The Ramsey Show - You Can't Stumble Your Way Into Financial Freedom

Starting point is 00:00:01 Doing nothing with your Medicare plan could cost you hundreds or even thousands next year. Chapter can help you avoid that. Go to askchapter.org slash Ramsey. Brought to you by the Every Dollar app. Start budgeting for free today. Normal is broke and common sense is weird, so we're here to help you transform your life. From the Ramsey Network and the Fairwinds Credit Union studio,

Starting point is 00:00:33 this is The Ramsey Show. I'm Dave Ramsey, Rachel Cruz, Ramsey personality, number one best-selling author, co-host of the Smart Money Happy Hour on the Ramsey Networks, and my daughter is my co-host today. Open phones at AAA 825-5-225. Hernan is with us in Tampa. Hi, Hernan. How are you? Hey, Dave, how are you? Better than I deserve.

Starting point is 00:00:58 What's up? Amazing. I'm 25. I just moved to Tampa, Florida. I'm making $2,000 a month across three jobs, and I want to build an online coaching business. I have 3K in savings, and I don't know if I should just be saving first

Starting point is 00:01:17 or investing everything into building my business right now. Okay. Tell me about the coaching. What are you coaching people to do? A fitness, hybrid training, where it's just running and lifting weights at the same time. Okay. And brand differentiate yourself for me, meaning if I'm your customer, which I'm probably not, Rachel might be. But if I'm your customer, why am I talking to you on the online rather than the 8,000 other people on YouTube? 20%, yeah. Well, I'm 25 years old and I've struggled a lot with being consistent in the gym and start a 75 hard journey, which.

Starting point is 00:02:05 just sparked my passion again for it. I know the struggles of being on and off with the gym and being able to get back into it and not overwhelm yourself with everything because it is an overwhelming journey of getting into shape. So you have a story of starting and stopping and failure that other people can empathize with and you're going to use that to connect to them

Starting point is 00:02:29 and help them on their journey. Did I get that right? Yes. Good. I like the, let me tell you what's beautiful about this. you articulated a brand position fabulously. It didn't take you a second. You didn't have to think about it.

Starting point is 00:02:43 You spit it out. You have spent time thinking about this and it has paid off. So really well done. Is part of the 2000 you're making every month doing this in person, this kind of training, or is it just like odd jobs that you're doing just to pay bills? No, it's just odd jobs to pay bills. Okay. So you're not making any money on this yet.

Starting point is 00:03:05 No, this is starting fresh. Okay. So how will you acquire your customers? Through my ideas through Instagram, through posting content online giving them value, and hopefully getting my first two to three clients just to get some testimonials out of them to have proof. Okay. So is there, I mean, in my mind, you working out and creating content for him, Instagram, if you have a phone is free. You don't need to spend money to do that until you get

Starting point is 00:03:42 customers. And when you get customers, they give you money. Then there may be a couple of things you could do to push some of those reels or enhance some of those reels or something to get people to see them that aren't seeing them yet. Yeah. How much is the online coaching? How much you're charging? I don't have a price yet, honestly. It's starting to build it now, but it honestly ranges around a a thousand to two thousand dollars i believe depending on how long how long you want to coach them for or they want you to coach them okay and and why are you not working in a gym as a personal trainer honestly dave uh did it try to go to gym once and they get a call back and that's just honestly the truth i haven't gone back to doing it yeah you're going to have more than one

Starting point is 00:04:34 rejection with customers the rest of your life. So I think it's a good base of operation for you to be around people doing the stuff you're doing all day long. And it also gives you a place to shoot some of your Instagram stuff and show some examples rather than just in your garage. And by the way, you need a job because you're not making any money. And it's going to be a while before this actually monetizes. So I want you to go do this. I don't think it's going to cost you much money. I don't think investing money into the business is the answer. I think getting an income while you grow this side hustle into a business. Yeah. And just be cautious because there's a lot of chatter on social media about, you know, buy my course on how to build a course and courses. It's all this,

Starting point is 00:05:22 you know, a lot of courses. And some people make great money doing it. But don't fall for something that feels too good to be true as well because there's a lot of effort and work that goes into it. So move at the speed of cash, Herman, don't go into debt for any of this. And if you can, before you purchase, you know, someone else helping you in the, any level of investment in the business, I would, I would do my due diligence to make sure that what I am buying or purchasing is going to help me and has helped other people. Because I think there's a formula. There's a smart formula to digital marketing. I really wouldn't do any of that until you're making a bunch of money. And right now, what you have is some girly.

Starting point is 00:06:02 good theories. You have a great brand position that you, I told you that, but you've made no money yet. You have no proof that this is anything but a theory. So the next stage, and when we're launching a product at Ramsey, whether it's a coaching product, a tech, a digital product, or whatever, we want to see some social proof. And social proof is people tell you they will do all kinds of things, but when you actually ask them for their money, that's when you find out if you got something or not, because they're not going to give you their money until you have proven value to them. people trade money for time and value it's all they trade it for and so you know when you start actually getting money on your theory now it's not a theory anymore it's a business but you haven't

Starting point is 00:06:41 got a business yet right now you've got a theory and i think you might have one and i want you to go do it but while you're doing on this to give yourself some patience you need to be making some money at a full-time job and i love having a full-time job in the vicinity of what you're going to be doing rather than I'm going to go work at Costco and I'm working on my other thing, my, my personal trainer coaching thing on the side. No, I want you to be in the training business, be around trainers, be around talking to people about this, be all up in this industry, be learning from people that are doing it wrong. Find you some anti-mentors, you know, find you some mentors.

Starting point is 00:07:18 And so, yeah, you need to go to work at a gym and you need to keep, you know, there's a bazillion gyms in Tampa, Florida. Somebody will hire you as a personal trainer. if you tell them your story. And, you know, you may learn some techniques of teaching while you're working there that will help you further this theory of yours into an actual business. So that's what I would tell you today. But no, I would not spend any money growing this business to Rachel's point right now

Starting point is 00:07:43 because you don't have a business yet. You have a theory. And I don't want to pay somebody to take my theory to market. You take your theory to market. That's your job. And you can do it. I really believe in you because the thing. about you was you could actually articulate with no hesitation what it is you're trying to do.

Starting point is 00:08:01 And that is very unusual. I have people come in that work on our team and they go, you know, we got this need out there and I think we could do this or this. And they're not nearly as dialed in as you were just then. Yeah. And the testimonials, I think specifically with, I would say, I mean, physical fitness. I mean, probably any service, but especially with that is one of the promises that you said or one of the motivations is that it's so hard to destroy. start and stay with it and stay consistent. So if you can find a few clients and over the course of six months, be like over six months they've stayed with me because of this tactic. Here's your before and after show. Yeah, a level of testimonial too, I think is going to give you

Starting point is 00:08:38 credibility. Because I think that's probably what you need starting out. Yep. Very good. If you're serious about building a business, you need an easy way for customers to buy from you. Yeah, that sounds obvious. But a lot of business owners leave money on the table. Not because their product isn't good, but because the buying experience is broken or complicated. Shopify fixes that. With Shopify, you can build a professional storefront and get it in front of your customers fast. No coding, no technical headaches. And when your customers are ready to buy, Shopify's purple shop pay button is one of the best converting checkouts in the world, which means fewer abandoned carts and more sales. And if you hit a snag, sidekick, Shopify's built-in AI assistant, is there to answer questions and keep you moving. You've got enough to think about just running your business.

Starting point is 00:10:05 The last thing you need is to lose sales because the buying experience lets you down. All you need is the idea. Shopify handles the rest. Start your free trial at Shopify.com slash Ramsey. That's Shopify.com slash Ramsey. Shopify.com slash Ramsey. Nathan is in Houston. Hey Nathan, how are you?

Starting point is 00:10:46 Hey, Dave. Hey, Rachel. Thanks for taking the call. Sure. I'm calling today to ask the question about should we drain or take our emergency fund down to a level to pay off the mortgage? We've been following the baby steps and doing that for a long time. Our kids will be in a rampie babies effectively and they'll be the beneficiary of all this. Wonderful. And so it's truly just.

Starting point is 00:11:08 the question for my wife, we've done this for so long, so budgeted, and all these things are happening. And now we've got to, you know, take that final step to pay off a whatever 2% mortgage or something. So what's the balance? What's the balance on the mortgage? 280. Okay. And where do you have $280,000? We have, we've sold some projects. We started a business a few years ago, and we have some projects that were acquired by a major public company. And so we have some earnouts that we've already received three out of the four payments and we have one final payment coming and so we've been

Starting point is 00:11:42 accumulating that and then separately why were you not already chunking that on the mortgage? Just it it's all happened so quickly. Okay. So it's very recent. It's only happened. How much do you have saved, Nathan? How much do you have in the account today in those accounts? In total, we have $190,000 and then we have about $100,000. $36, 156 maybe in non-retirement of brokerage accounts. Okay. So that is, what, 340, right? Yeah, 346, and you need 280.

Starting point is 00:12:25 So why would your emergency fund disappear? Well, it wouldn't. It's just when I talked to my wife and we laid it out. We were discussing, you know, what level of emergency fund, right? Well, emergency funds should be three to six months of expenses in what world is 66,000 not that amount? It 100% is way more than that, but it's more just the reality of the decision. The reality is you're not touching your emergency fund, which is how you ask the question.

Starting point is 00:12:54 Yeah, but seeing that amount of money in the bank. That's different than do I take my emergency fund down to pay off my house. That's not an accurate question. That's correct. It's more of the emotions of draining an account that has a lot of money in it. And you're thinking, do we really... And I'm fine with it, but my wife has, you know, she's more hesitant, you know, and your mom in your life's phrase or her feelings or, you know, she's...

Starting point is 00:13:19 Feels good. Yeah, her safety. Well, here's a couple things to think about. And, yes, I would write a check out of the $346,000 and pay off $280 and have 66 still sitting there by nightfall. No question about the answer to the question. but then let's talk about, you know, the actual feelings that go with that and the sense of all of those things. Two things come to mind. One is it is a valid thing, and we're seeing it more and more, we're understanding it more and more,

Starting point is 00:13:49 that it's weird the way your brain works. When you pay off a mortgage, it does not feel the same as when you have that same amount in a pile. Like you're diminishing this pile and putting it over on the house. and it feels like it's gone. Yeah, because you're kind of like losing that. It feels like it's gone. It's not gone. It's not gone.

Starting point is 00:14:11 You just moved it into equity. So math-wise, it's really not gone. You just changed it from a brokerage account to a paid off house. That's all it is. So now we have real estate instead of the other. So, and, you know, the mathematics don't tell you that. But the feeling is I'm diminishing one thing, and I don't feel like I'm getting as much on the other side.

Starting point is 00:14:29 That's thing one. Thing two is when you pay off your house on the positive side of the ledger of this discussion, you're going to feel different. She's going to feel different because you've never been there. And I've talked to literally tens of thousands of people over the last 40 years to say, it's like I could breathe again, like somebody was standing on my chest and they got off. And I didn't even know it. I got so used to it.

Starting point is 00:14:57 I feel a little bit that way now of I can see that I'm about to be able to take a deep breath. Yeah. I can still feel that call. from the guy that had to pay restitution from being a bank robber. I can feel it. I mean, we've done this through business school. Yep. And so many things.

