The Ramsey Show - Your Mindset Matters More Than Your Money

Episode Date: January 1, 2025

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Thank you. Live from the headquarters of Ramsey Solutions, it's the Ramsey Show where we help people build wealth, do work that they love, and create actual amazing relationships. George Campbell, Ramsey personality, co-host of the Smart Money Happy Hour is my co-host today. Open phones at 888-825-5225. That's 888-825-5225. Paul is with us in Minneapolis. Hey, Paul, welcome to the Ramsey Show. Hey, Dave, thanks for

taking the call. I have another should we pay off the house early out of our retirement question. Okay, why is this one different? Well, my wife and I are both retired. I'm 61, she's 58, We retired with the mortgage and I've got a number of different opinions from our financial guy. I've got friends that work in the finance industry. I worked for a bank in 30 years. And, um, I guess just looking for another opinion, maybe one with a little bit more credence than some of the others, I guess.

Okay. So how much do you own your home? Uh, so it's a $ bit more credence than some of the others I guess. Okay so how much do you own your home? It's a $450,000 house we owe $170,000. And how much do you have in your nest egg? What's that? What's your net worth? What do you have in your nest egg? Net worth is about a million and a quarter. We've got just over a million that is investment retirement if your house was paid off if your house was paid off why would you go borrow on it we would not then what's the difference I guess it's just okay when you phrase the question maybe a better question is if we decide to do this,

is it a process over multiple years to ease a tax burden? Do we just bite the bullet and take the hit and do it once or how would I do it? I've been doing this 30 years. I've never had anybody call me back and say they were pissed off because they paid off their house. Fair enough. So one shot or would you? I'd write a check today. I'd have been debt-free yesterday if I were you. And quit listening to all these idiots. There's a lot of idiots out there running around with an opinion about your money and you're a millionaire. What's your

mortgage payment? What's your mortgage payment right now? Mortgage payment is what? $1,200. Okay, you'd free up most of that, which now you can invest. So yes, you'll lose some out of that investment account, but you're gonna still invest for the next 20 years. Dude, you're just gonna sleep so much better tomorrow. I mean, we're both retired, so invest is rolling rolling not necessarily additional. You have almost zero risk in this situation because you could write a check at any minute and pay it off if you got in a pinch. You don't really need the

money in one way or the other. It's all about you know what is your end goal. When you're 85 do you want to have a mortgage? You know why would you keep it? There's no reason to keep it. You wouldn't go borrow on a paid for house in order to have more money to invest. And so, write a check and sleep better tomorrow. Tonight, pay it off tonight. Hit the submit button. And then when you go and you get the

mortgage release in the mail, make a copy of it, take your shoes off, walk into the backyard, have a mortgage burning party, and tell me that didn't feel good. I mean, there's just no downside to this. You're a million... You're going to be okay either way if you don't follow our advice, if you follow those idiots' advice. But if I've got a financial person that's telling me to stay in debt, I'm getting a new financial person. debt, I'm getting a new financial person. Period. Because, George, we studied 10,167 millionaires, the number of them that told us that they became wealthy because they borrowed on their home in order to invest was precisely zero. None of them leveraged their personal residence to build their wealth. None of them. And so the idea that I continue to leverage my personal residence to build their wealth. None of them.

And so the idea that I continue to leverage my personal residence in the name of building wealth is an asinine based on the millionaire data. Well, we're seeing so much more of this because people have their record low mortgage rates they don't want to let go of, Dave. It's like, why would I pay off my mortgage? You know, but I got your mortgage rate beat.

You know what my mortgage rate is? Zero, I don't have one. Hello. Heck of a rate. Zero. I got the best rate. Come on man. So when rates go up and down, you don't have to worry about them because you don't need debt anymore. It's a great feeling instead of worrying about what the market's doing. So yes, it hurts to write that check and lose that much money, lose quote unquote, but you never really had it if you owed it

to the lender in the first place. Paul, pay it off son, pay it off. There's a bunch of intangibles that you're not even considering in this decision. You're still acting like it's primitive math or at least the idiots advising you are. So you're gonna sleep different. Your wife's gonna look at you like a hero. Never,

never once have we had a wife said, you know, my husband borrowed deeply on our mortgage and he's my hero. Never came up. I love the Kermit vibe she had too. Miss piggy meets Kermit. Well, it's best. I can do. It's the best I can do. Uh, Anna as with us are is Anna or Ana? It's Anna I'm sure and she's in Grand Rapids. Is it Anna? Is that right? Yes it's Anna. Hey how can I help? So I recently paid off all of my student loans and in debt free. Thank you yeah so I couldn't have done it without you so

But I have my three six months of expenses I just finished that up and I'm wondering now if I should be investing my 15% or if I should Be saving for a wedding that my boyfriend and I are planning to have in about a year and a half. So I'm wondering if- Wedding. I'm waiting for that. Wedding. Yeah, okay, perfect.

Are you guys paying for this on your own? We think so. We don't really want it. We just want to plan for that and that if something comes, then we'll go for it. But yeah, we kind of just want to plan on doing it ourselves just in case. Okay, I would set a very specific goal,

a number you're trying to hit to save. And I would try to hit that before the year and a half is over and then begin investing. You got that money set aside, you know you're not gonna have to go into debt for this wedding, that is the goal here. And so that's why we're telling you

save for the wedding first. Cause what happens is you start investing 15%, the wedding was over budget, now we got to put it on a credit card. For sure, yeah. So what do you think you're gonna spin? We're thinking maybe between I would say probably we were thinking between 20 and 30 depending on what rates are but Probably 25 is the goal we set okay. Well if you yes that by the way, that's about an average wedding in America right now So um you're not above average or not below average or right around there's 28,000 last year. So the thing is having three grown kids that all got married and I was involved in the budget

because I was paying for it or at least part of it anyway on one all but one all of it. But anyway, my part, the bride's part and and then my son we participate some have a detailed budget not a general goal lay it out okay this how much we're gonna spend on the photographer there's so much we get on the dress there's so much we spend on the reception and treat it I'm sorry but treat it like a project you're managing a project you are so you have a timeline you have a budget and and you, you know, you stick to it. What must be true? Well, we can't have that. We got to have this instead. If you don't have a very specific thing, then you'll line item, you'll get into a mess there. But that sounds reasonable,

