in. There are little pencil marks on their hands.

Starting point is 01:01:04 They're going to love it. I will tell you this. They're going to love love it for those of you on the fence i walked into a planning meeting the other day because i was the next meeting with one of our content strategists and i saw some of the slides up there and i said what's that one and they explained it to me and i immediately did the math on my place, and that has already spurred a conversation with my wife. Oh, wow. It worked.

Starting point is 01:01:29 But you're a nerd. I'm a nerd, but I'm not a math nerd. You're a psychological nerd. Right, I like to put this into the statistics programs and let that nerd it out for me. But I already walked away with something just because I walked into the meeting early. So this is cool stuff, man.

Starting point is 01:01:43 It's fun. RamseySolutions.com slash events. Dave Ramsey's essential investing essential stuff we've never done before on real estate and investing. Certainly Baby Step 7 and beyond for sure. We're going to get into that stuff or at least showing you when you get there what it should be, right? You don't have to be there to watch it, but hey, we would love to have you. There's like, I'm amazed how many tickets sold. There's a lot of you people out there are nerds i'm just saying all right shannon's in austin texas hey shannon what's up hello how are you better than i deserve how can i help good i just have a couple questions so i'm currently working i have one child and with my husband we're currently

Starting point is 01:02:22 pregnant with our second and we're just really trying to figure out how to best set our family up for success. I currently make 83 and my husband did make 115 and just got promoted to where he's making 200. Yeah, so we're super excited for that and so we have as a family decided to have me quit my job and become a stay-at-home mom come July. And so we have no debt. All of our cars are paid off. So the only debt that we do have is our house, which we could sell for $400. We currently owe $190 on it. And so my question really to you and just seeing what's smart in the future is we want to be able to have this house for an investment. Do we put everything we

Starting point is 01:03:13 can towards it for the next three to four years, pay it off, or we're wanting to move closer to family about an hour south? Do we sell it and use that amount that we could get about $200,000 on to a house that we're wanting to actually grow into and be closer to family okay so if you move if you sell the house after the baby comes we don't move anybody when they're pregnant um i'm smarter than that and um but but once the baby comes if you put the house on the market and sold it and move south now you have a husband makes 200 you're debt000, you're debt-free except the house. Are you moving up in-house?

Starting point is 01:03:50 We would. Currently, our house... So you would go from $200,000 in debt now on the house to how much debt in the move? I would probably say that our house that we would look at down south would be roughly $500,000. And you're $400,000 now? That's correct. So you would have a $300,000. I mean, you'd have a $300,000 mortgage.

Starting point is 01:04:17 You've got $200,000 now, $190,000, right? Yes. Okay, so let's up that by $100,000 then because you're upping the price by $100,000. So now you've got a $300 thousand dollar mortgage instead of a two hundred thousand dollar mortgage you make a hundred you make two hundred a year can you pay that off and prosper yes you can do that do you think it'd be smarter to pay it off in three to four years or make the move and i'd make the move yeah i think you're trying to do trying to do too much start thinking about you're not going to keep the house you're in now it doesn't matter so they want to keep it and rent

Starting point is 01:04:47 it one day you're not going to be able to do that you're not going to have the money to do that because you're not going to i'm not going to tell you to uh keep a rental house that's paid for and then go borrow on your personal residence because you kept a rental house that's the same thing as borrowing on a paid for house to buy a rental. Not a chance. Okay. Not a chance. So you're not going to have the money to keep that house. Gotcha. Okay. And even if we tried to save as much as we could, why we're actually paying it off? You still won't have the money to pay cash for another house. And then you'd be effectively borrowing on your home to buy a rental and we'd never do

Starting point is 01:05:26 that you'd never do that if you had a paid for house you're not going to borrow on it with two little kids running around and put that house at risk to go buy a rental no no just sell it move sell it move and then get that one paid off and when that one's paid off someday that 300 000 is paid off you're making 200 and he's going to get more raises and when he gets all that paid off then start saving and pay and pay cash for your first rental but that's a little ways out okay that's a little ways out and you don't want to be landlords an hour away anyway it's a long that's a long hard drive yeah yeah yeah that's just your that's that's landlord by default not by plan um you fell backward into it instead of sitting there going proactively leaning towards it and so that that's what i mean but yeah you're doing great congrats

Starting point is 01:06:17 and congrats on the new baby on the way what a great time of life for you guys and he's making bank he goes from he goes to 115 all the way to 200 ching ching very nice very nice i like it i like it a lot daniel's in baltimore daniel welcome to the ramsey show dave and john pleasure to be speaking to you guys today really excited you too how can we help um so for a little bit of context for you guys, my fiance and I are getting married on June 8th. Yay! We are.

Starting point is 01:06:52 Thank you. We are moving on June 1st to our apartment. And about a week ago, I got the news that my car needs a new engine. So I just want to see if it's a smart time to purchase a new-to-us car or if we should ride it out as a one-car family for a little bit. What's your income? So we both work in sales, and last year we did $106,000. Combined? Yep.

Starting point is 01:07:28 Okay. And you have any money saved to buy a car with? So for a car, nothing saved specifically, but we can get our hands on $14,000 between our QBank account, a general savings account we have. Sell the piece of junk that the engine blew in. Get what you can out of it. Put $5,000 together and go get you a little something to limp along in

Starting point is 01:07:54 for your first six or eight months of marriage. And then save up and move up in car. You got $5,000, but do you need to go get a $30,000 car? Crap, no! Do you need a car payment no but five thousand dollar car to get around and get rid of that piece of junk yeah i would do that this is the ramsey show dr john deloney ramsey personality is my co-host, open phones at 888-825-5225. Matt is in Seattle.