Starting point is 00:15:14 Yep, exactly. Now, then the other one is the, you know, and this is for your wife, is I have told tens of millions of people, tens of thousands in person, but millions indirectly to pay off their house. And I get criticized for almost everything I do from the time I wake up until the time I go to bed. but no one has ever called me ever and said i hate you i hate the fact that i paid off my house because of you i've never had that one no one is ever mad at me for that they all talk about it as before they do it it's like oh why would i get rid of two percent dave you're stupid and you're wrong and you're crazy and all this and it's like but when they actually do it no one ever regrets it And so, and the joke is if you pay off your house and you hate it, Nathan, you can go get another mortgage.

Starting point is 00:16:09 Right. That's what I've shared. I think, I know it's an emotional thing. It would be a six percent, but it's, you know. So I would just say, honey, we have $66,000 left in the bank and we don't know anything else on our house. We've got to do this. Everything else that Ramsey has told us to do, we went and it worked, and they're not steering us wrong here. Yeah. And you're probably not going to like that. this, but I'm like, even if you wanted to slow step and be like, let's throw a hundred grand tonight at it. Throw a hundred grand. And let's wake up tomorrow and see how we feel.

Starting point is 00:16:39 You know what you mean? Like, nothing's on fire right now. You guys need to pay it off because you would have no mortgage next month, which is crazy. I know you would disagree. No, I get your logic. But the problem is you don't get the feeling of reducing it that you do of paying it off. No, I know. There's no relief.

Starting point is 00:16:53 No, it's not relief. But I think it is another step to show confidence of like, okay, we are okay. I'm okay, because it's the amount that's being diminished in the bank that is scary looking. Yeah, if you had $66,000 in the bank and a paid-for house, would you go borrow money on your house so that you have more money in the bank? No. And this is the same thing in reverse. It's exactly the same thing. Every day you don't pay this off.

Starting point is 00:17:20 It's like you're borrowing on your house to put money in savings. It's exactly the effect. And so it needs to be paid off tonight. But we've got to get her on board. and I appreciate that and we'll be empathetic and gentle and persuasive and all those things and do it. Yeah. Well, and run the calculations of how quickly you can build at 66,000 back on top of when you don't have a mortgage payment. And you haven't even gotten all your payments from your business sale yet.

Starting point is 00:17:52 Yes. You still got more money coming. Yep, yep. So it's not, you're nowhere near the edge. Yes. And well done, Nathan. And that's a lot of work on your part to get to this place, you and your wife. So you're there.

Starting point is 00:18:06 It's interesting. It's a study listening. So out of the abundance of the heart, the mouth speaks, right? The Bible says that. So the words we use tell us where our heart is. And, you know, it took a minute for us to figure out that he actually was asking the wrong question because his heart feels like he's actually. getting into the emergency fund.

Starting point is 00:18:31 And once we got into it, he's not. Or maybe she feels that way. And he was recasting what she was saying. I don't know. He may have been asking the question on her behalf. But it's interesting that the feeling is that they're getting into the emergency fund. And they're nowhere near it. Yep.

Starting point is 00:18:47 Yep. And yet that's, it's touching that same place. It's this feeling of security from a pile of money instead of security from debt-free. And once you've been 100% debt-free, you won't trade that for a pile of money. I mean, the stuff that I own that I could go borrow money on and make a pile of money, I could do it by the end of the day and have a big old pile of money and have all the debt to go with it over on the stuff I borrowed on.

Starting point is 00:19:12 But I wouldn't trade that piece for any pile of money. The piece, the piece, I always feel like I'm up in the mountains and it's a cool morning and the sun's coming up and you get that deep breath and it's cold air into your lungs. It's like 46 degrees. I love that. That's how it feels to me when you pay off your house. And nobody hardly has that feeling. When you do have it, you won't trade it.

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Starting point is 00:21:47 Are you sick and tired of working hard and having nothing to show for it? Work my fingers to the bone and all I got's bony fingers. You ever been there? I've been there. No fun. You don't have to live that way. Our every dollar budget app helps you find extra money every month. You'll feel like you got to raise when you start doing a proper plan. It also builds you a personalized Ramsey-based plan to beat debt and build wealth. In just 15 minutes, you're going to find thousands of dollars in hidden margin. Don't be normal when you can live like no one else. Start every dollar for free in the app store or Google Play. Thomas is in St. Louis. Hey, Thomas, how are you? Howdy, Mr. Ramsey? How are you? Better than I deserve. What's up? I have a couple questions. I'm getting married in about a week. We're 100% debt-free. I'm on baby step number three. And I'm debating leaving a stable job with good benefits to go risk an entrepreneurial opportunity in another state to do window sales as a window representative to potentially make a lot more money.

Starting point is 00:22:50 What are you doing now? I'm an H-FAC technician. I'm four-month. into the trade and I'm bringing in 3,800 a month. Okay. Where did you hear about the window opportunity? My cousin is a manager down there in another state in Idaho. He's running a window company and he's making it considerably more than I am and he has reached out. Well, I kind of reached out to him, but.

Starting point is 00:23:19 Dave's pondering. Yeah. Okay. Okay. So what I want for your first year of marriage for your relationship is stability and predictability. And this sounds like a wild adventure. And I do like wild adventures. I don't want to do those on my first year of marriage because I want you guys to invest in each other, not in a wild adventure. You are in St. Louis. Where is she? She's out here. We're living separately right now. She's living in a hotel, working for a hotel, and then we'll get married and be living here in St. Louis. So if you go to Idaho, she has to get a job, too, right? Yes.

Starting point is 00:24:12 Have you talked about that? We did. We have, and she's okay looking at any job, Costco or just something random. hopefully to get medical insurance, especially if kids come along. Because this job doesn't offer benefits, because you threw in benefits with your current job. Right. Current job has awesome benefits, and the sales rep doesn't, but for higher. How long has your cousin been doing it? He was on and off with other companies, and I think he's been with his company for two years now. And he doesn't own it. He's working. He's a manager there.

Starting point is 00:24:49 He's working for the company. How big of a company? is it? It's growing. It's not a huge sales company, but it seems really stable. His first year there, he brought in $198,000 in the year and then doing better and better each year now as his client management and has extended offers to me to come out and work with him

Starting point is 00:25:12 because he thinks I can do well in sales. But it's just nerve-wracking. Yeah. So are you, are you, are you? trained as a HVAC tech, you know what you're doing. So if this thing goes sideways, you could go to work for an HVAC company there? I'm getting trained. I feel pretty well versed, but I'm not 100%.

Starting point is 00:25:34 When does the training ends? You don't have a set of credentials to walk into another HVAC company and get a job. No. No. I soon will, though. I'll be getting my certification in a couple weeks. Okay. Then you would.

Starting point is 00:25:46 Okay. Yeah. Yeah, well, obviously, complete the certification. Okay. The only, I don't know why, I just have this like hesitation, Thomas, just a little bit of when things feel too good to be true. Right. Sometimes they are. Not always.

Starting point is 00:26:01 Sometimes they are, though. And so I, I appreciate your patience on making the decision and that you wouldn't just hear $198 and just be like, let's just jump ship and go. So, yeah, there, I mean, there's a part of me that I'm like, I mean, yeah, you can go try it because you have the backup of the, of the license. to be able to plug into another trade, which is awesome. Finish up your certification for sure. So the thing that's bothering me, the thing I keep hesitating, I never want to tell people to not go make more money if you can. I think that's a wonderful thing.

Starting point is 00:26:38 I don't think it solves all problems, but it solves some of them. And so if you can go from making $40,000 a year to making $140,000 a year, it does change your life. That's the temporary thing. But what it doesn't do is it doesn't give you a 15 or a 20-year track to run on. Because you're not, you're very likely, you know, you said you're what, 20, how old? 21. 21.

Starting point is 00:27:08 It's very unlikely that you will be selling Windows at 31. Right. Even if you're making 198,000. It's very unlikely that you'll still. be doing that a decade later. For sure, two decades later. So at 41, for sure. So the question I'm always asking is, where is this taking me? And it could be, maybe we need to rethink it, I don't know, I'm a big fan of people learning how to sell, because salespeople are some of the best paid people on the planet, and more people in marketing and sales end up as CEOs than any other trade. It's the

Starting point is 00:27:49 fastest track into the C-suite into running a business, running your own business, running someone's business, because you're developing people's skills and persuasion, the ability to persuade. And not the ability to talk, apparently, but the ability to persuade. Just say the word. That's a great point, though. Where is it taking you? Not just making more money. I don't want to just go make more money and end up being something I hate.

Starting point is 00:28:15 In a place I hate because my cousin called me. that's a that's a dumb reason to do a career you know it's like because i mean i like my cousin but i'm not going to do something because he said do it i mean there's like nothing he's going to no so no uh but uh but i mean i'm not saying he's a bad guy i mean that's just but this just sounds like somebody dangled a carrot and now you're the horse jumping after the carrot so i want to think through where this is taking me the who do i want to be at 35 years of old and how does this help me get there? And if the answer is, I'm going to go over there and make $200,000 a year for four years,

Starting point is 00:28:55 and then I'm going to move to X that I've always wanted to do, or we're going to open a business doing Y that I've always dreamed of, and I'm going to use that $600,000 swing to do that. That's an okay answer. That's an okay answer. You're going to pick up a load of fuel, and the fuel is going to take you to your dream. And that's okay, if that's what you're doing. But I want this conversation to go beyond I'm taking a new job because my cousin called me. Well, and because of the money.

Starting point is 00:29:23 Like we, there's a lot of people that they get a big bump in salary and they go work for a company and they're miserable. And they're just like, oh my gosh, I liked this other company. I wasn't getting paid as much. But it was a better fit. You know, that happens. Not always. But you just, if money's the only motivation. I love the idea of stacking a basement full of cash and learning a skill called sales.

Starting point is 00:29:45 And that's going to take me on my journey this way and define this way, define where you're going with it. That's a better way of doing it than I'm just randomly going over there and make more money in another place. And I just got married. Oh, this sounds like stress. Sounds like tough times on the new bride's going to leave her job at the hotel and work at Costco. Oh, wow. Yeah, I'd have a plan B, Thomas, and also a timeline that, hey, we're going to give it. one full calendar year.

Starting point is 00:30:16 And if this isn't picking up to X, Y, and Z that we thought, you know, if I were her, I probably would want some level of, because it's so new, is there an out? Or are we going to be stuck in this dream from the cousin forever and ever, even if it's not working? So there's always kind of a, I like having multiple options. So even with that, even if you choose to do this, here's kind of the parameters around that to go do something else if we need to. But if you're out there and you're 18 or 19 or 21 and you want to learn sales as a skill, I'm going to encourage you to do that before you do a whole

Starting point is 00:30:55 lot of other things like studying and getting a degree in left-handed puppetry. You know, you know, let's learn something that's actually usable in the marketplace. Most people spend years changing their money habits, but never think twice about how their bank probably works against their values with nuisance fees and endless debt products. If you're being weird by sticking to the baby steps, you deserve a bank that helps with that. That's why Ramsey partnered with Fair Wins Credit Union. They built the smart bundle specifically for Ramsey listeners, not for everybody else. And it includes up to 10 high yield savings accounts so you can set up different funds for different needs and goals.

