The Ramsey Show - Stop Being Normal, Attack Your Debt Now!

Starting point is 00:00:00 Brought to you by the Every Dollar app. Start budgeting for free today. 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. Holman Ramsey Personality, number one, best-selling author, and host of the brand-new hit on the Ramsey Network, it's called Front Row Seat. He's my co-host today. Open phones at AAA-825-5-2-2-25. Jackson St. Louis.

Starting point is 00:00:44 Hey, Jack, how are you? I'm great. How are you guys doing? Better than we deserve. What's up in your world? Dave, I'm broke. I'm borrowing money from family to live. My wife and I both work for a school district. We work all the hours they'll work. because every chance they get to do some extra jobs. We do it.

Starting point is 00:01:05 I'm qualifying for welfare now. I've got two adopted sons at home. We've adopted a lot of children to the years. Never made much money. And I've got a house that I owe about a hundred and twenty on. 120. I'm sorry. I'll interrupt you.

Starting point is 00:01:22 120. I'm sorry. What's it worth? What's it worth? It's worth about 189. Okay. Here's the problem. every house that's for sale in our area

Starting point is 00:01:30 is cost more than what I owe on the house I've got now so I could sell a house and break out with me equity and start over but then I'm going to be right back in the position I'm in again so I feel like I'm in a corner I can't get out of okay one thing I drove by there that I wanted to ask about and I almost interrupt you to apologize was the you're both working full-time jobs and somehow you still qualify for welfare

Starting point is 00:01:55 for the food program yes what's your combined income it's a little less than 35 and you work for the school system yeah wait a minute that that's not even $7 an hour you're not working 40 hours not two people well she well here's the catcher she is a substitute teacher but she works every time they call her yeah but that's not full time we don't know what else said Well, that's not a full-time job. That's sporadic at best. Well, my contract is for a little bit less than 20, and then she makes the rest. What do you do to make $20,000 for the school system? I'm in transportation, and I drive five routes a day.

Starting point is 00:02:42 Okay. And how long have you been doing that, hon? This will be my six-year. Okay. All right. What did you do before that? I pastor churches and ran a bank. I actually ran. ran a bank for eight years. This is a world I'm not used to. I don't know what to do. I don't know what to do.

Starting point is 00:03:04 Okay. Well, I do. Your job sucks. You need a different job. You make no money, sir. That's the problem. You are living at the poverty level. I mean, with two kids and $35,000 because she's not working full time.

Starting point is 00:03:18 And when you work, you're not getting paid anything. And so, dude, you can make more than you make working. at Target 40 hours a week, putting boxes on shelves. Way more than you make. Yeah. And so your job just sucks. We've got to reset your career sites. You do, and we'll be happy to help you with that.

Starting point is 00:03:41 But you have an income problem, not an outgo problem. And you're correct. I agree with your assessment. Your house sale will not fix this situation. And it's going to cost me $17,000 to sell it. Doesn't matter. Doesn't matter. It doesn't fix the problem because you have an income that is not sustainable. You cannot live on it. Yeah. And so you have to reset your career. Yeah. I don't want to put you on a spot, but I feel like I need to ask you this. If you were sitting across from somebody who used to go to the church you pastored and they told you what you just told us, what would your advice to that person be? well that's a good question i uh uh you know if it's don't don't listen you've already answered insanity is is you know as they say insanity is doing the same thing over and over again expecting

Starting point is 00:04:40 different results correct so my my advice would probably what you just told me yeah so you are i think that there's been a series of things that have happened that have led you to this we don't need to break all those things down but if i could just encourage you you to do what you believe, to do what you would tell someone else. And your wife needs to go get a real job today. I don't care if she's being a cashier at the local supermarket, but we're going to literally go, where are the open jobs that no teenager, most people don't want to go, but they're already going to make more money than what you guys are making. And you're going to have to get to the point where you say, I can do more things. If I can turn a wrench, if I'm hand,

Starting point is 00:05:25 I'm going to start working on some construction crews because at this point, you guys have been making so little money you've gotten to the point where you believe that's all your worth. Yeah, and you're not. That's not true. It's just garbage. So pastor, I would say, I'm going to use the word pastor on you. Get after it, man. Let's change our day. Let's change our week. Let's change our month by going and getting to work. If you're working 40 hours, you're making $9. And targets paying $20. I do have a separate issue here. I've got the two boys that adopted are autistic,

Starting point is 00:06:01 and my wife has to stay with them some, at least some. Yeah, yeah. So what she's doing as a substitute has allowed us to be able to take care of them, you know. What happens when she's substituting and you're driving? Well, I get a few breaks during the day, but that's about it. We tag team. How old are the boys? uh 15 and 11 are they going to require care of their whole life yes sir okay so you don't have a choice

Starting point is 00:06:33 you have to find a work around yeah yeah it's it's i'm telling you i'm in a predicament i don't know what to do no you're you do you've got to get a different job dude it's very simple it's a math problem you are not making any money and you have decided that this is the only possible thing for you and that's so fatalistic and incorrect So I don't care what you do. I don't care if you start a business. I don't care if you cut grass. Dude, if she starts cleaning toilets, she can make four times what she's making now, being somebody's maid.

Starting point is 00:07:05 Yeah. People are paying $25 to $50 an hour to be for maids right now. And take the boys with her, you know, or she gets a customer service job where she's on the phone, just doing a basic script. She could be making $12, $15 an hour easy, from home. But we have to get in the generating income mode. rather than we are trapped mode you are not trapped you have the worst possible jobs both of you for this situation and so you've got to start going what can i do to make some money because i need and that's not greed that's survival because your house is not unreasonable

Starting point is 00:07:45 your life is not unreasonable you're not a bunch of overspenders you're not out of control you just are broke you just don't make any money sir yeah i there's a spirit over him. There's a spirit over you, Jack, and you know it. That's just the I'm stuck spirit. Yeah. I'm trapped. There's nothing I can do.

Starting point is 00:08:06 There's nothing I can do. I'm in a corner. You said it like four times. And it's just not true. We're talking to a guy who's done things and can do things and you've got to do something else in your situation. You cannot survive. And so, yeah, you both of you are looking for jobs today.

Starting point is 00:08:23 And you may be looking for jobs. and upgrading jobs and jumping in and out of jobs for the next year to get your income up, $20, $40 an hour. And let's get after it. Go get you a lawnmower, man. Get you a pressure washer. Do something. You make a lot more money than you're making right now.

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Starting point is 00:10:36 They did a loan modification to get it out of foreclosures of the loan's current. They currently have about $13,000 and judgments against the house based on two credit card debts and a medical debt and a HELOC and a HUD loan. And I don't know, you know, what advice to give them to help them out but not enable them. I don't know if bankruptcy would affect the HUD or HELOC. So just trying to look for different answers. The foreclosure must not have occurred. There's not a plan with a traditional HUD mortgage where you actually get foreclosed on

Starting point is 00:11:13 and then they give you the house back on a modification. They must have done the modification right before the actual foreclosure sale occurred while the house was in foreclosure. Does that sound right? Yes, sir. The foreclosure was in process. Yeah, in process or anything. But once they drop the hammer at the actual auction at the courthouse steps, there's no going back. That's my point. Okay. So that's, anyway, so they've got a loan modification of HELOC and a bunch of debt.

Starting point is 00:11:39 Why are they not able to pay their bills? They just haven't made smart decisions for their money, and I think they were, you know, depending on Social Security and other stuff and realize that retirement money went a lot quicker than what they. They are both 65. Okay, do they both work? My mom has never worked due to, we'll say, medical issues. My dad has worked, and he still works some jobs. He's a contractor, so he does, like, remodels and stuff, but he's not able to do as much as he used to from doing construction for 40 years.

Starting point is 00:12:17 He's not physically able? He's not physically able to do a full-time position, and I've tried to talk him to get a job. What's wrong with him physically? Because I'm 65 and I work full time, and I could work full-time swinging a hammer if I had to. Yes, sir. He's just, he's broken his ankle a couple times, and when he was in the military, he broke his back falling off a tank. So it's just something that he can't, you know, carry lumber and stuff up and down.

Starting point is 00:12:45 Well, he never has been able to. He didn't break his back six months ago. He broke it 20 years ago. right so what do he do for the last 20 years for carrying lumber he's he's been able to do it i guess just the age and arthritis is catching up to him well but here's the thing though he's an actual contractor so if he were to go out and beat the bushes for some restoration projects renovation projects he can put a crew together of young guys he knows how to do it and a contractor doesn't have to be swinging the hammer if he goes or to lift in the lump he goes and gets good guys

Starting point is 00:13:21 young guys that want to learn in the trade. My point is he could make really good money as an actual G.C. The reason we bring this up is you can't live on Social Security with what you're talking about. Right. You got mortgage, you got HOA, you got liens from credit cards, all because they were trying to live on money that's not enough to cover their bills. Right. It's an income problem. Am I wrong?

Starting point is 00:13:45 You're absolutely correct. I just didn't know if there's – I've heard you say so many times, you know, He talked to creditors, you know, they'll usually settle pennies on the dollar with credit cards. They will, they will, but he's going to be right back there again. Right. If we clean them up, I don't want them coming back. I don't want the same mathematical problem in the household recurring. And so we've got to fix.

Starting point is 00:14:09 Now, if we fix the overall situation to where, in other words, the income is enough to cover the household expenses through whatever reason. We either reduce the expenses that far or we increase the income. Either one of those, if we do either one of those, then we've got a sustainable situation. Then if you went in and use some of your money to settle some of the old debts and get them cleaned off to where they've got a clean slate to start going forward, that would be not, that would not be enabling and that would be a good move on your part if you've got that extra money. But where you just pay off that stuff and they keep doing the same thing that got them there in the first place, they're going to be right back again, follow me? Right. And that's kind of where I'm selfishly like, well, maybe if I get them to file bankruptcy, I'll clear this up, and they won't be able to go into further debt because they're... Oh, no, they can get into debt. Oh, you can definitely get into debt after bankruptcy. Credit card company will send your pre-approved credit card 20 minutes after you file.

Starting point is 00:15:04 Okay. Well, will the, well, helix and hoodlones, are those negotiable down to you have you... No, they will not negotiate. Because they have a house securing them. Right. So how much do they owe? How much they owe in the first mortgage? Uh, one hundred and twenty one thousand. What about the E-Lock? Uh, He-Lock and HUD are both $30,000. Okay.

Starting point is 00:15:26 And what's the house worth? $350-ish. Okay. So here's an idea. Get them on a budget they can live on with a paid-for house, sell the house, and buy a $200,000 condo. Paid for, no debt. Right.

Starting point is 00:15:42 Now they got no house payment. And if you settle the credit cards and get rid of them, well, you could actually pay. them off out of the sale proceeds. You don't even use your money and then buy a house with the money that's left over in cash, a condo with the house, money that's left over in cash.