I would say, for the wedding first. I've been doing this show for over 30 years and some of the saddest calls I have taken are from situations that are completely Preventable. Yeah, and what's so hard is I feel like one of those especially the ones that I'm like, oh, it's terrible air People that call in and their spouse has passed away suddenly and they don't have life insurance when you have to think through How am I gonna pay my bills? I'm gonna need next week. Yeah in the middle of all that grief. It's just terrible. So life insurance is the one thing, especially as a mom with three little kids that I'm

so big on for people to get because it's inexpensive. Zander is the place that Winston and I actually get all of our life insurance. It doesn't cost much because Zander shops among a gazillion different companies. It doesn't cost much. You just have to admit that someday you're not going to be here. You've got to say it out loud and you've got to say, I'm going to say I love you to my family by taking care of them and taking the time to put this stuff in place. The cost of stinking pizza. To get a free quote call 800-356-4282 that's 800-356-4282 or go to zander.com. George Campbell Ramsey personality is my co-host today.

Thank you for joining us. Open phones at 888-825-5225. Will is in Atlanta. Hi Will, how are you? Good, how are you Dave? Better than I deserve. What's up? Um, about two months ago my grandmother passed away and I received about a 1.1 million dollar inheritance.

Wow! I'm sorry for your loss and thrilled for your blessing. What a wonderful thing she did. That's amazing. You're the only grandkid? No, I'm one of two grandkids. Each of you got a 1.1? Yes. Way to go granny. Wow. But my life today was

how do I make the... I'm 23 years old. I was just calling to find out how do I make the absolute most of this? So this is a little bit intimidating to you? Yes. Good. Good. That's a good sign. That means you're wise. If you were having a woo-hoo, I hit the lottery moment, it would mean you're a child. And so I'm glad you're a little bit... That's a great... It should take your breath away a little bit. This kind of fear is the beginning of wisdom. So way to go. It's a good fear. I don't want you to be panicked or anxiety ridden or anything like that, but I do want you to be aware.

I just got behind the wheel of a car that is way more powerful than anything I've ever driven and I need some driving lessons. That's what you're aware of. Good for you. So proud of you. Good, good, good, good, good. Okay. First thing is keep that mindset

second thing is Never put money in something you don't understand Mm-hmm. No matter who says to including me Anywhere you read or hear to put money in something and you can't tell somebody else how it works in detail Do not put money in something and you can't tell somebody else how it works in detail, do not put money in it. Okay? Okay. Which means you might be going a little bit slow at first, because this money might just

be sitting in a bank account, because that's what you grasp right now, okay? Okay. The third thing is, the Bible says in the multitude of counsel, there is safety. Money people, too many of them, have a little bit of arrogance in them, and they want to tell you what to do. If you have a money person, a financial advisor, an insurance person, a real estate person, an estate planner that is telling you what to do instead of teaching you, fire them and get another one. You want someone with the heart of a teacher because it is not their job to manage the money, it's yours. Your grandmother didn't leave it to them, she left it to you. So it is your job to

sit with a mutual fund broker with an advisor and learn and learn and learn and learn and learn and and you're doing that today you called us because I want to learn what to do right? That's very good but always look for someone with the heart of a teacher. You cannot offload the nervousness of this responsibility by letting someone else make your decisions. Okay. That makes sense? Yes. If you have to understand it and you have to have people helping you that

have the heart of a teacher that helps you understand that those two things work together and then you're going to move slow. you just move at the speed of your comfort at the speed of peace when in doubt don't Easy enough right That is very easy. Yeah in other words when it rear stomachs moving up towards your throat You wonder if this would make your grandmother angry with you. Don't do it Which is your fourth thing each time you make a decision with this money if this would make your grandmother angry with you, don't do it. Which is your fourth thing.

Each time you make a decision with this money, ask yourself, would this cause her sitting in heaven to smile and be proud of her grandson? Okay? And if the answer is no, don't do it. Because this lady had some sense. She left two million bucks to her two grandkids so I think we can use her as a filter for our decision-making honoring her legacy honoring her memory causing her to smile in heaven as our filter and that's gonna help you also does that make sense to

you yes it does okay so there's no magic formula on what to do with the money. I put mine in growth stock mutual funds and I pay cash for real estate and I live 100% debt free and you probably already knew that. Yes, I do. And George does the exact same thing. Absolutely. And when you look at this money as a steward or a manager of it, it changes the filter. And an easy way to do this is filter it through the baby steps number one, but also filter it through three buckets, giving, saving, and spending. So you should give some of this and be generous, just like your grandma was.

You should spend some of it and enjoy it. And you should invest probably the biggest portion of this for the future. What do you make? I currently make about $110,000 a year. Okay. So you don't need any of this. No. And so here's an interesting thing. If you put it in something like a mutual fund, it makes 10 percent. It'll double every seven years.

So you said you're 23? Yes, 23 years old. So it'll be 2.2 at 30. At 37 it'll be 4.4. At 44 it'll be 8.8 it'll be 16 million when you're 50 if you just don't touch it and invest it and it makes 10 percent yeah mind-blowing i i i didn't get it like wired to my bank account i just got transferred into one of the Financial institutions that she was associated with but currently it's split up about 350,000 as in personal stock choices and CDs and then

750,000 is in a managed stock account. Okay Well, I don't play single stocks So I probably wouldn't do that because there's more risk But I want you to get in there and start figuring it out And again, there's nothing to panic about but feeling the weight of this as a responsibility to manage is a proper Philosophical spiritual stance for you if you do that It'll cause your decision-making to be different than just some little kid who got some money and blows it all by

the time he's 26. Yeah. Okay. Because you're not. You're already more manly than that, I can tell. Very wise. Yeah, very well done. So I don't know if he said it, but no debt emergency fund in place.