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Starting point is 00:33:25 Dakota. My husband wants to retire next year and we're trying to get out of debt so we don't have any financial worries in the future. We are less than $50,000 away from paying off our mortgage. Plus, we have two car loans and three credit cards. The house and the cars don't trouble me too much, but the cards have a 25% interest rate, so we're not making much headway on getting them paid down, even with extra payments. Should we take out a home equity loan and pay off the cards, then throw everything at the loan and pay it off as quickly as possible. We have no intention in keeping any credit cards going forward and have agreed to just pay cash from here on out. No hope. I would not do that because the problem is you're just moving your debt from other debt. And so there's

Starting point is 00:34:13 no real progress happening. Yeah, you can play the interest rate game. But the truth is, if you focused all of your energy, didn't pay more on the house, didn't pay extra on the cars, you throw everything at that smallest credit card and you work your way down. Honestly, by the end of it, you didn't say how much specific credit card debt you guys are in. But ideally, it'll be less than a year when all that's paid off. So the interest isn't really what matters at that point. It really is the focus intensity that's going to get you guys far and then possibly selling these cars and setting yourself up. Because, yeah, going into retirement with two car loans, three credit cards, not too much in the mortgage.

Starting point is 00:34:51 You got $50,000. So, I mean, you guys are getting close on that. But you're not ready for retirement. It's not a retirement year next year for your husband, hope. You guys need to get this cleaned up. Your husband's not going to get to retire next year. You're not ready. You're broke.

Starting point is 00:35:05 You have two stinking car payments and credit cards coming out your ears that you can't figure out of way to pay off. You don't get to retire while you're doing that and make less money. You need to make more money. So he needs to double, triple his hours. And you guys need to quit spending like you're in Congress. This is out of control. So the deal. is this. You presented two things in the email that are juxtaposed with each other.

Starting point is 00:35:27 We're trying to get out of debt, so we won't have financial worries in the future. But the cars and the credit cards don't worry me so much. Well, they ought to worry you. That'll worry you so much the sole, you sell them. Because keeping your husband from retiring. So the problem is you're not worried. That's why you shouldn't do this. You need to get worried. You need to get fired up and wired up. You need to get pissed off that you're this old and still in debt. Well, why? Because you keep buying cars on payments. That's why. Sell them. Get you a couple hoopsies and let your husband retire. Ooh. Now I got personal. See? You need to get worried. That's the problem with this email. You're not bothered. No. What bothers her is a 25% interest rate, not the fact of debt. But she acts like that's the reason she's in debt. No, she's in debt because they keep spending.

Starting point is 00:36:15 Yep. And keep buying crap they can't afford with money they don't have. That's called debt. That's where that comes from. And so when you got you got to get upset about this stuff and go, Citibank has been screwing me. Ford Motor Company has been screwing me. I'm tired of getting screwed. I'm going to do something about this. I'm going to take control of my life away from these stupid bankers. And until you get that kind of thing going, you're not going to get out of that because you're not going to cut deep enough, sell enough, work enough to clean up the mess because it's all okay. It doesn't bother me that much. Well, of course it doesn't bother you.

Starting point is 00:36:51 You're going to stay right there then. You know, it doesn't bother me much. Well, then you're going to keep it. That's the thing. Until it bothers you, you're not going to fix it. John's in Macon. Hey, John, how are you? I'm good, Mr. Dave.

Starting point is 00:37:03 How about yourself? Better than I deserve. What's up? I had a question for you. So I just completed a college internship. I'm 21 years old, and they have offered me a full-time role in sales, in ag sales. But the caveat is I have to move off for a year before I can come back home to kind of get me out my comfort zone. And I understand that.

Starting point is 00:37:23 But my question is, should I rent while I'm gone or should I buy a large-sized camper? And that way, I'm putting money into something my own besides renting. You should rent. you should rent okay yeah but see i'm listening if you're going to go out and make sales calls and you sleep in a bed and an apartment you're going to look different than if you slept in a camper that's right and see it's not i was going with it's going to go down in value it's you're not going to have the money to pay you know to buy it outright rent so you don't have to you know yeah daves is your your your sleep scorch on that's what that's what dave's no it's your rumpled

Starting point is 00:38:02 clothing yeah yeah no ironing board fits in a camper. Okay. You would look fine, John. I would think you would look. John, why did you take this job? What does it pay? Intern with them.

Starting point is 00:38:17 I know, but why? I mean, you took an intern, but they're running you out of town and putting you in an uncomfortable bad position. Are they paying you to make up for all this? Why much are you going to be making? I'm making $70,000. Okay. And your degree is in what, ag?

Starting point is 00:38:33 You got a degree in act? Agriculture. Yes, sir. And you're going to come back there and sell for them after a year in your hometown? Yes, sir, that's right. Okay. It's maybe a naive question. Is that a normal process?

Starting point is 00:38:45 I never heard of it, but it's not a company process. They were very upfront with me about this. I mean, I accepted this role. And it's designed to get me out in my comfort zone because I have a lot of connections back home. And I guess this is not just me. This is everybody out there. They want to see what I can do. Where you don't know anybody.

Starting point is 00:39:06 Yeah, they want you to get your knuckles raw from knocking doors. I'm up for that. I like that. But yeah, just rent an apartment, John. Don't go get a camper because you're going to get a loan on it. You're going to pay an interest. It's going to go down value. It's, yeah, it won't.

Starting point is 00:39:19 Bad idea. This is, this is, you don't need a used camper when you come home. That's not, that's not a plan. No. It's a, I appreciate your thinking about and looking at other options, but just get you an inexpensive apartment and work all the time. And, you know, stay. Live like you're still in college.

Starting point is 00:39:39 Stay away from happy hour and work all the time. And get your couple roommates and keep your expenses down and go make your 70 grand. And this is boot camp. I got this, my one-year trial by fire. And then I get to come home and have a great life and make good money with the commissions. I make off my connections and my family, you know, the people I've grown up with and all that. And you're going to get the advantage of a family network. and so forth in a small town, which is wonderful, good for you.

Starting point is 00:40:09 Sounds interesting. Okay. But yeah, no camper, yes, apartment, one year, no big deal. Good sleep score, John. Yeah, good job. Good sleep score. What? We're worried about the sleep score?

Starting point is 00:40:20 Well, you're talking about him. No, I'm not. Actually, I'm just, yeah, in a sense, yeah, that's, I guess that's it. I hear, I know you're talking about it. All right. Scott's in Minneapolis. Hey, Scott, how are you? Good.

Starting point is 00:40:33 How are you doing, Dave, and Rachel? Better than we deserve. How can we help? Well, first off, I just want to thank you. You guys have been a real inspiration in my family. We've learned a lot because of listening to your guys' steps and ways of doing things. So long story, sure, we have a daughter that's in high school. She's in her senior year.

Starting point is 00:40:55 She got to accept to do a private school out of Minneapolis. We both contribute a full 20% into our fourth. or our 401Ks with each of my life, my wife's work and my own. We also contribute the max to our Roth 401K, or Roth IRAs. Cool. Four a run out of time on this hour. What can I help you with? So what we're looking to do is she has a, we did the math on this,

Starting point is 00:41:25 and it looks like she's going to have about $17,000 left over after a four-year degree, which is something we can wash out. We've got about $60,000 in our, emergency fund right now. We own our vehicles. What's your question? The question is, should we have her go to this school with that balance, or I know you guys have always talked about possibly not having balance when you're done with school, but that would be something we could probably help her with. $17,000 in the hole with tuition is what you're saying. Yes, that would be the leftover that we've done a math on. Okay. You can't cover that. Yes, we can. Oh, if we don't

Starting point is 00:42:05 I want her to know that. Okay. If you want to pay for college, and that's a college everyone's in agreement with, and you want to pay for it, go wherever you want to go. Yeah. But if you feel like it's a stupid idea because it's too expensive for what you're getting, and you want to just say, this is a stupid idea. It's too expensive for what you're getting.

Starting point is 00:42:23 It's not going to do with $17,000. You all have done well enough $17,000 in your problem. But we need to actually speak into, is this a good education decision? It sounds like you don't think it is. It sounds like between the lines. Let me tell you what I get asked all the time. When should I get term life insurance? How much do I need?

Starting point is 00:42:58 Is it affordable? Those are the right questions to be asking. So let's take a quick review. The fact is, term life isn't a baby step. So if anyone is dependent on your income, you need to have 10 to 12 times your income in life insurance. Now, and most people are surprised by how affordable term life really is. even if you're not in perfect health.

Starting point is 00:43:19 Look, I understand the hesitation since most insurance companies make it more of a hassle than it needs to be. Not at Zander Insurance. They're not an insurance company. They're a broker that works for you. That means they'll shop and compare the top-term life companies to find the most competitive options on the coverage for your family. For almost 30 years, I've recommended Zander for straight answers, competitive rates, and coverage that actually protects your family. Call 800-356-4282 or go to zander.com for a quick and easy quote. That's zander.com. Welcome back to the Ramsey Show in the Fair Winds Credit Union Studio. Rachel Cruz is my

Starting point is 00:44:11 co-host today. Sherry is in Los Angeles. Hi Sherry. How are you? I'm good. Thank you for taking my call. Sure. What's up? Well, my husband and I are getting closer to retirement age and we have 735,000 in combined IRA and 401K account. Why to go? Yeah, that is positive for sure. We do have $150,000 in cash that's in the bank. That's obviously a waste. And I just started to panic thinking, oh, my gosh,

Starting point is 00:44:44 we've got to get things rolling here and invest that excess cash. And I'm just not sure where to do that. We're not contributing to our IRA and one other. 401k that were separated from service from that employer, but that we've never rolled that over to IRA. Mm-hmm. So we do have an opinion. It sounds like you've kind of got some cleanup to do.

Starting point is 00:45:07 Yes. Like we'll pull all these things together and point them towards a single strategy. Exactly. Yeah. I would just jump on Ramsey Solutions.com and hit the smart vestor pros in your area. The brokers, the financial advisors that we endorse all have to have the heart of of a teacher or we don't put our name beside them. In other words, they're going to sit down and not tell you what to do. They're going to teach you what they would do in your situation and

Starting point is 00:45:35 explain to you why, and then you will decide if you want to do that or not. That's the proper way to go at this. So it sounds like that some of those things just all need to be rolled into good growth stock type mutual funds. In general, I spread my portfolio and Rachel and Winston have spread theirs across four types of mutual funds, growth, growth and income, aggressive, growth, and international. We put about a fourth in each. We want to move as much toward Roth as we can move because it's growing tax-free, and we don't have mandatory withdrawals at 73 called RMDs, required minimum distributions, okay?

Starting point is 00:46:12 So that's a couple of things you may want to kind of target, but they'll teach you all of that when you sit down with them because they're going to give you advice that's consistent with what you'd hear on the ear on the air also or we wouldn't put our name beside them. Are those other accounts, Sherry, that you mentioned with old employers? Was that included in the 735 number that you gave us, or is that more? That's included. Okay. Okay.

Starting point is 00:46:35 So that's just all total. Yeah. And how old did you say you were again? How old 50? I'm 53 and my husband's 57. Oh, you guys are going to have so much money. Oh, gosh. I hope so.

Starting point is 00:46:47 Oh, no, you will. So let me kind of give you a rule of thumb just to prove it. you. It's very interesting. If you take a number and divide it into 72, it tells you how long it takes a lump sum to double. So if you made 10%, it takes 7.2 years for it to double. So if you're in a decent gross stock mutual fund portfolio, your 735 is 1.5 in your 60. It's 3 when you're 67, and it's 6 when you're 74. Oh. If you do nothing else. So I'm not kidding when I say you're going to have a lot of money. You're doing really well. But you need to get all of this stuff. You can't be sitting in cash.

