The Ramsey Show - Wealth Is a Slow Game, Don’t Rush the Process

Episode Date: June 17, 2024

💵 Start your free budget today. Download the EveryDollar app! Dave Ramsey & George Kamel answer your questions and discuss: "Should we combine finances in our unique situation?" "My girlfriend will lose her pension if we get married..." "My rent is more than my income, what can I do?" "When will the overbidding on houses end?" "Should I stay at my job until they close?" "Does it make sense to pay off my mortgage?" Support Our Sponsors: Zander Insurance BetterHelp Yrefy Health Trust Financial Next Steps 📞 Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET or click here! 📚 Teach Kids About Money!  🚢 The Live Like No One Else Cruise is booking fast!  Listen to more from Ramsey Network 🎙️ The Ramsey Show   🧠 The Dr. John Delony Show 🍸 Smart Money Happy Hour 💡 The Rachel Cruze Show 💸 The Ramsey Show Highlights 💰 George Kamel 💼 The Ken Coleman Show 📈 EntreLeadership Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. The call is free, and some say the advice is worth exactly what you pay for it. The phone number is 888-825-5225. Thanks for hanging out with us, America. Number one best-selling author, Ramsey personality, and YouTube extraordinaire star George Camel would be my co-host today as we take your questions about your life and your money. 888-825-5225. Lisa's in Colorado Springs to start this hour. Hi, Lisa.

How are you? I'm good. How are you doing? Better than I deserve. What's up? Good. I am in a marriage. I'm a year in. And it was a high-risk marriage. We're not doing so swell right now. But I don't have about a year and a half ago is when I first started investing in my 401k through my work.

I have about only $ 10,000 saved up. I'm concerned being 45 years old that, um, I guess I don't know where to go from here on how to make sure that I am going to be okay. Come that age, uh, that I, I am ready to retire, but, um, I know I have a long haul ahead of me, but my, my husband is not super interested in a 401k. He only has about $20,000 in an older 401k. We don't have our finances combined currently right now just due to, you know, it's been a very rough year. So we didn't combine right off the bat like we intended to. Okay.

And I'm very hesitant to do that okay let's stop a second okay so how y'all doing we're not doing well okay are you seeing someone to help you with this we are we've been in counseling for pretty much the whole year what what is a high risk marriage i don't know what that is i thought they all were well we've got i'm at risk of dying at all times i'm just saying no we we have um i have grown children he has very young children one with special needs um with down syndrome and um so that going into it you know we were advised that that you know the percentages of things not working out were already pretty high not in our favor um well that's a way to put a blessing over a marriage you guys you guys meet like a is there like a marriage statistician

that laid this out for you it was a premarital counselor okay well i guess i guess he or she was just just trying to warn you that these are extra stressors that some people don't have to face, but I don't know if I'm going to allow that to be a curse that's spoken over my life either. Right, right. And moving into the marriage, we thought, okay, you know, we know this is what we have to work on, but right now. So what's the trajectory right now? Are we going to work through this? Are we going to make it? Or are you giving up hope? I'm not giving up hope.

I mean, we did file a couple months ago. We took it off the table. That's not what we want. It would be my second, divorce's third. So it's definitely not something that we are you know taking lightly and we want to try everything before you know that's an option um so your question is whether to combine your stuff now in the middle of this storm right no i would not yes no i wouldn't okay that adds one more stressor

okay okay but as a as a rule of and i said in the middle of the storm the other thing is you can't live sustainably in a storm forever so the hurricane the tornado whatever metaphor we want to use on this is going to leave at some point and it needs to leave at some point because you're going to drive yourself nuts you don't want to live exactly like this for five years agreed agreed okay so something's going to give we're either going to get better we're going to get out okay at some point i'm not saying today but as soon as we reach the point that we're getting better then we need to say all right we're going to make the hard decision to go one more step and that's combine everything because we don't see the numbers tell us the data tells us we don't see people succeeding financially or relationally that keep all their stuff separate

it's just it's just a roommate then and you're not you haven't you haven't you haven't promised that that i'm never going anywhere and so i don't really give a crap about your 401k or his, whether he's putting money in 401k right now. What I care about is can you guys get knitted together in this relationship? And if you can get knitted together and now you are one and you start breathing in the same rhythm and now we're starting to look distant into the future and we can see us together in that future,

then we combine the stuff because it'll help you on the financial front and now we're starting to look distant into the future and we can see us together in that future, then we combine the stuff because it'll help you on the financial front and on the relational front. But right now, it's just going to add stress because you've got all this suspicion and worry and I don't know if we're going to make it. And, you know, I would keep it separate. But I'd also keep it, if you want to keep it separate, it's fine.

But also then keep it all on the table so everybody knows everything you don't have any hidden accounts he doesn't have any hidden accounts yeah and i believe he does and that's part of the problem too is not knowing what exactly he brings in um we have a super high mortgage i mean just there's a lot of things yeah it doesn't absolve you of communicating about money so i don't want you to conflate the two. You still have to talk about money openly. It sounds like that hasn't happened.

He's still unwilling to do that. Is the nature of the issues largely financial or is it just a piece of it? Oh, that's just the honesty, transparency, and loyalty are our issue really at hand. But the finances, you know, I don't want to combine he does so that causes just another element to this is hey we're not acting as a married couple because you won't join finances with me but i have quite a bit of hesitation to do that for different reasons and you know so it's just it it's just calm circle circle back with your next time the two of you in front of your counselor together circle back with that because here's the deal.

Honesty, transparency, loyalty are all essential to win in any relationship, certainly a marriage relationship. And until you have that, you can't combine because your hope of making it forward is very low unless one of you just wants to assume doormat position, which is really toxic and unhealthy, codependent crap. But, yeah, if you're going to go forward, you need to get those things cleared up. And, by the way, I'll just be the old guy that knows nothing about therapy

except having been through it because Sharon tried to kill me. I mean, I tried to. I mean, we almost, almost yeah it was bad and um a long time ago but yeah so but uh honesty transparency and loyalty have nothing to do with grown children or special needs children those don't cause honesty transparency communication and loyalty problems they expose them like money it doesn't't cause those things, but it exposes the problems. And so, you know, the high-risk marriage thing has to do with those things. And if you don't get those solved, I'll give you a high probability of, you know,

either going crazy or getting out. So, you know, that's where – and, you know, I don't know what the time frame is, but you don't need to go on ad infinitum, forever and ever with this. It's not a plan. Constant counseling for years. Yeah, like five years later, we're still having this exact same narrative, this exact same routine. No, thank you.

Life goes on. You move to the next thing. I don't want you to end your marriage. I want it to work out. But I'm with you you keep them separate until you have honesty transparency communication loyalty whatever those keywords where you drop that are pretty serious bomb words so yeah you got to get that cleared up uh because that's that's part of what combining the stuff forces you to do actually but i wouldn't

do it in this case until you get some... New foundation first. This is Ramsey Show. I've been doing this show for over 30 years, and some of the saddest calls I've taken are from situations that are completely preventable. Yeah, and what's so hard is I feel like one of those, especially the ones that I'm like, oh, it's terrible, are people that call in and their spouse has passed away suddenly, and they don't have life insurance. When you have to think through how am I going to pay my bills in the middle of all that grief, it's terrible. So life insurance is the one thing, especially as a mom with three little kids that I'm so big on for people to get because it's inexpensive. Zander is the place that Winston and I actually get all of our life insurance. And it doesn't cost much because Zander shops among a gazillion different companies.

It doesn't cost much. You just have to admit that someday you're not going to be here. You've got to say it out loud, and you've got to say, I'm going to say I love you to my family by taking care of them and taking the time to put this stuff in place. The cost of a stinking pizza. To get a free quote, call 800-356-4282. That's 800-356-4282.

Or go to Zander.com. Welcome back to the Ramsey Show. I'm Dave Ramsey, your host. We appreciate you joining us. George Campbell, Ramsey personality, is my co-host today. Phil is with us in Detroit, Michigan. Hey, Phil, welcome to the Ramsey Show. Thank you for having me, gentlemen. Sure. What's up? So I started a business about two years ago and it's doing quite well. And I'm just trying to decide what I should do with the wealth that I'm amassing, especially because I plan on living a fairly humble life over the next 10 years and just kind of seeing what I can do with that. Good for you. That sounds cool. So what kind of money are you making? This past year, the second year in business, I took home about $190,000. This year I'm projected doing about $250,000, but it's just kind of climbing more and more,

so it very well could be higher than that. Good for you. Well done, sir. And obviously the most money you ever made in your life. By far. I started working four years ago. I graduated. I'm a physician.

Oh, good. Oh, yeah. You're rocking it. Well, good. Oh, yeah, you're rocking it. Well, good. Well, all those dreams are coming true on the financial side anyway. Yes, sir. Very good. So what's your question? So I'm trying to decide what I should do with the money that I'm amassing.

And I'm time between I already have my loans paid off, all of that. I'm trying to decide, and I see it in three categories, paying off my home that's not a forever home, going more into retirement, and then really the biggest option that I'm trying to weigh out is buying a commercial building. Okay. Well, all three are good things. The only question is the order, right? Yes, sir.

And what would we do? We would follow the baby steps, right? Yeah. So are you investing currently? Yes, sir. I'm maxing out a Roth IRA as much as possible, and all the money I'm amassing is going into an individual brokerage account that I'm making about 10% on right now.

Okay, so let's say you're investing 15%. That's baby step four. Are you doing anything other than just your Roths? I'm setting up a simple IRA through the business that I'll be matching out and maxing out as much as possible for myself and my wife, who also is an employee of the business. Okay. That's good. So we want to get you to 15% of your income going into retirement, not brokerage. Okay. Okay. That's step one. That's the first thing you do. Because you said three things,

retirement, pay off the condo, and buy a building building right i i don't even know if it's worth paying off the condo since it's not a forever home it doesn't matter honey there's not a forever home except heaven you're gonna move yes sir it's just when you move when you move they're gonna give you a check yeah so it doesn't matter yeah so uh how big the condo, and when are you going to sell it? It's a little 1,600 square foot. I have thrown around the idea of keeping it and just renting it out as a rental afterwards, but like I've heard many times on your show, that's not a truly passive income, so I don't even know if that's worth the headache of it.

Well, you told us your goal was to own commercial space, not to be a landlord. So I'd want you aiming at that goal. And if that means, you know, we're going to have a paid-for condo and the rest of the money we're going to get in a commercial space, and when we can upgrade to a home, we do that. What do you owe in your condo? About $160,000. I put a down payment on it starting last year.

Okay. Okay. First and foremost, you are an above-average doctor. Most doctors suck at money. And you have avoided doc-itis, which is graduating from school, buying a house you can't afford and two BMWs that you can't afford, while you have $280 million in student loan debt. That's a typical doctor, okay?

Yes, sir. They suck at money. They're like stereotypes. They're like athletes and artists. I mean, it's crazy. Now, some of them don't, but I'm just saying that's the stereotype. And they don't even make the top five in the millionaire category, the people who become millionaires. So you're way above average because you're thinking about this. You're actually, you said, I'm going to live humbly.