Starting point is 01:08:28 Hi, Matt. Welcome to the Ramsey Show. Well, thank you. Thanks for having me. I got a question for you. So I currently have three jobs and spend more than 12 hours a day working. And I save and invest about half of my income. So I'm saving about $100,000 a year.

Starting point is 01:08:46 So financially we're sound, but it comes at a cost. So I'm not spending enough time with my children, and my health is deteriorating. Well, I'm not dying, but it's impacting negatively. How much do you have in savings in your investments? Yeah, so I've been doing this. I've been having three jobs for about five years now, going into six years. So you put a half million dollars away. Yeah, exactly.

Starting point is 01:09:16 So with that money, I've bought four homes, one primary residence, and three single-family homes, and I'm renting it all out right now. Okay, and what are the three single-family homes, and I'm renting it all out right now. Okay, and what are the three single-family homes worth? Roughly, on average, about $600,000. Each? And I bought it for about, yeah, correct. Okay, so the three rental properties are worth $1.8 million, and they're paid for? No, no, no, no, no.

Starting point is 01:09:42 About, like, I have about 40% equity on these house. Oh, so you still have debt on them. Okay. Correct. Okay, so when it comes to equity, I have about 1.3 in all those four houses. Gotcha. And I have about $350,000 in savings. So what's your question?

Starting point is 01:10:07 Yeah, so I just turned 40, and I've been happy so far, but I just turned 40 this year. And since then, I've been thinking about a lot of stuff, like am I doing a good thing? And initially I thought I'm doing the right thing for the family, but I'm starting to think about myself too. I think I'm just kind of going through the midlife crisis. But also, so when I think about quitting those two jobs,

Starting point is 01:10:36 the thought of living paycheck to paycheck terrifies me. Honey, you're not living paycheck to paycheck. You're putting $100,000 away. Quitting two jobs is not going to make you paycheck to paycheck. You're so exaggerating that. Well, after I put all the next out on 401K and IRA, I'm not going to be saving any money at all oh on a monthly basis so back off of your investing you only got two million dollars you're not living paycheck to paycheck that's a bogus

Starting point is 01:11:15 emotional response why are you afraid to just sit at home with your family dude yeah why why well initially i was part of like fire movement but i'm thinking a lot a lot of things can happen in the future so i fire movement burned down did you notice it burned to the ground it burned around people's ears because they were trying to do something that wasn't sustainable what you're doing is not sustainable what you're doing is not sustainable you didn't build a life you built a financial portfolio and now your brain is waking up and saying go build a life and and we're saying yes go build a life here's what i promise you i agree with your brain when you're 50 you can hand the kids a key to a rental house, I promise you they would have exchanged it for time with their dad. And by the way,

Starting point is 01:12:09 that's a false dichotomy because you work hard. You're still going to be able to offer your kids a pretty extraordinary life financially. And you get to spend time with your kids. I think you're scared to go home and be with your family. Am I wrong? Well, are you afraid to admit that the fire thing you bought into sucked and also i think it has to do with my ego like i just feel like i'm successful and

Starting point is 01:12:32 superior but and you have four houses worth 1.3 million dollars your net worth is two million dollars and you're 40 years old ding ding you got the bell you You rung the bell. You're done. You're done. If you don't do anything else, you're going to be worth $20 million at 65. If you just let the investments that you have grow, that's all. There's no need to panic here. And by the way, people working and enjoying their work and going to work and having meaning as long as they're able is not bad. I intend to be on this microphone until I don't make sense.

Starting point is 01:13:11 Now, I don't want to be one of those guys that doesn't make sense. We've seen those, and they're dangerous. But, yeah, so anyway, yeah, we need to get off at that point. But, no, dude, yeah, your brain is telling you what to do you already know what to do all i'm telling you is is your emotions are exaggerating that you're like going to be starving to death and or something and living paycheck to paycheck not even close how much of oh here's an idea quit and if a year from now you're you think you're going to be homeless or something go back to work three different jobs you can get you can get those jobs right back those kinds of jobs are

Starting point is 01:13:51 always waiting how much of this stress dave because i've never lived this life you keep telling yourself with your neocortex that you're thinking part of your brain i'm worth 1.3 million dollars i'm worth 1.3 million dollars but your amygdala the threat detection part of your brain i'm worth 1.3 million dollars i'm worth 1.3 million dollars but your amygdala the threat detection part of your brain says you still owe 900 000 on these four houses you still owe money you still owe money and every month no matter what your net worth is or how much money you have coming in your brain knows you're still on the hook for all these properties that's got to weigh you down doesn't it that's probably part of it but i think he's been running at breakneck speed he didn't even notice that part huh i that's my opinion just talking to just exhausted i think he's just no he was trying to run he thought there was an end game tell me about fire fire is the retire young the retire retire at 40 okay not have to

Starting point is 01:14:39 work again yeah and the numbers don't work gotcha it does you people and because the problem with money like when you view money that way is money's a bully in the schoolyard as soon as you say hit me in the nose you step back if you cross this line i'm going to hit you you step across the line he steps back and draws another line says if you cross this line then i'm gonna hit you and that's what money does it keeps keeps because there's always another one there's always a bigger thing there's always a different thing there's always a reason there's always inflation there's always a better car there's always a oh mama mama wanted a house in the mountains oh there's always there's always doesn't matter where you get to there's always another one and a bigger one and

Starting point is 01:15:19 a shinier one and a different so you just can't get away from it once you get on that treadmill you can't check you can't catch that carrot it's impossible to catch and so uh if you could maintain godliness with contentment and say okay i'm gonna live a lifestyle of fifty thousand dollars a year income then you can build a big enough nest egg to quit but you can you're something about our psychology won't let us do it we start out with that and that's the math but then by the time we get used to living on a hundred and fifty thousand dollar lifestyle uh then i got to go back to a fifty thousand dollar lifestyle to quit which is exactly what he's saying he's saying i'm going to be paycheck to be not even close to paycheck to paycheck But he's going to have to cut his lifestyle. He's going to have to drop his investing from $100,000 a year contribution.