That's a good spot to be investing and to buy a property with cash, a reasonable property, enjoy some of it. And then the rest I'd be investing either in more a property with cash, a reasonable property, enjoy some of it, and then the rest I'd be investing either in more real estate if he's comfortable or just putting it in some good mutual funds. Just take your time, just take your time. No rush. Yeah, very, very calm.

Well, good question, man. So put good people in your corner that have the heart of a teacher, they'll help you. If you wanna know about the investing, the way we do it and the way I personally do it, and get someone with the heart of a teacher click SmartVestor at RamseySolutions.com you'll find a SmartVestor Pro or two or three in your area there are there are people that have the heart of a teacher and know the

way Ramsey does it and they can walk you through that and teach you what you're doing and and they're gonna move you out of those single stocks I can tell you that if once you understand you're gonna move you out of those single stocks I can tell you that if once you understand you're gonna move you out of those single stocks Paul is in Cleveland Ohio hey Paul welcome to the Ramsey show I think for having me on how are you better than I deserve what's up I'm trying to I recently graduated from college we've got about $20,000 to club debt and about 40,000 already invested in my retirement account split between a Roth IRA and my company's 401k.

What do you make? I'm trying to balance. What's that? What do you make? I make about $60,000 a year. Okay. And you're trying to balance what? Trying to balance continuing to save for retirement and getting ahead on that. I'm 24 years old and just making sure that I also pay off the student loans. So I have a got about $10,000 set aside as an emergency fund and I'm just

trying to figure out what to do next whether I should lump some pay down my student loans or just keep saving for retirement since the interest rates are a little bit lower than what you expect to get out of the stock market. Well, Paul, I will talk to you like I as if I went back in time because I had more student loan debt than you and I made less than you. And so at 23, I was $40,000 in student loan debt. I wasn't making any progress. I was trying to play the same game you are balancing this all.

Here's what you got to do. Paradigm shift. Let's try a proven plan. That means we're going to take 9,000 from this emergency fund, pay down the debt. That's going to leave you with 11 left. Making 60, you're going to knock that out quick. Pause investing. You'll be back to investing probably in six months if you do it this way. Investing 15%. Don't balance debt and investing. Get the debt cleared, and then go whole log on the investing. That's what George is saying, and he's right.

This is The Ramsey Show. This show is sponsored by BetterHelp. Hey, it's that time of year, it's starting to get a little bit colder, it's getting a little bit dark earlier, and sometimes if you're like me, you just wanna stay inside and get cozy. And for me, my perfect cozy night is me and all of my family

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Find comfort this December with BetterHelp. Visit BetterHelp.com slash Deloney to get 10% off your first month. That's BetterHelp, H-E-Lhelp.com slash deloney. Where did you find that? George Campbell, Ramsey Personality is my co-host. That was direct to the booth dudes who picked out some strange bump music there, George. That's a new one. I know them all. I think this one. I think I'm on The Price is Right. One dollar, Bob. It's like a hip game show. I would love to see you on The Price is Right, George. That's a new one. I know them all. I think I'm on The Price is Right. One dollar Bob.

It's like a hip game show. I would love to see you on The Price is Right Dave. It's not too late. I don't know, I was stuck on an elevator. I don't know what happened. All right, up next is Jacqueline in San Antonio. Hey Jacqueline, how are you? Hi guys, I'm well, thank you.

Better than we deserve. Good, how can we help? You didn't even ask, but I answered anyway. What's up? Hey you know, I already knew the answer. I'm on autopilot, Jacqueline, how can we help you to any mask but I answered anyway what's up you know I'm autopilot Jacqueline how can we help I have a beautiful responsible 19 year old daughter who lives with us and is about to make me a grandmother I know it's

funny I said responsible first right except for that one time yeah yeah okay yeah my my question well financially responsible hard-working excellent work ethic and and and morally sound and My question is How much should I be helping her throughout this pregnancy and throughout the first month? It was obviously unplanned throughout the first month. It was obviously unplanned and she's had a hard time with processing the whole thing and she is now unable to work. So I'm just kind of looking to you. It was sort of a light came on as I was driving and

listening to you and I thought I respect Dave's answers so let's run it by him. Well I appreciate that. Sometimes when I'm facing something like that that is a little bit ethically or morally or I don't even know those aren't the right words, relationally overwhelming. It helps me to say not what is the right answer today but what do I do today that is the right answer for ten years from now. Exactly. Because we have a strong foundation with our kids of teaching them financial responsibility. You know we go by yours for years and years. And so what you got is an extenuating circumstance. Obviously a baby is an awesome wonderful thing particularly

grandbabies if I don't know how great grandbabies were gonna be I'd have been nicer to their parents so you know all of that part is wonderful so this is a bad metaphor but I would almost say what if she had a car wreck and couldn't work she ran a red light it was her fault fault, and then she got hurt. Right? That's not a really good metaphor because it's not as, babies are much sweeter than that, right? But I mean that's kind of how I think I probably would look at it. I'm just thinking like a grandpa right now, or like a dad. And that's where my brain is stuck. This is not a 39 year old who's done heroin for 15 years and hates me. This is a 19 year old that messed up, made a mistake that otherwise has led a pretty

good life is what you're describing to me. That's correct. Yeah. When our kids graduate high school, they start college. Thank God, God didn't throw all of us out in the ditch the first time we made a mistake. So I got lots of grace and mercy in this situation if it's me, I'm just going to take care of her like she's 17. And then but all with the idea that we're going to lead towards a sustainable answer

when she's 25. So what's sustainable for her when she's 25. So what's sustainable for her when she's 25? Well obviously financial responsibility, career responsibility, mommy responsibility, living on her own and sustaining and developing a life. Whether she does that as a single mom or later on gets married to someone, right? You mind if I add one more thing in? Okay. When they graduated high school, we have them pay us rent immediately.