Starting point is 00:15:58 And if that sets them up on a budget that they can live on the amount that they've got coming in without either one of them working much, then fine. But I still think your dad ought to go do something. Right. I agree. What about

Starting point is 00:16:13 the idea that I've been floating now is buying the house from them? absolutely not no because we're not addressing the core issue the core issue is they can't live on it I mean if you just gave them a free house yeah I guess if you want to do that I mean do you have an extra $350,000 laying around I do you do what's your net worth I do uh close to $2.9 okay all right you buried the lead on us yeah that's information that would have changed the whole discussion from the start. But if you want to do that, then you own the house, but I still want them to create a sustainable life. And so I want

Starting point is 00:16:58 them to go through Financial Peace University. I want them living on a budget. And I don't want them to, I want them to promise to never borrow another dime the rest of their entire lives. Right. And we've talked about it. I think without the house payment, you know, their social security income and the side jobs, they could, they could easily get buy on. They mathematically could, but they've chosen not to do that in the past. They've chosen to let their house go all the way into foreclosure. They've chosen to not pay credit cards to the point they now have a judgment lien on their house. And so they'll choose that again unless we have a very clear understanding, and I would write it down, not as a legal agreement, but as a clarity agreement.

Starting point is 00:17:42 And my concern is if you buy the house, and I'm wondering here, are you planning to let them live there rent-free? Yeah. I just wanted to clarify that. Is that the plan? That's the plan. I just feel like if I try charging rent and they got behind it, it just three- No, no, I get that. But here's the thing I'm going to say. I don't even like this because let's say you do that and they live rent-free, but they don't stick to a budget. Yeah, that's my point. Now the resentment is so high, and then you got this stupid house. I'd make them sell the house. I wouldn't buy this house if I'd buy this house. are you whether you have the money or not i i might buy it i might disagree we can but under the same under the conditions that address his concern yeah and that is me and mom and dad have a very clear understanding we're going to have zero debt when this transaction is complete and you are

Starting point is 00:18:28 promising to a live on a written budget that the two of you run every month and i'll help you with it i'll coach you along and b uh you promised to never borrow money again under any circumstances ever the rest of your breathing freaking life okay and if you do those if they stick to those two things they can sustain on social security with no house payment and you're paying you own the house house is going to go up in value you'll be all right over time you're going to have some repair costs and taxes and insurance you've got to come out of pocket with annually um and you'd have to do those you have to plan on that but you've got the money to do this if they agree to make the changes in their behaviors, characters, habits, and they agree. And I'm literally going to

Starting point is 00:19:15 write this out as a one-page document that we agree to. I'm afraid they won't. I don't know why. I was a little cynical. There's no evidence that they will. So you're right. You're right. Yeah. That is a correct assumption. But that's the only way I would do the deal. Otherwise, I'd simply make them sell it and that's really hard to do. You've got the money and it's super hard to do since you got the money. Yeah, it is. I'm a little heartless today. You are.

Starting point is 00:19:43 You're just kind of getting with it today. I'm glad I got you on here because I might have wussed. You've got a job, a dog, maybe a peloton, but no will? Come on, people. It's make-a-will month. Time to stop pretending you're immortal and start adulting like a pro. And here's the deal. A will isn't just for boomers with beach houses. It's for anyone who owns stuff or loves their people. And I assume that's you. Because when you die without a will, the state gets to decide who gets what. And spoiler alert, the state doesn't. doesn't know you. And that means your ex-roomate could end up with your collection of vinyl

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Starting point is 00:21:16 Make a will today. Mamabearlegalforms.com, promo code Ramsey. John's in Texas. Hey, John, how are you? Hey, Dave, I'm doing good. How are you doing? Better than I deserve. What's up?

Starting point is 00:21:48 So I kind of got an issue. I need to know. I need someone with more insight than I do on this if I'm taking more of a risk than I should. I'm looking at buying another car, a used car. Since I've been 18, I've been driving $500 beaters. and that's just the way I've lived I got married, got my wife pregnant

Starting point is 00:22:10 and I bought a new car and I kind of regret it because I have 13K of that car I still need to pay off. It's reliable but I've always said you know I should just stuck with a good used car so I'm looking at getting another one

Starting point is 00:22:23 my usual budget buying a car is around 5K but I live in an area where it's hard to find a reliable car for 5K you'll typically buy it for 5K and then you'll have to sink another one, two, three grand and repairs into it.

Starting point is 00:22:38 And I've come across the car that's at $9,200. It's got 43,000 miles on that. It's a Lexus ES 300. It's super reliable. The dude said he has receipts from every time they got gas. I mean, it's got every record that you need there. It's in mint condition garage cabs. John, do you have $9,200?

Starting point is 00:22:56 I do. I do. Yes, sir. I have, so in cash-wise, I have about $30K disposable income and about $5K and crypto and silver that I, I don't consider spending money. But I have, right now I have $10,000 in cash on my desk, and I'm looking at it. And you have a $13,000 car payment.

Starting point is 00:23:17 Yes, sir. Okay. All right. I would sell the crypto today. Okay. For all the reasons. And I would pay off your car today, and I would buy this car. Okay.

Starting point is 00:23:33 Okay. You've got the cash to do all of that. I do. Yep. I'd be debt-free by the end of this transaction and have two decent cars and then start saving with no car payment. Is that your only debt other than your home? It is. Me and my wife got a, we got a lawsuit from a car wreck.

Starting point is 00:23:53 We finally settled a lawsuit, and I paid off all my debt this past year. Except her car. Except that car she's driving, yeah. Okay. And you got a baby on the way, you said, or a brand-new baby? No, he's one and a half. Oh, good. Okay, perfect.

Starting point is 00:24:05 And you're what, 26 or 25? 27. 27. Pretty good guess. Okay. And so, almost like I've done this. Yeah. And so, yeah, that's exactly where you are.

Starting point is 00:24:17 And now here's the trick, dude. Okay. You have mastered the art of living frugally in order to save money. You have not mastered the art of managing money. Yes, sir. Which will make the money that you have coming in now with no doubt. debt grow really, really fast. And so I'm going to give you guys every dollar premium for that baby. And I want you and your wife to sit down with zero car payments. And you have the new

Starting point is 00:24:47 you have the new Lexus. She has the paid for $13,000 of debt that's gone. And you've got some money over here to work your baby steps. And now we've got to build and make sure we have an emergency fund of three to six months of expenses. And then once we have that, we're going to start investing in our 401ks and you're going to be wealthy. But you're going to sit. But you're going to systematize your frugality rather than just saying frugality is going to save me frugality won't make you wealthy it is one of the things that will cause you to build margin and the margin will make you wealthy but you can't frugal yourself into rich you can only frugal yourself into survival and you live in a cave collect lint and only come out on triple coupon Thursday and so you

Starting point is 00:25:31 that's that's frugality but there's no there's no life in there and so that's that's the $500 car thing and so you've been very wise in that sense but I want you to just harness that energy and focus it now and systematize it and that's called managing money not just cheaping cheaping's good for a while to get you where you need to go you're going to be a great dad you're a great husband you're a good man I'm glad you called we want to help you and your family you hang on we'll have them pick up and get you going on this carsons in Provo, Utah. Hi, Carson, speaking of frugal. What's up? Hey, how's it going? I'm doing great. How are you? Better than I deserve. How can I help? Yeah, no, I loved hearing what you're saying before. I guess my

Starting point is 00:26:12 question is, how do I know if I'm being too frugal or too cheap? I love kind of what you talk about giving, and I think that's something that I could be a little better at. But it's sort of sometimes I'm a little too frugal or a little too cheap. Or the people around me think I'm at. Well, you live in a cult, you live with people around you that overspend, and so if a congressman says you're being too rude, too frugal, that's not an indication you're frugal. It's just an indication you're on track. So broke people make fun of your finances, that's okay. So that doesn't bother me. What bothers me is you're wondering. So are you married? I'm not. So I'm 24. I just started my first, like, full-time job, and I'm making pretty good money. What's pretty good money? I'm making $85,000 a year. Good. What are you doing? I'm a computer, we're a software developer.

Starting point is 00:27:04 Good. Good for you. Give us some examples. Let's say Dave and I go to lunch with you. Give us a couple of examples where we might think you're too frugal. What is your best guess? If I didn't offer to pay, if I chose or like made some comments about if the most expensive thing on menu is, you know, ridiculously expensive. or if I chose maybe, like, the cheapest thing I'm in the unit is a little obvious.

Starting point is 00:27:30 I don't know. That's not jumping out. That's just somebody that's being aware. Yeah, I think you may be beating yourself up. Yeah, I think you're doing okay on that. Here's the thing. There are three things you can do with money, and you should always do all three things to be psychologically and spiritually mature.

Starting point is 00:27:48 You should always be generous. So when you're at lunch, regardless of what you order, I want you to leave a nice tip. Those people work hard. Okay. The second thing is you can enjoy money, and I want you to get some joy from money. I used to work for a guy that was trying to help me build wealth, and he said, Dave, I want you to build enough wealth that you read a menu from the left to the right. Most people spend their whole lives looking down the price column to choose what they're going to order. I want you to order what you want to order regardless of the price, and that means you've built enough wealth that it doesn't matter what you have for freaking lunch.

Starting point is 00:28:22 okay and so I want you to enjoy your life within reason and the you know so generosity enjoy and then investing and I want you to be systematically investing so if you're giving money and you're enjoying money you're doing no investing you're out of balance if you're investing and you're enjoying money but you're not doing any generosity you're out of balance you follow me so any of the it's a three-legged stool you got to get all three legs to sit down on that stool and I'd be working on that and practicing you're good at living on less than you make. That's a natural gifting. My wife is the same way. My wife has leftovers in the refrigerator and we're multi, multi, multi, multi millionaires. It makes no sense at all, okay, but they're there. And then tells me

Starting point is 00:29:11 how great they are over and over and over again, just to try to sell me on them. After 43 years, she's still trying to make this sale. Her natural gifting is frugality. Okay. Some people's natural gifting is generosity. Some people's natural gifting is they love saving. They get a hive from investing and watching their mutual fund account grow. So lean into that, enjoy the ride. But make sure you're doing some things that feel a little bit like you're spending too much. That's you enjoying your money. Yeah. While you're being generous, while you're investing. And if you're doing all three, you're going to be okay. That's right. Quick question. Would you describe yourself as fearful? are hopeful with money? Will? Oh, me. I'm sorry. Oh, my bad. I pushed the wrong. Carson's already on hold. I got you.

Starting point is 00:29:59 I put him on hold. Here's what I was going to get at. I think people have to, it's a great point you made. You got to ask yourself, is my natural default because of the environment I grew up in or the experience that I've lived to this moment? Both your environment and experience is what shapes the way you see any issue and certainly money. So ask yourself, is my default, my natural penitent towards fear, or is it towards hope with money?

Starting point is 00:30:27 And there's no wrong answer here. But when you can see that, then you can go into the roots of this and go, why am I naturally fearful about money? Or why am I tending to be a little bit more hopeful, a little bit more optimistic? And that's really key to kind of know yourself. When Rachel wrote her bestselling book, I'm looking at it, number one bestseller, know yourself, know your money. I thought it was very insightful to understand. Let's do that. I think it'll be a great gift.

Starting point is 00:30:49 Give me a copy. Carson, hang on. We'll get your copy of Rachel's book. I think it'll help you with this whole discussion. Really good. Yeah, very good. You know, one of the first things I discovered working in the financial world is how absolutely devastating it is when the breadwinner of a family dies. And there's too little life insurance or none at all.