Starting point is 01:16:11 Now, that was in addition to maxing out everything else. Yeah. Yeah. So he can still max out everything. And you can't do $100,000 extra. Extra. Yeah. And that's paycheck to paycheck.

Starting point is 01:16:22 That's not paycheck to paycheck. There's also this this you get to be 40 and you got two million dollars and you thought it was going to feel a different way that's true you thought it was going to be a billion you thought you were going to do nothing and doing nothing will kill you it's one of the things i had to outline with all these um little communists that are coming out of college have to explain to them the um that a billionaire is not the same thing as a millionaire a millionaire a billion is a thousand million billionaires have four houses a jet and seven cars millionaires have two used camrys and one house and it's paid for and they have $800,000 in their 401k.

Starting point is 01:17:06 That's a millionaire. But a billionaire is $1,000 million. And people emotionally have these two things confused. They think of some rap artist or whatever in a private jet, which they don't even know. It's chartered. But, I mean, they think it's, oh, that's how it, you don't live like that's chartered but um but i mean they think it's they oh that's how you don't live like that with a three million dollar net worth you know stupid jet would be

Starting point is 01:17:31 more than that much less you know the whole i mean it's just like so that's not how it works it's the emotions of when i get to be a millionaire i'm going to be a billionaire no you're not you're going to be a millionaire two years and that's still a good thing two used cameras and 800 000 in your 401k and a paid four five hundred thousand dollar house and a lot of laughter in your home ding ding ding ding ding ding ding ding you're done this is the ramsey show live from the headquarters of ramsey solutions it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. I'm Dave Ramsey, your host. Thank you for joining us. Dr. John Deloney, Ramsey Personality, is my co-host today. The phone number is 888-825-5225.

Starting point is 01:18:21 Flo is in Cincinnati. Hi, Flo, how are you? I'm doing well, Dave. Good. How can I help? Yes, so just a little context. I'm a child of immigrants. My dad moved here at 51. My mom was 40. I'm the first of five.

Starting point is 01:18:42 Three out of five of us making one of the six figures. Two are still in school. Today, my dad is 75 and my mom is 64 and retirement is right around the corner so you know being that they moved out kind of later in life we're trying to get a picture of what retirement looks like for both of them my dad he's retired but working part-time collecting social security My mom is about to retire. So we're just trying to figure out, between myself and my siblings, how do we help them retire in peace? We've thought about maybe starting a fund to supplement their income monthly, but we're kind of lost as to where to even begin.

Starting point is 01:19:22 So your parents have been in the country how long? We moved here in 2000, so about 24 years now. Okay, and they've saved nothing? My dad, when I checked last, all he has is Social Security, so he's collecting about maybe $1,800 a month in Social Security. And your mom? My mom, she does have some retirement income. I was just looking at it a couple weekends ago,

Starting point is 01:19:46 and I know she's going to be collecting in total, I estimate, about $5,500. This is pre-tax. Okay, so they got $7,000 a month and they can't live on that? Well, so here's the issue. They also have a ton of debt. Like they have the Prant Plus one that I just found out about, credit card debt. I forget the complete, the total amount. And also just a bunch of other,

Starting point is 01:20:11 and then they still have payments on the house that they're living in. So we estimate that they're going to be, and then that doesn't include a cost for like healthcare when they retire. So we know it's going to be tight and we're just trying to make sure. I so we know it's going to be tight and we're just trying to make sure i don't know it's going to be tight i haven't heard any numbers that said tight yet how much is the parent plus loan uh my mom's when i checked last was 35 000 your mom's is not a parent plus loan your mom borrowed money for one of your siblings to go to school yeah that's correct yeah who's the sibling oh two of my sisters okay 35 000 for your sister to go to school yeah that's correct yeah who's the sibling oh two of my sisters okay

Starting point is 01:20:47 35 000 for your sister to go to school sisters that's correct okay and how much credit card debt uh nine thousand okay nine thousand dollars does not keep somebody that makes seven thousand dollars a month from existing that's an exaggeration it's not even doesn't even show up on the radar and then how much is their house payment right now their house payment is 1300 a month okay all right 1300 a month can be paid out of 7 000 would you agree with that i think so okay and you could buy groceries and you could buy lights and water and you could learn to live on less than you make and cut up your stupid credit cards. Now, if your sisters take over the student loans and pay them, which is not a bad idea at all,

Starting point is 01:21:32 or some of you all jump on it together and knock out the student loans, and then if you want to reach over and pay off $9,000 worth of credit cards, that's fine. It's under the obligation that they don't use them ever again, and they close the accounts, and they get debit cards, and they live on a live on a budget they can make it on 7 000 and have a very nice retirement yeah and then my dad right now he's he's 75 so he's retired and working part-time and basically supplementing his social security that he's getting monthly yeah but here's the thing These people don't manage their money, and that's what scares you,