And the thing is they're great staff in college. When they graduate, they get all that money back. So it's basically savings. If they don't, we keep it. Yeah. She was able to, in school, pay us rent, $500 a month. And she also saved $6,000 working full time in six months.

So she has $7,000 in her savings account. And really my question was, do I even let her touch that? No. Are you guys, are you guys okay financially, you and your husband? We are. We're debt free besides our house. This is not a financial lesson. This is, I'm loving my daughter through a very, very tough time. She had a car wreck, You know? And that's very validating. Yeah that's what I would do. And I'm pretty hardcore on tough

love as they call it. But this is not tough love. This is not a time for that. For me, for me this is a little scared pregnant girl and I'm gonna put my arms around her. I'm a lover. She's mine and we're gonna get her through this. But not with the idea that she lives in your basement until she's 39, but the idea that she's gonna, because you gave her some room here to heal and to, not heal, but to go through this process, well and heal. It's been traumatic, I'm sure. And so to go through it and get back on her feet emotionally, relationally, make better

choices going forward. This is not a pattern that represents her life. And so let's get back on that track that she was on. And then you got a 25-year-old that's an amazing human being with an amazing mom and everybody's happy and proud. Again, I'm not enabling into the distant future, but on the short term here, I just completely take care of her as if she was in an ICU or something. What do you think, Georgia? Yeah, I'm with that and I'm also wondering, you said she's unable to work. Is that just a short-term thing? What does that look

like? It is. She developed a pregnancy disease around five to six weeks and her pregnancy before she could even process and she became so sick that she was hospitalized. The good news is that it does go away the moment she delivers and she has managed to now. The hospitalization helps them to manage her sickness and so she is medicated and she's managed at this point and able to function but it's very unpredictable So she's not able to get another job. Yeah. This is a 19 year old and a baby.

Take care of, just take care of. Yeah. So what I would do, uh, and that's exactly what I'm going to do. Okay. You're a good mom. You got a good heart and you're not, you know, you've raised a, I know you're tough because you raised a kid that has work ethic. You raised a kid that's making, you're making her pay rent.

You raised a kid that did this and that and this and that. And you know, so you're not a pushover enabler mom. I don't think, I didn't hear that. Well, I think that's where it goes into the long-term ramifications. If this is still a decade from now and we're still living like this in the basement, that's where we need to go. We need to have an exit strategy out of this too once she's healed up and on her feet. In my mind this is the perpendicular opposite of someone who's 31 years old and does this and is belligerent and says if you don't help me you'll never see your grandkid

and all that kind of stuff. I have a completely different reaction to that person than I do this 19 year old kid. And if you're 19 and you don't like me calling you a kid, I got socks older than you, so just calm down. That's the deal. That just means I love you is all that means. It doesn't mean that I'm putting you down, but I got a little more rings around the tree.

So a little more age going here. So, you know, that's the tree. So a little more age going here. So, you know, that's the thing. So, you know, what you're looking for in relational things, period, but certainly in financial relational things is you're looking for patterns, not singular events. And patterns cause you to endorse a situation or to avoid a situation and that keeps you from becoming an enabler if you're wondering out there and you're a mom and a dad.

So if you've got a 37 year old that lives in your basement and will not work, that's a pattern. You need to kick said butt into the street because you're not a blessing to them. You are a curse to them. You are an enabler. You have stolen their dignity. The dignity of autonomy, the dignity of standing on your own, the dignity of hard work, the dignity of killing something and dragging it home. The only thing they know how to do is play Nintendo and it's your fault you should be ashamed.

That's a different pattern for moms and dads. And we got that out there because we got a group of males that aren't yet men that are stuck in their mommy's basement and mommy's still doing their dad gum laundry. And if you don't like that, that's okay. Get you a show. This is mine. So that's how this works. Wow. Well, nothing will turn you into an adult like having a baby. So the maturity, we just hit the fast forward button right there. Just getting a puppy will do it. My gosh, a baby.

That'll push it right there. This is the Ramsey Show. Okay here's the hard truth. Your investment dollars could be winding up in the pockets of companies that hold positions you don't agree with. People are unknowingly putting money into tech giants and household brands that don't match up with their core values. But here's good news. Timothy Plan is at the forefront of biblically responsible investing. That means Timothy Plan uses a strategy that lets investors chase competitive returns

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Read carefully before investing, mutual funds distributed by Timothy Partners LTD and ETFs distributed by Forsyth Fund Services LLC. George Campbell Ramsey personality is my co-host today. Canada is on the line. Maggie is calling. Hi Maggie, how are you? Hi, good Dave. How are you? Better than I deserve. What's up in your world? Well, Dave, I'd like to liquidate my portfolio and be able to put it I want to trade on with cryptocurrency and I just want your opinion. Do you listen to this show?

Yes, I do. Okay. What are you currently invested in? I have an investment account, I have TSFA and I have a RIF account. And what has caused you to go, hey, you know what, I'm gonna trade all of that to go into crypto? Because I'm losing in my portfolio drastically this year. And I just know that I don't believe I'm gonna come back,

like for a long time. Like, I mean, they say it'll come back, but I think it's not gonna come back for 10 years. And I'm already 72. So I just feel like, and I've also have experienced, like it's not like I haven't, I have been doing crypto trading now for a while. Have you seen the crypto market?