Starting point is 00:47:24 And they'll be using some of that in retirement. You got to maybe, maybe, depending on, you know, what's going on. What else are going to? Well, you may be drawing down on some of it at some point. I don't know. But that's also, you probably will be adding to it between now and retirement, too. So those numbers aren't going to be that far off for that reason. So anyway, let's get the cash working.

Starting point is 00:47:44 Let's make sure that those old junkie leftovers from the other jobs are all pointed in good mutual funds. Everything's dialed in on Roth as much as it can be within reason. And, you know, we've got a good portfolio of long track record, high producing mutual funds that you feel really, really good about. And then you can really just, you know, watch this thing cruise, and you're going to do great. Okay. Well, with that being said, I've been, our goal is to have our house paid off when we do retire.

Starting point is 00:48:15 Good. And I've been bringing extra towards that every month. Good. saying that we're going to be okay financially should I be putting this extra money into the house or should I be using that to invest no you need to get the house paid off because there's two things that causes people to get their first one to five million dollars of net worth one is a juicy retirement program which you have and two is a paid off house we find the average millionaire that we find that becomes a millionaire say they got a 1.7 million dollar net worth we find you

Starting point is 00:48:44 know 800,000 on the house and they got another six or seven eight hundred thousand in their 401 case. And that's the typical first $2 million as somebody builds. Yes, but you are investing 15% of your income until then. Yes. Yes. But no more. Okay.

Starting point is 00:49:00 Everything else goes on the house, and we're going to get this all working. What's your household income? We make 242 combined. Yeah. So you got another third. How much is left on the house? 2.30, I mean, 3.30. Okay.

Starting point is 00:49:15 And I've been paying a thousand extra a month, but a, according to the mortgage calculator, if that's accurate, if I paid $2,400 extra a month, which would be an extra $1,400, which I could do, we'd have it paid off in seven years. I would do that. And so that's not too aggressive. No, there's no such thing as too aggressive. Get it paid off. Unless you're not having fun in life because you're aggressive.

Starting point is 00:49:36 But I still want you to go on a cruise. I mean, you're making a quarter million dollars a year. So enjoy your life. But put 15% of your income away and throw as much at the house as you can get the house paid off as soon as possible. and then with a house paid off and you've got by then several million dollars saved, invested, you know, you're in a really, really good spot at like 60 years old here. Okay. Well, that is a relief.

Starting point is 00:50:02 I was starting to panic. No, there's no reason to panic. But I do believe in tuning up things. You know, this is a good piano. Let's get it tuned up so it plays a good song. Okay. You're doing a good job. Let's just do a little.

Starting point is 00:50:16 bit better. Excellent job. And that'll also give you the comfort, the emotional piece because you've got your hands around the neck of this thing making it behave. Right now it feels like it's a little bit drifting and that's bothering you as much as the actual numbers. Yeah. So when you're on top of it and you're telling your money what to do, there's a sense of power. When things are drifting away, there's a sense of powerlessness. That's right. And anxiety that goes with that. Because yeah, by 60, I mean, it paid off house and then if they're investing 15% over the next seven-ish years. And that would have $2 million. Yeah, it would be close to $2 million.

Starting point is 00:50:54 Plus the house. They'd be worth probably $3 million. Yeah. I don't know what the house is worth, but, you know, guessing a million. So, yeah, she's in great shape. You've done a wonderful job, by the way. Just this is what you aim at. I took a call earlier in the week from a 64-year-old that had $40,000.

Starting point is 00:51:13 He didn't know what he was going to do. He was a security guard. He was worried about eating. So that's the other side. I mean, so, you know, that's a cautionary tale for the rest of us to get ready. You know, get ready. It's coming. Christmas is in December.

Starting point is 00:51:31 Retirement's in your 60s, 70s, whatever. I mean, it's coming. The other option is death. So you probably ought to plan, you know? I mean, this is what you need to do. So this is the thing. And it's amazing how fast it comes at you, all of this. So, I mean.

Starting point is 00:51:50 Yeah, you feel like you have forever when you're in your 30s. Yeah, I was just a daddy yesterday. And now I'm a grandpa. Who knew? You know, it's just like that. And now I'm a grandpa of a 13-year-old. How does that happen? I've got a teenager.

Starting point is 00:52:05 Now I'm thinking about being a great-grandpa. You know, oh my gosh. Stay alive, Dave. Stay strong. I'm working on it. I'm working on it. As your business grows, everything becomes more complex. There was a time when Ramsey Solutions had too many disconnected systems and not enough visibility across the business.

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Starting point is 00:54:18 Hi, Andrea. How are you? I'm careful. Dave. How are you? Better than I deserve. What's up? Yeah, so I want some advice on if I should buy a car, if I'm already in debt. I am about $69,644 in student that I just finished my master's degree. I drive a 1994 F-150 and drive about 30 minutes to work. So I'm thinking I need a new car. I just started a new job and I make $65,000 a year.

Starting point is 00:54:50 Cool. What's your master's in? Landscape architecture. Good for you. Okay. Thank you. How long you've been driving the F-150? For about two years.

Starting point is 00:55:03 Drive it for two more. Okay. You're broke. Do you have any money saved? Yeah. Andrea? I do, yes. I have about 19,600 and some change.

Starting point is 00:55:16 Okay. And nothing's wrong with the truck. It's just old. It's just old. I have had some issues with it. And, you know, that uncertainty of driving 30 minutes every day and not being sure if something's going to happen to the truck. It's just stressful.

Starting point is 00:55:32 I mean, it's not like there's one specific thing that you're like, it's about to go down. It's just the idea that something might, right? Right. Exactly. Yeah, I'd keep driving. Things have happened, but I, you know, just keep repairing it. And throw 18,000 at this debt, too. Yeah.

Starting point is 00:55:51 We teach you to pay everything down to $1,000. Don't borrow anymore. Live on beans and rice and attack your debt and clear your debt. you believed in investing in this master's degree, and so far you've gotten a $65,000 job as a result of it. Hopefully that's going on up from there to make your theory of investing in this education correct. So I want to see you making $100 because of this master's, and I want to get some master's paid off as soon as possible. This is not a pet. It's a student loan.

Starting point is 00:56:21 Kill it. Right, exactly. And that's how I feel. The cars that I'm looking at are all within the $37,000 ring. 37,000, you have 19. You're going to go in debt while you're trying to get out of debt? And so that's why I was like, I don't think that's the right position for me to make right now. 3,700 isn't the right decision.

Starting point is 00:56:45 37,000 is 10x a bad decision. No, no, no. Right. No. Yeah. Well, that was my question. You know, I feel like I knew the answer to it. Yeah.

Starting point is 00:56:56 Here's the thing. If you will get in the business, if you'll set your head. to say my number one wealth building tool is my income. And as long as I'm giving that away in car payments and student loans, I'm going to be what's known as a middle class broke person. But you can make 65, 75, 85, 85,000 as your career expands here and become a millionaire if you'll get out of debt and stay out of debt because you're not giving all your money away to other people every month.

Starting point is 00:57:26 Right. And with my 19,000, you guys are saying, you know, pay everything but $1,000. Yes. I do have my company that matches $5,000 in 401K. No, do I not worry about that? You do not need to be putting money into a retirement plan. You're broken in debt. Okay, gotcha.

Starting point is 00:57:46 Get the debt cleared up as fast as you can. Yeah, Andrew, when you walk the steps, we call them the baby step. So it is that $1,000 emergency fund. Baby Step 2 is paying off all of your consumer debt. So that'll be your next goal. and hopefully you can do that in two years. And then you want to save up a three to six month emergency fund. And by that point, you're probably going to be simultaneously saving up for a car.

Starting point is 00:58:06 For a car. That you pay cash for. Yes, and that emergency fund. And then after that's done and that emergency fund is in place. And if you're single and you have a great job, you could do a three-month emergency fund. It doesn't have to be six months. And then from there, you start investing. So, yeah, you will not be investing probably for the next three, three and a half years.

Starting point is 00:58:23 But that's okay because when you start investing, We tell you to put 15% of your income into retirement. So that is that 5% match and also a Roth IRA. So you will have plenty to catch up on. So just because you're not getting that 5% match in the next three years, you're going to more than be okay because you're going to be funding 15% of your income into retirement because you have that margin. So those are the baby steps, really, we walk people through.

Starting point is 00:58:49 Hey, Andrea, if I give you a book that shows you how to do all this, will you promise to read it? Yes. All right, I'm going to give you the total money makeover. it shows you how to do all those baby steps. Let's give her every dollar for a year. And we'll set you up on our budgeting app, Rachel's talking about. And it helps you walk the baby steps too on that.

Starting point is 00:59:04 Yeah, it's going to guide you through the baby steps as well. And reinforce this idea that with no payments, you have money to invest. With no payments you have money to invest. See, what we've done is we all make, most Americans make pretty good money. They just give it all to a bank. They give it all to Ford Motor Company, $37,000 car. they give it all to Sally May, you know, $69,000 in student loan debt. And we give all our money away.

Starting point is 00:59:32 And then we wonder why they have tall buildings and we're broke. And they have Samuel Jackson saying, what's in your wallet? Well, apparently, my money is in your wallet. That's what apparently we can go with there if you're using that stupid city bank card, right? So that and whoever it is. What's the other guy, Bradley Cooper? Is that the one that lives in the lobby or something? I don't know.

Starting point is 00:59:55 I saw that one the other day, the city bank guy that lives in the city bank man lives in the lobby. I don't know. I think it's Bradley Cooper maybe. Oh, no. No, they didn't get Bradley. I don't know. It's some actor. Oh, man.

Starting point is 01:00:07 These actors are now all bankers. Jennifer Gardner, I know. Yeah, Jennifer for sure, which is real disappointing because I was a fan. Oh, stop. You're still like Jennifer Gardner. I know, but I can't stand the, you know, this, anyway, these companies are screwing you guys. It's what amounts to it. Yes.

Starting point is 01:00:25 And they're paying a pretty person to tell you to do it. And regardless of who it is. And so I don't know if Samuel is pretty. Oh, it was, no, it was Dan Levy is what I'm seeing. Citibank commercial where he's in the lobby of the hotel. Is this what you're talking about? No. Different.

Starting point is 01:00:41 Different one, I think. No, this guy lives in the lobby of the bank. Capital one. Oh, wrong one, not Citibank, capital one. Okay, thank you. We'll figure it out in a minute. All right. Will is in Atlanta.

Starting point is 01:00:52 Hey, Will, who is it? We're mad at. What's up? Hey there, Dave. How are you doing? Better than I deserve. How can I help? Hey, well, thank you.

Starting point is 01:01:02 First of all, thank you for taking my call. Even when I was a kid, my dad was watching your Fox business show, you know, back in 2009 when all that was going on. And I took a financial literacy course that they had set out for you in high school. Wow. I've always really respected your work and everything. So that's why, yeah, that's why I wanted to talk to you today. I'm 25 years old and I've been married for two and a half years and we're doing okay financially. But there's two things I wanted to really get your advice on.

Starting point is 01:01:36 And we have a $17,000 car loan left from a car we purchased two years ago. And on the flip side, we want to know how we can maximize our cash and income. we already have in the bank and that we do make. How much do you have in the bank now? Currently, between me and my wife's savings, we have almost 13,000 in our joint. I have $85,000 in a money market. Pay off your car today. Pay off your car today.

Starting point is 01:02:19 Well, do you remember the class you took? I mean, I will say I wasn't that smart in high school. No, no. You can say it was boring and you ignored it. It's fine. I didn't really like you, Dave, but I thought I would start out being nice on the call. Anyway, no, pay off your car right now. You have $85,000 and $17,000 car loan.