Starting point is 01:22:09 and it should scare you because if you think you're going to be able to supplement enough to backfill for somebody that won't take care of their money, you can't possibly give somebody that much money. Look at Congress. Yeah. Same thing. You can't give them enough money to make them responsible they take they take billions and trillions of dollars and they're still idiots

Starting point is 01:22:33 and your mom and dad have got to not do this they've got to get control because it's unreasonable that someone that comes here and develops a nice pension and a nice social security over the last 24 years can't live on seven thousand dollars a year with a thirteen hundred dollar house payment and no debt payments because we cut up their credit cards their kids paid off one car one kid or two paid off the credit cards the sisters picked up the student loans they can live on this but they're going to have to get their crap together and that's the conversation y'all don't want to have but you've got to have. You think it would be a good idea to, because we've tried to have it,

Starting point is 01:23:12 but it kind of, especially my dad, he's a little resistant to really opening up and talking about the full picture. So what I told you is, like, I think a partial reality. I think there's even more behind the curtains that they haven't told us. And I've been thinking about maybe we're not the right person that people are talking to. Maybe we need to talk to professionals. Yeah, put them in with a coach. Yeah, put them in with a coach. I'll give you a coach to sit down with them as my gift

Starting point is 01:23:33 to try to help them turn it around. But you've got to get them to go over there, and they've got to be willing to listen. Hey, Flo, have you sat down and said, there's usually two ways this conversation can go. Hey, Dad, Mom, I need you to tell me about your financial situation. How much debt do y'all have? Or, hey, Dad, y'all are getting older.

Starting point is 01:23:55 You just retired. And I can't sleep at night wondering what your situation is going to be. I'm scared to death for you guys. I know how expensive things are. It would be a gift to me if we could sit down and go through where you're actually at how good things are how tough things are so that helped me sleep sometimes pride is too big for that but sometimes the dad will hear that and say i don't want my son losing sleep because of me anymore i'll have that conversation but if you come at him, hey, what's the problem?

Starting point is 01:24:26 Man, they're going to wall up and not talk to you about it. Yeah, the alternative reality is that he, when they immigrated, they fully embraced the American dream, which can be a nightmare if you do it wrong. Yep. Credit cards and Parent PLUS loans and spending everything you make and not saving money. That's normal in America, agreed?

Starting point is 01:24:49 Yep. And your parents fully embraced the culture. Where did they come from? What country? Nigeria. We're Nigerian. Yeah. Okay.

Starting point is 01:24:57 Yeah. They found a lot of wonderful things and didn't know how to drive a car that powerful. Yeah. I think what really kind of triggered it for me is I've tried to have it conversation with them a bunch of times. I always ask my parents, hey, where do you see yourself five years from now? And I asked them that last year. I asked them that this year. Yeah, I think John's right. I think you go at it with, Dad, I'm scared. you see yourself five years from now and i asked him that last year asking that this year yeah i think i think it's i think john's right i think you go at it with dad i'm scared and i'm worried

Starting point is 01:25:30 and i woke up this morning early about 3 a.m i couldn't go back to sleep thinking about y'all would you would you sit down with this guy that we've lined up and and see if he can make sure you're okay because i just want to make sure you're okay. Cause I just want to make sure you're okay. Yeah. He would probably hear that a lot more than if you bump into his pride. If you bump into his pride, he's probably going to bow up like he already has. Right. And that's, that's not just a Nigerian dad.

Starting point is 01:25:57 That's all dads. That's every day. I'd be a hillbilly redneck dad. Yeah, I could do that. That's every dad. I could definitely do that. It has to defend themselves.

Starting point is 01:26:05 There you go. Good on you, man. Hey, thanks for being so successful, and thanks for loving your parents. It's amazing. The way to love them is to get up under this and fix it, not throw money at it. This is The Ramsey Show. Dr. John Deloney, Ramsey Personality, is my co-host today. Selling a house the Ramsey way makes home ownership a blessing instead of a burden.

Starting point is 01:26:32 The Ramsey Trusted Program is the only way to find a real estate agent that you can trust to keep you on track with what we teach here at Ramsey. You'll get the best offer on your house, or if you're buying, help you find the right house for you. We send you some of the top agents in your area, high-octane, high-protein, who we trust. They're Ramsey Trusted. We review their stats, interview them, and then you can go through and talk to them,

Starting point is 01:26:58 do the same thing, and you decide which one you want to work with. Ramsey Trusted agents have years of experience. They're high producers. They're the best in the business, and they'll help you make wise decisions when it comes to pricing, marketing, and making or choosing the right offer. Find a Ramsey Trusted Real Estate Agent for free at ramseysolutions.com slash agent. Matt is in Iowa City, Iowa. Hiowa hi matt welcome to the ramsey show hello guys thanks for taking the call sure what's up so we've got a second child on the way uh due in november wife wants me to remodel the basement so we have more space um just for plaria a full bathroom that we can get done.

Starting point is 01:27:52 She wants me to use the HELOC that I took out before I listened to both George's book and Dave, your book. And I want the cash flow, whether it takes me a couple more months just to do it or not. I'm just trying to make sure that's on the same path. But I'm thinking I have to pause kind of the debt snowball at the same time. Are you trying to get me and Dave to tell your pregnant wife something you don't want to tell her? No. I have told her already that it's okay to do this, but at the same time, I need time because I can do a lot of it myself, but I only want to do it with cash. Yeah, your impulse is right, man. Yeah.