It's a lot darker than the stock market. You're trading a paper cut for a stab. Well, I've made money in the crypto market. How much? Probably about $10,000. Is that enough to retire on? No. What's in your investments currently? But I've also picked contracts that have been lower, definitely, because I haven't had that much money to do anything with. At your age, I'm not going to go to Vegas and just put it all on black and hope for

the best. That's not a great retirement plan. That worries me. Let's back up. Let's back up a second, okay? You are, you're scared because your good investments went down and right about the time I get desperate and scared is the step before I get really stupid. Desperate people and highly greedy people make the worst financial mistakes, and your fear is making you do statistically, or suggesting that you do statistically, the equivalent

of putting this money on a roulette wheel or a hand of poker. Because crypto is extremely volatile, extremely risky, at least 100 times more risky than your current retirement portfolio. At least. And you're telling me, oh I put money in the slot machine and I came out with more money than I put in. Well I'm not doing it myself. I have a trader that's helping me, you know, like, like, so I never close

my market in a negative position. It's always in a positive position in crypto. Well, Maggie, you do what you want. I'm 62. Yeah, I my net worth is hundreds of millions of dollars, and I have precisely zero in crypto Right and I'm not desperate and I'm not scared Warren Buffett said and you have it you have it You know the idea that you have a trader doing it for you scares me for you even more Because this is giving you false confidence a you've had some wins Be you have someone whispering in your ear How wonderful they are and how

they are going to take care of you, which is how people that are 72 years old lose everything they own. This is how it happens. Okay? Please don't do this. But I don't think that the decision is really up in the air. I think you've already made your decision. And if I told Maggie, hey, two years from now your money's going to be back to where it was in your retirement account, I don't know that she would do it, but it's hard to see that far out ahead when you just see your accounts bleeding out. And so you just want to do anything to not be doing that. One of the wealthiest men in the world says, be greedy when others are cautious and cautious

when others are greedy. And that's Warren Buffett and he doesn't mean greedy like being a bad person lack of character greedy he means be aggressive when others are cautious and cautious when others are aggressive and crypto is no place to play with money that you can't afford to lose and you're gonna lose it and then you're gonna call me back and say well I'm gonna have this guy who made me you know and he's singing a siren song and I sure hope you don't do it honey I sure hope

you don't do it it sounds like this trader is probably telling her hey I'm telling you today give me all your money this trader is definitely he's talked her up big time he's buttered her bread and this guy's a freaking con artist. He's a crypto con man. Well we've also have the quote from Warren Buffett saying he wouldn't pay $25 for all of the Bitcoin in the world. Yeah and I think he's got more money than me, you and your trader put together. So you know and I don't disagree with that at all. So it's just an extremely volatile market and that's being kind.

It's crazy crazy is what it is. But I don't have any money in it. There's a reason. Crypto is way more down. Well, how much is it down, George? I mean, it depends on what coin. A lot of them went bankrupt, there's fraud, there's scams, 97%. Oh, and by the way, too, Maggie, the number of people that have the number of dollars lost not in Bitcoin or not in crypto but in fraud associated with crypto is what I mean bill in the billions billions it's two and a half billion dollars at this point have been lost to Chris and let me tell you who the number one target of that type of fraud and con is. People over 65. People that are desperate and scared.

Empty promises. And so, I'm not saying your trader is a con artist, I'm just saying there's a higher probability that he's a con artist than if he was in any other business. Because of the number of crypto con artists that are out there. People that are this this thing is drawn the worst of the worst and so you can do what you want to do but you made the mistake of calling here and asking and we will give you our opinion and we are experts on our opinion. Jessica is in Michigan. Hi Jessica what's up? Hi my name is Jessica and I am 37 years old and I'm a single mom of two.

And my question is, is how do I get the momentum to, I'm on Baby Step number one, I am about 30, or I'm sorry, $17,000 in debt between student loans. My car's completely paid off, but I'm just trying to get momentum into getting that cash shaved up for baby step number one because I always try to validate my purchases. And I'm just trying to find a way to get the momentum

to stop validating the- Yeah, what's your income? Right now, I make about a little over 38 a year. Okay. What has caused you to wanna do this plan in the first place? I have been listening to Dave Ramsey off and on for about, let's see, about 11 years,

but I've really jumped into it more in the last couple of months. Wanting to say, wanted to the change my family tree I come from a family where we've all not been so great with money and my dad actually died. I'll tell you how I did it Jessica as a fellow spender. Yeah. I looked at my kids they were babies and we were broke because of my stupidity and I said I'm not doing this anymore I'm sick and tired of being sick and tired. And every time I got ready to spend, I treat, I would ask myself, if I had to

not spend this money so that I had the money to save the life of my child, could I do it, could I find the discipline? And that was an easy answer, of course. And so I did stuff like I would practice going to Costco and buying nothing and walking out. And that was like a breakthrough for me. Because I truly thought that if you went to Sam's or Costco that they check your receipt on the way out,

that it was federal law, that you had to spend $200 or you couldn't get out. They wouldn't let you out, that's why they check it. And I was that guy. And so I just had to, I kinda had to equate it with the life of my children Which is a bit melodramatic, but it's also kind of true because you want to change your family tree you said yeah What is 40 year old Jessica want to look back on it say man?

I'm so glad Jessica made those decisions And if that means you know taking away your debit card information from every website that you have hiding it having accountability With a friend do whatever it takes. I would think if you've got a spending problem that Amazon Prime is not even a possibility. I'm cutting that out of my life. It's got to, you got to turn it off. If you got a spending problem, if you're trying to say no I'm not gonna spend, because I mean that's just so easy, it's easy for me, you know, and I teach this stuff for a living. So you just got to, you got to equate it with a big why and you got to be sick and tired of being sick and tired and then

gradually you'll reform your character. This is the Ramsey Show. Mortgage rates have dropped so if you're thinking about buying a home in the next year contact your local Churchill mortgage team right now. If you wait, more people will be in the market competing for the same homes and potentially driving up prices. Churchill will help you do the math to be sure your budget is correct, making your home a blessing and helping you build lasting wealth. Learn more at ChurchillMortgage.com.