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Starting point is 00:33:19 Rachel or George or Jade will be teaching you about how to run every dollar. We're going to show you how to stick to a budget and even find the average is $9,560 worth of the of the people that have done it in the last 90 days. That's the average using every dollar. We've got a new improved version of this, and it is blowing up. You can get out of debt, start building wealth, put you on the plan you hear on Ramsey all the time. and you can ask questions at this webinar during the live Q&A, so it's a little bit like this show, only it's easier to get in.

Starting point is 00:33:53 Sign up for free at ramsysolutions.com slash webinar. Jane is with us in Florida. Hi, Jane. How are you? Hi, I'm good. How are you? Better than I deserve. What's up? I had a question about what you would think for our situation. We just bought small business using an SBA 7A loan. I'm sorry, say that again.

Starting point is 00:34:15 I didn't hear the first part at Gargobled. Oh, I'm sorry. I was just asking what you think we should do in our situation. We just bought a small business using an SBA 7A loan, and we live in a very high cost of living area, my fiancé and I, and we're considering buying a house versus renting, considering that we have this new debt with us, so what do you think we should do? You both signed an SBA loan together and you're not married? We're about to be married, yes.

Starting point is 00:34:46 When? This year. Friday. Got it. This is very dangerous. How much is the SBA loan? Around 700,000. How old are you, too?

Starting point is 00:35:04 I'm 28. He's 29. What is this business? It is a blue collar service business. That does very well. It's a specific area that it services, and it's a necessary service. So it does. Have you opened?

Starting point is 00:35:23 Yeah, we took over two weeks ago. Oh, someone else had it and you bought it. Yeah, yeah, yes. What's the annual profits on this business? Growth last year was over a million. The owner last year paid himself from $350,000. and you paid 700 grand for it okay correct um what uh and are both working at full time um i have a job making what working a hundred thousand around there okay and so hypothetically

Starting point is 00:36:01 your household income is 350 well he's not going to pay himself as much you know i mean you have a profit in the business of 250 right Yes. That's a profit. Even if he doesn't pay himself, he paid himself. It's a profit. It's taxable income. It's got to come somewhere.

Starting point is 00:36:18 If it's not a salary or not, it comes to you at the end of the year. You're going to pay taxes on it. You might as well take it home. Okay. Right. So you make $250 there, $150 with you. That's $350, you owe $700. No, I would not buy a house.

Starting point is 00:36:30 I would rent a cheap one-bedroom apartment, and I would pay this crazy butt loan off that you got yourself into in two years or two and a half years. Well, that's hard right now. So good. Good. I would just stay right where you are. And I also think that you're extremely vulnerable when you did this without being married. And so you're not going to do it, but you should get married immediately. Yeah. Yeah. And by the way, we've taken this call many, many times where an unmarried couple gets into a business and the relationship goes kaput and then it's nasty. I want to make sure our audience understands why you're so certain about that. We hear that over and over again. We get it. When everything doesn't work out exactly like you planned, which is every time, it never works out exactly like you planned. It might be better than you planned. It might be worse than you planned, but it never works out exactly like you planned. So, folks, here's what you've got to think through.

Starting point is 00:37:25 What, Ken's right, what we see is what causes this, okay? So here's an example of things that have come in over the years. Now, this is pretty macabre, but it's actual phone calls, okay, and over the 30 years are doing this. They're in the situation that that young lady is in, and he gets teaboned and is in a wheelchair. Can't speak, can't move. Now what? Oh, or he gets killed. Now she owns a business with her future mother-in-law, because there's no will, of course. But, and And his half of stuff does not go to a fiancé under Florida law unless there's a will that states that it does. So you need that done by the end of the day.

Starting point is 00:38:18 But yeah, you end up, and you didn't really like the mother-in-law. You just loved the son-in-law. Just love the son. That's all you loved. But now you're partners with her. And she's not going to work there, by the way, but she wants her half. And you've got to go down there and work full time because you are about to get foreclosed on by the S.P. B-A if you don't. All this stuff happens all the time. And so the other thing that can happen

Starting point is 00:38:44 is you go in there and you take it over and it runs better than you thought it would and you're able to pay the loan off in 18 months instead of two and a half years. That would be an awesome thing. I hope that for you. I hope that's what occurs. I hope it's better than you thought it was. But this thing of running a business, there's three rules of business. It takes twice as long as you think it's going to. It costs twice as much as you think it's going to. And you're not the exception. Those are the three rules of business. And I've experienced them in depth over 35 years of running Ramsey. So I'm not the exception either. And so I have to plan everything out for worst case scenarios. And that's certainly A, not borrowing money, and B, certainly not

Starting point is 00:39:25 borrowing money with someone I'm not married to. The same thing applies to buying a house with your sweet little fiancé. Don't do it. That's right. Well, see, they're living together now. One more common scenario, too, is that he gets under pressure. He's never run his own business before. And I'm going to tell you something, folks, that's a whole different enchilada. And if he gets super stressed, the relationship starts to break. You just called him an enchilada? I said, no, not him.

Starting point is 00:39:51 I said, it. Being a business. He will change form. He will. And you hope none of this happens. But that's why we're not, you know, the sky is falling. This isn't chicken little advice. This is a lot of experience.

Starting point is 00:40:04 Don't ask Sharon Ramsey about Dave Ramsey going broke version. versus Dave Ramsey today version. You won't like the discussion because she will tell you the truth. Yeah. It's not pretty. I'm just saying. Yeah. I agree with you, Dave.

Starting point is 00:40:14 Get to the courthouse. Get a will. Let's get this stuff. We jumped into this massive partnership, but we didn't really cover it all the way around. Yeah. That's what concerns us. Doing things in the wrong order.

Starting point is 00:40:25 Yeah. Get your head, taking off. It's pretty simple. Right. So, yeah, the data's there, folks. The data's there. It's not simply a moralistic argument, although you could make a, the argument on that basis alone. But it's not simply that. There's legal implications,

Starting point is 00:40:41 financial implications. All of these things roll into these discussions and running out your worst case scenarios. So no, I would not buy a house and add to the problems that you have already. I would run like my hair was on fire to get these problems cleaned up. One thing I want to do, I want to ask a question on behalf of our very large audience here we didn't discuss. I'd love for you to give them a fundamental, okay. If you're going to buy a business, how much you should spend based on revenues. I don't think they overpaid for it. I don't think they did either.

Starting point is 00:41:13 If they got a good buy, if they, if the numbers are what they think they are. Right. If they're due diligence when they're signing up and going through the books. That's right. They actually did that. I mean, because here's the thing. You're buying a business. There's the owner will tell you this is what our books say.

Starting point is 00:41:30 I don't care. What are the tax returns say? Yes. Well, they file taxes on. Well, we didn't report everything. Oh, so you're telling me you don't have integrity. Okay. And now I'm supposed to believe your books.

Starting point is 00:41:41 No. I think I'm going off the number on the tax return. What you're willing to pay taxes on is your real profit. What you actually have to pay taxes on, that's your real profit. Well, I have depreciation schedule. Yeah, you also had the expenses of the, I buy the item that you were depreciating. So that's bullcrap. And so help you with a math on that.

Starting point is 00:42:00 There's no depreciation on anything that you didn't first pay for. That's how that works. Anyway, I want to see what the real bottom line is, what the real taxable income is, and based on that, I'm going to do a multiple of three, four, five, somewhere in there is going to be the valuation of that small business. And that's after a manager is paid to run the business if you're an absentee owner. This is the Ramsey show. These days, business as usual is anything but tariffs make trade policy a moving target. Supply chains are squeezed, and cash flow is probably tighter than ever. So if your business can't adapt in real time, you're in a world to hurt.

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Starting point is 00:44:37 Ken Coleman, number one best-selling author, Ramsey Personality, and host of the new hit on the Ramsey Network's front row seat. And you need to check that out if you haven't checked out that podcast. It's a long-form interview with some of America's best and brightest and some of the world's best and brightest, as a matter of fact. And you had Gary Sinise on the other day. Yeah, you know, what a great actor, probably one of the most respected men in Hollywood, and really probably the most respected servant of our men and women who have served in the military.

Starting point is 00:45:08 He's got a great heart for veterans, does incredible work, of course, on the backs of probably one of the most beloved characters in movie history as it relates to our military characters, and that's Lieutenant Dan, and doing great work. He's a good friend of yours and came in, and we had a great time. Yeah, he's moved to this area a few years ago, and we've got to be friends. and genuinely the kindest, gentle guy. Very humble. Yeah.

Starting point is 00:45:31 Yeah, you guys will love watching that interview. It's great. So check it out. And the Jimmy John interview has been going Zoom, Zoom, hasn't it? Absolutely. Catching fire. As we really had a hunch that it would because, A, the guy knows what he's talking about. When you go from offering three sandwiches with used equipment to selling for $3.3 billion, you should probably listen to this guy.

Starting point is 00:45:51 He's got the American Dream figured out. He did it and did it well. I'm one of the kindest, talk about kindness. And generous. Yeah. Yeah. He shoots the whole theory that billionaires are evil people to pieces. I thought he would be more bombastic to that answer.

Starting point is 00:46:09 It was a good answer, though. Yeah, yeah. He was starting to heat up. Yeah, he was, but he caught himself. He did, he did. You know, I just feel sorry for him. They're just not smart. It's like, yeah, that's good.

Starting point is 00:46:19 Oh, my gosh. Check it all out. It's called Front Row Seat with Ken Coleman. It's on YouTube and on podcast anywhere. Great podcasts are sold. You'll be able to fill it up, watch it, listen to it. You will get great information and inspiration, and that's what we do here. Alex is with us in Texas.

Starting point is 00:46:36 Hi, Alex. How are you? Good. How are you? Better than I deserve. What's up? I'm a newly led, just wanting to get your opinion on the best way to join finances. Cool.

Starting point is 00:46:46 How long have you been married? I got married in July, so just a couple weeks. Oh, look at you. Wow. How old are you got? 27 and 28 okay that's a very important question and the reason it's very important is 30 years of doing what we're doing we know that very few couples have a high quality marriage and and build wealth without combining their finances and as a matter of fact which one of the things we found in the millionaire study where we're studying millionaires 803 percent of millioners said they were working hand in hand as a team with their spouse both had a vote. Both were pulling the wagon together, and that's how they became millionaires. So it's a great question. Now, the question is how to do it. From a tactical standpoint, your monthly income, pretty simple, one checking account. All the money goes into one checking account. That number, that monthly income number, goes at the top of the budget. And the two of you sit down together and have a budget committee meeting. And you say, okay, before the month begins, we're going to have $3,273 or $8,642, or whatever the number is, this coming month.

Starting point is 00:48:04 That's what we're going to have. Now, let's spend all of those dollars, give every one of those dollars a name in the every dollar budget, and we both agree to it. There cannot be any money left over. It has to go into savings. It has to go into generosity. It has to go into a debt. It has to go be spent on groceries. It has to go to something.

Starting point is 00:48:22 every dollar has to have an assignment exactly to the penny. No leftover squash money, no need. If you want to put it in savings, put it in savings. I don't care, and then call it, you know, call it my emergency fund. Whatever you're doing with it, do it on purpose and do it together. Is that what you're asking? Yes, but also, so we have some debt. I just wasn't sure.