You're living in a tiny little condo. You're awesome. In order to achieve bigger goals, you're willing to put off more. Delay pleasure. little condo you're awesome you're in order to achieve bigger goals you're willing to put off more delay pleasure again you delayed pleasure to get through med school to achieve a big goal way to go now you're talking about doing in the financial realm you're way ahead so let me just give you like star star star star five stars across the board you are killing it i'm proud of you now having said that you asked the question so we're going to teach you the fastest right way to build wealth that I used, George used, and that we've taught tens of millions of people to do. We use a thing called the baby steps. We want you to have an emergency fund of three to six months of expenses.

We want you to have then, we want you to be putting 15% of your income into retirement. If you're not going to stay in that condo longer than six months, let's just go ahead and get it on the market and talk about selling it and buying a house that we want. Then the next step is going to be pay off the house. If you are going to stay in the condo, let's just pay off the condo. Then and only then do we start saving up for longer, bigger investments. That's after baby step seven, which maybe step seven is everything's paid off, 100% debt-free, and you're putting money into retirement at the tune of at least 15% going in. Above that, then go buy some commercial buildings for cash.

They're awesome. I've got a bunch of them. What's it going to cost? I was looking at possibly around a million dollars, and I've, yeah, for the commercial building. Cool. You can put your practice in it, or you just want to buy one? Yes, sir. I would be moving my business into it to then start a different business

that I would be renting from and then I would also attend. Yeah, that's not a bad plan at all. But it's not necessary for your practice to grow. It's just a nice benefit. I'm sitting in the building we own 100% of, paid for, and our operation runs from this campus. And, you know, it's a large commercial building, obviously. And so that's after you get the condo paid off or wherever you're living paid off, and that's after you're 100% debt-free, and that's after you have money going into retirement and have an emergency fund. That's when I do the commercial building.

So this could be years down the line. Not really, because he's making bank. Once you start increasing this thing, you can put $200,000, $300,000 away each year. It becomes a three, four-year goal. You can start putting 15% away today into different retirements. He's got the simples. He's got the Roths. You can probably get 15% there today.

And then you go from $250,000 to $350,000 from 250 to 350 to 450 and you keep living in a 16 square foot condo. You pay it off in like a year and a half. It's gone. And then you can start moving towards a commercial building or you can move up in house depending on which one your wife wants. I mean, I mean, depending on- That was the honest answer. Whoops. I just said that out loud. Happy wife, happy life. Well, when you started, you know, Ramsey Solutions, you weren't, you didn't just go buy a commercial property at the no i didn't buy anything for 10 years so you were leasing renting a space exactly until you could pay cash yeah i think you bought that you were you bought the building that we were in at the time but we were there five years

with a lease with an option yeah first yeah but we weren't making the money he's making either i mean i wasn't making that kind of money then. But eventually we were. But I'm saying that's when we bought that building because we got to Baby Step 7 and we were stacking cash. And we moved at the speed of cash, which is still a shock to everyone that we even do that around here. And they're like, Dave's lying. I bet they – and I'm like, no. I don't know how – you got to show them the financial records, Dave. They need proof.

Yeah. I mean, people are – isn't it how you got to show them the financial records, Dave. They need proof. Yeah. I mean, people are, isn't it funny? So here's the thing. Okay. This is this. You'll love this one. Okay. So we've got a very nice home.

Um, a wee bit expensive. And this, um, I'm going to try to be nice. I can tell you're trying to be kind. This person told a friend of ours that it's impossible to own a home like that that's paid for. And I'm like, why is it impossible? You either have the money or you don't. I mean, it's possible. You can say it's unlikely. You can say you don't think Ramsey makes that much, and he's lying, so he borrowed to buy that house. But here's the thing. In every state in the United

States, if you get a mortgage, do you know what they do? They record it at the courthouse. It's public record. Do you not think some of these left-wing rags that hate me would have already pulled up the public records and announced that Dave Ramsey's a complete fraud if I didn't have mortgages on everything? Because it would take about, I mean, anybody's ever done a title search, anybody in the real estate business, anyone who's ever bought a piece of real estate in America knows how to do it. I mean, you walk into the thing and go, hey, pull up and see if Dave Ramsey or any of these entities that I know that he has got a part of has any mortgages listed.

It takes about, I don't know, with a computer, 45 or 50 seconds. So out of all the lies, that feels like a pretty stupid. That's just the dumb one. I mean, I get the guy over at the mall that sells timeshares and says, oh, Ramsey buys a timeshare from us every so often over here. He's a liar. My favorite one. Because you can't prove that one. Someone said you financed like a washer dryer because there was another guy named David Ramsey.

I got an extended warranty. That's what it was. It's just hilarious. These people just, but yeah, but yeah, no, we don't have any mortgages. What a fun life you get to lead. I know, but it's just, I'm always amazed how dumb people are. You know, that you would say something like that because all you've got to do is go down to the stupid courthouse

and this left-wing rag we have in Nashville used to be a newspaper. Now it's a little pamphlet called The Tennessean. It would have already run a negative story about me. It's run negative stories about everything else. Ain't got that kind of dirt. You know, that would be big dirt on Dave Ramsey. I mean, he has mortgages. That'd be pretty much the end of my career.

This is The Ramsey. I mean, he has mortgages. That'd be pretty much the end of my career. This is The Ramsey Show. This show is sponsored by BetterHelp. This is the season for Halloween. It's October. We're wearing costumes and we're wearing masks. If you haven't started planning your costume yet, get on it. And while you're thinking about it, I want you to be honest. A lot of us hide ourselves. We hide our true selves behind costumes and masks all the time. We do this at work. We do this around our friends. We do this around our families. We even do this when we look at ourselves in the mirror. I know because I've been there multiple times in my life and it's the worst. If you feel like you're stuck hiding behind masks and costumes all the time,

if you find yourself hiding from your true self, I want you to consider talking with a therapist. Therapy is a place where you can be honest, where you can talk to somebody else and reflect and learn, and you can accept all the parts of yourself over time and start living an authentic life. Masks and costumes should be for Halloween parties, not for our emotions and our true selves. And if you're considering therapy, try calling my friends at BetterHelp. BetterHelp is 100% online therapy.

You can talk with your therapist anywhere so it's convenient for you and your schedule. Just fill out a short online survey and you'll be matched with a licensed therapist. Plus, you can switch therapist at any time for no additional cost. Take off the costumes and take off the mask with BetterHelp. Visit BetterHelp.com slash Deloney to get 10% off your first month. That's BetterHelp.com slash Deloney. George Campbell Ramsey personality is my co-host. open phones at 888-825-5225 David is in Kansas City hi David welcome to the Ramsey show hello hi what's up well I uh I am a divorced man I'm 69 I have a relationship with a widow who's 68. She's in another state.

We're talking and we like to get together, but I'm trying to be a righteous, godly man. I don't want to just live together. I want to get married. But if I get married to her, then she will lose her pension from her deceased husband, which is quite substantial. So, what I was thinking is just having a church wedding, doing everything the same, except not filing for a state license. So, I just wanted your thoughts on that. What is the nature of the pension? I'm confused why she loses it if she remarries. That sounds more like alimony than a

pension no no it's it's a her her husband was a police officer for the state of new jersey which they have very very generous pensions and so uh it's between three and four thousand dollars a month and she would lose that if she remarries. And what most people do in these situations is they just live together. They don't even think about it, but I can't do that. It's a deal breaker for me. I would, I would want to have some kind of ceremonies, trying to be a righteous man, trying to do the right thing. But, uh, it's, and this woman has had been through a lot. She's lost her mother, her sister and her husband within the span of three years. And she's been insecure most of her life.

And she finally has financial security. And so for me to come and say, hey, well, you know, we're going to get married. What is your net worth? Well, I'm a chiropractor, so I make about $90,000 a year. But I get some Social Security, too. My net worth is not much, $20,000 right now. I don't have anything saved. I lost everything a couple of years ago through divorce.

Yep. Okay. And how long have you been seeing this lady? We've been talking for several months. Okay. Have you met her? Oh, yeah. Okay.

Yeah. That's why you said talking. I didn't know if you were talking on the phone. Like long distance. No, I saw her last year. I saw her. We met and we talked. And she's an old, years ago was a girlfriend in high school. So I know her from back then.

I know all about her from back then. Okay. All right. Yeah. Well, it's a difficult one. I'm not going to argue with you there. I'm with you, though. There's no question I'm not living with someone I'm not married to.

I can't do that as a person of faith, okay, as a Christian. My book tells me not to do that. I don't do what the a person of faith, okay, as a Christian. My book tells me not to do that. I don't do what the book tells me not to do because they don't prosper me, and they're not good for the people in my life and people around me and so forth. So I just try to, even though it doesn't make sense sometimes, I just do what the book says. And so I'm not doing that. I'm not like a Pharisee. It just worked good for me, you know. So I'm a follower of the book. Well, there's a lot of people that do do that they just live together i know i know they do and they say it seems like it's okay but but you and i know

that there's other issues so uh so then the only question if you go to the church wedding and you don't file with the state is just it's not a no longer a theological or doctrinal or religious question it you've solved that the only question on the table is you are intentionally lying. It's an integrity issue just to keep this in place. And that's also a potential deal breaker. I've got to work through that in my head if I'm in your shoes. I'm not saying you're doing that, but this is basically a maneuver to manipulate and not tell these people you're married,

and you are married, and so that's deception. There's not any question about that, and there's good reasons for it here, but it is that. It gets back to who instituted marriage. Was marriage instituted by the government or was it instituted no no it doesn't it doesn't it doesn't you and i know when you go get married you're married okay and you know that the state of new jersey did not want this pension going to her when she remarried and you're not telling them is what you're doing and so you know that that i've

just got to work through that i'm not accusing you of something bad here, but I can't get – I'm 63, so you and I could be in the same boat someday. I'm not today, but I'm trying to relate and think through. Well, I'm not trying to gain the system. You know, the other thing is I would investigate if there are any things that you can file with the pension board for individual exceptions. Like the particular nature of... I did hire an attorney. Yeah, I did hire an attorney. I looked into it, and they said,

there's nothing much you can do. And it's just kind of crazy to me because the state is actually promoting, you know, a fornication lifestyle. It's okay. It's okay. Well, they do with a lot of things. I mean, they do with a lot of things.

They do with the tax code. They do with a lot of other things. So that's not new. That doesn't change your stance or my stance we have to do our thing regardless of what the stupid state does there's a lot of things that are legal that aren't right so well that's what i'm saying if i'm doing this right in my eyes before and then we have a ceremony then i mean i'm just talking it through with you you you you're more than welcome to whatever you want to do i'm not saying you're a bad guy i'm just talking it through with you. You're more than welcome to do whatever you want to do. I'm not saying you're a bad guy.

I'm just talking it through with you. If I'm in your shoes, I've got to work through the fact that I am intentionally deceiving the state. And is that okay? And I'll give you a parallel example in my life is that I hate, so much so that just talking about it right now, my heart rate is changing. I hate the federal income tax. It is absolutely immoral, out of control, pitiful. The money that I send to the federal government makes me want to throw up every time I think about it. I hate it. It's pitiful how bad

they run this country. And they keep milking me even more, taking my money at the point of a gun. I hate it. But you know what? I pay 100% to the penny that I owe. I take every legal regulation and loophole they allow me to take, and I'm a student of it. And I hire people with expensive checks that are students of it so that I can give them as little as possible with a hundred percent of integrity but I hate it that I mentioned that I hate it that I bring that up and so you know but it's it's not about them it's about me Am I doing the right thing? So if I'm in your shoes, I've got to get – I'm not going to accept your lawyer's answer. I'm going to get with these people. I'm going to talk to the governor.