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it's The Ramsey Show. We help people build wealth, do work that they love, and create actual amazing relationships. George Campbell, Ramsey personality is my co-host today. The phone number is 828-825-5225. Melanie is with us in Philadelphia. Hi Melanie, welcome to the Ramsey Show. Hi, so excited to be here. Thank you for taking my call. We're honored. How can we help? First of all, let me just say George, I'm reading your book. It's super awesome. Oh, thank you so much. Appreciate that.

Yeah, no problem. So my question is, so my husband and I are in baby step two, working two full-time jobs. He's a school teacher and also has a training, like a personal training, um, dig on the side that he does. He rents his own facility. Um, but he's had it for four years. And my concern is that he really hasn't made any profit off of the business. He makes just enough to just pay the bills in the business. Um, at what point do I have that conversation that it may not be worth? just enough to just pay the bills in the business.

At what point do I have that conversation that it may not be worth his time in the business, just because it's not bringing in enough leverage. Anything that doesn't make money is called a hobby. Right. It's not a side hustle. It's a hobby. He likes work, he likes personal training so much he's willing to do it for free almost I mean he makes

some money but not as much as I think he should because he's been doing it you changing your tune in the middle of the call which is it how much does he really make net profit on the thing? Probably it varies every month so we can run range anywhere from $1,500 to like $2,500 a month. Profit? Oh well. You said after he pays his bills he's not making much if anything. He's not. What bills has he got? The rental on this place? Yeah, just the rental on the place and then he has like, that his utilities are included with the rent in the facility and then he has like, I don't know, his internet or something that he pays.

Okay, so he's getting $1,500 to $2,500 in. What's the rent? $1,600. So it almost takes everything. So if he doesn't make 1600 in a month he loses money. Right. Okay. Well I don't think it's unreasonable to sit down tonight and say honey, we've got to look at this as a business and we need to look and see what we've got to do with your pricing and the number of clients that you have to make what you're doing over there profitable because it's not okay that you're spending all this time over there and potentially even losing money right so let's get let's get out the numbers let's get out the numbers and run a P&L on this thing just sit there tonight and run a spreadsheet on it. How long has

he been doing it? He's had this place now for four years. Okay, well let's go back, you know, for the last 12 months and pull the revenue and then put in $1,600 a month and then put in the internet fee a month and let's see if we've really got a profit or not. Figure out what his hourly wage is on this. Yeah, and then go, okay, you made 500 bucks and you spent 600 hours over there.

Right. You're making a dollar an hour. Come on, man. So as a business owner, how do you, like at what point do you say, like it's just not viable anymore? I mean, he's supposed to be like an adult and stuff. He teaches children. Yeah, yeah, he's supposed to be like an adult and stuff. He teaches children.

Yeah, yeah he does. What does he teach? Health and Phys Ed. Okay, and how, how, what age children? Anywhere from kindergarten to high school. Okay, and so we would assume that they know how to do basic addition of subtraction. Yes. And he should. Mm-hmm. If he's teaching. I mean really. Yeah. He needs, you know, you need to sit down with him and say, I need you to look at this through the eyes of a business and let's look at it for a few minutes and

let's see if you think this is worthwhile. But I don't't you don't need to tell him he needs to cut he ought to be able to a logical adult male female should be able to come to a conclusion on this without his wife or husband telling them I mean you ought to be looking at and go I'm making a dollar hour no that doesn't cut it you know I'm supposed to be providing for my family during this time no no, no, no. And you guys are in debt. And so I think that's a part of this equation is we need to actually make money right now.

So here's the thing. Anytime we're in a business situation with our entree leadership clients on a side hustle or a small business idea, we do one of a couple of things. One is we have to ask ourselves, what can we change to make this viable and if the answer is there's not a change that will make it viable then it's time to shut it down okay I mean I think you guys are gonna look at this and figure out I think you're gonna look at this and figure out you put $18,000 or what is $19,000 in rent into it last year mm-hmm you know and he brought in 19,500 bucks. I think that's what you're gonna find. Yeah, I think so too. And you know, so, and then how many hours you spend over there, divide that into 500, and you look at him and go, honey, what part of this is smart? None. Right. Right. So, you know, so we, something has to change. This is not okay. We have to raise our prices, increase the number of clients, both, or we got to say we're not doing this anymore.

Okay. Yep. Gonna have that conversation. I appreciate your opinion on that. I guess the other thing is, you know, do you have a basement? We do. Why don't you do it down there? Yeah. $1,600 a head per month instantly. Another thing people do now is they'll go to your house and do the work out there. Oh yeah.

And the other thing he can do is just go work at a gym that already has personal training and they hire him and pay him money. So he doesn't have any of the overhead. So there's a lot of options. Part of the equation on the business model may be getting rid of this rent. And suddenly, yeah, you're doing in-home work and in your homework. In other people's homes for them,

personal training, you go visit Jim, then you go visit George and then you do whatever. That's the dream. And they pay you money. And I have a gym in my house. We did that for a long time. And so my wife made fun of me, she said, you know, the guy's counting for you.

You can't count to 10. You're paying that guy. Paying that guy big money for counting, I'm paying him for accountability. Ooh. There's that, but I can count to 10. I already can do one, two. I can count.