Starting point is 01:28:33 The problem is that you guys are not aligned. It's not whether to do a basement or not. The problem is she's willing to borrow whatever amount of money to get whatever she wants, and you're not. And so because you're dealing with a set of information that she doesn't have after going through Georgia's book and consuming some of our material, you have become accurately, I think, convinced that the best way for your family to prosper

Starting point is 01:29:00 is to get out of debt and stay out of debt. She's not convinced of that. Yeah, it took me a while for her just to even listen to your book, Dave. prosper is to get out of debt and stay out of debt. She's not convinced of that. Yeah, it took me a while for her just to even listen to your book, Dave. I had to kind of not force her, but I did that through the car on trips or whatever. And she kind of was under the impression like, okay, we need to get on this. But I kind of talked her off the cliff of buying a new home, which would be more than twice what we're paying now for a mortgage payment, which I didn't want to do. And so now we're going to stay.

Starting point is 01:29:31 And the contention was that I need to remodel the basement. Okay. No, it's not. The problem is not the basement. The problem is you and your wife do not agree on how to live life. And you are begging and pleading her to listen to something, to understand something, and she's bowing up and saying she refuses to do so. By God, get me what I want.

Starting point is 01:30:04 That's what you've just described now i don't know if that's what's happening but that's what you described sure you're not leaving her in a very good light in this conversation uh and i i don't mean it that way no i'm not criticizing you i'm criticizing her unless you're wrong because i mean i gotta tell you i don't have conversations with sharon nor does she have conversations with me where she's tiptoeing around like you're tiptoeing around her like oh i don't know honey baby maybe i listen to this no it doesn't happen that way at the ramses it's like hey this means a lot to me and you mean a lot to me and I really want you to give this a serious listen like an adult and then I go listen to the podcast that Sharon wants me

Starting point is 01:30:52 listen to it I may disagree with the thing I may come back and we may have an argument about it but we're going to do it on an adult level but I don't I don't do stuff because I'm scared of Sharon or because I had to talk her off the ledge and I concede my principles by talk to talk her off the ledge and my wife doesn't give me ultimatums in my house well if you're going to do this I'll listen to the book but you have to we don't do trade outs like you're going to go build out the basement if I if I if you don't get me a new house no that's not I mean you know if we decide instead of moving to a new house that we can't afford, we're going to build out the basement. We're still going to do that based

Starting point is 01:31:28 on principles that we both agree to. So Matt, you do not have a debt problem or a cashflow problem or a decision on how to build out the basement problem. You have a marriage problem. Yeah. And you have to sit down and have that conversation and from the sound of your voice it sounds like that's going to be a tough one and it may be that y'all have reached an end of the the end of the road where y'all can have that together you're gonna have to get a third party whether it's a counselor or a minister from your church or a trusted friend but y'all have to get on the same page with how you're doing life and And it's you versus her right now. You're bringing a second kid into the world. That's just a recipe for chaos.

Starting point is 01:32:08 Yeah. You probably do need to sit down with somebody and make it easier just to have somebody walk you through this. And it could be family of origin stuff in the sense of Rachel talks about this. Let me send you a copy of Rachel's book for both of you to read. You know, title escapes me. Oh, know yourself, know your money, know yourself, know your money. But one of the things she for both of you to read um you know um title escapes me oh know yourself

Starting point is 01:32:26 know your money know yourself know your money but one of the things she goes thank you one of the things she goes through is if you grew if she grew up in a household where spending was just part of the game and you grew up in a household where money was fearful then you're trying to bring fearful into her princess world and that doesn't work she grew up as a princess and now you're telling her no or if she grew up poor and and now you're telling her no and she wants to spend now yeah or whatever it is i don't know what the background is i'm not saying she's a princess but i'm saying you know when you start demanding things back and forth like that that's's a relational breakdown, man. That's not a, cause what you're saying is we have a baby on the way. I, my wife wants me to build out the basement. Um, that's not unreasonable. She wants me to build

Starting point is 01:33:16 out the basement now and use a HELOC to do it. And I can do it two months later without borrowing money. That's unreasonable, that's unreasonable completely unreasonable completely unreasonable oh and here's what's even more unreasonable this is a baby that is six or eight pounds maximum 21 inches does not take up much room does not need an entire basement can exist for quite a while in the upstairs and not be and not be damaged by anything you know what it won't even know dave it won't know it won't even know for years it won't even know it may never know nope that there was a downstairs here's a good equation um for all you math nerds who are married if she wins and you lose you both lose lose. And if you win and she loses, you both lose.

Starting point is 01:34:08 You can't win marriage arguments because somebody loses, and if one of you loses, everybody in the house is lost. We have to realign and find a way. So one of the things that we learned to do on stuff like this, Matt, was first we've got to agree on the principle. The principle is we're not borrowing money. The principle is we're getting out of debt before we go do agree on the principle. The principle is we're not borrowing money. The principle is we're getting out of debt before we go do upgrades to the basement.

Starting point is 01:34:29 That's what really ought to happen. You're doing baby step two. No, I'm not stopping baby step two. We're going to get out of debt because I want to be free and borrow or slave to the lender. Now, once we're agreed on that principle, then happy to do the basement. And I'll do it as soon as we're out of debt

Starting point is 01:34:43 and as soon as we have the emergency fund in place, the first thing we'll do is the basement. And I'll do it as soon as we're out of debt. And as soon as we have the emergency fund in place, the first thing we'll do is the basement. Okay. Now we hit that point and I had, I remember exactly what it was. It was $18,000 that I needed slash wanted to do here at Ramsey in the business. I had $18,000 in my pocket and I had a thing I wanted to do here. And I knew I could turn that 18 into 100 investing into the business she was driving a 1902 astro van that had enough goldfish crumbs in it

Starting point is 01:35:14 from raising three toddlers and it had 285 000 million miles on it and she wanted a new an upgrade car both things are right. You know what we did? Both of them. But we just had to choose the order. And I was happy to get her the car first and then come back and do the investment at the office. It wasn't a no. It was a what order once we aligned on the principles. Perfect.