Crap. Call the governor. Talk to him. I mean, talk to whoever runs the police commission in the state of New Jersey and say, look, this guy died on the job, and you're denying his widow the right to move forward with her life with this. It's ridiculous. You're asking her to shack up at 69 years old, like she's some kind of 19 year old that can't keep their pants on. This is ridiculous. And you guys need to, you need to give us an exception on this. I'm going to, I'm going to

bust them if I'm you. And I why they do it, by the way, but to keep the widows from being a target later with the juicy pension. But I'm not saying he's targeting her at all. If they get married, he makes $90,000. That would effectively replace her income as long as they're married, but it still puts her in a precarious situation. She's not going to do that. She's been through hell, and this money means a lot to her.

And so I understand the predicament, and I'm not unsympathetic to it, but you asked, and so I've got to tell you, the way we answer questions on this show is what would we do if we woke up in your shoes, right? I mean, put your shoes on and walk in them. I hope I'm not ever in those shoes those are difficult shoes uh but the first thing i gotta solve is for the doctrinal part the the faith issue you've solved for that one that one's done and then i'll fight the bureaucracy after that yeah that's like a couple

of kids getting married in their 20s or something and they want to have a big fabulous wedding but they want to go ahead and get married they want to go and live together now so they get they go to the church and they get married and then six or eight months later they have a wedding for all their friends and that's okay because they're married that's that's you know financially legally uh spiritually all in line it's a you know that it's in that kind of same bucket for me as far as that goes but But I don't care if you register with a state, but I do care about deception in my life. I don't want to be the guy that's doing that. This is the Ramsey Show.

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Y-Refi is not licensed by the California Department of Financial Protection and Innovation. Y-Refi is not authorized by the New York State Department of Financial Services to service any New York loans. Funding may not be available in all states. No discipline seems pleasant at the time, but it yields a harvest of righteousness. That's a Bible verse. The way we say it around here is if you live like no one else, later you can live and give like no one else. You're going to pay a price to win.

Or you're going to pay a price by living in mediocre. You're either going to go through some crap and deny yourself some things in order to get to where you want to go, or you're just going to live in mediocrity. There is a price to be paid either way, a life of mediocrity or the life of a champion, because you paid a price to win the game.

You did the workouts, you did the runs, you did the film study, and then you go win the game. And so the way we say that is live like no one else, pay a price so that later you can live and give like no one else, drive a car like no one else. All your friends making fun of you. And then when you buy a car that's worth more than they are, you can say, how do you like me now? And then you drive whatever the flip you want to drive because you've got some money because you didn't spend it all on a car when you was a broke person trying to look like you're not a broke person, right? Delayed gratification.

That's it, man. Instant gratification. It's the hallmark of people who are emotionally mature, the ability to delay pleasure. In other words, you'd be a grown-up. And I'm not talking about chronologically. You can be a grown-up at eight years old if you know how to delay pleasure. That's a hallmark of emotional maturity. Most people don't have it.

That's why you stand out, like, in a wonderful way when you have it. People that can delay pleasure, they can stay away from the donuts. I've been working on that one, and it's hard for me. But I like donuts, and I haven't had one in a while. You look good. while you look good thank you you do too camera ads down pound so don't go off of that so to vacations but not this one it was hiking the whole freaking time but anyway uh so all of that to say we live like no one else so later you can live like no one else so about in 2020 we decided we were going to, in 2019, we launched this wonderful cruise that was going to happen in March of 2020 called the Live Like No One Else Cruise. And we're going to take folks that are on Baby Step 4, meaning you're out of debt, everything but the house, and you have your emergency fund in place.

You've paid a price to win. If you're Baby Step 4 and beyond, you're investing, you're paying off your house and beyond. Then you go on the live like no one else cruise. It's a mile marker, right? And so we've got the Holland America, one of their top ships, fabulous ship. We've got some of the top people from Nashville, like Stephen Curtis Chapman, multiple Grammy winner, 67 Dove Awards. He's going to be with us, one of our good friends. We've got other comedians and things with us that

are it's going to be a blast all the ramsey personalities and we're going to do events ramsey events on the ship all week long and we're going to be with you all of us including me including sharon all seven days and it is a fabulous this is not the walmart on the seas cruise this is the nice cruise okay i don't go on those boats all right this is the nice one i want i'm not and i don't want to do it if we're going to go if we're going to go half butt right so if you're going to live like no one else you need to live like no one else so if you're baby step four and beyond we're doing the cruise again because obviously we didn't get to do it during the fauci pandemic so um now we've got to go and, you know, we had to start everything over. So we launched the thing for sale.

We're going in March of 2025, and it's going to be a celebration of you because you've lived like no one else. So that's where you are. If you're Baby Step 4, you're doing that. Live like no one else, Cruz. It is, at this point,'s 72 sold out uh there are like three suites left and some really nice rooms left and so um because there's not any dumpy rooms on this particular ship it's it's almost brand new it's a fabulous fabulous ship so

holland america's top top flight so anyway this is going to be a blast March 22 through 29, 2025. The pit stops are amazing too. Turks and Caicos, St. Thomas, Puerto Rico, the Bahamas. So we're going to have fun time just with those excursions there. Maybe we'll go snorkeling with Dave. Is that an option? Is that an upgrade package? Yeah, swimming with Shamu.

Yeah, that's it. That's it. I don't have that one on there that I know of. But anyway, we're going to be hanging out with y'all all week. It's going to be fun. You'll get bored with it, but it'll be okay. And what's cool is that right now, if you book it, there's a deposit. So $600 locks in your room, and then you pay the rest as we get closer to the cruise.

So if that's something you want, you're like, well, I haven't budgeted for this. Well, if you're in Babysit 4 and beyond, and've got the wiggle room, put the deposit down and then join us. Yeah. Yeah. You got time to do it. And you better, well, you got not got much time because it's selling out really, really fast. We're on pace to sell out by the time the summer's over. Yeah. Oh, well, or sooner. Yeah. I talked to him this morning. I think probably, what is this June? We need to be done in June probably. But anyway, yeah. So if you guys want to come, we would love to have you the Live like no one else cruise be sure and check it out Karen is in Irvine California hi Karen welcome to Ramsey show

hi how are you better than I deserve what's up um okay well thank you I saw you at my church probably 12 years ago and you really left an impression on me so thank you well thank you for that are you at mariners how did you know well you're in irvine so i mean i've spoken there like three times no stranger over there yeah yeah it's a great church we love the place okay i'm sorry anyway how can i help you um well i just went through a really hellacious divorce after five years. It finally settled out and kind of all the chips are falling. And even though I got what most people will call a decent settlement because the cost of living is so ridiculous here, I couldn't afford to buy anything. So I am renting a small house, a fraction of what I used to live in, a fraction of the size, but I maintain just through the nose, and I maintain actually more than I make. How is that possible? For rent. Are you going into debt every month?

No, I'm not right now. So you're able to float it right now, but it's unsustainable. Well, exactly, yeah. I mean, I can tell you kind of what I have in the bank and what i'm what i have coming in what did you get out of the divorce how much have you got okay so we sold a house so i in in a bank in a high yield savings account right now i have about 1.3 million from that house that is just sitting there and I'm just trying to figure out what to do with it but figure okay we'll put that put that away in a corner really don't want to touch it and then I'm getting some alimony slash spousal support but it's only for six months

and that's fifteen thousand dollars a month and it will drop drastically. I mean, I could end up with that getting nothing. And then for my personal income, I started working after being a stay-at-home mom for 20 years. I only bring home about a little over about $5,600 a month after tax. Okay. And what's your rent? I paid off my car. I paid off all my credit card debt from the divorce. So I don't have a lot of debt, but I'm just trying to be smart, and it just feels like in this area it's an uphill battle.

I'm a single mom. I'm still raising kids, so I feel like I can't really move out of this area. How many kids have you got? I have three, so I have two still living with me. One's 17 and one is 14. Okay. And I'm a full-time mom. I got you.

No shared custody or anything like that. Right. So there's no child support? There is child support, but it may not last. I'm just kind of dealing with an addict, and he just doesn't have a way to pay me. Okay. But he's paying you $15,000 a month right now. Yes.

So that is coming out of the proceeds that he got out of the house. And then, yeah, that will be reassessed in November. Gotcha. So you have a 17-year-old and a what? 14-year-old. Okay. I'm sorry. You've been through hell girl. That's heartbreaking. Yeah. It's not a good situation. Here's the thing. Okay. You're very wise in that even in all of your pain, you're starting to see that this math doesn't add up. Right. Okay. How much is your rent again? $8,000 a month.

And no, I am not living high on the hog. I'm living very basic. Yeah, but you're in Irvine. And you're in one of the most expensive real estate markets in the world. Yeah, it almost feels like it would be gone. Here's the thing. I'm sorry that your husband was an addict, and I'm sorry he left his children in a lurch,

but they can't live in Irvine anymore. You don't have the money. And so as heartbreaking as it is, the best thing you can do for them is to create a stable environment. And you know you're not in one. And so if $8,000 is the cheapest you can find there, you've got to go somewhere else, kiddo. I'm sorry. This is The Ramsey Show.

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that big YouTube star and co-host of the YouTube show on Ramsey Networks. It's a big show blowing up the Smart Money Happy Hour show that he and Rachel Cruz do together. He's my co-host today, and he knows some stuff about this stuff. So open phones at 888-825-5225. Grace is with us in Philadelphia. Hi, Grace. How are you? I'm good. Hi, Dave. Hi, George. Hey, what's up?

I appreciate you taking your time. I know you and your team talk a lot about the trends in the real estate market. And my question is, when do you think the obnoxious overbidding on houses will stop? Wow. Is that happening in your area in Philly right now? I mean, I believe so. But, yeah, I could tell you personal experiences, but I just feel that I personally put in offers, and, I mean, I'm just getting beat $50,000 more than asking price.

Mm-hmm. Mm-hmm. 50,000 more than asking price. Well, the simplified answer is that that is caused by more buyers than there is inventory. Anytime basic economics supply-demand curve says that anytime there are a large number of people chasing a few goods, it drives the price up. Scarcity drives the price up. The opposite of that would be if there was more houses on the market than there were buyers, then that would be called a buyer's market. This is a seller's market.