But you need a guy yelling at you other than the guy in your head. We don't need anybody yelling at me, but we need someone. I know if he's going to come over there, then I'm going to do the workout, right? Otherwise I might find my little butt on the sofa. That could happen. And so that's what a personal trainer does sometimes. We can Google the workout workout we hire the personal trainer because we need that level of hand-holding right now. Yeah I mean that's

okay. Yeah so I mean do it he could he could provide the service like George is saying charge even more to come to people's homes in person and or in your basement and or if you're gonna keep the location you got to make the location having the location needs to cause you to make more money than not having the location would have taught you to make i think you're going to get rid of this location at a minimum this is the ramsey show people tell me about their experiences with big banks all the time. Bad service, fees that nickel and dime them to death, and predatory lending that tries to catch them in never-ending cycles of debt. So if you're ready for a bank that puts

people over profits, check out FairWinds Credit Union. I recommend FairWinds because they share our Ramsey values of helping people get out of debt and live generously. If you go to fairwinds.org slash Ramsey, you'll see the combined checking and savings account bundle they created just for Ramsey fans. This account bundle is designed to help you take control of your finances and stay out of debt. And Fairwinds also has a great mobile app that's safe and secure so you can manage your transactions with peace of mind. Fairwinds has been helping people avoid big bank traps for 75 years. So go to fairwinds.org slash Ramsey to learn more. It's easy to join.

No matter where you live. That's F-A-I-R-W-I-N-D-S dot org slash Ramsey. Are you determined to get out of debt and build wealth this new year? Then don't leave out an important step, which is having the right insurance. Don't make the mistake of thinking you can get by with minimal coverage or no coverage at all because when Murphy comes knocking and he will you'll start backsliding further into debt if you don't have the money to pay for it and if you don't have the right insurance. So take our insurance coverage checkup. We make it easy with a free tool that helps you find out if you have all of your bases covered. To check it out go

to RamseySolutions.com slash checkup. That's ramsysolutions.com slash checkup. George Campbell Ramsey personality is my co-host today. Today's question of the day is brought to you by WhyRefi. If you're in over your head with private student loans and tired of getting calls from collection agencies, you may need WhyRefi. WhyRefi refinances defaulted private student loans so that other places won't touch. They give you a low fixed rate loan built for you. Go to Y-Refi.com slash Ramsey today. That's the letter Y

R-E-F-Y dot com slash Ramsey. Might not be in all states. Today's question comes from Chad in South Carolina. He says, I work full time and I have a lawn care business on the side. Part of my business income was paid in cash and partly by payment apps like Venmo, et cetera. I've been paying taxes on everything except the cash and I was wondering morally and legally how I should handle that income.

Obviously, I already pay a lot of taxes and I'm trying to save money where I can. Should I feel bad about this and if so should I clear everything up with the IRS and pay back what's due to them? You can decide if you want to go back or not and deal with it and how far back you want to go, but income in America regardless of how it's, is taxed. That's the law. And so it is a moral and an ethical thing to pay taxes on money you receive as cash. Period. And I pay taxes on it. If we get paid in cash for something here, it all goes into the revenue, and it all goes into the calculation, and we pay taxes on

it. Just like we do everything else. So mechanically how you can do it is when you get paid in cash just deposit it into the business bank account and then it'll be reflected there as income and that'll help you do the totals and figure out what you're supposed to do with your quarterly estimates on your business. That's the mechanics of it. So Chad, one of the things I read several years ago that really leans into this, George, as far as I'm concerned, is Tom Stanley, the great Tom Stanley who did the original book, The Millionaire Next Door.

He and I became friends before he passed away. His daughter, Sarah, we interact with her now. She still does research on millionaires and billionaires and so forth. He did another book called The Millionaire Mindset Later. There's two books by that name, but he did one by that name. Or he studied billionaires that wasn't millionaires, billionaires. And he studied people who had accumulated a billion dollars from nothing and so

these were very very billion is a thousand million and he did he went out this what this research a little bit different he tried to find the correlating things in their life you know marriage were they married one time had they been married six times what was their education you know what were they married one time had they been married six times what was their education you know what were the things in their life that led them to be in a position to do this and he found 37 different items or things that he correlated and the then he were forced ranked them in how often they appeared so no number 37 appeared the least often among the billionaires and number one

appeared in every one of them. And number one that appeared in these people who became billionaires from nothing was that they had fanatical levels of integrity character. fanatical levels of integrity. Character. Every time he interviewed a competitor, a friend, an employee, a former employee, his kids, his wife, when they spoke of this man, they always spoke of impeccable integrity. Not just honesty, but integrity as a wholeness to it. And it's he's the same on Sunday as he is on Monday. If he says this guy's

falling, duck. I mean, this guy is impeccable, fanatical about his integrity. And that reinforced to me that when I don't pay my taxes, it has nothing to do with whether the taxes are just or not. It has to do with, I'm not doing the right thing. It's my integrity. It doesn't reflect on them. Anybody who has walking around since pretty much agrees that the federal government and the IRS and the income tax system is a complete moronic trainwreck. It's absolutely unfair and horrible. But that doesn't say anything about my integrity. My integrity is I'm gonna follow the law exactly. It's what

they said to do. I'm not looking for a shortcut. And so we report every stinking dime that we take in at the Ramses because it makes a statement about me, not about them. And then I'm going to also make another statement about me. I'm going to spend a lot of money with attorneys and CPA firms to try to figure out what I legally don't have to pay and I'm not paying a stinkin dime more than I got to on the other side of that because I hate them but still my dislike of the tax system is not going to be reflected not going to change me as an as a person of integrity because I want to be on that list that Tom Stanley did you know I want to be in that I want

to be in that lineup with that Hall of Fame right there if you want to build sustainable wealth and have your integrity intact pay your taxes Chad so that's it it's that simple and you know I'll go so far as this let me just let's just carry that on out a little bit. Fanatical integrity means like when you work for someone and they pay you to work there, when you're not working you're stealing. When you're sitting on your Facebook account for three hours while you're being paid to do work that you're not doing, that's not integrity. being paid to do work that you're not doing. That's not integrity. That's stealing.