Starting point is 00:48:45 I've seen how some people say do like 95% all in one account. You each get like 5% for fun money, squash money, whatever. Yeah, some people are broke. So don't listen to some people. Yeah. Some people got an opinion about everything. And so, and they're wrong. So, no, I wouldn't do any of that.

Starting point is 00:49:04 The thing is this, you're going to attack your debts together. It's for better for worse, for richer for poor. And the old, the old marriage vows from the Book of Common Prayer say, unto thee, all my worldly goods, I pledge. So we're truly joining everything. He got you and your debt. You got him and your debt. You got him and his income.

Starting point is 00:49:30 He got you and your income. And now we are we, not you and me. Okay, perfect. And I have one other question if that's okay. Okay. We do have a daughter. She'll be two. And we're trying to find out the best saving option for her future.

Starting point is 00:49:46 Okay. That would be a 529 plan for her college, and you don't need to worry about that until you're out. out of debt, have your emergency fund in place, and that'll be called the Baby Steps. I'm going to send you guys a wedding gift. It's called the Total Money Makeover. It's our best-selling book. We've sold 14 million of them, America's greatest coffee table coaster.

Starting point is 00:50:07 And so it's sat there on people's coffee tables for years, and they don't read it. But I'm going to send you one. It's got the baby steps in it, and people that follow those baby steps show you exactly how to do it. They become wealthy, and they get out of debt, and they learn to work together. I'm going to add a little wedding gift as well, Dave, since you've got me in the spirit of giving. Rachel Cruz wrote a great book, number one bestsellers, called Know Yourself, Know Your Money. And this is the advice I want to give you. Dave gave you great tactical advice.

Starting point is 00:50:35 But you two are learning how to truly live together. And one of the most important things you'll do in your marriage is learn how to manage money together. And one of the reason I want you two to read this book together is because you both need to know, based on your experience, experience in life with money and then your environment, the way your parents talked about money, that's all shaped you. And then you guys are wired a certain way towards money and knowing how you guys are wired for money, which this book will teach you and you'll be able to really grasp it. It's a great book for young couples that are getting started because if you two can understand each other, as you go into the budgeting and into the baby steps, I think

Starting point is 00:51:16 it'll make it so much more. I think it's a great book for every young couple to read. so we'll give you that book as well yeah i agree and rachel wrote it actually out of the pain of her and winston learning to that's right work together yeah um and um because they're very different rachel's got a little bit of her father in the sense that uh this abundance versus scarcity i've always thought i could out earn my stupidity and rachel definitely goes along with that and uh winston on the other hand is very methodical very careful and as a saver yeah and is very wise and And so the two of them working together have woven that together over a decade plus a marriage into a wonderful marriage. Yeah.

Starting point is 00:51:54 And so that's good advice. And you learn to work together. Larry Burkett used to say opposites attract. If two people just alike get married, one of you is unnecessary. Typically a spender attracts a saver. Typically, abundance attracts scarcity. Typically, you know, the nerd that likes details attracts the person who is not that concerned about details and would much rather have a party. And so the free spirit.

Starting point is 00:52:23 So the nerd and the free spirit, the spender and the saver, the scarcity and the abundance, all these things are typically opposites. And you need each other. You learn from each other that you add spice to the gumbo from each other. One's not right, one's not wrong, but learning to work together, as Ken's pointing out, is absolutely vital. Hey, you guys, health insurance costs are only moving one way, and that way. isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer, and it's harder than ever to get anything approved through the bureaucracy. So, if you feel like the system is working against you, try a biblically based alternative to health insurance,

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Starting point is 00:54:06 So learn more today and join at CHministries.org. slash budgets at CHministries.org slash budget. Mel is in Nashville. Hi, Mel. How are you? I'm good, Dave. How are you? Better than I deserve. How can I help? Oh, hey. So I am set up with trying to figure out what I'm doing. I have no clue what I'm doing, just to be honest. I'm trying to get on a plan to get out of debt. And I don't really know where to start. And the last year has been awful. I have about approximately probably $25,000 in credit card debt. um and also include the personal loan um but um about a year well a little over a year ago i lost my husband he passed away and ever since then i like i was doing actually trying to do a little bit better before that happened i was starting to get things paid off and then i went back right back

Starting point is 00:55:26 into the cycle of just using my credit card for everything and just trying to stay afloat and um i still have two kids at home. So I'm trying to navigate all of that. And I'm trying to get there just without crying. So how old are your babies? How old are your babies? They are 10 and 15. Okay. And what do you make? What's your income? Before taxes, it's almost 60. Okay. All right, cool. How old are you? I'm 44. What do you do for a living? I work in insurance. Okay. All right. Well, there are several touch points that help you get control. Okay.

Starting point is 00:56:16 Some of them are emotional, spiritual, psychological. Some of them are mathematical. Okay. Math is, math is we get our income up looking at some side hustles that you can do with babies at home. and we get our outgo down, and we make the money that we have behave, and that's called a budget. The money that you have is not behaving. It's living from desperation to desperation because you are.

Starting point is 00:56:46 Right. When you're scared, and you're scared, I can hear it, you get desperate, and every time I get desperate, right after that, I get stupid. Yeah. And that's what piles up. and then you feel stuck and then shame comes and all those other things. So all that's the emotional part and the psychological part and the spiritual part, okay? But the good news is you actually make enough money to live on.

Starting point is 00:57:16 You don't make a ton of money, but you can probably figure this out. What do you owe on your car? Actually, I don't. Oh, good. That's good news. So $25,000 in credit card and a student and personal loan, what are the debt? that's it what do you own your home nothing it's paid off it's paid off well we live in a trailer but it's paid off you don't have any house payment paid off right no mortgage yeah that's good that's

Starting point is 00:57:46 good okay so no mortgage is a good thing in 25k in credit card and you make 60 this is doable okay right and so I tell myself I'm like it's doable I don't know why I can't well because because your heart was broken. You lost your husband, huh? And you were struggling, okay? And that's just normal human stuff. So what we've got to do is help you put together a system to live on the money that you have, and we're going to put you on the every dollar budget, and we're going to get your Ramsey coach, and I'm going to pay for all of it, okay? I'll take care of you, make sure you get up and get running here. You can do this mathematically. But the first thing is, is you've got to change the way you look at it and the way you think about it. Of course, we're going

Starting point is 00:58:28 get the credit cards out and cut them up they've been such a blessing not not okay so we're going to stop using the stupid things we're going to have a plan to eat and pay the lights and you know make sure the water is on and then we'll start talking about how we can pay off this debt after we've met our basic needs in the household but if you've if you've eaten food if your family has food, and your family has lights and water, and you've got gas for your car to drive to work. Now, you make plenty of money to do all that. Right. And so we've just got to make the money behave.

Starting point is 00:59:09 And then we can start using some of it after we've taken care of Mel and her kids. Then we'll use some of it to start taking care of the stupid banks and get them out of your life. Forever and ever a men never go back. Yes. Okay. So that's what we're going to do. So I can, we can show you exactly how to do this, but you're just by yourself and you're, it's what I would be doing if I lost Sharon. I'd be just flailing around a little bit. Yeah. And you're just kind of flopping around, you know, and it's just going everywhere and you're just running and going and you're tired and you're stressed. Is that, am I, is this true? Am I telling the truth? Yes. Yes. Very much. Okay. All right. Are you in a good.

Starting point is 00:59:53 church? I am, yeah. Good. I am. Does your pastor know you're facing all this? Yes. You sure? Yeah.

Starting point is 01:00:04 I mean, they know, I don't know if they know how bad I've been the last few months. Probably not. Yeah. You need to tell your people that love you. Yeah. The book that I read and the book that you read says we take care of widows. Okay? So give your congregation and your pastor the opportunity to do what they're called to do. Okay. And Ramsey's going to do that too. Ramsey's going to set you up with a Ramsey coach, free of charge, sit with you, help you put together your budget, and then coach you, and then also hold you accountable. That means they're going to be mean to you and make you do it. You're going to freaking do it, okay? Yes. And Mel, Mel, listen, this is really doable. And I want to just throw a number at you.

Starting point is 01:00:53 not that you have to take on you, but I just want to show you something. If you were to make an additional $2,000 a month and you put every nickel on that towards this debt, you're talking about getting out of this in a year. Now, I'm not saying you have to do that, but I want you to catch, because we're going to give you all the help, but I want you to be able to see that what seems insurmountable to you at the start of this call, you can actually knock this out, and you've had horrible change thrust upon your life by losing your husband. But you're still here, and your kiddos are still here.

Starting point is 01:01:27 And this is not going to be fun getting a budget and cutting out credit cards and not relying. It's not going to be fun. But you've already had a horrible season. It's going to be more fun than the hell you're sitting in now. That's exactly right. You can get through this. I just want you to hear that. You can actually get out of this.

Starting point is 01:01:43 Yeah. This is very, very doable. And you hang on. We're going to put our arms around you and help you make sure you do it. You get on the phone with the Ramsey coach as soon as you get hooked up with one, sit down with them. They're going to take, we're going to take care of you, and we're going to make sure you get on that every dollar budget to stay on it. And you let your pastor and your community know where you are and that you, they may not need to give you money. They may just need to love you.

Starting point is 01:02:06 That's okay. I'm not saying you're a charity case because I don't really think you are. But if they want to give you some money and put towards this, it wouldn't make me mad. But it depends on the congregation, how they work and all that. But, I mean, more than anything, they just need to love you. That's right. You know, you don't need to do this by yourself. Life, it's not good, the man, be alone.

Starting point is 01:02:24 You know, when you do these things together. Dave, you picked up on something and she broke when you said it, and you were right. You mentioned the word shame. You've coached so many people one-on-one on the air. How does shame hurt us in times like this when we're trying to jump out of debt? Because you've experienced it personally. Yeah. Just talk about shame.

Starting point is 01:02:44 It's the great lie from the pit of hell is what it is. It makes you, people, when they get in a situation like that when you're broke, you can't pay your bills, you think, and you screwed up, you think you're the only one. Right. And it turns out if you've got your act together, that's when you're the only one. Right. Most people are broken out of control. Most people don't have their crap together.

Starting point is 01:03:08 78% of Americans say they live paycheck to paycheck. That's eight out of ten houses on your street are broken out of control. So don't let anybody whisper in your ear called the devil and say, you're not worthy because you're broken out of control. you're just a normal person normal just sucks that's all you don't be normal normal sucks bad so it's the great thing I used to think when I went broke I was the only one on the planet earth that was that stupid and when I started telling my story it's like everybody's like me too me too me too me too me too it's like everybody raised their hand and said I've been I've done stupid I was stupid I went broke too Dave I went broke in real estate just like you I kept hearing it

Starting point is 01:03:46 over and over and over now for 30 years I've heard it everywhere normal is this you just don't want to be normal. That's the trick. Today's question of the day is brought to you by why refi. If your private student loans are in default and you feel stuck, you're not out of options. Why Refi specializes in helping borrowers like you find real solutions with low, Fixed rate refinancing. Start from zero and go. Go to yrefi.com slash Ramsey. That's the letter Y-R-E-F-Y.com slash Ramsey. Not available in all states. Today's question comes from Victoria in Texas. My 14-year-old son wants to allocate some of his earned money to online gambling. He says, everyone, and this is in all caps, at school does it. Please help me explain to him why it is 100% wrong. How old is your son?