A buyer's market means that the sellers feel just blessed to have anyone look at their poor little house because nobody's out looking at houses and because there's hardly any buyers. In other words, there's 10 buyers for 100 houses. Right now there's 100 buyers for 10 houses. You see the difference? And that's the simplified answer, and that's being caused by several things. But one of the things that's driven it uh of late in the last five years as much as anything is all of the migration uh that has happened of people changing states because of taxation and archaic crazy uh laws having to do with the fauci pandemic and all

kinds of stuff people just left california they left New York, and they're in Tennessee. They're in Georgia. They're in Florida, and they're in Texas, and the numbers are there to support that. That's not a political statement. It's just a huge change in population shift, and so that's created in those states in particular a shortage. Now, you're not in one of those states, but just to say that's exasperated it in those states um then the other thing that's exasperated it is if the economy if if builders of single-family homes do not believe in the economy then they don't build houses because they're afraid they can't sell them and that's happened hardcore in the last 18 to 24 months because the real estate market slowed down and so builders the number of new housing starts is way off and we were already had an inventory

shortage and so now with not with not as much new housing coming online as it needs to now we've got even more of an inventory shortage and that's what's driving this is you've got 100 buyers or whatever the number is on 10 houses that's not an exact number but it's what's driving this is you've got 100 buyers or whatever the number is on 10 houses. That's not an exact number, but there's this tremendous oversupply of buyers. And so they're doing stupid stuff like bidding $50,000 over what the appraisal is, which then ends up ultimately changing the appraisal. Because people do it enough, it becomes a new market value. Yeah, and that was a follow-up question too exactly i mean how are these houses townhomes getting appraised to this value that or just it's it's kind of i don't want to be made up but

how are the how is it equaling the um the overbidding how are these praisers saying you're right it is over 50 well if you have if you have 10 houses in a row on the market and six of them sell with overbids you now have a new market value it's the overbid value because market value the definition of it in appraisal class is what a willing buyer gives a willing seller where no duress is involved now we could argue that this is a duress market but i'm but in other words no neither one of them are being cheated, and neither one of them have a gun to their head. And so that buyer's willing to pay that seller that, knowing it. And if they do that enough times on that block, voila, you have a new market value. And it's the overbid price. It's not the original value.

And so, again, the shortage of housing versus the number of buyers is driving it up. And so we've got some markets like yours. I was not aware Philadelphia was that hot, but we've got some markets like yours where you put a house on the market and you're getting multiple bids over the weekend, even with interest rates almost double what they were two years ago. Yeah. And that's another piece of this, Grace, is that there's some golden handcuffs out there because people either refinance or bought at crazy low rates. And now they're unwilling to sell that home because they don't want to take on a new mortgage that has double the interest rate,

which means there's lower inventory. So I don't see this thing shifting drastically in the next year. I think when you're ready to buy, you got to buy. And if it means you had to get a competitive bid in with a good real estate pro, then that's what you had to do to get that home. There's not going to be deals out there where you're, you know, doing 20,000 under asking price. It's not the time to look for a bargain in real estate business. That's for sure. No, not at all. I mean, I'm a bargain buyer. I don't buy except in bargains. Dave hasn't bought a lot lately. And I haven't bought anything in a while. I mean, it's, and I'd kind of like to, I got some cash I'm sitting on, but I'm not going to pay. I don't pay retail, so it's just like a Ramsey rule.

So what's your price point, Grace? Well, I mean, and I've been guilty where I, I mean, to kind of get to be competitive, I've gotten $20,000 over, but, I mean, I'm looking around at $300,000 to around at 300 to 320. That range goes real fast. That's the biggest shortage. I was talking to my real estate buddy yesterday and he said, homes under 500,000 in Nashville are going like that. If I was a home builder in an average city in America right now, I would build all the $500,000 houses I can build because you could sell everything you built um there's just because that's an entry level in some markets it's a uh number two move up in other markets uh and it's just you you know i would build there's a tremendous inventory shortage

um now again this is going to be behind the scenes but do you think banks are going to after when the appraisal comes back and they're saying okay there's this town home that was i mean for example i had a 309 townhouse i did for 330 and it finally sold for 363 so do you think the banks are going to counter offer that thing i don't think this is going to be appraised for that high well they're going to run an appraisal and if there's no statistical evidence that that other townhouses are selling at the 369 then that deal is going to run an appraisal, and if there's no statistical evidence that other townhouses are selling at the $369,000, then that deal's going to have a problem, because that bank has got a bunch of regulations on them.

They cannot loan more than appraisal. That's what got us in the 2008 debacle, was them loaning on bogus appraisals. And so the appraisal industry since 2008 has tightened way up on regulations, and the banks are tightened way up. The mortgage companies are tightened way up. So they don't have a lot of wiggle room. So if somebody made that offer, they have to disclose to the bank they're paying $369,000. But if the appraisal comes back at $320,000, the bank's going to lend on $320,000. They've got to have the cash in their pocket for the difference. Grace, you're going to have to compromise on some things, whether that's location, the home type, how old it is, see past some things that you can renovate.

But I don't want you to sit on the sidelines hoping for the market to shift drastically. It's not going to. And I don't really disagree with your word obnoxious. I kind of think it's accurate. But it is based on supply and demand. And especially if you're trying to buy, it's distressing. It's harsh out there. Weird. This is the Ramsey Show. You've worked, saved, sacrificed, and been gazelle intense with your financial game plan.

But do you have the right defense in place? Like the right health insurance? Look, you can't walk past a doctor's office these days without getting a massive bill. And if you don't have health insurance, a major medical situation can undo all of your hard work. That's where my friends at Health Trust Financial can help. They work for you, not the insurance company. So they find you the right health insurance, and they save you money. Ramsey has recommended Health Trust Financial for two decades because they're the experts. And whether you're 19 years old or 90, you can trust them to do two very important things. Listen to you, then find you health insurance coverage with everything you need and nothing you don't. Health Trust Financial is your one-stop shop for unbiased advice about affordable health insurance options.

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That always changes the algorithms and helps things, too. Thank you very much. We know a lot of you are doing that kind of thing. Also, some of the platforms have a share button. You can click it and share it with somebody and send it over and say, hey, watch this, look at this, this think of this watch these guys or or you could just click the thing out or you if you're listening on talk radio you can just say hey i listen to the station and it's got these people on it and they're talking about life and it's fun and i'm learning stuff and just share about the show tell people about the show if you read a good book you tell people if you go to a good movie you tell people if you

go to a bad movie you tell people stay away right and so hey if you think we're a bad movie then don't tell anybody keep it your little secret a bunch of you are telling people because our numbers are way up on all of these platforms i mean wow spotify thank you amazing guys thank you thank you thank you pretty cool all right open phones at 888-825-5225. Today's question comes financial assets are at serious risk. I'm a 64-year-old single woman with about a million dollars in retirement funds, $800,000 in non-retirement investments, plus $230,000 in cash in the bank. I also own a home worth about $600,000 with about $425,000 in equity. I've spent my life building a business and financial security and I'm debt-free except for the house, but now I feel like everything is in jeopardy.

I also still make a large salary from a business I own. At this point, what can I do to minimize my exposure and potential loss of wealth? Well, it's anything you do. I'm not an attorney, and I'm certainly not an attorney in New Hampshire. I don't even know one law in new hampshire except to follow the speed limit but the um but in general as a business person i've learned the legal theory is this that if you move assets after a lawsuit has been filed in order to avoid people getting those lawsuits the The judge can come back later and undo that move and still give it to them.

So if you took, for instance, if you took something and moved it into an LLC or moved it into a trust or something in order to do risk management, it's too late. They can undo that in most states. Again, I'm not an expert on the law, but I think that's a pretty standard legal business law piece of knowledge. So I would hire your own attorney that really knows New Hampshire law and ask that question. You have enough assets, you need to spend 10 or 20,000 bucks on your own attorney and say, okay, what can we do here? What is at risk? What is not at risk? What helped me assess the, um, the potential on this thing. And, um, uh, you know, what is this injury,

an injury of this type, do some research normally normally have a payout of, and that kind of thing. And so a 69-year-old, 64-year-old single lady does not typically, in most court cases, have all of her personal assets taken from her. That would be highly unusual, but it can be done. It can be done it can be done and it depends of course on a lot of things but how egregious was the um was your mistake um in the in the car accident in other words how uh careless were you or was this an accident or were you doing something over the top you know

in the car that kind of thing weird i don't know i have no idea but i'm going to start assessing every one of those things uh in most cases the one million you have in retirement funds are is not accessible to a lawsuit your 401ks they can't get them okay and your roth iris they can't get them in most cases so but the rest of stuff which is several million dollars that you've laid out here is probably you're probably right it probably is. And I'm just going to start investigating what I can do to, um, protect it or at least maybe make it difficult, uh, which gives you then the ability to try to negotiate and, um, attempt to do that. And so, um, but you know, you're not in a real strong position. So I'm going to analyze all of my options. And I think you need legal counsel because I'm not that and I'm not any

good at it. But it's, George, it's the reason that I don't own anything anymore. Nothing is in your name. I don't own anything. My cars are in LLCs. My, all of my properties are in different LLCs. And once we properties are in different LLCs. And once we get a certain amount of dollars in an LLC, we don't add any more to it. Make a new LLC. Yeah. Because you don't want too much of a target.

I don't own the, and I don't, there's not, Dave Ramsey doesn't own anything. I'm really pretty poor, actually. Personally. And so, on a personal level. But Sharon on the other hand. The actual man, Sharon's fairly well off, yeah. Hope Sharon doesn't have a car accident.

Well, this is a good reminder, honestly, for everyone listening out there, if your net worth hits half a million or more, it's time to get an umbrella policy. That's good. I was just looking at mine. I got a million-dollar umbrella policy once I hit that level. And it costs 300 bucks. Yeah, 300 bucks a year. And I got underinsured motorist on there, uninsured motorist on there, protection as well,

because that stuff can decimate you. And so you want to transfer that risk over to the insurance company. Yeah, LLCs splitting this stuff off, number one. Then number two, having the right amount of insurance. You know, just call somebody like Xander Insurance. It's an insurance broker. Let them shop around and get you a policy. In her case, a million would have gone a long way. Yeah, and being underinsured on your auto insurance. If you've got a policy, it's 100, 300, 100 instead of 500, 250, 500. You got to make sure you have enough coverage. Yeah. The cheapest, the best insurance, there's not many things you can say that's a good buy. There's really two types of insurance that are really a good buy. And that's long-term disability insurance when you're an employer buying it as a group for your team.

I buy it for our team, but dirty little secret is it doesn't cost much. And the other piece is liability insurance like an umbrella policy and or upping the liability on your cars and on your home. And then adding to the top of it an umbrella policy. I carry a $10 million umbrella, and I think it's about $3,500 a year. 10x, whatever. Something like that. A million would cost. It's roughly, it might be $4,000.

And a great tool for everyone listening, watching out there, ramsey solutions.com slash checkup and we'll do the work for you and show you the areas you might be exposed or underinsured i just helped a team member do this dave and they saved 80 bucks a month with better auto insurance coverage yeah you're paying too much you got to get rid of that company and go talk to our friends at you know zander the auto and ramsey trust well go to the plc the pnc on the website for their uh elp the endorsed local providers for property and casualty and they're all insurance brokers they don't work for one company they shop for you and get you the best and these are top rated companies on homeowners and and on and you'll save money yeah but you need to keep your liability high especially when you start building your net

worth and then once you get to a half million you're right you need to keep your liability high, especially when you start building your net worth. And then once you get to a half million, you're right. You need to pick up a million dollar umbrella. And then once you get to four million or five million, go ahead and pick up a ten million. It's just it's the best buy in the insurance world because of what she's facing. It's so sad. I know. Well, you know, to minimize the potential loss of wealth, I hope your insurance company has a great lawyer that's going to fight for this. Well, they got a lawyer that's equal to the amount they're exposed.