Starting point is 01:02:39 Pay off your car today. You understand? Okay. Instantly, instantly. And never borrow money on a car again. No, and we had a, she had an old car. the time and in retrospect. It did have a few

Starting point is 01:02:57 problems here and there. I don't really want to hear your excuses. Just pay off your stinking car, man. Pay off your car. And never borrow money on a car again. Ever. Ever. If you want to be rich.

Starting point is 01:03:09 If you want to be poor, keep a car payment. Poor people drive big old cars with big old payments on them and walk around with stress. They don't have financial peace. Two words that don't go together, like airline service.

Starting point is 01:03:23 So, I mean, you've got to think different, man. Break the cycle, break the cycle, break the cycle, no car payments. I don't care what's going on. Don't get a car payment. I'll ride a bicycle before I'll get a car payment. When you're trying to hire, you don't have time to dig through stacks of resumes, hoping someone halfway decent floats to the top.

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Starting point is 01:05:42 It's full of Ramsey answers from three or four years on this show. We dumped it into the AI. into the data set. We dumped all the books we wrote into the data set. We dumped all the articles, several thousand of them that are on our website, into the data set. So when you ask Ramsey, you're getting a Ramsey answer. There's no Reddit trash stirred in. There's no sewage from TikTok stirred in.

Starting point is 01:06:06 It's just Ramsey, straight up. If you don't want a Ramsey answer, you shouldn't ask Ramsey. If you do, you should ask Ramsey. It's completely free. You can do it at Ramsey Solutions.com or click the link in the description. of your own podcast or YouTube. Ask Ramsey. Jocelyn is in San Diego.

Starting point is 01:06:25 Hey, Jocelyn, how are you? Hey, I'm doing well. How are you guys? Thanks for having me on. Sure. How can we help? Well, I am just trying to figure out how to get my husband on board with one pain off our debt and just really like getting that gazelle intensity. I don't think we've really had that.

Starting point is 01:06:44 It just doesn't feel like, yeah, he's really there and he's the moneymaker right now. And I'm doing the best I can, but I kind of want to control things, you know, human nature. So what's the pace look like? What are you wanting to do? What is he pushing back against? What's the... I think it, he says he's on board, but our biggest expense is eating out. I mean, it's a lot.

Starting point is 01:07:16 And so it's like, I'm like, could we not eat out? You know, yeah, yeah, I'm down to bring it down. But like, it's not really happening. I just did our first budget last month. So we did have expenses. We didn't really exactly hit everything. But he's not unwilling. I just feel like he doesn't participate that much.

Starting point is 01:07:35 You've made a mistake that is unusual for ladies to make. usually the man makes the mistake you're making. Because you're hard driving and I love you. I think you're awesome. But what you did is you started talking about what we're going to do and what we're going to do this, we're going to do that, what we're going to do instead of why. And so I want to sit down tonight and turn off the television,

Starting point is 01:08:03 put the kids to bed, and let's have a dream date. I have a dream. Why? Because the debt scares me to death. The idea of having no retirement scares me to death. The idea of having a car payment the rest of my life scares me to death. And I have it, I want us to dream about what it would feel like to have no payments and have a big old stack of money to be able to travel and to be able to do the things that you want to do, honey. What would you do if we had a big stack of money?

Starting point is 01:08:37 and him dream with you. And then we've got a why, a reason to not go out to eat. That's true. And it changes the motivation. What would it be for you, Jocelyn? What's the reason you want to get out of debt? I mean, we don't have much, honestly, like on the scale of things, but I want to be able to save up for a house.

Starting point is 01:08:57 And right now, I honestly don't know, even if I go back to work, like I'm a nurse, but right now I'm at home with our one-and-a-half-year-old son. I can make a decent amount, but from what I'm understanding with numbers, I'm like, we don't have a down payment. And homes here, you could get a tent for probably more than we could afford, you know? Right.

Starting point is 01:09:18 How much debt do you guys have? Honestly, we've got, oh my gosh, I just spaced. We've got just a personal loan with my parents because they bought our truck off of us. We were in over our heads with it. Like, we owed more than it was worth. So we've only got $8,700. Okay, and that's it That's your only debt?

Starting point is 01:09:37 Yeah Well, I just got him to pay off the credit card I was like, please let's pay off the credit card Okay, so that's paid off. How much do you guys make here? How much does he make? Right now he's bringing home $7,500 a month. Good.

Starting point is 01:09:49 Oh, great. It's not bad at all. Okay, so I think you just sit down and you say, okay, let's talk about what it feels like in the future to have a stack of money and own our own home. And not owe my parents. And not own my parents anymore. When we don't owe your parent, don't owe anyone anything, and we're stacking money for a down payment on a home, we're building a life for this one and a half year old that's going to change his whole life.

Starting point is 01:10:17 And I want us to have a home. I want us to be able to do this or that. I mean, would you join me in this dream and then let us sacrifice to hit the dream? It sounds nice. I want to dream in high definition. Let's start talking about. I remember we were in a rental house and Rachel was eight. And no, yeah, Rachel was eight.

Starting point is 01:10:49 Rachel was seven or eight years old. And we were in a rental house because we sold our house to get the rest of our debt after the bankruptcy cleaned up. And my wife hated that rental house. And she said, we have to get a house. I this is life is too short and I'm going to pray for a white kitchen and a three car garage for our two cars in our boat and I'm going to pray that we can do that and and in the school system over here where the kids are going to school already and I'm going to pray for that and you know we were on this little weekend trip and I got an email from a real estate friend of mine and it was in the early days that they actually started putting pictures on the internet of a house.

Starting point is 01:11:36 That's how long ago it was. And the dadgum thing had a three-car garage and a white kitchen. That's crazy. Because we had dreamed in high definition with great detail, and we were both agreed. That's what we were pointing at. And we had pulled the money together to do that. And when we came home from that little weekend trip, we didn't even go home. We drove straight to that house to view it with the real estate agent.

Starting point is 01:11:58 and then we went home. And we bought that house, by the way. It's the house that Rachel grew up in. And so that's the kind of stuff, but you're together joining. Well, it makes it feel real. To a detail thing. It's not this vague thing of, I just want to have a pile of money. Right.

Starting point is 01:12:15 No, no, no, no, that's not good enough. It's a life. What's the life that you want? What is the money is? Yes, the money is the tool to create the life that you want. What is that? What does that look like for you? Is it the white kitchen?

Starting point is 01:12:27 Is it the, you know, the, the certain school district, whatever it is. But I think, and John Deloney talks about this too, do you really, as detailed as you can create that? It just makes it tangible, that it's not vague and it's not out of reach, but it's like, no, no, no, this is the type of house that realistically, because you guys were being, you weren't like, we need a $4 million house. It was a house we had the money for.

Starting point is 01:12:51 Yes, that's right. So it's like it's a realistic in there, but to pinpoint it and to have those details And I would say too, Jocelyn, I always love a timeline, like map it out. And you guys be like, hey, let's have a goal to be out of debt in three months. What do we got to do to make that happen? Okay, from there, building up that emergency. Yes. And you actually start painting it and looking ahead and be like, oh, my gosh, in five years,

Starting point is 01:13:16 he's going to be starting kindergarten. We may have another baby. What does life look like in five years? How much money do we think realistically we have saved up? What type of house can buy? And you just really start. And I'm going to go to nursing then to hit that next goal. Yeah, totally.

Starting point is 01:13:30 Yeah. Go back to work for a little. I'm going to take ER weekends now to hit the goal of buying a house. Yes. Or there was a mom in the lobby earlier and she was saying for 22 years she stayed home and that was their number one goal. And because they did the babysept, she, that was her goal to stay home. They did it.

Starting point is 01:13:45 That was the high definition dream. That's a good dream. So. Exactly. Yeah, whatever it looks like. And too, Jocelyn. You know, if you're super broke, I remember a dream we had. We were super, super, broke.

Starting point is 01:13:56 and we've been so scared for so long. Sharon's dream at one point was, I want to have enough money to go to the grocery store and fill up the buggy. And just the buggy. What a southern, southern phrase. Fill up the shopping cart. The shopping cart. The buggy.

Starting point is 01:14:12 The buggy. Yeah, and I have to look at prices. I want to fill the whole thing with food and not feel like I broke the family. Yep. That doesn't sound like a big goal, but that's a lot of money. You can mortgage a house for that today. Well, today, yeah, yeah, yeah. But it's more that feeling of freedom.

Starting point is 01:14:30 Well, it's a clear... I want to get to this place. I can see it. Yes. It's very clear. It's not a dollar amount. It's what the dollars do. Hey, guys, it's Rachel Cruz.

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Starting point is 01:16:14 That's CHministries.org slash budget and promo code Ramsey. Holly is in Austin, Texas. Hey, Holly, how are you? I'm pretty good. How are you? Better than I deserve. What's up? You would approach, how can I better encourage my fiancé to try to continue to better our income without him feeling like I'm telling him he's not making enough money? Where's this feeling coming from, Holly? Do you feel like he's not making enough money? Oh, he's making plenty of money. So about a year ago, we started getting really serious about paying off our debt, following the baby.

Starting point is 01:17:18 steps trying to get set up to where we can start saving to build a house right now we're living on his you're not married no we get married um our marriage date is uh exactly a year from now well you don't buy a house or pay off each other's debt until you're married um our debt's combined right now that's dumb for about a year and a half that's really dumb you're gonna have a nightmare in your hands that's really no no no no no, no. Please do not do that with somebody you're not married to. Yeah. If you want to get married this weekend, you can start acting like you're married, but you're not married. This is a disaster. What's the combined debt, Holly? Cars? Yes, so it was two vehicles and then a credit card

Starting point is 01:18:10 and then a car hauling trailer. Okay. And are these both and both of your names? Yes. Oh. Please have a celebration one year from now and get married this weekend. You are so vulnerable that your goose is cooked if something happens here. This is so scary. You have no idea the mess you have potentially made. This is really, really dangerous for you.

Starting point is 01:18:39 How much do you make, Holly? I take about $40,000 a year, $45, and then he makes about, this is all take home, and then he makes about $75,000 a year taking him. And what is it you want him to do better about when he makes twice what you make? Not necessarily doing better. He was told about, I would say, four to six months ago that he is making the best he can make at his shop right now. And, you know, he goes in on the weekends. He works late during the week.

Starting point is 01:19:13 And I've kind of tried to encourage him to, you know, possibly seek a different shop. or a higher position at his job currently. And he feels like I'm not being appreciative. And I was just wondering how you would go about encouraging, kind of like when is the end of the road of trying to increase your income. Yeah. I'm trying to figure out. Is he enjoying his job?

Starting point is 01:19:45 He does. He's a body tech, body shop technician. Okay. He does enjoy his job. He's had a couple of problems. just with like co-workers and stuff, but nothing. How old are you, gosh? He is 25 and I am 22.

Starting point is 01:20:04 Yeah, I probably, honestly, Holly, I would focus in more on not only figuring out what to do with your 40,000 and start paying off some of these debts and start working your journey separate than how I'm, because you guys are not married. And it's one thing to tell him, you know, that he, you see potential in him and what he's doing. But he may be very content with where he is right now, and he's not making a bad living, you know? No, not at all. Yeah. So I'm just curious how those conversations go, because he's not feeling appreciated, apparently. Yeah, it's kind of back and forth.