Starting point is 01:05:23 Your youngest? My youngest is 17. I got a 17 and a 19. So I will answer it as if they came to me and said, Dad, everyone is doing it. First I'd start with, I can't help but hear my nanny's voice right now. He used to say to us, if everyone's jumping off of a bridge, would you do it too? You know, that's just old school, you know, and I'd start with that.

Starting point is 01:05:46 Then I would say, all right, let's look at gambling. And I actually would come to it with numbers. I'm a little bit of a data geek. And so I would actually go pull real numbers on this particular type of online game. Let's say it's sports, okay? And I would show the rates of success on this and let the numbers talk for you to some degree. Second, I would explain gambling as a whole and how it does not pay off. And I would say just because they live in your house, if they're going to do something that you are

Starting point is 01:06:19 philosophically or spiritually, whatever you want to say, opposed to, what I would tell them, my son is if you're going to do that and you're going to go around me and not honor the advice I'm giving you and do something so stupid, then you are not going to receive these blessings for me. Now, that may be too harsh. Dave, you may disagree with that, but I would take a pretty strong stance after I've made the numbers case and make it very clear I don't believe in this. I think this is foolish

Starting point is 01:06:52 and this is against the values of my home and therefore there are going to be consequences if you do this. And then they've got to learn the hard way. Yeah. Everyone at school that is male in 14 is looking at pornography.

Starting point is 01:07:10 Not everyone is gambling. That's a good point. He's lying. He's overstating. He's being a 14-year-old using hyperbole. Okay. And 14-15-year-olds are interesting beasts. They're very interesting.

Starting point is 01:07:27 I raised a few of them. At our house with teenagers, we went with the Andy Andrews approach that we are not trying to raise great kids. We are trying to raise kids who become great adults. And so at that stage of their development, the process that Sharon and I use, was pretty simple, because inside of every 14-year-old, there are two people, a 34-year-old and a 4-year-old. And so I would ask them, which one am I speaking to, Sybil? Y'all don't remember Sybil with multiple personalities.

Starting point is 01:08:02 It's an old show from the 70s, okay? But, yeah, which one am I speaking to? The 4-year-old or the 14-year-old? If I'm speaking to the 4-year-old, I'm simply going to tell you what to do, and you're going to mind because I'm older than you and I can make another one that looks just like you. You will behave, period. You will do exactly what I say for your own good because I love you. I don't care if you have a feeling.

Starting point is 01:08:29 It doesn't matter to me. You're simply going to do what I say. If you're four years old, that's how we deal with it. Now, I'll be gentle and kind, but at the end of the day, I'm in freak and charge. You're not. The inmates don't run the asylum. I'm bigger than you, I have more power than you, you're simply going to mind me for your own good. You're not going to play in the street.

Starting point is 01:08:49 You're not going to touch hot stoves. You're not jumping off of waterfalls. You're four. You're not driving cars. You're four. We're not having a negotiation with a four-year-old. However, if you want to be an adult and sit here and talk about this, I will talk to you like an adult instead of a four-year-old. If that's the case, then I would do exactly what Ken's saying.

Starting point is 01:09:11 Here's the data. Since the internet opened, when I started this show, people used to call me with addictions all the time. When we started doing financial coaching in 1992, we've been dealing with addicts ever since. 100% of addicts have money problems. There's no exceptions. That's the nature of being an addict. When I started, addiction was alcohol and drugs. the number one addiction in America today being treated as pornography online has exploded it

Starting point is 01:09:49 it's huge porn online makes more money than all professional sports put together in America today it's vastly profitable and it's everywhere it's ubiquitous keeping a 14 year old away from porn if they have a phone is impossible if they have connection to the internet and it is the fastest growing addiction it's destroying the sexual function of young men for an entire generation the second and we see them in our office every day here where they've lost everything they've lost their families they've lost their homes they've lost their jobs they've lost their careers because they're addicted, just like when they were doing cocaine. Same thing. And son, this is the truth. And son, here's the other truth. The second fastest growing addiction in America is online gambling.

Starting point is 01:10:44 Do you think draft kings can afford all of those ads because everyone that bets on draft kings won? No, they can afford all those ads because everyone that bets on draft kings loses. That's why. The bookie always wins. The house always wins. Period. It's a statistical fact. It's how gambling works. And if you're so stupid that you don't understand that, then you can understand this. Gambling is a tax on people who can't do math. Walk into the lobby of the Bellagio, walk into the lobby of the MGM Grand, and you will see some of the greatest architecture. You'll see light fixtures that cost millions of dollars. And it's all built on house money. You people gave them the money to build it. it. That's how it works. It's a mathematical fact. So, son, if you're 14, I'm going to explain these facts to you. And so I don't want you to be involved in it. By the way, honey, I'm not involved in online porn and I'm not involved in online gambling. I sadly spoke with a 32-year-old

Starting point is 01:11:51 the other day that's run up $600,000 in sports betting. He makes $180,000 a year. He's going to lose his marriage and his two little babies and his beautiful. wife are going to leave and there's nothing he can do about it because he can't stop himself he's addicted so why would i let someone that i love be engaged in that sweetheart i love you there's no chance i'm going to let you be engaged in things that will destroy your life by the way you're not doing cocaine either even if everyone's doing it by the way you're not doing crack either even if everyone's doing it by the way you're not going to drive 110 miles an hour and act like your speed racer or something out here because everyone's doing it. You're going to do things in this house because I love

Starting point is 01:12:40 you that benefit you. This does not benefit you. And so you're not doing it. Now, if I can convince you and persuade you as an adult, I will persuade you as an adult like I just did. Yeah. Here's some data. Here we go. UC San Diego, new study, 96% of over 700,000 online gamblers. That's a big sample size. 96% lost their money. That's all of them. I mean, nobody wins. You want to play the 4% game? It just doesn't add up.

Starting point is 01:13:13 What that makes you is an idiot. 96%. Yeah, if you want to be an idiot, if you want to join the 96% of losers, that's how I talk to a teenage kid. I get entertainment from it. That's the glassy. Yeah, whatever. You work all week and you get entertainment from losers. the money that you worked all week for.

Starting point is 01:13:34 At those rates, you might as well buy a donkey and go trying to mine for gold. Get yourself a pan. So the deal is I'm going to try to convince you. You're not doing it, but I'm going to try to convince you and persuade you if you're willing to talk this through with an adult with me and you're going to understand why you're not doing it.

Starting point is 01:13:51 If you don't want to do that and you want to just throw a fit and be a four-year-old, I'll just simply tell you you're not doing it. We don't negotiate with idiots. Not when they live in my house. Thank you. Thank you. Coordinating Peace University class is a great way to stay motivated on your own baby steps journey while

Starting point is 01:14:39 you get to encourage other people as well. That's pretty fun. And when you lead a class, you get access to the Financial Peace University lessons, the premium version of every dollar, plus additional content and perks for free for an entire year, just for leading a class. We're going to give it all to you. Plus, you also get support from a community of other coordinators, our team of experts, and tons of free resources to help you lead the class. So far this year, we've seen over $75 million in debt paid off and money saved in the financial peace university classes. If you've got a passion for serving others, this is a great way to help others. Experience the life change you've seen yourself.

Starting point is 01:15:17 Go to ramsysolutions.com slash FPU and get your first class set up or click the link in the description at ramsysolutions.com slash FPU. We'll help you get going. Will is with us in Ohio. Hi, Will. How are you? Hey, Dave. Thanks for taking my call. Sure. What's up?

Starting point is 01:15:34 So until about a year ago, we were living in a single wide trailer to save money, pay off debt, and we paid off about 60 grand in debt. We bought some land to hopefully build a house on in the future, but then we found black mold in our trailer and had to move out. So now we're renting. And between the rent and the land payment, that's destroying our savings, and we're kind of struggling here. So I'm wondering, should we sell this land that we plan on for the future and want, and keep renting to pay other debts off, or, you know, we've got some family that's offered us land to build on for free, but houses are so bad on expensive now. I'm not sure what to do. Okay.

Starting point is 01:16:21 What's your household income, sir? About 120 grand. How long you've been married? Ten years. Okay. All right. What's the land worth? It's worth about double what we owe.

Starting point is 01:16:34 it right now. It's worth about $120. And you owe 60? Yes, sir. Okay. All right. What would happen if you sold the land and took the $60,000 in cash that would be in your pocket and used that as a down payment on a house? That'd be a heck of a down payment, yeah. It's real good for commutes.

Starting point is 01:16:55 We like the land. I think it's an emotional connection to it, you know. But there are some other houses in the area we can look at. Yeah. I mean, you just buy. house and then you know later on do a land deal right after you get if you get some things going get the house going up in value start getting it paid off you make good money but you're kind of trapped right now you can't really afford to build on it right and you says destroying your savings with

Starting point is 01:17:21 the payment and the rent and so putting those two together and a down payment off the land and that buys a house that makes a lot more sense as a as a first step it's not necessarily a permanent decision you know it's always funny when you're buying a house it feels more permanent than it is yeah that's why people say stuff like i bought my forever home which is a load of crap because it's never your forever home there's only one forever home that's heaven and other than that you're going to move so this idea i'm never moving again is that's just not true okay unless you're 85 you're probably moving again so um you know and you may even be moving again there to the nursing home but anyway uh so something's going on anyway you're moving again so anyway it's not a permanent deal

Starting point is 01:18:03 buy your house sit there five six years save up some more money take the equity you make on that property with the equity you put into it buy and start talking about building a house and buying a piece of land at some point but um you know it's called a starter house right yeah what's your total debt uh we've got about a hundred k in debt uh 20 on a student loan 20 in a car and 60 on the land okay okay Okay. All right. So you got that $40 in debt. Good call, Ken. I drove past that. I went straight to the real estate deal. Yeah, I need you to clear that stuff, too, and that makes this discussion harder. What's the car situation, $20,000 debt on the car? Is it worth more than you owe? No, it's probably worth right about that. It's fairly new.

Starting point is 01:18:56 What's the car payment on it? $400 a month. okay um yeah it again the way we answer questions here is what would i do if i woke up in your shoes i'd sell the car and the land and i'd take five i'd take five grand go buy me a car to get back and forth to work and i start talking about buying a house and get these student loans paid off and um you know now we only got 40k to put down not 60 but anyway um but we're still doing a starter house deal we're going to do a 15 year fixed where the payments no more than a fourth year take-home pay and you don't have a payment in the world then dude and not a

Starting point is 01:19:35 student loan payment not a car payment not a house payment not anything and uh at this point i mean not land payment not anything and and you're going to put 40k down and um yeah i'm going to go buy a house that's what i'm doing uh in that situation and then i'm gonna the emotional tie of the land i get i've got a uh a piece of ground over here not far from where i'm sitting right now that's um I go over there and shoot guns, ride four-wheelers and everything with the grandkids, all that stuff, and I love that piece of dirt. I have an emotional connection to it. I understand what you're talking about. I don't want to sell it.