Yeah. Well, this happened to me, Dave. This was over ten years ago now. I bumped into a going to fight for this. Well, they got a lawyer that's equal to the amount they're exposed. Yeah. Well, this happened to me, Dave. This was over 10 years ago now. I bumped into a lady. I remember this. She ended up suing me months later because I was on my dad. You had a car wreck right in front of the office. It was so embarrassing.

The whole office watched George have a car wreck. All of Ramsey's looking out the window, and I'm just out there in my little Chevy Cobalt, and I'm just going, oh, my gosh. Tearing up other people's stuff with your little cobalt. Two fire trucks, an ambulance, two police officers. It looked like a parade out there. Well, I mean, you were just driving. You were just a reckless person. I bumped the door and guess what? A few months

later, this lady, I get served. She's suing for like $385,000. And I'm broke. And I'm on my dad's insurance. So he was exposed too. They ended up getting $25 25 000 from my insurance company which was my limit and 25 000 from her insurance company she sued her own insurance company and she got 50 grand out of the deal so but i didn't pay a cent out of pocket was

she really hurt no no she wasn't they said we never seen as many medical boxes that she sent over she's a literal ambulance chaser oh really, really? She had a lot of the... Not her first rodeo, Dave. Let's say that. Well, maybe she hit you, George. That's what I was... I got a camera the next day. I was like, I'm going to get a dash cam.

You got a little body cam because George's body's... And I increased my insurance coverage the next day. Wow. Never again. The next day is too late, by the way. Too late.

That's the point of this whole email. You don't get to go back in time this is the ramsey show george camel ramsey personality is my co-host you're invited by the way to join us anytime you're in the nashville area um we charge absolutely nothing to sit and watch us do this show and it's worth every penny so um we want you to come out and the coffee is free and it's good coffee and the homemade cookies are free and they're really good smells kind of like mama's kitchen when you come into our building instead of corporate america which is iron tent by the way they do a great job over in the baker street cafe a little nod to the opener on the show by the way but we've got a lobby here full of folks almost every day monday through friday one to four we

do the show central time a little south of nashville in a beautiful town called franklin tennessee and so come out and visit us anytime we'd love to have you in that lobby on the debt free stage is anthony and shauna hey guys, how are you? Pretty good. Awesome, awesome. Where do you guys live? Tampa, Florida. Oh fun. Welcome to Nashville and all the way to Nashville from Big Tampa to do a debt-free scream. How much have you two paid off? We've paid off $71,102.49. Excellent. How long did that take? Nine months. Good for you. And your range of income during that time? It was about $100,000 to $112,000 just in personal, not including the business. Okay. Well, I mean, do you make money in the business? Yeah. Okay. What kind of money

do you make in the business? We do about $350,000. Wow. Very nice. Good for you guys. Well done. So you're killing it, you two. How old are you two? 33. Wow. What kind of debt was this 71,000? So we had taxes, which was $8,921.50. Student loans, which were $28,008.36. And credit cards cards which were $34,172.63. Awesome nuts. Very cool. So what happened nine months ago or 12 months ago that said we got to change this and then nine months later boom you're out of debt. Well we actually have a very interesting story. So when we first started dating this was about march of 2020 we were sitting oh that's good timing yeah right um we were in his room because we were not living together yet and he had these floating shelves and he had your total money makeover book on the

shelf and we're just sitting there just hanging out and all of a sudden the book falls off the shelf like true story out of nowhere so we were like the spirit of george put the book off the shelf read this well we did we read the entire book in one day i would that would have freaked me out i would have made put that book away i It's like a Ouija board. It was, it was pretty crazy. Um, so we read the entire book in one day. We cut up all of our credit cards. We got rid of his, um, life insurance policy. Wow. A whole life insurance policy. Yeah. The whole life. And, um, yeah. And then we got to work paying off our credit card debt, not any of our other debt. And we were just living life. You know, we were making about $10,000 to $12,000 a month.

And, you know, things were going great. But we weren't really taking it very seriously because we didn't pay anything off after the credit card debt. And then about a year later, we decided we wanted to move from an apartment to a house renting. And so then we got right back into a whole bunch of credit card debt. So we had to get furniture and washer and dryer and deposits and all that kind of stuff. so um we got a whole we got into all that credit card debt again um and then we also got married and you know so got into some debt for that so uh fast forward to november of 2022 and we were we're making about 10 to 12 thousand dollars a month and but it was off of one client

and we didn't have second jobs. We only had the business. And then they just said, this was like a right before Thanksgiving. So they said, um, sorry, on December 1st, you're out of here. We, we're not giving you any more money. So that, uh, in December, we actually had to use all of our wedding money to pay our bills. And then after that we started having to put all of our bills on credit cards. So that's how we racked up even more credit card debt. And that was when things kind of snapped for us. We're like, we're, this is never happening to us again. So we had nothing in place. We had nothing. So we were like, we need to change something.

So that's when we started going really hard in the business, and we also both got second jobs, and here we are. Did the book fall off the shelf again? But we definitely picked it up. Like, wait, I remember this. Yeah, pay off debt that's good and then you guys just went for it because now you had the income to go all right we're no more fooling around yeah now will you go back again no sure yeah as soon as i knew that i was

a problem with the money and i gave it up to her we literally got out of debt free like as soon as i gave her all power of handling all finances. So that's my biggest lessons. Let her run everything. Ah, okay. All right. But you got to know what's going on, right? You know that. We talk every month about all the bills.

I look at it daily. Yes. I can tell you're the nerd because you have it down to the penny on the phone and he's just hanging out having a good time. Yeah. He's the free spirit. You guys call it the every dollar budget.

I call it the every penny budget. Wow. the every penny budget so because every single i mean we run payroll and and we run you know four thousand one hundred and thirty two dollars and nine cents we run exactly down to the penny of what we need and that's how we do it wow okay never gonna be there again it's that never again moment that changes things that's right yeah and if you really won't go back in debt and you really will not ever live on one client again, then you'll have a great business and you'll build wealth and you'll be in great shape. And so, yeah, you learn some harsh lessons there.

Yes. Well, way to go, y'all. I'm proud of you. Thank you. How's it feel to be free? It feels amazing. Free. Absolutely.

But we really, our big goal is to buy a house so you know we don't really feel like there yet you know so we're out of debt but um well you're making great money you ought to be able to stack the cash and be able to do that tampa's a great market to buy in yeah we're almost there keep living like you're broke and you know a year or two you'll have go oh my gosh we have hundreds of thousands of dollars for this down payment actually um he for his um you know his w-2 job that he got um he had actually gotten a raise about four months into him having the job but we continued to live on the original amount and everything from the raise just went towards it that's amazing that's a big deal yeah very good yeah good job y'all well done well done

what do you tell people the secret to getting out of debt and staying out of debt is? So I have two things. So the first thing is you have to want to get out of debt more than you want the thing, more than you want the coffee, more than you want the nails, the clothes, whatever. And then the second thing is, which this has helped us probably the most, was continue the credit card stacking amount even after you've paid off your credit cards. So by the time we got to the end of our credit cards, our stacking payment was $1,000 a month. So even when we moved into paying off my student loans, we kept that $1,000.

You're talking about your debt snowball amount? Yeah. Yes. Okay. Yes. All right, cool. And then when we went into saving for emergency fund, we kept that $1,000. And then, you know, now that we're saving up for the house, we kept that $1,000.

So we always, bare minimum, have $1,000 going towards, you know, debt or savings. Yeah. So that's really, really been helpful. Yeah. Once you learn to not need it anymore because you're throwing it on that then just don't need it ever again and it turns into serious money like someday when you don't have a house payment anymore and you take that amount and just that amount always you always pay yourself a house payment that turns into a million dollars so fast it's scary yeah yeah we did that when we paid off our first house and um it was like 2,500 bucks a month or

something back in those days and I just set that up going into a mutual fund and that turned into a million dollars so fast I looked up and I was like wow savings rate is amazing amazing yeah yeah pretty cool way to go y'all very very cool very proud of you thank you for coming up from Tampa Florida to do your debt-free scream. Anthony and Shauna, Tampa, Florida. $71,000 paid off in nine months, making $100,000 all the way up to $350,000. Count it down. Let's hear a debt-free scream. Three, two, one.

We're debt-free! Yeah! Yeah! We're also going to give them two every-dollar premium subscriptions for a whole year that they can use and give away as they save up for this new house. And they'll love it because they're already using every dollar. Every penny. Every penny instead of every dollar.

There we go. Well, maybe we have a new subtitle. This is The Ramsey Show. George Campbell, Ramsey personality, is my co-host today. Thank you for joining us. So many years ago, we started building a network of real estate agents across America that are high-octane, high-protein, that sell more houses than just about anybody in the area, and that understand

and run their whole thing the way Ramsey talks about so that when you go to them to list your house or you go to them to buy a home, you're going to recognize the lingo that they use if you spend time on this show. So they're called Ramsey Trusted because they do stuff the way we do, endorsed local providers for your real estate. And so if you're thinking about buying a house or selling a house, this is the best possible way to do it, especially when you've got a difficult market time. As a seller, there's some unique challenges right now. You may be in a position, if you price it right, to be fielding multiple offers depending on the market. other markets are stagnant sitting

um and because people are frozen by these interest rates other places we're getting multiple bids it's a weird dynamic and you can't just assume that anything you saw on the news or zillow is correct uh as a matter of fact you can pretty much assume both of those things are wrong and so uh you know you need to get with a professional in your area that's got some experience and it sells doesn't sell three houses a year and got their license last week because they thought it'd be fun that's just not what we do it's a side hustle dave i go to church with him he's a nice man yeah but he's dumber than a rock he's just it's a good thing he's in church no you don't need to that does not need to be your real estate agent. No, absolutely not.

You get somebody that sells a lot of houses, you know, 50, 300, 200, what are houses a year? These are people that real, because if they're moving that kind of volume, they know what the flip they're doing. Okay. So these are Ramsey trusted. Check them out for free at Ramsey solutions.com slash agent. If you're getting ready to list a house or look for a house.

And by the way, it is a great time to do either. I love a market like this where things are weird. There's opportunity when things are weird. And so on both sides of this equation, you can make things happen. Janet's with us in Palm Springs, California. Hi, Janet. How are you? Good.

How are you? Better than I deserve. What's up? Good. How are you? Better than I deserve. What's up? Sure. Okay. So my question today revolves around transferring or rolling over a Roth into a traditional 401k with an employer. So my husband's been with this company for over 10 years, and they had previously not offered a Roth option, and they just announced that they would now have that option for them

and so we're wondering if if it would be best I know that you do suggest having them the cash available to pay the taxes we would have to pay on it but does it make sense to keep it within the company or should he just roll it out of the company altogether and does he still work there he still works there yes you can't you can't move it out if you still work there okay okay now he has two possible three options here one is he can keep doing what he's doing which i don't recommend number two he could make all future contributions be roth and there's no taxes caused by that yes he, he plans to do that. Okay. Or he could roll whatever his balance is with that company into a Roth 401k now that it's available, and that will activate taxes on that balance. How much is that current balance?