Starting point is 01:35:39 None of that's happening in this conversation. None. This is the Ramsey Show. Dr. John Deloney, Ramsey personality, is my co-host today on the debt-free stage in the lobby of Ramsey Solutions. Joe and Danella are with us. Hey, guys, how are you? Hi. Good. Good.

Starting point is 01:36:00 How are you? Welcome, welcome. Where do you all live? Henderson, Nevada, right outside of Las Vegas. Very cool. Welcome to Nashville. How much debt have you two paid? We paid off $201,000. Good for you. How long did that take? It took 44 months.

Starting point is 01:36:15 Good for you. And your range of income during that time? We started off making $157,000 and we finished at $213,000. Excellent. What do y'all do for a living? I am in records and information management. And I work in the power generation industry. Very cool. Good for you. What kind of debt was your 201,000?

Starting point is 01:36:34 Our house. Hey, looking at a couple of weirdos. That's right. Got a paid off house, baby. Yeah. So what's a paid off house in henderson nevada worth these days um anywhere close to uh half a million dollars yeah it looks like a great place they just flashed a picture of it up here on youtube yeah wow very cool good for you man very neat gotta pay for house older you

Starting point is 01:37:00 too i'm 54 and she's a lot younger. Okay. That's good. That was an outstanding answer. Great answer. Well played. I love it. I love it. And then you have a paid for property. Yes. How much in your nest egg? How much in your retirement? Uh, we got about 570 in retirement right now, which means that you are baby steps millionaires then? Uh, very close when you add the liquid cash. Yes. Yeah. Well, and add the paid for house. Hello. Yeah. It's worth a half a million, 500 and 500 is a million where I come from. Good for you. Well done. 390 actually is misunderstood. I thought you said it was about a half million. Okay. All right. So yeah, you're probably there. Good man. Congratulations. So how much of this million dollar net worth did you inherit? Uh, zero, zero zero and how long ago did you all start this

Starting point is 01:37:46 whole process so the current paying off the house that'd be fine that started about four years ago so you started that four years ago 2020 it was january it was how long y'all been married 27 years almost 28 years now all right very good oh you looked at him like you still like him. That's so good. All right, so 2020, before the world fell apart. Before the world fell. Right before the world fell apart. So in January, I'm walking through the local library and looked over at a setup of books, and there's the radio guy's face.

Starting point is 01:38:21 I said, oh, look, there's the radio guy. The radio guy's face. That's a scary thought right there. And immediately this quiet whisper in my heart happened and said, take that book home, check that book out and take it home. So I did, grabbed it, checked it out, took it home, started reading it, read bits of it to him, started listening to the radio podcast. Oh, wow. And then we heard about the 14-day free trial for the Financial Peace University videos. And so we went and signed up for those and started binge watching them, watched each of them two or three times over. And the part about retirement and investing kept sticking out and resonating with us. And

Starting point is 01:38:54 that's what got us very focused on helping us get on the track of paying off our house and getting everything tightened up. Right. So our debt-free journey really kind of, I always like to say it began in 2020 once we got through your program and kind of got on board with that. Prior to that, years ago in our marriage, we followed, kind of listened to Larry Brickett back in the day. He was teaching this stuff before I was. Right, but we just kind of hummed along with no real plan in life. We were able to pay our bills

Starting point is 01:39:32 and everything and everything seemed fine but we weren't getting money stashed away for retirement, things like that. So it really, once we got through your program, it really, uh, that really kind of opened my eyes a lot because initially I wasn't really, you know, following her or we weren't really working together. We were close, but it wasn't, it wasn't perfectly in sync. Right. Right. And now there's a rhythm.

Starting point is 01:40:00 It's perfectly in sync. And, uh, I, uh, I read I read, what was it, Everyday Millionaires? Mm-hmm. I read that book. And just the idea of becoming a millionaire where years ago kind of seemed like, oh, this is just a dream. This is never going to happen. Yeah. And then I looked at our budget.

Starting point is 01:40:20 I looked at our income. And I'm like, we can do this. Yeah. It's very doable for us we have great incomes yeah and so we got on board and and uh we just chunked away at the house and got it done so wow tell me about your matching shirts one of them says shut up the other one says do the plan tell us about that so a while ago we were listening to one of your podcasts and you know john i don't know if it was you or might have been george somebody in there said just shut up and do

Starting point is 01:40:51 the plan and somehow that just stuck it just kind of resonated like that actually sounds like jade but right so the so the shut up part is my personality and the kind of do the plan tortoise slow and steady oh it's a tortoise across now i see it okay got the tortoise little tortoise going across the do the plan all right good i like it well done y'all thank you well done i like we may need to sell those shirts i like those shirts since we're in the shirt business now yeah what was the biggest disagreement you had over the last four years when it comes to your money so the hardest thing i don't know that we had a huge disagreement maybe we did but i love going out to eat and cutting back on the going out to eat