Starting point is 01:20:49 sometimes he has a lot of feelings towards him wanting to better himself, wanting to become a shop manager potentially or starting his own business as far as that goes. And then other times he's kind of down in the dumps about it. I do think that when they told him he was making the most he can in his shop, he was not very happy about it. And he really wanted to move and then he kind of changed his mind. Yeah. Well, I don't think there's much that you're going to be able to do. I think the only thing you can do as a...

Starting point is 01:21:26 Fiancee. No, as a fiancé, you can't do anything. As a wife, the only thing you could do would be to... You don't have the leverage from the fiancé position to lift or to do anything because you're still in the negotiation phase, believe it or not. So you're barking up the wrong tree. But once you're a wife... then the thing you could do is just be saying, honey, I think what I see in you. I see that you could run your own business. And you'd have to learn some skills that you don't know yet about running a business because being a body shop tech is different than running a body shop. Different set of skills.

Starting point is 01:22:06 You have to learn the business parts of it, the marketing and the accounting. Sometimes being 25 doing what he's doing and really getting good at it. It's not a bad thing. It's not bad. But if we started planning and said, okay, five years from today, we have a goal of you opening something. Let's start saving towards that and you start reading books about business and learning about business. I think you could be, I think you can make three times what you're making and own your own shop and have guys like you working for you. And I think we can get there

Starting point is 01:22:35 and I think you can get there. And as your wife, I would love to help you do that. I honestly think you're doing it from the wrong position and you're not listening to me. So that's okay. You go do what you want to do. But I'm telling you from having sat in this seat for almost 40 years that you guys are you are playing with fire and if you don't get burned in this i'll be shocked and so please do not buy a house or someone you're not married to you are doing what we call in legal terms a general partnership and if he dies and there is no will you will own a house with his mother this is the kind of crap you're playing with that you don't even know about And you think I'm just being mean and telling you to get married.

Starting point is 01:23:21 But you are really walking across the lake of fire and asking to fall in it and get your butt burned. You are playing with about four different things there that are going to take off your head if you guys aren't lucky. You might luck your way through this, but you might not too. And so please, if you're going to own cars together and buy houses together, get married first and do your celebration a year from now. But you're not listening. So you're not going to do it. No, I can tell. Really, yeah, I've been doing this a while.

Starting point is 01:23:54 You never know. You never know, Holly. So I think you can encourage him from that position to go do something with his life. But, you know, yeah, I don't know. Something wrong in the air. Something wrong. No, they're just 22 and 25. No, there's something wrong in the air.

Starting point is 01:24:14 No, I think they're young. Sorry, not that sounds demeaning, Holly, but you're young. And what she doesn't see either is that, you know, engagement, there's zero legal protection for either of you. And he, he or you, and four months could be like, I think I'm done, you know, and you walk out and that's it. And then for the rest. And now you want a trailer that tows cars. For the next three years as you're trying to get out of debt and date and all of this, you got the X. And I mean, it just, it is not worth it.

Starting point is 01:24:45 It's not worth the risk. Keep your money separate. And that's for other people listening, right? I mean, they're in it. But like, when you are dating, keep it separate. Do not combine finances. And then once you are married, even in an engagement, but once you are married, yes, combined. It is so funny to me on the show.

Starting point is 01:25:03 I don't know why it is like this. There's so many couples like that that are dating, engaged, and everything's combined. And then we talked to married couples and they refuse to combine. And I'm always like, how is this? How is this happening? How is this happening? How is this happening? Oh, I know.

Starting point is 01:25:20 but yeah there's just it's the it's the protection side there's just not there's not any and oh and the worst is the co-signing and then we get the call and they're like I co-signed with my ex-girlfriend and she's not paying anymore you know what I mean and then I can't find her or the car yeah and I mean it's just like there's just there's so much life that can happen and when you're not legally married you get to just walk out you just you get to just leave at least with a divorce you're having to go through a court system and you know the judge will make you pay it then Yeah, but there's a lot up in the air, Holly. So I'd lock it down if I were you and get married.

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Starting point is 01:27:38 Welcome back to the Ramsey Show in the Fair Winds Credit Union Studio. Rachel Cruz, Ramsey personality. My daughter is my co-host today. Aaron is in Charlotte, North Carolina. Hi, Aaron. How are you? Hey, guys. How are you?

Starting point is 01:27:52 Better than we deserve. What's up? First of all, I just want to tell you, you've changed our lives. Like, we're in Baby Step 2, and I mean, you guys have, our marriage, everything is just on such a trajectory that I never could have thought that a few years ago we'd be there. So thank you to you guys. Thank you. Well done of you. Way to go.

Starting point is 01:28:12 I'm going to cry. No. So, okay, so currently we're in Baby Step 2. We have paid about $76,000 down in the last two years or so. Right. Good to go. Thank you. We have about 33,000 to go. Now, our question is, we have a mortgage on the house now. Our plan is, once we get everything paid, the emergency fund, we want to take a couple of years. Our plan is to buy a house, a new house in a different location. We kind of want to move out in the country a little bit. And our plan is to stay, we want to say, take about two or three years, save hopefully up to about $150, $200,000.

Starting point is 01:28:52 and, you know, depending on, you know, life and situations. But so to use on a down payment on the house and plus the equity in our house now. Yeah. So what were your, how much equity do you think you'll get out of that house at the time you moved? You know, unfortunately, I made a lot of stupid tax decisions, as you would say. We refinanced the house way too many times and the last time right before we started the baby steps. So unfortunately, the mortgage we have now, it's only a few years old. Well, it'll be two or three years from now, you said, right?

Starting point is 01:29:25 Yeah, yeah, true. So it's going up in value in Charlotte, North Carolina, isn't it? I, you know what? I don't know. I guess we could see what it's going to be like then. But right now, we owe 243 on the house. And the last time we had it appraised about three years ago, it was at about 310. So it's probably worth $400 a day anyway.

Starting point is 01:29:44 Yeah, well, hopefully, fingers crossed. But my question is. At least by then, it's going up like 2%. And that what? Okay. Yeah. Okay. Well, that's good.

Starting point is 01:29:53 So my question is the money that we're saving in the next few years, should that go into a high-yield savings account, or should we be putting that money on the principal of our mortgage since we're going to sell anyway and use that on the down payment of the house? I put it on the principle of your mortgage. All of it? Yep. Really?

Starting point is 01:30:14 Okay. Above your emergency fund, yes. You wouldn't save any cash for, like, you know. Not for the move, no. Not for the move? Okay. Okay. Yeah, that's kind of what I was thinking. And I know sometimes I say you should have, you know, a certain amount of cash. What's your, well, for closing, I mean. I mean, you may want to have a little bit for the actual mover and the closing, some closing costs for something like that. But you're going to get all the money out of this house when you sell it.

Starting point is 01:30:38 It's not like you're giving the money away or spending it. It's going to be there. It's just stored where you can't get to it. And what's your mortgage interest rate? What's your mortgage interest rate? It's 4.99. Okay, which is more than your high-yield savings is paying. True. It's almost like a forced savings account, Aaron. Yeah. Yeah.

Starting point is 01:30:59 As you're putting it in, you're like, we'll get it out. Yes, in equity, but it's not sitting there for a beach vacation to grab. You know what I mean? Like, it makes you, it forces you into that goal. And if your plans turn left and you end up staying there and paying off the house, then you didn't lose any ground. True. Yes.

Starting point is 01:31:19 So it's a point two. Yeah, I don't know that that's going to happen. I think you probably will live your dream because you've been executing on the other part of it beautifully. So I think you're probably going to play through. So I think two years from now, three years from now, you sell this house. It's going to be $450,500 somewhere in there. And probably, based on the numbers you're giving me anyway, and you will have reduced the principle dramatically during that time. So you're going to walk out with this big, fat check to buy this house in the country with.

Starting point is 01:31:44 That's going to be beautiful. And you will have been making $4.99 on your money. not bad really for that situation and you won't accidentally go buy a bass boat with it so not that you would because i don't think you would but um he might i don't know you wouldn't i can tell races in new york city high race how are you living a dream how are you doing better than i deserve what's up so i just graduated from law school this past may and took the bar and i have some law debt or student loan debt that i need to pay off and i just graduated from law school this past may and i took the bar and i have some law debt or student loan debt that I need to pay off, and I'm planning on paying it off as fast as possible.

Starting point is 01:32:21 Good. And I was wondering, would it be worth it to refinance the loans I have to get a better interest rate, or does that even matter since I'm just playing on paying it off as soon as I can? What's the balance? 104. When do you think you'll pay it off? How fast? We've got it calculated out to, I think, two and a half to three years.

Starting point is 01:32:46 Okay. And what's your current interest rate? So it's separated in between six loans. The highest rate is just a little over 9% and 9.2%, I believe. And when I did something through SOFI today, it said they could give me a rate of just under 6%, if I remember correctly. I'm not sure your aggregate is not 6% already. Do you not have loans that are below 6? No. None? Okay. No, none of my loans are below.

Starting point is 01:33:20 Below is just seven. I don't trust SOFA any further than I can throw their stadium. So I want you to get some other people to look at it, all right? Okay. And so they didn't pay for that stadium by giving you the best deal. So their stadium sponsorship. Shop around. So, you know.

Starting point is 01:33:40 But student loans at race are the one area that we would consider refinancing. You get one shot. These are federally insured, right? Yeah. Yeah, you get one shot. So shop around and check on it and try to find a company. What's the company we used to endorse that's gone? They were a good little company.

Starting point is 01:33:58 I can't think of their name off the top of my head. But we had one on here for a while that was doing that, and they were dependable. But here's the thing. Let's pretend that you can go from six to nine on the entire. You're not thinking why refi. On your, why refi? No, why refi doesn't do it. That's private.

Starting point is 01:34:14 Yeah, it's private. Yeah, yeah, yeah. Private only. Question of the day. Yeah. Thanks. For your private student loans, though, if they're in default, check out why refi. But, race, that's not your problem.

Starting point is 01:34:27 So if you can move, the entire portfolio is not at nine. What do you think the aggregate of the portfolio is, the average through the whole thing? Eight? Probably eight or a little under eight. Okay. Let's call it eight, and let's say you could refinance it to six. That saves you two on 100,000 paid off over two years means at the end of the first year you would have paid off 50,000 of it. And so your average balance that you're saving 2% on is $50,000.

Starting point is 01:35:01 And so that is $1,000 you're going to save through this whole exercise. Okay. And you don't have a $1,000. If you want to do it, it's okay, but you don't have a $1,000 problem. you have a $104,000 problem. Correct. Meaning that if you're paying this off in two years, to your point earlier, the way you asked the question was correct, race,

Starting point is 01:35:22 was does it really even matter because I'm paid it off so fast? And the answer is it matters about $1,000. Okay. Assuming you can't beat SoFi's number, and you might not be able to. But if you want to do it, it's okay. You get one shot at it. But the important thing is to find the other $103,000 during the two years

Starting point is 01:35:42 by living on nothing, not going out to eat, and starting your law career on beans and rice, rice and beans and get this mess cleaned up. That's the important part. That's 98% of the equation. Hey, guys, Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now, you can get that same kind of help any time with Ask Ramsey. Ask your money question and get answers built on Ramsey.

Starting point is 01:36:38 principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to Ramsey Solutions.com and try Ask Ramsey Today. That's Ramsey Solutions.com. Kat is in Des Moines, Iowa. Hi, Kat. How are you? Hi, I'm doing well. How are you guys? Better than I deserve. What's up? My husband and I are wondering if we should move forward on an opportunity for financial freedom. Yes. Of course you should. What kind of a question is that?