The current balance is like close to $18,000. $18,000? Yes, in his traditional 401k with his employer yeah do you have any money are you guys in debt what's your situation no we're actually in baby step 3b we found your fdu through our church uh over a year ago so we're out of debt we have paid off cars um we have our fully funded emergency fund and we just started saving for a house um so you want to use four thousand dollars of your house money to make this 18 a roth i'm sorry do you want to use four thousand dollars of your house money

to make this 18 into a roth no we would save up for that. You can't save up for it. When you roll it to a Roth, it's going to activate taxes of the following year. Yes, correct. What Dave is saying, there's an opportunity cost. If you're trying to save for a house, it's going to delay that because now you need to take a portion of that money to pay the taxes. Yes, correct. So I wouldn't fool with this. I would just make future contributions to the Roth, leave traditional assets. I would, just because it's only $18,000. It's only $4,000. If it was $180,000, you'd have a whole lot more taxes. I'd rather pay it sooner than later where it's larger amounts. Yeah, I agree. I would move it just because it's small, but you need to

understand that basically there's $4,000 in taxes that you're activating, and that's going to lower the amount you have for a down payment by $4,000. So figure out how much that's going to hold you back from buying a house. We have about $2,000, $2,500 extra a month that we've been throwing at debt and all that stuff, so that will just continue to roll into saving for this. So it will take us about two months to save that $4,000. Exactly. And you would have been putting that towards a down payment because you're in 3b and that's four thousand dollars it's not going to be available for a down payment now that's what i was saying yes so as long as you're willing to do that i and because it's such a small amount i

would if it was double this i probably wouldn't okay but if you know it's just it's it the other thing i like about it quite honestly because i've got so i'm old and i got so many different accounts from different stages of my life now uh this is very clean and it simplifies your future because now you're 100% roth everywhere right And that's going to be very sweet later instead of this weird little 18,000 account that's now grown to 200, and it's been 25 years, and you're like, oh, crap, I've got that thing laying over there now. So I like the cleanliness of it. Now, I'm curious, Dave, when it comes to employer match, that sits in the traditional side. So at Ramsey.

Now, when I retire one day, hopefully 40 years from now from Ramsey, I'll have a traditional side with the match in it. So you already kind of have, you know, you've got the different buckets there. If you have an employer match, it's likely going to that traditional side. Now in your case, you won't because you could take that and roll it because you're a baby step seven millionaire. So pay the taxes on that. You can roll that once a year, the employer match into Roth, but the employer cannot make the match in Roth. And so you've got to pay the taxes on it when you roll it once a year. But in your case, because you're in a good financial position, I would do that.

That's generally the time to do it. In her situation, because it was such a small amount in there, it's not a deal breaker. 99% of the time you folks call here and ask us if you're going to roll something to a Roth before everything's paid off, including your house, we're going to tell you no. You've got priorities. Because you would put the money towards debt instead of toward taxes. That's what we would rather you do. But the only reason we're answering her differently, or I'm answering her differently,

arguing with George, was that it's just a small account. We found the exception to the rule. Wow, it doesn't happen very often around here. It's something to celebrate yeah i have no hobbies malcolm is in seattle hey malcolm what's up hi how are you today better than i deserve how can i help i uh i'm looking to ask you a question get a reality check from you. So I started a small business about 60 days ago, and it's been much more successful than we thought. This isn't my primary job, nor am I going to leave my primary job.

We buy and sell paintball equipment. And we do quite well on it, but it's hard for us to get inventory because there's only a couple events per year. So I was thinking of doing an equity deal with another person he buys the inventory i sell it basically it's a way to fund the business without taking debt but i don't know if i'm just being delusional is this another form of debt no it's a partnership that's I was thinking, but I just didn't want to be. It's easy to look at things.

Yeah, it's a partnership, and I think it's probably unhealthy. Okay. I think you're probably paying a pretty serious premium out of your profits in order to bring in a partner to do this. Okay. I would suggest that you just grow a little bit slower and grow with your own profits. And you'll make fewer mistakes and you won't end up with somebody over to the side pissed

off at some point because something went sideways on you. What's the inventory cost? It's tricky because every marker... What are we talking about, $100,000 or $10,000? Like $75,000 six times. Okay. Yeah. Six times a year? Yes. Okay.

What I would do is do about a tenth of that and roll it and just roll up a little each time. You don't have to be king of the mountain on day one, dude. You can be the little guy at the bottom of the mountain at the start. And just don't be on the cover of Fast Company Magazine. Be on the cover of Slow Company Magazine, and you'll survive. That's what I would do. It's what I did, by the way. That's how I grew this $300 million company.

This is The Ramsey Show. Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. George Campbell, Ramsey personality, number one best-selling author of Breaking Free from Broke. He is my co-host today. If you want to break free from broke, you're in the right place.

He's here to help. The phone number is 888-825-host today. If you want to break free from broke, you're in the right place. He's here to help. The phone number is 888-825-5225. Allison is in Little Rock. Hi, Allison. Welcome to the Ramsey Show. Hi, guys. Thank you so much for what you do, and thank you so much for taking my call. Sure. What's up? All right. Sorry, I'm a little nervous. I would really like to go on a beach vacation, and my husband says that we cannot afford it. Okay. Can you afford it? Well, I think it's worth the expense. That isn't the question.

The question was can you afford it? Do you have the money in cash to pay for it? We do. Okay. But we do also have debt. Okay. Then the question is how do you define afford okay so you called folks uh if he told you to call us he set you up by the way no okay because we teach folks that when you know, that until you're out of debt and have an emergency fund in place, you really can't afford to do anything. That's our definition of afford.

You can't afford to go out to eat. You can't afford to go on vacation. You can't afford to buy a couch. You can't afford to upgrade your car. You're in debt and you're broke. You can't afford it until you get those things cleaned up. And so for a short period of time, you sacrifice those things, uh, these lifestyle decisions, which is all they are in order to, uh, uh, in order to get out of debt so that you can travel and do anything you want to do later. And you've got, and you can afford it because you got the money and you don't have debt, but let's say's say you owe uh do you have credit card debt as an example uh no it's um cars and my husband's student loan okay so what do you owe on car number one uh my car you owe five you you owe what oh five thousand oh you owe000. Okay. And how much is the vacation we're discussing?

If only myself and my kids win, it would be about $500. And your household income is what? $85,000. Okay. All right. And how long have you all been married? We celebrated our fourth anniversary last month. Okay.

So you're like late 20s yes okay cool good all right so the the big thing that this all points out allison is that you and he need to get on the same page about what your goals are and what price you're willing to pay to get to them that's the thing that that that helps you get the proper debt and agreed upon aligned definition about what a Ford is. Cause really what you're arguing about is not, can you actually afford it? What you're arguing about is what afford it means. What's the definition?

What's the definition of afford? Because what he's saying is if you spend $500 on a vacation, that's $500 less we put on the car. So it's just like we borrowed $500 against our car for you to go on vacation. That's what he's saying. Oh, that's a good point. Darn it. I'm sorry. But that's his definition because he's got a goal to never have any debt again, it sounds like. Like he's working our stuff, right? I'd say I'm more of the Ramsey listener than he is.

Oh, so he's not. Okay. He's just a tightwad then. Well, like I said, we've got some money in savings and we could be debt free if we wanted to. We probably have about $54,000 in liquid. What? And how much debt do you have again, total? Let's see, $19,000 for his student loan, $30,000 for the truck the last time I checked.

It's probably lower now, and then $5,000 for my car. Okay, so you could be debt-free by nightfall. You said if we wanted to, so you're telling us you don't want to be debt-free. I really do. Prove it. Liquidate that bank account and pay off the debt today. I think that he would divorce me if we didn't talk about it. Well, no, I don't want you to do it without talking about it.

I never said do it in secret. No, we're not suggesting that. I think the two of you need to get on the same page. So here's the thing. The discussion about the vacation is not really a discussion about the vacation. It's the symptom of a bigger problem. And the bigger problem is you all don't have an alignment on what your long-term goals are and what winning looks like financially. I mean, for purposes of just loving you guys, like you're our friends, I don't care if you do our stuff. We think our stuff is the fastest,

best way. And we've proven that. So I'll try to sell you on doing that. But I'm more concerned that the two of you get aligned and you're in agreement on where we're going right now. He's just working his butt off and he's scared and there never seems to be enough and you want to go spend money on vacation. And so the tightwad in him raises up. Okay. Um, but you guys are, you're not talking about the bigger issues of clearing off all this debt having all the savings and you could clear off the debt by the by dinner time uh you're not talking about the bigger issues of living on a budget together because let's pretend you were debt free and had three to six months of expenses set aside and you didn't have any payments but a house payment a five hundred dollar vacation is very affordable in an eighty five thousand dollar

household income. Agreed? Oh, totally. But I've got to tell you, the guy I'm listening to, the guy you're talking about, he's a great guy. He's a good man. He works his butt off probably. 100%. Yeah.

But he has absolutely no plan. And so his inner tightwad raises up and slaps down anyone that wants to spend money because and that's a symptom of he doesn't know where we're going even though he works his tail off and so he'll he'll get a tremendous amount of freedom by you two getting on an agreement for instance if you if i could get you to agree to do the baby steps both of you with enthusiasm then you take this money you clean off the debt you'd rebuild the emergency fund very quickly you'd be able to go on vacation he'd be able to fund his retirement he would have he would relax because he's pretty tight inside right now i can feel it just thinking about him

yeah why do you think he would be against using the savings to pay off the debt because he doesn't see a plan if he saw it as a part of a plan he just goes no we worked hard to save up this money we're not using it the plant the savings is a cushion but if you if you no one would logically do that but you only reason you logically do it as if it takes me somewhere right it's got a we got to know that we're going to a replenish it and then b we're going to build serious wealth because we made these moves because we take these stupid butt car payments and stupid butt student loan payments, and now they become investments. You stop paying for the past, and you start building for the future. Absolutely.

That's the difference. But when you've got that as a part of a plan, then you'll release that $54,000. But just saying individually, can I go on vacation? It doesn't make sense. Individually, can we pay off the $54,000? No. You've got to look at this as a part of a whole strategy. individually can I go on vacation it doesn't make sense individually can we pay off the 54,000 no you can't you gotta look at this as a part of a whole strategy and then you get tremendous power from being aligned on it but you guys not being in alignment is what this vacation discussion

exposes not that he's right and you're wrong or you're wrong and he's right both of you are wrong because you're not in alignment and you don't have an overall game plan that takes you where you want to be in 10 years. You're sitting over here dabbling in the edges of the Ramsey stuff. He's over here working his butt off trying to stack cash. Meanwhile, got debt clawing his back off.

I'm also confused. What part of the world do you live in where you can go on a beach vacation for $500 with a bunch of girls from Little Rock, Arkansas? I'd be impressed if you pulled that off. That's gas money. Yeah. And food. No lodging. No fun. Yeah. Sleeping on the beach. This is The Ramsey Show. George Camel, Ramsey personality, is my co-host. Folks, we now have officially crossed the line. The EveryDollar budgeting app is the world's most powerful budgeting app. It is insanely popular.