Starting point is 01:20:11 But, you know, what's the best thing for my family long term? You know, that's a lot of money to shoot guns. So you've got to think about what you're doing and what is more important than something else. In my case, I'm not saying that's what you're doing with it, obviously. But, okay. Chris is with us in Cincinnati. Hey, Chris. How are you? I'm fine. How are you?

Starting point is 01:20:34 Better than I deserve. What's up? I have a question. I have got about $45,000 to $50,000 in various debts. I think about $15,000 in credit card debts and about $22,000 or so in student loans and then a couple of other things. and I have been contacted by this debt consolidation or debt reduction company and run away, run away, quickly. What's your household income? About 25,000 a year.

Starting point is 01:21:17 25,000 a year? Yeah. How many hours a week are you working? Oh, you're on Social Security. How old are you? Yeah, 75. How have you got a student loaned at? Well, I was, I went to this community college.

Starting point is 01:21:45 I started about 10 or 12 years ago, and then at one point I just, I was a little short of money, so I signed up for some student. loans for a total of about $20,000. And then... What did you used to do for a living before you retired? Computer programming. I mean, I'm not... Actually, I'm looking for a job doing that.

Starting point is 01:22:07 Yeah. Again. I think that would be helpful. Yeah. Yeah. Because I enjoy doing it, and it pays good. Yeah. No, and here's the thing.

Starting point is 01:22:16 The debt consolidation doesn't work because it doesn't change anything except the interest rates. Your student loan interest rate is so small, it doesn't matter. Your credit card debt's so small. you're going to pay it off fast anyway once you get this new job. And so that's why I'm saying run away because they're making you a promise that if you just take this pill, everything will be okay. No, you don't need to take the pill.

Starting point is 01:22:36 You need to just make everything okay. So the way we work that is we list your debts, smallest to largest. We pay minimum payments on everything but the little one. And let's do something to get some income coming into this house and approaching it that way. But credit cards of student loans as you approach your 70s are. Yeah, those got to be cleared up because it's taking all the fun out of your life, I bet. That's just no fun at all. Dave, you and I were talking about this during a commercial break several shows ago.

Starting point is 01:23:05 We were on together and we were seeing what the call was coming up next. And I said to you, I said, I'll bet you this lady, because she was in her 70s, got a student loan when she was in her early 50s. And it came true. Now I've taken this call a lot and I've seen it a lot where, you know, people would call me on the old Ken Cole show and they'd say, hey, I tried to transition at 50 or whatever. And I just want to say this. We're anti, you know, this idea of just going for a student loan just to get a degree without any kind of focus as to why we're getting it. But, Dave, I want to say, if you're in your 50s, there is no scenario by which you should ever take a student loan.

Starting point is 01:23:44 I'm going to go that hard core on that. Let me go a harder core. If you're breathing, there is no scenario which you should take out a student loan. Yeah, I agree. Yeah, yeah, yeah. Just what is happening? We're seeing this happen a lot where people think they're going to change their life midstream. Yeah.

Starting point is 01:23:59 With a student loan. Or downstream, either one. That's possible, too. I like what you did there. I see what you did there. I see what you did there. We've all done dumb things with money. I've done them with zeros on the end.

Starting point is 01:24:28 One of the biggest mistakes I see people make with money is not having a plan for it. You've got to have a plan. You've got to be intentional and you need to get a budget. You have to tell your money where to go, so you're not wondering where it went. Our budgeting app, every dollar, helps you do just that. It's the easiest and fastest way to make a monthly plan for every dollar you've got coming in and going out. Now's the best time to get started before the ridiculous holiday spending. season gets here and sucks you in because you didn't have a plan. Don't let that happen. You're

Starting point is 01:24:58 done making that mistake. Go download every dollar for free in the app store or Google Play today. help people, build wealth, do work that they love, and create actual amazing relationships. Kid Coleman Ramsey Personality, number one bestselling author, and host of the Ramsey Network's hit front row seat. He's my co-host today. Be sure and check that show out. The phone number here is 825-5-225. Sarah's in San Francisco. Hi, Sarah. How are you? Good. How are you? Better than I deserve. What's up? So I have kind of a unique dual job situation. I'm a property manager and a teacher. So basically what that means is I live out of property and I get to live here for free in exchange for doing housework. You name it. I've probably done it. Dog care,

Starting point is 01:26:11 pet care, laundry. I mean, I designed a golf cart one time. It's really random. So I don't have to pay rent, which is incredible. I've been doing this for about four years for really, really affluent people, but the household that I'm currently with, there's a lot of secrets that I unfortunately have to, like, carry with me of really terrible things that are happening. And I just don't know how to weigh, like, should I leave and start paying rent somewhere, or should I stay and just kind of like push down the gross feelings and continue saving money? Wow. Life is too short to be feeling gross because of somebody else's behavior. yeah so yeah you've got to leave now the question is how do we leave smart

Starting point is 01:27:01 so what are you going to do with your life now now that you don't work any there anymore what are you going to do i mean i just i feel like i could save so much money for a down payment on a house if i if i stayed since i'm fully no no no we've already established you're leaving okay because they're are they doing illegal stuff no they're just like cheating on each other and like stealing alcohol from me it's just really like bad stealing alcohol from you yeah i and then they blamed me for it about a year ago it's just blamed you for stealing your alcohol they so they drink a lot they're trust fund kids all they do is just like drink and party all the time and about a year ago they thought i was stealing alcohol until i found out one of them

Starting point is 01:27:49 was an alcoholic oh okay sarah if you're representing your position in a court of law and dave and judges, you're not doing a really good job. You keep giving it as multiple reasons as to why you should be running from these spoiled brats. Listen, the amount of money you're saving is not worth the toll it's taking on your life. True or false? This is probably true. Well, then there you go. How old are you?

Starting point is 01:28:12 I'm 23. Okay. Now, what are you going to do with your life, 23-year-old? I mean, I can move really anywhere I want. I'm a teacher, so I can move wherever. Do you want to stay as a teacher? That's what we're trying to figure out. She's a caretaker.

Starting point is 01:28:25 No, she's a teacher and a property manager. Oh, you teach outside the home or outside the home? Outside the home, just like a public school teacher. So you have a teaching certificate? Yeah. A four-year degree? Yes. And you're still currently teaching, if I understood you correctly, right?

Starting point is 01:28:42 Yes. You have any money at all? The only debt I have is my car loan. I said money. I said money. You have money? Yeah, like six grand in my savings. And like, yeah.

Starting point is 01:28:54 All right. Leave. Load up the car. Load up the car and move. What city do you want to be a teacher in? Because you're leaving. And it's not San Francisco. I'll help you. It's not San Francisco. What city do you want?

Starting point is 01:29:10 Where did you grow up? I grew up in Oregon, which I'm sorry. I would never go back there. Okay, that's fine. We've established one state you're not going to. Two states. Yeah, we got 48 to go. The state of San Francisco and the state of Oregon.

Starting point is 01:29:20 You are not going to those two states. Okay. Now, where else are we going? going. Because you're 23, have wheels, have $6,000. We're going to move and get a one-bedroom apartment and be a teacher. Tadda. Just like that? Just like that. You're like a free person and everything, and this is America, not Russia. It's awesome. Where do you want to live, kid? Where's your next adventure? Even though it saves me a bunch of money. Where's your next adventure? Where's your next adventure you're leaving or go do this again somewhere else but not for alcoholics

Starting point is 01:30:00 go to the state where you want to be you're going to end up getting sued or put in jail for something one of them do yeah you know evil is in the house you can smell it it's in the air get out of their girlfriend now now where are you going what city i want to know what's your next adventure that makes you smile where have you always wanted to live Gosh, Florida's pretty great. Hello, load up the truck and head to Beverly, kid. Yeah, no income tax, state income tax there. That's great.

Starting point is 01:30:32 Florida's good to their teachers, too. Yeah. And you can property manage for sane people in Florida if you want to save up money for a house. You keep coming back to how much money you're saving as if you can't reproduce this somewhere else in a much better situation. You've become a prisoner to this situation because you're only looking at how much money you're money you're saving is that if you can't do it anywhere else that's true i know that's why i said it okay so here's the deal okay i want you out of there before labor day you have 27 days ready set go this is your this is your old uncle dave old ugly uncle dave who loves you telling you

Starting point is 01:31:22 ready set go set yourself free you are free leave let these fine people know that by the end of the month we're going to load up the stuff and go and if they want you to go sooner oh good oh good get in the car put your crap in the car you can put all your crap in one car can't you yeah basically load up the car and drive to florida what city in florida do you want to live in I like NASCAR. Daytona's pretty cool. All right. Daytona is a neat little town.

Starting point is 01:31:57 And affordable, by the way. It's a neat, neat little town. Yeah. Head on over there, kiddo. Not that far from Boca, and there's some rich crazies there, too. That's a good point. Who's your favorite NASCAR driver all time? Oh, fuck.

Starting point is 01:32:12 I've been watching a lot of documentaries lately, but I just got to go with probably Kyle Bush. Okay, so I want you to channel your inner Kyle Bush. That's where I was going. And drive from San Francisco. Yeah. Under the speed limit. We're not trying to get you to break the speed limit. He's aggressive.

Starting point is 01:32:26 I want you to go all the way to Daytona. Yeah. And when the sun's coming up, by the way, at Daytona, you can still drive on the beach. I want you to drive out on the beach and sit there and smile and go, I am 23, have money in my pocket. I can be and do anything I want in the greatest land the world has ever known. I don't have to put up with a couple of cheating, drunk trust fund morons, and I'm gone. How's that feel? It feels good.

Starting point is 01:32:55 It's scary, but it's scary, but it's an awesome scary. It's like bungee jumping. Go! We're pushing you off the bridge. I don't know if you felt it or not. This was our answer 20 seconds in. We were into this answer 20 seconds into the call. Now you're ready to do it.

Starting point is 01:33:13 Go do it. We love you and we want you to have a great life. You're not going to have a great life staying where you are. As a matter of fact, your life's going to go downhill pretty quick if you stay there. you know in your deepest inside, God's spirit inside of you is telling you to get away from the evil. He's telling you, listen to him. And then we told you, too, listen to us. Then there's a fact that two trust fund babies are stealing your alcohol and blaming you for it.

Starting point is 01:33:42 What? How bass backwards is that? It's way too easy to put off making a will. And believe me, I've heard every excuse in the book. But not having the time is one excuse we can kick to the curb right now. Because these days, most folks can make a legally binding. will on their laptop between loads of laundry. If you're wondering if you can make your will online or if you need a lawyer, we have a

Starting point is 01:34:30 quiz to help you figure that out in less than five minutes. Just go to ramsysolutions.com slash will's quiz. Ramsey Solutions.com slash will's quiz. buying or selling a home is a big deal and there's a lot of opinions out there about the real estate world if you don't believe me just open up your social media there's a lot of opinions and opinions are like armpits everybody's got them and most of them stink they really don't know what they're doing everybody's got an idea some everybody's got a course on tick talk everybody's got something you can get into listen here when you got all this drama one thing you know about drama

Starting point is 01:35:22 Here's how you beat drama. Facts. Facts are your friends. If you want to know the facts about real estate, you can simply go to our website. We've got all the market trends on there. You can tell exactly what's going on. And then you can make your decision. Our house price is going up. The answer is facts. Yes. Not quickly. Not a lot. But they are going up. They've gone up every single month this year. that's a fact interest rates are low the average 15 year fixed rate is 15 is 5.95 right now in any stretch of history six percent or less has been considered a low interest rate it's just tough for it to be a low interest rate when you're coming off of two and three and some of you still have a recent memory of that so it makes it feel like it's high it ain't high high high is 14 high is 10, 12. This is not high. So you can start to figure this out and look at actual trends.