Starting point is 01:37:40 Tell me about it. What's the opportunity? So my mother-in-law would like to sell us her home and about 10 acres of land for what she has left on her mortgage. She wants to help us. She knows we've been through a lot in the last few years, and she is ready to move on from that property. She's tired of maintaining it when she doesn't even live there. How does taking on a mortgage equal financial freedom? Well, we would be...

Starting point is 01:38:11 Right. But we would be selling our home in a different area of the state. and if we sold it even for what we paid for it four years ago, which it sounds like we would get more for it after talking to a realtor, we would be able to buy the land and property outright. Okay. So you currently have a home that you owe how much on? We owe $177,700.000. And it's worth what? Well, when we bought it

Starting point is 01:38:52 I mean the realtor told you the other day, you think you can sell it for what? He said that what we bought it for would be easy, but he's anticipating we'd get a little bit more. He didn't give me an exact number. So what do you think the number is going to be in real life when you put it on the market? What's it going to sound like? Probably around 230. It wouldn't be much more because we did take the...

Starting point is 01:39:15 Okay, 230, and so it's only 50,000 bucks. Okay, minus them expensive. So I'm probably going to walk away with $40,000. And her mortgage on this land is only $40,000? She said $30,000, yeah. Okay. And what's the land and house worth? Probably more than what our house is.

Starting point is 01:39:34 It looked like from what we were being all about. She's going to give you a $200,000 gift. Yes, yes. Yeah, it would be a huge gift for us. Nice gift. And what does your husband do for a living? he is a machinist and he will be moving being a machinist there yes um so there are opportunities there but it is a lower income area which is kind of where we're where this is just a

Starting point is 01:40:01 the whole area is lower income uh i'm sorry what was your question the whole area that you'd be moving to is lower income lower income than where we're at yeah it's not there are operations opportunities, but they're harder to come by. Do you like the house cat? Would you guys have moved there if the opportunity, if this whole deal wasn't happening, would you guys willingly want to move there just for your own family? Yeah, I would say so. My husband has been on third shift, sorry, for a while.

Starting point is 01:40:41 And I don't know. It's just been really hard for our family. We've been through a lot in the last year. What have you been through? He had emergency surgery in December of last year. We had another baby, which is wonderful and amazing. But I broke my ankle, so he's had to take less pay because his job doesn't pay FM or.

Starting point is 01:41:14 LA. We've had to take some unpaid time off because I was recovering from a broken ankle while heavily pregnant. And on top of that with him being on third shift, it's been really hard on our family. We have five kids and I homeschool. And I've just watched my husband change. It feels like he's barely surviving. So moving to this land, you go with you. Right. You still got five kids and you still have a husband that's a machinist. Right. But you're thinking you won't have to work third shift.

Starting point is 01:41:56 Is that kind of the straw that? Yes, that's the hope. And he has to work third shift in order for you guys to live where you are today. He has not been able to get a job with similar pay that is not third shift. What does he make? He brings home 1,200 a week when he's not working overtime, and he usually works overtime, so usually it's about $1,600 a week. He's making about $60,000 a year. Yeah.

Starting point is 01:42:29 And the place that you're moving. Okay, so here's the problem. I'm a little bit afraid that you think you're going to run away from all of these problems when most of them are moving with you. you've still got a broken ankle or had one. He's still going to be a machinist. He's still going to be a machinist. And now you're going to be in an area that's not as economically viable. And it might even be harder for him to make this kind of money.

Starting point is 01:43:02 So I love the beautiful generosity of your mother-in-law, and that's all wonderful. So, I mean, there's other options. Okay. Option one, stay where you are. Option two is take the deal. And the only way you would take the deal is if he first has a job. You cannot move over there if he didn't have a job first. Right. Right. So he's got to go find a job and then we can say yes to mother and all. That's option two. Option three is she sells the property and gives you the money and you pay off your house and your husband finds a better job in the area where you are. Okay. It's the same thing. Yeah, I don't think she wants to do that though. I think there's still. It's the same thing. She still gave up the money. Why does she care where the money goes?

Starting point is 01:43:50 Is it the property sentimental to her? Yeah. Her. So what happens when you want to sell it? I don't know. Yeah, I don't do that. If you have to buy a property, if you have to take on a property that you can never sell or never do anything with, no thank you. I'll pass.

Starting point is 01:44:10 Okay. If she, so only, I mean, I would, I think it might be better for your husband to get a better job. job that's not, you know, in the area where you currently are and everything's already set up and just pay off your house with the proceeds of the sale of the farm. But it sounds like there's all kinds of emotional complications there that are going to be emotionally complicated. So you're jumping from one fire into a frying pan because now you got mother-in-law breathing down your neck about everything you did with the house she gave you because it comes with strings attached. Yeah. Ropes attached. Hangman's noose attached. Oh gosh. Don't say that.

Starting point is 01:44:45 No, I mean, really, it's bad. You can't. cannot get rid of it. You're stuck in it. And, well, I gave you that house. And now you're stuck in the country and your husband can't find a job. He loses that job where he finds. Yeah. You got five kids. You think you've got problems now. That might not, that might be a trap. You need to be careful. On the front end, it sounds great. But if they're, I mean, and honestly, Kat, I would, I would assume you guys are going to be leaving friends and, you know, possibly a community of people of where you guys are. And it's just a lot to think. through where the knee jerk is oh wow we basically get a we get a house like that's paid off

Starting point is 01:45:25 but then when you start untangling it you've written this narrative in your mind that it changes your life and it really doesn't it might change it negatively uh and then somehow that this you know no mortgage is going to make everything okay and make all the things that are causing you to cry go away and all the things that are causing you cry are going with you five kids and a husband that's a machinist. I mean, that... And he's probably exhausted. I mean, I, I can hear you. He's probably just tired. Very, very. Very. You're probably just tired. All of it. So I'm just wondering, is there a career difference, you know, a different decision in that? And that clears all this versus a house. Mm-hmm. And a house that you cannot sell. With that you can't sell. Yeah. Yeah. Yeah. So I'm going to

Starting point is 01:46:09 approach her and say, I think we would love to have the proceeds from it. How about that, mom? And that's not for you to do. That's for her son to do, by the way, and known as your husband. You do not make that phone call. You spend hours researching before making a major purchase like a home or car, but it's also a good idea to put in the work searching for the right insurance coverage. To protect your biggest assets, I recommend using Ramsey trusted pros. Whether you're looking for car, home, or any other type of insurance, Ramsey trusted providers have been coached and vetted to serve you like we would. Find what you need at ramsysolutions.com slash insurance.

Starting point is 01:47:30 One of our favorite things to do is have a debt-free scream on the debt-free stage here in the lobby of Ramsey Solutions. We do this show, if you didn't know, on the glass in our lobby from one to four every Monday through Friday. And so folks stop in and have a free homemade chocolate chip cookie and some free coffee and hang out. and watch the show happen. And occasionally there's a debt-free scream happening as well. The only thing that we like more than that is when it's one of our own Ramsey team members doing a debt-free scream. And in this case, one of the most popular guys in the building. Yeah, look up.

Starting point is 01:48:24 Look who's here, Rachel. RISly. RISly, one of my faves. Rizley. Thank you. Thank you. Oh, my gosh. Actually, Matt Rizley, but we call him Rizley.

Starting point is 01:48:33 And Madeline, I think we've officially Matt. Madeline? Yes. Hi. Welcome, Madeline. I know. Congratulations. Good to have you.

Starting point is 01:48:39 And we've got like 100 of your team members that are not working and watching you do your debt for you scream. Sorry about that. Productivity in the building has gone down caused by you. Congratulations, you guys. Well done. Well done. Hey, congratulations you two. We're very proud of you.

Starting point is 01:48:53 Well done. So how much debt have you two paid off? It was $188,000. Oh, my gosh. How long did this take? Five and a half years. Wow. And we don't ask incomes because all your friends.

Starting point is 01:49:06 and coworkers are standing around. That would be a little strange and weird. Yeah. So, um, and awkward. So, uh, what kind of debt was the 188? Well, you're looking at weird people. It was our house. Yeah.

Starting point is 01:49:19 And what's your house worth? It's about 400,000. Boom. Look at Risley. Way to come, guys. Oh my gosh. You guys. Look at you, man.

Starting point is 01:49:28 So proud of you. How's it feel to have a paid for house? Amazing. Yeah. True freedom. Now he's the senior director, folks, of media distribution in the Ramsey Network. And so a lot of you that see things happen with a show somewhere on the internet, it's all his fault. And so he works really, really hard going through every single episode and making sure it's distributed with all nerd probabilities and analytics and everything out there and does a great job.

Starting point is 01:50:00 And so a lot of you have found this show because of the work of this man. And so we really do appreciate him. So, Howlston and everything? You've been here, what, seven years? Yep, well over seven years. Working here. And how long have you been on this journey? Yeah, this journey started about 15 years ago to condense that 15-year story into something really quick.

Starting point is 01:50:23 I was a baby Christian. I was really skeptical of the whole Christianity thing, and I decided, hey, I've got something important in my life. Let's see if this prayer thing works. So I remember praying at the time, hey, do I go Lord to in-state school and accrue no debt? Or do I go out of state with some friends in accrue debt? And the next day, I went to a men's event. And Dave, you were on the screen at Willow Creek basically yelling at me to not go into debt. I can't imagine me doing that.

Starting point is 01:50:55 And so it was a double whammy. You know, I realized prayer works. and also I became a Ravid fan from that day forward and every week I'm listening to the show and then you come to work here yeah it was a dream come true totally get dunked in it yeah

Starting point is 01:51:13 well and then you gotta watch the show every day you're totally dunked in it yeah I have to analyze how this segment does that's right that's right you're gonna be looking at yourself how long have you guys been married eight years eight years okay so you've been working Madeline all this time

Starting point is 01:51:29 with this guy who went Ramsey crazy to the point he comes to work here. Yes. And has he been hard to live with during this time? No, not at all. My dad raised me with the money mindset, so you guys were on the page. Did you guys have consumer debt before this? Or was the whole thing was just the house?

Starting point is 01:51:49 Yeah, just the house. Okay. So you moved here, took the job, and then later bought a house and then took five and a half years to knock it out. Yeah. Okay. Way to go, dude. Yeah.

Starting point is 01:51:58 Way to go, man. Okay, so we talk about when you're paying off the house, we always say that's kind of like the intentional step, right? That you want to enjoy life and all of it, but the extra goes on the house. And some people go crazier and they just stay intense. Where were you guys on that scale, would you say? We were on the intense side. We weren't gazelle intense. We went out to eat once a month.

Starting point is 01:52:20 Once a month. You splurge you. But there was a piece that left us because this is the only debt that we've ever had. And so we were very intentional together. We would talk about money every week, almost every day. Hey, what's our goal? What are we going towards? And we really wanted to pay off this house so that we could live and give like no one else.

Starting point is 01:52:41 So you're saying when you bought the house, took on the mortgage, the piece left and you wanted it back. That's right. Okay. I'm making sure I understood that. So good. Very cool. So what were things that you guys, you mentioned the out to eat thing, but what did you say no to? Honestly, a lot of trips and vacations.

Starting point is 01:52:56 both of our parents are in New Jersey, so we didn't go home often. Was it worth it? I'd say so for sure. Yeah. Now that you're free, how's it feel? It feels amazing. We honestly can drop of a hat, go take a trip, and that feels freeing. Yeah.