Tens of millions of you are using it, and we are honored by that. Thank you. It is absolutely an incredible piece of software that drives this app. It does everything for you. It makes budgeting simple. You can not only track your expenses, but when you do the premium every dollar version, you can walk through the whole paycheck planning thing. We'll actually, using the digital model, it's so robust, it'll help you work the baby steps,

and it'll call you out if you're not doing it. Like you want to call in here and go, Dave i'm not really doing the baby step the every dollar is going to go shut up don't even call dave just don't do it anymore it's gonna it's like gonna smart off at you right doesn't it george that's a premium feature you get dave to yell at you inside of the budget there's a little sass built into the software i'm just saying well it is ours why would it not be sassy if it's not ours i mean come on it's not lifeless it's got a little personality to it and that's a cute little personality every dollar the world's best budgeting app you can start for free on the app store or google play or you can go to

everydollar.com and check it out uh if you don't you're going to be one of the few people in america pretty soon that don't have it or for that matter around the world i'm amazed at how many of people are downloading this thing thank you thank you thank you thank you but um i gotta tell you it's it's working and the guys are improving it every day i'm watching some beta tests on some of the things that we've not released to the public yet some of these features this thing in a year is going to be i mean it's amazing right now when you go over to that floor they are just whittling away santa's workshop is right with a over to that floor, they are just whittling away. Santa's workshop is right with a bunch of serious nerd programmers instead of elves, but they're similar.

Very similar. Very similar, in personality anyway. You can find both at Comic-Con. There we go. Jeremy's with us in Cedar Rapids. Hey, Jeremy, what's up? Hey, guys. Thank you so much for taking my call. Sure. How can we help? Yeah, so I've really got a two-part question. The first part being, the company I work for, I've been employed with them for 17 years, and they just announced the sale of the company that's projected to close the middle part of next year. So my question really is,

should I stay on board and take part in a severance package that would be available at close that I would be walking away with about $40,000 in a severance package. And then I have two stock options that would best as well that would be around $18,000 to $19,000. So that's the first part of my question right there. Or should I be looking to jump ship and finding out what I want to do for my next career now? What do you make? Around $95,000. Okay. So we're talking about a $58,000 swing in this discussion.

Did I get that right? Correct, yes. What would be wrong with lining up the next thing to start the day after you got that $58,000 package? That would certainly be beneficial, yeah. I mean, it's a year out, i'd have to i know but i mean why don't we use that strategy what would be wrong with that strategy is there some downside to hanging around till the end if you've got the next gig lined up right yeah i think the the fear maybe is just more finding a job that would allow me to still provide for my family um since i do

make you know 95 000 i don't know that there's a lot out there in that range uh for me currently what do you do um i work i've been in sales my whole career um but i work in operations currently i transferred to that about a year ago well you can make 95 000 in sales almost anywhere dude yeah if you know how to sell you can always find a job right i want something that was going to provide a better work-life balance for my family than sales and that's why i left why does sales have a bad work-life balance uh i'm in retail sales well you don't have to be you could just be in sales sure i got sales people that come in at 7 30 and leave at 5 30 and they make more than

95 if you know how to sell you know how to sell you don't have to be in retail sales sure yep and so i mean that certainly could be a lane that i look to pursue i was really just trying to figure out the best plan to the best the best plan is to have the next gig lined up that makes 110 000 that starts the day after your 58 000 package drops in your lap that's the best plan. Okay. Because you make 58,000 signing bonus going into the next deal and you make more money going into the next deal and you got a year heads up to go find the next deal and line

it up to start then. I've started about 10 people here. Um, let me think that I personally was involved in the hiring decision on, and we had to delay their start so they could run out the end of their severance package so we could be on the receiving end of getting great people. In other words, we would want you, and so we would allow you to go ahead and make the decision. We'd make the decision to hire you, and we normally would start you in two weeks, but you're not able to start for four months because you've got to run this thing out

and get you an extra $58,000 that I'm not going to pay you when I hire you. And so I'll put up with that as the hiring side of the equation in order to get this. And I've done that with high level executive positions too. I mean, I had one that had several hundred thousand dollars on the table that, that, that person was going to get when they came here and they did get. But we had to delay their start date and we wanted them in order for it to line up with their other deal vesting in. Does that make sense? Yeah, that makes total sense. I guess my concern was just how long would a company hold a position?

It sounds like basically. Depends on how bad they want you. Yeah. And there might be another one that opens up a year from now when they get back in touch because you made the connection yeah i think i think you've got to get your pipeline full of possibilities and then your worries go down got it yeah that sounds awesome right now the unknown the unknown is what's driving you crazy yeah that's the direction to go but if you can line it up now if if somebody comes along and offers you 200k and you got to start tomorrow forget the well screw it yeah walk away from

the 58 because you just got 105 000 raise right you can do that math but if they're going to offer you 95 to 95 and you're going to have to walk away from 58 i'm going to keep looking and i got to quit tomorrow no i'm not you know we're going to ride this thing on out if you got that much in there. And I don't know what those stock options, you need to understand what the sale is going to do to the value of those stock options. I don't know what that is. You seem to have that nailed down, but I'm not sure exactly how that works in that world because I don't know this stock and I don't know this deal.

But I'd want to learn those things too. But, yeah, that's the thing to do. So George, one of the things that Ken Coleman talks about a lot, and I love discussing with him is, um, and this guy, you know, he, he didn't say this, but a lot of people in these situations, I lost my job. Okay. Cause that's basically what he's saying. It's just a matter of time. He's lost his job. Immediately, the first thing that happens to any human being when that occurs is fear. If not, you're weird, right? Your first thing is you get afraid. But immediately after you get afraid, what we want to train people to do, and Ken's talked about this a lot, is possibility thinking rather than, because what happens is i talk to

people and they go yeah well you know i'm gonna lose my job in two months and and you know i'm not gonna be able to get a job making as much why not why don't you get a job making more why is it that automatically you have to take a pay cut just because you're changing why don't you get a pay increase when you're changing you would never have left the job voluntarily to make less money and so you know you haven't been out there looking around yet you don't know how real they're just a belief you might be prettier than you think you are you know that's the hope and usually what happens is that next job ends up paying more rarely do people go to the next thing and it's wildly less and so what it is if

they accept defeat before they actually fight the battle yeah you know go ahead don't surrender we haven't been fighting yet go and raise the flag just because you quit no no no no no roll up your sleeves go get it baby go get you some and there's plenty of stuff going on the marketplace right now this is a wonderful time to be looking for a job yeah and let me just tell you, if you can develop the skill of serving people by helping them do business with your company, that's called sales. If you can develop the scale, not sales and manipulation and greasy, grimy, slimy stuff. But if you can develop the skill of serving people well with something you believe in i believe in our every dollar app i don't i have zero qualms about telling you to go get that that's me serving you that's selling you and i'm going to do that the rest of my life and so you find

something like that that you can represent with integrity and you can serve people and you develop that skill of talking people through that and letting them see the brand differentiation the value build value for them if you know how to sell you're always going to have a job you'll never go hungry ai can't replace that i'm just saying and there's no digital thing that'll replace it human beings talking to other human beings in a way that causes them to be served is a very, very old profession, baby. It's not going out of style.

Yeah, and it's going to be around. So this guy, he's a lot prettier than he feels like he is, right? I like that. This is The Ramsey Show. George Campbell Ramsey personality is my co-host today open phones at 888-825-5225 jay is with us in fort lauderdale florida hi jay how are you dave how you doing good man how can we help well um i'm new to the, and I'm sure you get this question a lot, but I've never heard the answer. I'm trying to figure out why I should pay off a 2% mortgage with money that's making 5% or 15% or whatever.

I mean, I can pay it off, but, man, 12 years left on a 2% loan it's i can't what what's your balance find the reasoning uh 92 000 okay all right so um i i understand your question and uh i as a math nerd i used to make all of my decisions through the math lens as well the more i've developed teaching this stuff and learning about it over 30 years and working with very, very wealthy people. One thing, a couple of things that come to mind, and I completely grasp your concept. It seems ludicrous in the way you're looking at it to do that. Um, but let's, let's first break down and say, what are you really making? Okay. So at 92,000, I'll round it up for your benefit to $100,000, so the math is real easy.

Sure. And so if you're paying out 2%, and let's just say you're making 7%, you're netting $5,000, agreed? Yes. Okay, and so that's $5,000, right? Yes. Okay, what's your household income? It's about $140,'s about 140 okay all right and well it's actually more than that because i i uh collect a pension as well how old are you i am 63 okay so am i so okay so can can we agree that five thousand000 a year, $400 a month,

is not going to make substantial difference in your wealth? I mean, we can agree to that, yeah. It's $400. A lot of families spend that on pizza. Right. Okay? So, I mean, it's not a lot of money we're talking about. So more than anything, we're talking about a concept than an actual fact.

And the reason I know that is that we ended up a few years ago studying millionaires because I became very interested in what makes people wealthy. And we did the largest study of millionaires ever done. We studied 10,167 of them. And we found, by the way, that 89 89 of them were like you they're first generation rich because i've got a feeling you're a millionaire are you no not yet i got a feeling you're pretty close though how much equity you got in that house uh i got where i'm at right now i probably got about 150 now what do you got in your nest egg? I got about, I don't know, 400. So I'm not there yet.

Okay, you're about halfway then, 650. Okay. You're sitting on pretty good coin, though. You're not a broke guy, okay? No. So you've done well. Congratulations. So what we found as we studied these millionaires was we asked them questions of what caused them to build their wealth. Where did their wealth come from? And because we want to know, okay, if 89% of them are first generation, it's important to know that 9 out of 10 millionaires in North America today became millionaires by doing stuff. So what did you do? The number of them that said,

I kept a mortgage and invested it because I made the difference was almost zero. It was weird. It was weird. Well, I get that because, I mean, traditionally we haven't had 2% mortgages. Well, but even if you had a 6% mortgage, if you had it in a mutual fund and you're making 12, you ought to be making 5 or 6% on it. You ought to still be making that $5,000 spread. But the point is that $5,000 is $430 or $416 a month, which is not spit.

It's not enough to cause you to become a millionaire. So it's weird. What we did discover in further analysis was with the actual data of real wealthy people, not discussing concept, but discussing the people that really did it, was the freedom that they felt by having zero debt allowed them to negotiate with their employer different. It allowed their relationships to be at a different level because there's zero stress. And you would purport to say there's zero stress here because I'm not stressed about this. But you have stress that you wouldn't have if you were debt-free.

We have to all say that. If you had zero debt, your stress level goes down oh and by the way that actually has a physical component to it too the number of people with hypertension in america is at the highest level it's ever been high blood pressure is at the highest level it's ever been heart attacks at the highest level they've ever been oh by the way debt levels are at the highest level they've ever been there is a correlation and a cause effect series here in the data. And so as we get into all of that, what we've bottom line is you can keep doing what you're doing. We wouldn't call you stupid, but the data says that people don't really do that that are building wealth. They really pay off their

mortgage and they really take their old mortgage payment and invest it in their 401k so that they have more money. That's what the actual data tells us. And that's good news. But, you know, and we talked about this in the investment seminar a little bit, that the difference in the thing we're leaving out of this discussion is risk. The beta. Yeah. You're not talking about risk. You do carry risk when you carry a mortgage, because we've done research. 100% of the foreclosures occur on a home with a mortgage. And there's a lot more to this.