Starting point is 01:36:29 Go to Ramsey Solutions.com slash market or click the link in the show notes and we'll get you helped out. Colin is with us in Missouri. Hey, Colin, what's up? Well, so my grandmother that I haven't really talked to in years, it's been a strange from my father and I've recently been strange from him and all that. uh just recently offered the other day to pay off my credit card debt uh never told her how much just told her i was going through your steps to get out of debt and uh she said oh well i'll help you so you don't got to pay interest i'll pay off your credit card sorting to pay me back and i'm over here like i don't feel comfortable taking money from her i would take it if it was a

Starting point is 01:37:12 gift but it's not a gift it's a loan yeah it's alone no no no thank you i'll pass yeah So estranged and estranged and estranged. There's a lot of estranged going on in your family. The last thing you need to be doing is owing one of them money. Yeah, that's kind of how I felt not only just for the fact that I'm not sure how how she's going to be on making me pay back this debt to her, but just I don't personally feel comfortable taking money for family. Well, I mean, if she has $2 million and wants to give you $25,000 to pay off your credit,

Starting point is 01:37:49 card debt as a gift we'll talk about it that's fine that's one thing no strings attached but you're this is not that this is you loaning money no we do not loan money to family we do not borrow money from family you will change the quality of the relationship and you guys have trouble with quality of relationship in your family anyway yeah don't add to the character i mean you've actually reestablished a relationship with this lady that you have hardly ever known and and don't ruin that. Yeah. Do you still have doubts about this?

Starting point is 01:38:27 I mean, I never really considered for more than like three seconds for Okay. Well, then your voice sounds like you're like, yeah, well, maybe. That's what I'm picking up on. Are you afraid to tell her no thanks? Kind of.

Starting point is 01:38:43 I knew it. I knew it. Yeah, but here's a deal. Yeah, when my parents were going through I'm sorry to cut you off. Let me help you with this, okay? You just seem to say grandmother or whatever you call her. I really appreciate that, but I need to take care of this myself. I got into this mess. I need to get myself out of this mess. Dave and his team are going to help me get out of this mess. And I'm reestablishing this relationship with you, and I just don't think it's a good idea for me to be in debt to you when I'm already in

Starting point is 01:39:14 debt over here. So I appreciate the offer, but I just want to build my relationship. with you and just move on. And I think it's going to be okay. All right. And by the way, let me say this. And I want Dave to weigh in here. She may not like that, but I doubt it. I think she's making this gesture because I think she wants some reparation. She wants to repair. And I think she's trying to make a good gesture here. And I think she'll be okay with that. Dave, do you see a problem with that approach? No, it's the only way I would do it. I think you're just going kindness and say, it's me it's not you it's me yeah yeah i can tell yeah i need to pay off my debt because of a way i feel and the guy i look at in the mirror granny but thank you granny you're very sweet i appreciate

Starting point is 01:39:58 the offer it's very kind of you it's kind of hard to pass up but i'm going to yeah because i need to do this for me what ken said and just blame it on you and that's the truth by the way too yeah but the last thing you need is weirdness between family that already has its old boatloads of weirdness. Estranged and estranged and estranged and then not estranged and then a strange. There's a lot of strange. And so, yeah, just stay away from it. And that's a, you know, don't, don't muddle this up.

Starting point is 01:40:26 So, yeah. And I think she'll receive that well. Maybe. And if she doesn't, then that's another signal. That's right. That's another signal that you shouldn't have done it. The last thing you want to do is be, you know, owing money to people that get weird when you start talking about money.

Starting point is 01:40:41 So it's a bad idea. Megan's in Vermont. Hey, Megan, what's up? Hi, thank you so much. So my husband and I are on Baby Step 2. We started off at $200,000 in debt. We're at $172,000 in debt as of now. I need some help with my car situation.

Starting point is 01:41:01 So I'm a road warrior. I do 60,000 miles a year. And my car is unfortunately out of service. It's not fixable at this point, so I'm borrowing my mother-in-law's extra car for the time being. But I'm wondering with the amount of mileage that I do and how much I'm on the road, what is the best way for me to go about purchasing a new vehicle that's going to be reliable? You guys don't have any money. No, we're throwing everything in our debt.

Starting point is 01:41:34 And you're down to $1,000. You're doing it the way we teach. Yes. What's your household income? it's 250,000 excellent okay all right that's good news

Starting point is 01:41:46 what do you do I am a home repair building okay excellent okay cool all right how long can you use this borrowed car

Starting point is 01:42:00 a month two months I'm probably six weeks I'm on week two right now okay another month then okay Yes. Well, I'm going to tell you what to do, and then I'm going to tell you what to do long-term, okay,

Starting point is 01:42:16 and how to think about this is here's the thing, okay? So the first thing I would do is answer your question. Let's let the pressure off. I would stop your debt snowball and save up $10,000 in one month and pay cash for a $10,000 car. Okay. All right. And what you're looking for is a car that is ugly. and low miles and has a lot of life left in it.

Starting point is 01:42:44 An old Camry, an old Honda, a cord, maybe an old Chevy of some kind. But that's what you're looking for, something that's got a lot of life left in it, but it's not pretty. Because no one buys home repairs from you based on your car. That's true. Okay. Now, then let's talk about a principle for road warriors, for everyone listening, including you. whatever you let's pretend you've got unlimited money and you're out of debt we're a couple of months or years down the road from this discussion i think it's fair to say that when you put

Starting point is 01:43:19 60 000 miles a year on a car whatever you are driving you are destroying its value agreed absolutely miles destroys a car's value that's a fact that's a statistical fact okay so a two-year-old car with 120 000 miles on it piece of crap All right? A four-year-old car with 240,000 miles on it has got no value. You've wrung all the value out of it. So the question is how, and when you destroy the value of a car, you're destroying the value of what you paid for. And so from a business perspective, what you want to drive is the least expensive car that will get the job done. Now let's define get the job done. It's got to get there, number one. Number two, it's got to get there with reliability. And number three, It's got to get there with a reasonable level of comfort. So you're not driving a freaking Dodge neon. You'll be in the chiropractor's office. Okay?

Starting point is 01:44:16 So what is the cheapest car that's reliable and reasonably comfortable because I'm in it all the time? And that's a 12 to a $15,000 car. And I don't care what you're making or how rich you are. That's all you ought to be driving. Because if you buy a $50,000 car, $100,000 escalate, you're going to destroy $100,000 in three years. Does having more money and less stress sound nice, but feel impossible?

Starting point is 01:44:52 Well, in my brand new book, Breaking Free from Broke, I share my story of going from broke to millionaire in exactly how I did it. You'll learn about the money traps and cultural lies out there designed to keep you brainwashed and stressed out, from credit card schemes to mortgage myths to investing traps. So if you're not where you want to be financial, I can help you finally get ahead. You can get breaking free from broke today at ramsysolutions.com slash store. That's ramsysolutions.com slash store.

Starting point is 01:45:36 In the lobby of Ramsey Solutions Solutions, The debt-free stage, Lee and Liz are with us. Hey, guys, how are you? Doing great, Dave. How are you? Better than I deserve. Where do you live? Tampa, Florida. Oh, fine. Welcome to Nashville. And how much debt have you, too, paid off? $260,781. $51.00. Love it. How long did that take? Just about six years to the day. Cool. And your range of income during that time? We started at $181,000. Our best year was $21,000. And then I became a stay-at-home mom when our son was born. And we ended up at about 133,000. Cool. Very cool.

Starting point is 01:46:12 Good for y'all. What do y'all do for a living? Lee is a police officer, and I was a certified nurse midwife, and now I'm a stay-at-home mom. I love it. Very cool. Good, good, good, good. So six years, 261. Did you pay off your house?

Starting point is 01:46:25 We did. I love it. Looking at weird people. Very cool, y'all. So what's the house worth? The house is worth $512,000. Very cool. And how much is in your nest egg, your 401 cases stuff?

Starting point is 01:46:38 About $570. Hi, millionaires. Woo-hoo. Baby Steps Millionaires. I'm proud of you. How old are you two? 36. 36-year-old millionaires in Tampa, Florida with a paid-for house, ladies and gentlemen. Let me introduce you to Lee and Liz. Way to go, man. Thank you.

Starting point is 01:46:54 That's so fun. So fun. Excellent. So did somebody give you like $300,000? No. No. No. You just went and got money and lived on a lesson you make and all that. So six years ago, tell me the story. How did you get introduced to this? Ramsey stuff? Well, we had been married and in our house for about a year and a half, and we were making a lot of money, we were making extra mortgage payments, we were investing, doing a lot of different things all at once, but didn't have any shared goal or vision.

Starting point is 01:47:24 And then Lee found the podcast and listened to the audio book of the Total Money Makeover one night during one of his night shifts and came home and shared it with me. And I was really concerned that I wanted to be a stay-at-home mom. but I wasn't sure if we would be able to do it with the mortgage payment. So we got on board. We were doing some dumb stuff like chasing credit card points and paying it off every payday. So we quit doing that, got on a written budget, and started attacking the mortgage. And the bulk of it was paid off in the first three years.

Starting point is 01:47:58 And then when I stayed home and left my six-figure job, it slowed down. But even still, we surpassed our goal by about 13 months. Wow, good for you. Well done. So your big motivator, your why was for you to be home. That was our plan all along. That's why we scratched Claude and did all the things we did, right? Yes, sir. Overnights, night shifts, overtime, extra duty, whenever we could pick up at the time. We just did it. There were some days where somebody was always asleep and we would cook. Or we were both at work. Or we both at work. We would high five and then, you know, one of us would leave and the other one would leave shortly their afternoon. after so we just worked all so we'd be home that's a good that's a good why yes sir it's a good

Starting point is 01:48:44 reason you got to have something that is bigger than the pain it makes you go do it because you sacrifice deep it's hard to believe that as a police officer for 13 years 10 of that was on night shift or swing shift so here we are and now you don't have to do that no sir you're a millionaire yes so you get to work the shift you want to work yes sir and you've been there long enough if you probably do get to choose now. That's correct. Yeah, I love it. Very good.

Starting point is 01:49:12 Very good. And you've got the shift you want, which is mommy shift. 24-7. There you go, babe. I love it. That's good. Very good. So I think a lot of people listening and watching go, how in the world did you walk away from a six-figure job and still finish?