Starting point is 01:41:28 spending that was the hard one for me yeah it was very worth it we found lots of ways to go out and do stuff that didn't cost much and you know during covid we had to so yeah you didn't have a lot of choice there we kind of sort of did beans and rice not that we had to but just because getting the house paid off became that important to us that we just cut back on a lot of other things and uh well and the more you more you can see the number and you can say we could be there then it's like i want to rush to the finish line i don't want to just play along i want to get there and that's the way most people's brains work way to go y'all that's very cool what church are y'all in out there in henderson so we don't we go to green valley christian center okay in henderson okay and we went through financial

Starting point is 01:42:14 peace i was at 20 or 21 we went through that uh anyhow it was online because of covid and all that but uh just a little shout out to charlie bromley who's our fpu coordinator all right way to go charlie good stuff yeah well way to go you guys and charlie was cheering you on who else was cheering you on i think that's about it we we kind of just you didn't talk about it a lot we didn't really talk about it a lot you know we didn't talk hard to brag about i'm paying off my house yeah but i don't know but char but Charlie was in our corner definitely for sure. I bet. Well, congratulations.

Starting point is 01:42:49 We're proud of you. Thank you. Way to go, guys. Very proud of you. You're heroes. You took control of your life. You start with nothing in America. Fifty-four years old.

Starting point is 01:42:56 You have a paid-for house. You got a net worth of over a million dollars. You're in agreement on your marriage. You're smiling at each other. Life is good. It's really a story of not anything that we achieved, not what we accomplished, but it's what God has done our marriage, and I had an addiction in my own personal life that really divided us mentally, emotionally. And I think that kind of kept us from really connecting together, and it affected our finances in that way. Wow, you've come through a lot of healing.

Starting point is 01:43:47 Yeah, be not conformed to this world, you're not you're weird right but be transformed and how you do that by the renewing of your mind and what i've noticed that's interesting in my life and people i've observed over the years as well as it's interesting that you do all these things to become debt-free but who you become as a couple, who you become as individuals while you're on this journey is probably more important than actually just paying off the house. You've become different people, a better version of yourself. Way to go. Very proud of you.

Starting point is 01:44:16 You're heroes. Excellent, excellent job. All right. It's Joe and Danella from Las Vegas, Nevada. Henderson, to be precise. 201,000 paid off. House and everything. Baby steps, millionaires, baby.

Starting point is 01:44:34 44 months, making 157 to 213. Count it down. Let's hear a debt-free scream. Ready? Three, two, one. We're debt-free! Yeah! Yeah! Woo-hoo-hoo-hoo!

Starting point is 01:44:48 I love it! Man, very cool, guys. Very cool. This is The Ramsey Show. Our scripture of the day, James 1, 17. Every good and perfect gift is from above, coming down from the Father of the day james 117 every good and perfect gift is from above coming down from the father of the heavenly lights who does not change like shifting shadows h jackson brown said talent without discipline is like an octopus on a roller skates there's plenty of movement but

Starting point is 01:45:19 you'll never know if it's going to be forward, backwards, or sideways. That's a great quote. He did a book many years ago that sold several million copies. He's from here in Nashville called Life's Little Instruction Book. And it was almost like one of our quick reads, but it was a quote per page of whatever quotes from his friends, his dad's friends, and that kind of stuff. And it was, gosh, that's probably 25 or 30 years ago, but it went big. It went real big.

Starting point is 01:45:50 David is in Washington, D.C. Hi, David. Welcome to the Ramsey Show. Hi, Dave. Hi, John. Thanks for taking my call. Sure. I really wanted to talk about I'm a father of five. I have a supporting spouse, We have some debt. There's debt, car

Starting point is 01:46:09 loans. We did a recent home improvement. We had some contractor issues to the point where we had lost quite a bit of money. So I ended up taking money from my 401k to kind of cover the the home improvement that we were doing on the home and so i think in total between the cars and the ac improvement the home improvement we're looking at about 121 000 but i thought you covered the home improvement is it paid off or not it's i used i took money from my 401k. You borrowed money or you took money? I did. I borrowed money.

Starting point is 01:46:51 So you have a 401k loan. I do. Of $50,000 or what? Yes, of $50,000. Okay. And then you have what else? Two car loans. Okay.

Starting point is 01:47:03 And that amounts to another $50,000. Okay. So you got a hundred thousand in debt right yes you said a hundred how much 121 121 okay cool i got the picture now all right and your question is what uh we have i have stocks uh in my my personal brokerage that's probably valued over 200 000 and the thought is should I take that to sell them down to cover those outstanding loans? By the end of the day. By the end of the day.

Starting point is 01:47:33 Today, right now, as fast as you can. You should have done that before you took out these loans. You should have used your money to buy a car. You should have used your money to do your renovation. Definitely, 100%. Yeah. I think at the time, I took out these loans a little while ago, and the market was down.

Starting point is 01:47:52 It doesn't matter. You don't borrow money on a car to invest in the stock market. And when you don't take money out of the stock market to buy your car, it's the same thing. No one in financial history except tiktok has said borrow money on your car and invest in the stock market no one ever said that was a good idea and effectively that's what you did by not taking your money out of your brokerage account because the market was up to buy the car and instead borrowing money on the car it's the

Starting point is 01:48:24 same thing as having borrowed money on the car to invest you understand what i'm saying i do yeah so undo this mess today and quit buying stuff unless you pay for it right because it's killing you it's killing you you make a lot of money and you're a very smart person and you over analyzed this big time big time you got paralysis of the analysis and you overanalyzed this. Big time. Big time. You got paralysis of the analysis, and you thought you had this figured out, and you put yourself in a mess. Don't do that. Don't ever do that.