You know, there's the mathematical side, like you mentioned. Most people don't actually look at their amortization schedule and their mortgage because you might see, oh, I'm actually paying $600 a month toward interest right now because of how this thing's weighted right now. You're not making that. And unless you have the full $92,000 in a 5% account, which is almost nobody, doesn't sound like he had all that money sitting there necessarily, then it's not even apples to apples.

And another piece is people forget on the Ramsey plan, you're investing 15% while paying off the house. So it's not a trade-off of saying, I'm not going to invest it and said, I'm going to pay off the mortgage. Then on top of that, you pay off. Yeah, but he's just saying in general, on the concept of why would you ever pay off a 2% mortgage when you can invest at a 10?

That's a standard question. And he's right. He's a new listener. It's a good conversation. Thank you for calling in with that, by the way, because people think we're crazy for suggesting you do pay it off. But the rationalization or the justification, the reasoning, none of that, the reasoning for the advice is that it's right

because the data shows that the borrower is slave to the lender. The data shows your relationships are different, your career path changes, and you make more money because you're not. If you're running your own business and you have zero debt, you make different decisions running the business uh and you take fewer crazy risks and more proper risks in your business because you can and it doesn't scare you anymore you're not you're not playing desperate you're not playing not playing small ball and i've watched small business people prosper beyond belief because their brain is freed up they don't have this monkey riding their back living in your head rent free the other piece is I want to ask different questions. Do I want to be 63 with a mortgage? You know, like who dreams when they become homeowners?

Man, I hope I get to hang on to this thing forever. I mean, there's just a life you get to live when you don't have a payment. I mean, mortgage means death pledge in French. Did you know that? Yes. Death pledge. That's what you're signing up for. And so I'm going to live more freely. I want to live in my sixties within free up a payment, invest it, and you're going to be okay either way. But in the meantime, goodness, I want to get that mortgage off my back. Yeah. So, um, it is, um, Jay, it also doing the show all these years, I have noticed that, um, people that have pretty serious wealth never ask this question

and that's not to make fun of you but they just don't it never occurs to them that they're they're on georgia's side they're like i don't want to be in a death pledge i want to be out of debt and they don't even necessarily know why sometimes they just have this pension to get away from it but your most powerful wealth building tool is your income. And when you don't owe anybody any money, you can use that income. That $140,000 is a lot more powerful than the $416. Than any spread you could make. And Dave, I did this when I was in my early 30s. We paid off our house and, you know, my financial advisor and creator friends were like,

dude, you're an idiot. I can't believe you paid off your mortgage at 3.1. And I'm like, guys, life is more than a spread. I got goals. You know, my wife is able to stay home now because we don't have a mortgage payment. And so you got to think bigger than just a mathematical spread on a piece of paper. Well, I've been doing this so long that I've seen people's lives change in all areas of their life. And that actually has a mathematical effect as well.

For instance, you don't have to work for a toxic boss. You can go work for somebody else that pays you more, and you have a better quality of life. Your stress level goes down. Your doctor bills go down. All these things run together. More options, more margin, more freedom, more joy. I'll take it.

Turns out God knew what he was talking about. Get rid of the death pledge. The borrower is slave to the lender. You don't believe me? Try paying it all off and see if you don't feel like you're free. This is the Ramsey Show. Our scripture of the day, Luke 1610. Whoever can be trusted with very little can also be trusted with much.

And whoever is dishonest with very little will also be dishonest with much. Winston Churchill said a lie gets halfway around the world but for the truth gets a chance to get its pants on. That's a truth especially these days. Social media. Yeah that's what the internet's for. Everything on the internet's true. Abraham Lincoln said that. All right Chris is with us. Chris is in Miami, Florida. Hi, Chris. How are you? Hi, Dave. Good.

So my wife and I, we're going through, you know, we try and follow the Ramsey solution as much as we can. The only debt we have right now is a mortgage, and we have a home equity line as well that we took out to replace our roof. So we're attacking the home equity line to try and get that paid off. The question that we would have is, we own both of our cars. Should I sell my truck to pay the equity line off faster? Our plan right now is to pay the equity line off in about nine months.

No. If I sell my truck, we could probably do that in about three. No. You should just pay it off in nine months. Okay. And you ought to cut some other stuff out of the budget and do it in six months, but you ought to keep the truck. That's not enough time.

If you told me it's going to take you three, four years or something, and selling your truck would cause you to do it in nine months, I'd sell your truck. But if you sell your truck now, nine months later, you're going to be looking for a truck. Because you'll be out of debt. You don't have the money to buy a truck, and you'll be able to do that on the baby steps, right?

Right. And the truck is paid off. Truck's paid off. The only debt is the HELOC. The only debt, yeah, is our first mortgage and then the HELOC. Yeah. And what's the balance on the HELOC? About $38,000.

Okay. And your household income must be over $100,000. About $275,000. Oh, God about 275 okay okay shut up on the nine months it's 38 000 cut your freaking lifestyle and pay that thing off and then get you some money saved so you're never doing this again you're too you make too much money be the stinking you're making 20 grand a month. Hello? Yes, we're also maxing out our 401ks. We both put $23,000 a year into our 401ks. Okay.

Well, we tell folks when they're in debt to stop all 401k investing. But I wouldn't do that in your case either because you're going to be out of debt in six months or less because you're going to be able to just you know i don't think you pinch this budget hard enough i really don't i mean i don't care if you're maxing out your 401k you're making for it freaking quarter million dollars a year plus okay so you know you've got the margin in this you guys need to look at the budget and go look this whole thing of being broke was stupid we're almost through it now and we need to knock this thing out and then you get us an emergency fund hey hey wait wait just just just just just a second hold on come back chris where

dave's not done with you where'd he go how much do you have in your savings uh we have about 15 000 liquid okay i would take that down to about a thousand and then I would do this in about three in about a month and a half, two months, I'd be debt free. And then I would rebuild your emergency fund to a proper amount of three to six months of expenses. And then I would start your 401k. In your case, you're going to do this so fast. I wouldn't stop and restart your 401k two months later because you're going to do this real fast. If you guys are are um doing about six things at once poorly does that make sense and all i want you to do is slow down and focus on one thing knock that out then knock the next thing out then knock the next thing out and and if you'll just do that and do

that with a really tight budget and say look we're not spending any money till we're out of debt and have an emergency fund in place. No more spending people. We're turning off your freaking Amazon prime. Okay. We're turning off your stupid little thing you had planned for the summer. We are getting this mess cleaned up. We make too much money to constantly live in paycheck to paycheck and asking a $38,000 question when I make $275,000. Dude, dial it in. Knock it out. You can do this. You can do this. Hang on. We're going to get you guys signed up. I want you and your wife on the every dollar budget together, and I want you all to sit down and have a serious discussion about avoiding this kind of thing. Again, you make too much money to even have to borrow this money in the first place to put a roof on. You should have been able to put a stinking roof on your house when you make 275. And so all of that. And the reason I'm

talking to you like this, Chris, is one of the things I discovered in my personal life as I went through going broke and losing everything and starting again, and I've watched it with people for 30 years, the people that win with money are not the people that feel like everything's okay they're the ones that get pissed off they get disgusted and they say stuff like I make too much money to be this broke that's why I'm saying it for you you make too much money to be this broke Chris you need to be disgusted about that enough to do something about dialing this in managing this tighter you don't have to live on beans and rice but you do for about i don't know the next 20 about

next two months because you need to get this thing paid off and you get your emergency fund built back up as fast as you can and then we'll talk start talking about going out to eat again and we'll talk about doing all this other stuff again but um there's a lack of focus and an organizational laziness in your symptoms here. We need to change some habits. Selling a truck is a one-time thing. You got to change the habits that got you to this point. And that's where this next two months of sacrificing will help change that. Yeah. If you're willing to do something as radical as sell a truck, it's not what I'm asking you to do to get organized and focused is is less radical than selling your truck it's a few lifestyle tweaks less radical than telling you to cut off your 401k and i didn't tell you to do that even just because you're going to do this so

fast if you'll lean into the other things if you're going to screw around with this stuff for six or eight or ten months on all of it you need to stop your 401k temporarily till you get your till you get your crap together but i think you make enough money to do it without stopping without selling the truck or stopping the 401k for a short because it's such a short time frame you start it and restop it it's going to create all this dadgum paper logistical nightmare same thing as selling the truck around buying another truck so it's a good question but folks let me tell you this personal finance thing is 80 behavior So a healthy level of getting disgusted with your former self is part of a part is part of turning things around.

I'm not living like this anymore. I don't want to feel like this anymore. I don't want to have these discussions with my spouse anymore that sound like this. I don't want these words coming out of my mouth. Jade talks about when she was growing up that they would say, we ain't got no money. And she she said i don't want to ever have a house where we have to say we ain't got no money so that's a that's a no it stops with me i'm breaking the chains i'm breaking the curse of my family tree it stops with me this is the last ramsey that's going to have this discussion about debt uh because the rest of them i'm going to disown them if they go in debt that's it i mean

we're just not going to do this anymore. It stops with me. And, you know, you can do this. You guys can make a decision to change your family tree. You've got to have those values and principles. If you've got nothing to stand on, then you're going to fall for the next thing that comes your way. And that's where that value is.

We don't do debt. It's off the table. Yeah. And so roof needs to be fixed to make 275 we put the roof off to 24 we put the roof off two months and we pay cash for it or three months whatever it is but yeah that that's you know when you take debt off the table as a possibility it forces you to think differently about all the different things you're doing and it forces you to move at the speed of cash yeah force you to change your lifestyle yeah and focus in but there's nothing wrong it's not shaming to say what i was doing

was stupid and i'm not doing that anymore it's different than saying i'm stupid i'm stupid is shaming but what i was doing is stupid that's not shaming that's just saying i learned something about the law of gravity i fell off the freaking porch you know that was stupid that doesn't mean i'm stupid but i had to learn a lesson about the law of gravity and so you know i man i gotta tell you the number of stupid butt stuff i have done and i'm a pretty smart guy it's crazy my only goal is to not do the same one twice shame what is it fool me once shame on me on me. Fool me twice, shame on you. Something like that. I forget. I don't know. I'm not good at these quotes, Dave. That sounds right. Maybe a nursery rhyme, but I don't know.

I just kept thinking of the George Bush version of that, you know, where he fumbled it. Oh, did he? Yeah. I don't even want to know. I'll show you after the show's over. It's that good. Oh my gosh. But that's a good life lesson. And I love one of your quotes, Dave, you know, what is it? Success is a pile of failure that you're just standing on top of yeah instead of laying under it that means i learned from my mistakes right the number of people that i know that are successful that made zero mistakes is zero there are people that they learn all the time they're always doing something stupid but it's just one more thing i stand on top of it's

a you know success the gleaming mountain of success is really a pile of garbage. You're standing on it. That's how it works, boys and girls. Sorry to upset your apple cart, but that's the deal. Good call, man. Thank you for letting us, uh, giving us a jumping off place that puts us 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, Dave here. You want to hear even more life-changing content from Ramsey? Download the Ramsey Network app so you can catch all your favorite shows all in one place like the Ramsey Show,

Smart Money Happy Hour, and The Dr. John Deloney Show. You'll get real talk about life, relationships, money, and your career. Plus, the app lets you browse by topic like debt, business, or selling your home. Get the content you want whenever and wherever you want to listen. Download the Ramsey Network app today.