Starting point is 01:49:28 I want you to answer this. I think some people are going, how'd you do it? So how'd you still finish ahead of schedule when you lost that big income? The grace of God, I think. any time we were worried, it was like the budget just made sense by the end of the month. And I had paid off some of my nursing school loans before we got married and then went to grad school debt-free. So if you're a nurse out there thinking you want to become a nurse practitioner, you can

Starting point is 01:49:55 absolutely do it without going into debt. And that helped a lot knowing that anything that I earned was going towards the mortgage. Yeah, there will be some months where we have a goal to pay down the mortgage and then we would surpass that. We would say, okay, let's do X and we would do double that because of just either the paychecks would come in or just all the work. Like I forgot how much we worked and then the paycheck will show up two weeks later on a Friday and you would go, well, I guess we're doing more. By the way, signs you know you're working really hard is you forgot how much you made. that's a great sign you're like wow I actually worked a lot last month and when we first got started we were like man every dollar's not for us we have an irregular income we get paid every

Starting point is 01:50:43 two weeks it's not lining up on the monthly budget so if you're out there and struggling with the same thing just just stick with it give it a couple months keep practicing keep plugging away and chunk up those big balances because when you're doing a big mortgage or a consolidated loan or something like that. Every year we would look at our plan and say by the end of the year, we want X number on that balance sheet on New Year's Eve. And some years we made it. One year I totaled our car, so we had to cash flow it, and we didn't make it that month.

Starting point is 01:51:16 One year we made it by July. Yeah. That's fun. So how does it feel? Paid four house or millionaires, you're 36 years old. It's pretty cool. It's surreal still. Was it worth it?

Starting point is 01:51:32 Absolutely. Because you guys went crazy for a while. Yeah. That's awesome. Yeah. Because people always ask us, you know, I don't know, man. I think I want to live my life. Well, you could do anything you want for the rest of your life now.

Starting point is 01:51:45 And we also did live life too. I mean, being on baby steps four, five, and six and doing those simultaneously and following the program, we were still able to cash flow home repairs, go on vacation, and do the things you talk about when you're on those baby steps. and so we did it and just stuck to the plan. Pretty cool. Was that the breakers in the picture? The Donsas are. Oh, okay, okay.

Starting point is 01:52:10 I thought I couldn't tell. Just got a quick look on it when it flashed in front of my peripheral vision there. But wow, good for you. Nice vacation. Good, good, good for you. Wow. What do you tell people the key to being a millionaire by the time you're 36 is? Being consistent, being content, and working hard to get.

Starting point is 01:52:30 even if you're not seeing a lot of each other also the tracking your net worth was big for us because yes you can see some of the debt going away on the house but then you would also we would also see our net worth rise and so and having a goal we would like to have x by the end of the year and once again sometimes because you're simultaneously paying off the house and putting money into your 401k yes sir yeah because you're doing babysat four or five six yeah which is what you're supposed to do. And so tracking the net worth is a, it doubles the equation. And it, and it helps me because I'm the natural spender. So it helps me to kind of see the end. It was hard in the beginning for me to see $260,000. I was like, well, I'll just work hard at the end. She told me, no, you should work

Starting point is 01:53:15 hard now because it will, in the end, it will literally fall off a cliff. Yeah. And that's what it did. Yeah. Wow. I love it. You just learned to say yes, dear. That's a great example there. What did you guys learn about each other in your marriage as a result of this serious commitment? I think how much we are willing to sacrifice for each other and how much humility we can have and just choosing that over and over again. I'm proud of y'all. Thank you. And I know your parents are here bragging on you and cheering you on. I got to meet them earlier.

Starting point is 01:53:51 And you brought the kiddos with you. Bring them up. Let's introduce them with their ages and names. The reason for doing this, they need the team. T-shirts that say, I'm the why, I'm why they did this. Oh, my goodness. So names and ages. We have John Edwin, who's two and a half, and Maggie, who's 11 months. Ah. So they're too young to even know how big a hero their parents are. Your old man and old lady Vanderbilt. You got the whole thing started right here. That's awesome, man. I'm proud of y'all.

Starting point is 01:54:22 Thank you. Well done. Very well done. You changed everything. thing. Very cool. Very cool. Very cool. All right. Lee and Liz, 261,000 paid off in six years, including putting money in their 401k. They are now Baby Steps millionaires at 36. Count it down. Let's hear a debt-free scream. Three, two, one, we're debt-free. Yeah! Woo-hoo! Love it. Aren't they fun? Rock stars, man. Absolutely amazing. Our scripture of the day, Isaiah 3021, whether you turn to the right or to the left, your ears will hear a voice behind you saying, this is the way, walk in it.

Starting point is 01:55:53 J.P. Morgan said, the first step towards getting somewhere is to decide you're not going to stay where you are. Well, that would be true. There we go. Tyler is in Reno, Nevada. Hey, Tyler, what's up? Hi, Dave. So I'm just going to just kind of jump right into it. Recently lost my job back in the middle of July.

Starting point is 01:56:18 We used our emergency safety fund that we had. to make sure build a cover and such. My question is... You used your emergency fund for what? For, like, our other utility building such to catch up on. You were a little bit behind. And so my question is, my 401K for my previous job now, since I got fired, do I withdraw my 401K to cover the other...

Starting point is 01:56:53 debt that we have? No. Or should I not? No. If you withdraw money from a 401k before 50 and a half, you're going to be charged a 10% penalty plus your tax rate. And so you're going to be charged the equivalent of about 40% interest. So Dave, would I borrow money at 40% interest to pay off my debt? Of course, the answer would be no. So mathematically, that is suicide. So how's the new job Hunt going? It's going good. Right now, I currently serve for the Army National Guard, so my leadership was able to put me on orders to keep income coming for my family and I, which thinks of them that

Starting point is 01:57:36 it is helping a little bit. Other than that, the biggest thing that is wanting to, what was wanting to do the withdrawal is our car loan, which we still have. a pretty good amount of balance and I was sure whether it's the balance on your car about $7,000 left. That's not bad. Okay. So what does that, they put you on orders, what does that, how much

Starting point is 01:58:02 money does that amount to? Every two weeks, it's roughly $2,200. Okay. Does that preclude you from doing anything else? No, I mean, typically It's like a full-time job with the Army National Guard, which the orders is only like three months, for three months only. So at the end of September, it's my last month that they will help me. And then from there, I love to find a...

Starting point is 01:58:33 What Ken and I are trying to understand is they put you on $4,400 a month, which is very nice. That's awesome. But you're going in and working every day at the Guard? Yes. Okay. Okay. So you have a full-time job until the orders run out in three months. Okay.

Starting point is 01:58:50 Correct. So you're going to go get a job, right, for the end of September? Yes. Yes, I've actually applied for a few jobs. I'm just waiting to hear it back. There is one in particular that I'm hoping to get more than anything because it's right around the corner from where we live, and the pay rate is actually pretty decent that would help us keep a flow.

Starting point is 01:59:15 I just wasn't sure to make a drastic move now, or kind of hold off. What would be the drastic move? No, we've already established. No, we're not doing that. That's not a drastic move. That's a dumb move. Okay.

Starting point is 01:59:32 What were you doing where you were fired? What work? What happened? I was in a manufacturer warehouse and had a forklift incident, which bent a pole. And from there on, I got suspended from the job, because they do like the urination test and breathalyzer, just like the normal policy job normally dies.

Starting point is 02:00:02 And from there, I was suspended, waited for about a week and a half. And then when the time came, they called me, say, I was terminated from the incident and never really gave me a more depth. So there were drugs in your system? No, not at all. Okay, so you just ran a forklift into a pole, and they don't do that from a safety perspective. They fired you? Correct.

Starting point is 02:00:28 Okay. Cool. What were you making? I was making, I mean, total, because I worked a lot of overtime over there. I was at around 77,000 a year. Okay. And how long have you been driving a forklift? Five and a half years.

Starting point is 02:00:44 Okay. And one incident? Yes. What happened? Give us the short version. That's a little weird. Yeah, just one mistake. You weren't paying attention? What happened? It simply was just a mistake. I was just exiting out the roll-up door to have at the warehouse and checking my left and right as I normally do. And as soon as I started accelerate, I just turned a little bit while looking at the same time and right into a pole.

Starting point is 02:01:13 from there on suspended me and they ended up firing me. Well, the reason I'm digging into this is because, you know, you can get paid really nicely and you were making good money. I would get back into that field if I could. I don't know what this thing is around the corner. That would be ideal. But I would be looking at multiple options in that space where you had experience before. If you have the ability to operate heavy equipment, there is a tremendous shortage of heavy equipment operators.

Starting point is 02:01:41 And so, you know, I'd be looking in the bulldo. Those are Baco World as well as the Forklift World. There's a tremendous shortage. Mike Rowe, our friend from Dirty Jobs and I were talking about the other day, he said he's got one guy in Phoenix that would hire 22 people right now today, but he can't find them. Yep. That have experience and can, you know, run a piece of equipment, in other words.

Starting point is 02:02:05 That's the thing. So that's what I'm looking for there. And so, yeah, you just need to get the next thing lined up. As far as the 401K goes, Tyler, what you're going to do is get with a SmartVestor pro. Go to Ramsey Solutions.com, click SmartVestor and sit down with the one there in Reno, or one of the ones there in Reno, and they'll have the heart of a teacher, and they'll show you how to roll it over from your old job into an IRA.

Starting point is 02:02:31 There will be zero taxes. You pick a couple of three mutual funds, like we teach, four types of mutual funds, growth, growth, and income, aggressive growth, and international, and you roll it into that. You only have a $7,000 debt. Don't borrow money at 40% interest, which is the effect of taking money out of your 401k and getting a 10% penalty plus tax rate. So don't do it. Roll it over.

Starting point is 02:02:56 It's called a direct transfer rollover. Do not have the old company send you the check. Have it go straight to the investment. They do not withhold. If they send it to you, they're required to withhold 20%. Now you don't have 100% to roll over. It's a problem. So get with your SmartVestor Pro today.

Starting point is 02:03:17 Jump on that website. Today, Ramsey Solutions.com, get your SmartVestor. They'll help you do a direct transfer. Write that down, direct transfer, rollover. But do it before HR sends you a check from that other place because you don't want them sending you a check. You want the check sent by direction of the new IRA directly into the IRA. That's the direct part of this transfer. And the other thing I would challenge you with, Tyler, as you mentioned, you were working some overtime, a lot of hours at this previous job. So let's go. You've got the National Guard paying you. Every hour you can work. I would set a goal to try to pay this $7,000 off before you're done with your guard duty, this next mission. I think that's doable. And it's certainly, if it's not, you're going to get a long way there. But you can do this with extra work, selling stuff. No reason why you shouldn't be able to knock that $7,000 out.

Starting point is 02:04:07 Yeah, and we, you said, so I would assume your wife is working. If not, she could be as well. So there's no reason for us to have a shortage of money in this house. You're making enough with your guard duty and with whatever else you can do and then leaning into the next job and moving right ahead. There's no reason for you to be behind on utilities again. So it changes your life when you stay in control of these things. Very, very good question, sir.

Starting point is 02:04:34 Sorry you've been through that. Sounds like you're going to be okay. You might end up being a blessing. You might end up making more at the next gig. You may look back and give those people a great thank you for the bent pole in their warehouse. They could put a little sticker on it. It says Tyler was here.

Starting point is 02:04:51 That puts this hour of the Ramsey show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace. Christ Jesus. You know, uh,

Starting point is 02:05:09 me and uh, a man me and me

Starting point is 02:05:18 and I'm Thank you.

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