Starting point is 01:48:52 Don't ever do that. Ryan is in Augusta, Georgia. Hey, Ryan, what's up? Hey, Dave. Hey, John. I appreciate you taking my call. Sure. How can I help?

Starting point is 01:49:02 Yeah, I found out at the beginning of the year, my dad was diagnosed with terminal cancer and they ended up, yeah, yeah. They gave him three years, but it's been a pretty steady decline since the beginning of the year. So I don't think that's accurate any longer. My question, though, is in regards to what I can do before he passes to kind of make things easier on the family after he does. I don't believe he has a will, and his cognitive decline is, I think, going to keep us from getting him to create one. You don't think he's a sound mind now? He's seen Indians in the kitchen, so I don't think so.

Starting point is 01:49:53 All the time or just sporadically? It's sporadic. It's worse in the afternoons. Hey, Ryan, I'm telling you this because I love you. You need to have that conversation today or tomorrow. Are you anywhere near him geographically? A couple hours away. Okay.

Starting point is 01:50:13 Get in the car and go over there and get a will done now. Right now. Get online, get a mama bear will, get something done so you have something written out. Otherwise, it's going to be a mess. Yeah. so you have something written out otherwise it's gonna be a mess yeah that that one hard conversation in a two-hour drive and a one hours of hard pushing while he's if he's clear of mind is going to save you and your family a ton of problems and money okay big time do you have a sibling or a aunt or uncle that's going to sue for the estate or is it going to be pretty simple well it is more complicated i do have a brother and a sister um that live in the house that he

Starting point is 01:50:53 lived in okay um he has a mortgage i think there's some back irs debt um as well as potentially a heloc but i don't know any of the so it doesn't sound like he has any money when the smoke clears. He's got an equity in the house, but I'm afraid that's going to all be gone. Yeah. Yeah. And your brother and sister are going to have to sell the house and move. And move. And that was my next question. Yeah. The court will force them to do that. They're going to lose the house. Okay. Because they can't keep it. And it doesn't, and your dad doesn't have an estate to amount to anything. So the will is not that important. It is important to get that done.

Starting point is 01:51:30 The second thing you've got to do while you're there, sit down with your brother and sister and go, look, here's the math. The IRS debt plus the HELOC equals the house. There's nothing. And the house is going to be gone when he's gone. This is a really hard situation so i love you too and i wanted to help us i want to help you figure out where you're going to be living

Starting point is 01:51:51 because they haven't thought of that they're in denial yeah are they planning on just living there after he passes away i think that's the hope yeah yeah i think it's sitting down and doing the math with them yeah you're going to have to show them the math and go, the IRS is not going to let you keep this house, and you don't have the money to pay them off. The HELOC is not going to let you keep this house, and you don't have the money to pay them off.

Starting point is 01:52:16 And so, guys, you know, you've lived here as long as you can, so you can live here as long as you can, but they're going to take the house from you. I'm not getting anything out of this. I'm not getting anything out of this. No one's getting anything out of this. There's not going to be any money to amount to anything. Maybe a little bit of equity if we're all smart and we sell it. You might get $10,000.

Starting point is 01:52:35 I might get $10,000. She might get $10,000. But it's not going to be $200,000. There's no lottery check coming. Dave, I'm going to ask you a question. Ryan, I'm going to ask Dave a question on your behalf. If this house is, let's say dad says, I want everything split between these three. Okay. It has to be sold. Would it be wise if I'm Ryan to say, I would prefer not to be on this list because here's what I don't want. I don't want Ryan to be left as the sole heir of this

Starting point is 01:53:00 house and they gets foreclosed on and he's responsible. He's not responsible for anything. Okay. All right. None of the, none of you three kids are going to be responsible for the debt but the house will be and they will take the house for the debt but that foreclosure will sit on whoever is on nope it sits on dad's name it's not in their name okay it's a foreclosed on a dead man's estate okay it's awful but that's the that's the dead that's the end of it so yeah get a will done and have a clear conversation with your brother and sister and get your numbers straight. Am I correct in hearing you that the adding up of the IRS and the HELOC

Starting point is 01:53:33 is as much as the house is probably worth? Well, in the condition the house is in, there may be $80,000 or $100,000 in equity. Okay. All right. So the best thing for your brother and sister is to sell it as soon as he passes away. And if you don't need any of the money, you can give them the whole equity. I don't care. But let them get a fresh start out of there.

Starting point is 01:53:55 But the thing is, they've been hiding from reality at your dad's house for so long that you helping them face reality now is the best gift you can give them? Okay. Am I missing something? No, no, you're dead on. Okay. Would it be smarter to sell the house before he passes? No, no. I would let everybody stay there and let him be comfortable and love him well.

Starting point is 01:54:21 Okay. It's just too much. I don't want to disrupt him in his situation. It's horrible what he's going through. He's lucky to you run good for you all of them are we got oh man i'm sorry wow that puts us out 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, Dave here. You want to hear even more life-changing content from Ramsey?

Starting point is 01:55:15 Download the Ramsey Network app so you can catch all your favorite shows all in one place, like The Ramsey Show, Smart Money Happy Hour, and The Dr. John Deloney Show. You'll get real talk about life, relationships, money, and your career. Plus, the app lets you browse by topic, like debt, business, or selling your home. Get the content you want, whenever and wherever you want to listen. Download the Ramsey Network app today.

The Ramsey Show - Quit Trying To Calculate Your Way out of Debt!

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