Starting point is 01:53:14 You can do anything you want to do. You can do any payment. I mean, you do anything you want to do. It's pretty incredible. So talk to the person out there who's thinking about this, and they're going, I don't know if it's worth it or not. Is it worth it? It's so worth it.

Starting point is 01:53:31 And there's nothing flashy about our story. There was no big paycheck or payoff. I didn't inherit it anything. And so it was a daily choice to do something hard. And if you're seeing this or listening to this right now, you have a choice before you to do something hard. And take that next incremental step because it gets easier over time. And so when we had a tough decision,

Starting point is 01:53:56 it was relatively easy because we were just on the same page about everything. So I just encourage you guys to take the next right step when it comes to your money journey, and that snowballs into the rest of your life. Yeah. Have you run out the numbers if you just invested the mortgage payment and where it takes you? How many millions that's going to be? Oh, yeah. I'm old school.

Starting point is 01:54:20 I have a time value of money calculator. Oh, my life. Yeah. Yeah. An H.P12C or something. Yeah. Yeah. Okay.

Starting point is 01:54:28 Good. I like it. Very cool. Yeah. So you can run that out. You don't even need the Ramsey calculator on the website. And you can figure out that this is millions and millions and millions of dollars. Because how old are you guys?

Starting point is 01:54:39 Well, we're 33. Oh, I'm 32. Okay. So early 30s. Paid off house. Yeah. And we paid off $400,000 house. Unbelievable.

Starting point is 01:54:48 And we're kind of, I'm a loser. I had a goal of paying it off at 30. But, you know, I missed that goal, but I don't know, I have a paid for house at 33. I think you're going to be okay. The extra restaurants were worth it. Enjoy your life. That one restaurant a month. That's what's at it.

Starting point is 01:55:07 That's exactly. No, that's not, you guys are impressive. I'm so proud of y'all. Thank you. Very, very well done. And we certainly love the work that you've been doing here. And the team loves working with you. Is obvious with them all standing out here to cheer you on today.

Starting point is 01:55:23 that's very cool. So pretty, pretty stinking cool. What was the driver? What was the motivation under this for you too? Yeah. We have a very clear goal of where we want to be long term. Early on, it's really fun. I'm seeing the guy next to me. We wanted to support missionaries long term. And I'm looking at the guy who was in China doing missions work. And he came here. to work here. I brought him. But when he came over, I said, man, it would be great if we can house missionaries when they're in between things or they're getting ready to go out to missions or they're coming back. And so someday we'd love to own a big plot of land, put some houses on it so that we can serve the kingdom that way. Well, you're going to be able to. That's a no,

Starting point is 01:56:14 that's a no-brainer with the math the way it is in your situation. Just a matter of when, that's all. It's not going to be next week, but you'll be there. You're going to be there before you know it. Well, congratulations you two. Very, very well done. Okay, now you've got no payments in the world. What's the first thing you're going to do for you to celebrate? Big, something big. We're going to get Madeline a newer car.

Starting point is 01:56:37 Yes. Good. Good. Good. Madeline needs a better car. I don't even know what you got, but you need a better car. Yeah, great. Good job.

Starting point is 01:56:47 Awesome, you guys. All right, Rizley and Madeline. No, it's actually Matt Rizley and his wife, Madeline. Let's make sure we get that right. 188,000 paid off house and everything at 33 years old. Count it down. Let's hear a debt-free scream. Three, two, one, we're dead free.

Starting point is 01:57:13 And little Lillianna in there. My gosh, precious. Beautiful. Precious. Dave Ramsey here. For more than 30 years, I've been talking to folks on the air, and I can tell you that most people are broke, not because they don't make enough money, but because they don't have a plan.

Starting point is 01:57:45 You need to give every dollar you earn a job because when you do that, something changes. You stop guessing. You stop worrying. You stop stressing. Our every dollar budgeting app will show you how to find extra cash, pay off debt, and finally start winning with money. But most people won't do it. They'll keep living paycheck to paycheck. Keep hoping things will change without making a change.

Starting point is 01:58:11 It's time to say enough is enough. It's time to take control. of your money. It's time to start your every dollar budget for free today. Go download it in the app store or Google Play. Our scripture of the day is Luke 637. Do not judge and you will not be judged. Do not condemn and you will not be condemned. Forgive and you will be forgiven. Robert Lewis Stevenson said, don't judge each day by the harvest you reap, but by the seeds you plant. If you're buying and you're selling a home, it's super expensive, and you want to make sure you do it right. And if you make a mistake, it's always with too many zeros.

Starting point is 01:59:08 So you need to get a pro in your corner that does a lot of real estate transactions that knows what they're doing. Ramsey trusted connects you with vetted real estate agents who have high performance and the experience to guide you step by step to make the right Ramsey type smart decision. No expensive mistakes. Connecting is easy. compare the agent profiles, interview your top choices, pick the right one for you. Find a local Ramsey trusted agent who has your best interest at heart for free at Ramsey Solutions.com slash agent or click the link in the description, the show notes for YouTube and podcast. Marshall's in Baltimore.

Starting point is 01:59:46 Hey Marshall, how are you? Bill and well, Dave. How about yourself? Better than I deserve. What's up? So I've got a quick question. I've got to give you a little bit of background. I'm 29. I'm married. I'm living in an apartment. My wife is out of a job right now. And basically to my question, should I liquidate my broker's account to pay off my truck?

Starting point is 02:00:09 What do you make? I make 71 a year. What did your wife make when she was working? She was at 75,000 a year. Are you able to live on yours? We're doing all right. Will she get a job? Will she go back to work? Do you think so? soon? We've been looking. There's a potential opportunity, but we haven't heard too much more about it. Okay. How much do you owe on the truck? I owe just about 26,000. How much is in the brokerage? 28,000. Okay. If you guys are not in the middle of an emergency, and it sounds like it's kind of medium, I would write a check today and pay off the truck. There's no reason I'd have borrow on my

Starting point is 02:00:56 truck to have a brokerage account, and that's basically what you've done. The down-win income. You may want to wait two weeks and get her a job, and that would make it much more comfortable to do that. But it sounds like you guys are going to make it okay until she gets a job, so it's not like you're going to need this money, right? Right. How much is her car worth?

Starting point is 02:01:20 Oh, it's a 2009 Nissan, so maybe $500 or for lucky. Okay. Okay. I was just seeing. How long you've been married? It'll be a year in October. You should give her your car, Marshall. I have to give you the unfair information that it's federal law. Wife gets the good car.

Starting point is 02:01:43 Okay. So, yeah. But yeah, we're going to have to move her up in car quickly as soon as you guys. That's your only debt, right? That is the only debt. I want to move her up in car with cash after she gets lands a new job. You got to save up some money and let's get the emergency fund of three to six months expensive. Do you have other savings?

Starting point is 02:02:05 I have a Roth IRA and the 401k and then a little bit of cash in my savings account. How much cash in your savings account? $4,000. Okay. Okay, well, that's a good little buffer too. So you'll have $6,000 that you could get to if you needed it after you pay off this truck. Yeah, pay off the truck, though, too, into the, savings and we're building an emergency fund of three to six months of expenses. As soon as she lands a job,

Starting point is 02:02:30 let's save quickly and move her up in car. So that way you get to keep your truck and don't have to give it to her. But I want her to land a position pretty quick to bounce back emotionally from the job loss because she's got this huge potential. I mean, your all's household income doubles when she lands that back. And so I don't want to, um, I don't want to jump into something bad, and I don't want to take something for less. So let's continue to work the network and find that next position as soon as possible. But as soon as you're comfortable with it, I would pay that off. And if you're comfortable today, living on your income, then I'd pay it off today, for sure.

Starting point is 02:03:12 Stephen is in St. Louis. Hi, Stephen. How are you? Doing better than I deserve. I appreciate it. How are you? Better than I deserve. What's up?

Starting point is 02:03:21 So I've been listening to you guys for a few months now, and I really appreciate all the really practical, emotional, and moral clarity that you have with all of your decision-making processes. So I was curious about a car, as a lot of people on here are curious about. My wife and I kind of live in two very unique financial realities. I am a trust fund kid, but I have not used it really apart from education. So a little bit about my wife and I's combined income is probably about $75,000 a year. And we just had a new little kid.

Starting point is 02:04:12 He is doing great now, but at about two weeks of life, he had to have a pretty major heart surgery. And something, yeah, no, I appreciate that. Luckily, insurance is covering the vast majority of it, but I went a little bit more into dad mode and wanted to get more protective about things, particularly about just wanting to make sure that we have the best, safest car for him. So currently, my wife primarily drives 2015 Ford Lex.

Starting point is 02:04:43 It's been pretty through the ranger in its own career. It has about 120,000 miles on it. I would personally be very pro into upgrading her into a newer car. Something that is either pre-owned, certainly newer, certainly has the newest safety specs, all of that sort of good stuff, just to make sure that her and the kids are about taking care of. Okay.

Starting point is 02:05:12 What does you make? So I make $72,000 a year. I thought you said that was the household income. Yeah, yeah. So my wife used to work. We moved to Missouri a couple years ago. Okay. And when we moved, she left her finance job where she was making probably close to a quarter of a million dollars.

Starting point is 02:05:36 Oh, wow. Okay. Yeah, yeah. So we were doing well. We saved up a lot of money then. A lot of it is still primarily. in like retirement funds. So we heavily funded the Roth IRA and the 401Ks.

Starting point is 02:05:50 But you have no cash just on the side? No, no. So we have some cash also bought a new house when we moved to Missouri. Luckily, we are debt free from all that when my grandpa, who was 100 to pass away. So in my trust, it's about $2.8 million. And what is your draw on that? I don't touch it. I've never touched it.

Starting point is 02:06:18 But you have access to it. If I were to ask my parents, they would give me access to it. So your parents are the trustee, and it's at their discretion. Yeah, correct. And you're how old? Young 30s. And you're thinking about buying a car, that's how much? Probably no, if we were to get a new car, probably no more than like 50 or 60,000.

Starting point is 02:06:44 Okay. We tell folks not to buy a car that is more, and to have vehicles that total add up to more than half their annual income. So no, I would not do that. Okay. But you have, I'm sorry, wait a minute, wait a minute. We tell people not to buy new cars unless they have a net worth of over a million dollars. And I guess you do because I guess your net worth is $2.8 million. Okay. And so pay cash for it. I... Is your fear, like, lifestyle creep that you're going to start tapping into this and spend it, Dave? Is that, Dad, is that your...

Starting point is 02:07:24 Yeah. Okay, that's your, that's your hesitation, Stephen, too. Are you scared to touch it? Are you just like, oh my gosh, this is so much... She's driving a $3,000 car. Why don't we go halfway and buy a $30,000 used car? No, so that's one of the other options and considerations. Yeah, I think that's what I would do.

Starting point is 02:07:41 And I would do that more as an exercise in restraint than I would as an actual mathematical guideline. Because you've been really restrained about dipping into the trust fund. You're showing good discipline in that. I mean, you're not a trust fund kid in the sense of like stereotype. I don't think you're going to destroy anything if you bought the 60, but I just like the restraint of, I'm going to buy you as half my annual income and I'm going to stay with that. And it's still enough to take care of this.

Starting point is 02:08:11 I'm not being emotional about the kid. That puts us our of the Ramsey's show and the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.

The Ramsey Show - You Can't Stumble Your Way Into Financial Freedom

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