It's not cute. Everybody does it, but everybody's broke. And everybody doesn't have a good life. And everybody struggles in their relationships. And everybody can't deal with anything except their anxiety and their heart attacks and their obesity and everything else. So everybody you don't want to be like. So here's what's weird. Even if it's not popular with your co-workers, while you're at work, work. All day. Every day. day every day because that makes a statement about you not about them it's not about well my boss is toxic oh kiss my butt because they wanted you to work

now you are here you have a toxic ball it's a toxic work environment they expect me to work and I can't live on Facebook you're killing me here. Dad gum snowflakes. Work while you're at work. It's an integrity issue, you know? And so it carries. Get there five minutes early, get there five minutes late, leave five minutes late. Don't be the first one screeching tires out of the dad gum parking lot every afternoon, you know? It's not that hard. That's a sign of integrity. It's a sign of integrity. And I figured out being on time is integrity. I hate that one. Once I figured it out though, I'm, I'm, I'm, I'm, trains run on time around here. We put

a little clock up on things. Staff meeting's got a little countdown clock. We started at 8.30. We don't start at 832. We start at 830. You come wandering your little butt in six minutes late, it's you know, well there's traffic. Well there's traffic every day. There's nothing new about that. You know, there's traffic. Of course there's traffic. You know, I had to get the kids ready for school every day, you know. It's not a surprise. You know, we do, you know, if I tell Sharon, I'm going to be home for dinner at five 30, I come walking in at five 37. She's like, it's getting cold. Food's cold. Getting cold. You said five 30 and you know, and she's not a bud about it.

I'm not a butt to our team about this stuff, but these are things I had to start talking to myself about. And that type of character is the type of character that grows billionaires, Chad. And so pay your taxes, honey. Every dime of them. Hope that was clear. It is true though. It's interesting how that carries through every part of your life, your career, your marriage, your relationships, your finances, the person you said you were going to. Be the person, a character.

Do what I said I was gonna do. Follow through, follow through, follow through. And, you know, God, I can't stand being late. Because it says I didn't think they were important enough to get there on time. It's arrogance. I can't stand it. Stinking airlines. Unbelievable, man. What's delta mean when you're looking up in the Greek? We ain't gonna be there. That's what it means. This is the Ramsey Show. You've got a lot to keep organized in life. Kids and calendars and carpooling and cleaning. I mean it is so much. That's why you need a knockbox. That way, if something happens to you, you leave your loved ones with happy memories and not a huge mess. Knockbox is a complete system to help you

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That's knockbox, N-O-K, box.com slash Ramsey. Hey, George Campbell here. So you're thinking about buying or selling your home. It's exciting, but there's a lot to think about, That's knockbox, n-o-k, box.com slash Ramsey. Hey, George Campbell here. So you're thinking about buying or selling your home. It's exciting, but there's a lot to think about. And all of those decisions can feel overwhelming. Well, here's the good news. You don't have to tackle the process alone.

Ramsey's Real Estate Home Base is the place to find all of your free tools and resources for help to get prepared to buy or sell your home with confidence. You'll find calculators, start to finish guides, a podcast, and even an in-depth video course hosted by yours truly. What's not to love?

So if you're ready to take the next steps toward your home goals, go to ramsysolutions.com slash real estate. That's ramsysolutions.com slash real estate. Thank you for joining us America. George Campbell, Ramsey Personality is my co-host. Joe is in New York City. Hi Joe, welcome to the Ramsey Show. Hi, my parents have recently taken out two loans to remodel their home in the amount

of $55,000 and they're trying to tell me I'm responsible for it and I want to know if I should agree to this or not. I'm sorry, why would you be responsible for a loan on their tell me I'm responsible for it. And I want to know if I should agree to this or not. I'm sorry. Why would you be responsible for a loan on their house? I'm confused. Because after I left college, I moved back in with them and I've been with them for the past five years. So?

That's how I see it as well. Was there not room for you and they had to create an extra room for you? And you requested this? No, it was my same room from high school. In fact, when they were looking to get the home redone, I told them, no, I was part of the conversation with the contractors that came to look at the house. How old are you? I'm 31.

Why do you still live at home? I have a lot of students that I'm working through right now. You need to move out. I agree with you. You should have moved out ten years ago. What in the world? I mean, no, you're not obligated morally, legally, ethically, anything here. I have no idea where they got this. I don't understand the conversation even. but I also am not going to tell you to stay there one more minute you shouldn't be there it's not good for you so I've been paying down my student loans like a recap it doesn't matter it's

not good for you even if it slows down your debt payoff this is stunting your growth and it's causing this relationship to be strained which it may already be too strained to repair I don't know what do you do for a living I work with the local Department of Social Services what do you make 60 grand a year okay so you your degree is in what? It's in environmental science. Okay, and what do you owe on this degree? Well, when I last booked 110. Okay, all right. Well, it sounds like you probably are gonna have

to make some career choices as well. And you're probably gonna have to pick up some part-time income and be working like a maniac because you're not you're not making progress Okay, you're not you need to be paying like 30,000 bucks 40,000 bucks a year on the loan to make it go away in two or three years and And you can't do that making 60 living in New York City. And so you probably need a different job and you need six other jobs in addition to that. And let's get your income up and get you out and get you into the world in a sustainable situation. So the odd thing is is the

reason you stayed there was to pay down your student loans and you haven't. Ta-da! Time to go bud. Time to go get you a better job, go get you lots of jobs and get you a different place to live and pay down the student loans for real this time. But so that was mythology that you told that was lie you told yourself. So that and and you didn't mean to but lots of people do this. Five years with very little bills you should have made some serious progress on the debt and it sounds like it's just you get comfortable living at home you sort of resort to your old childhood self and you don't make as

much progress as you think. And I, you know, the frustration with the 31 year old still living in your basement could boil over into a misguided, toxic claim that you owe us money for us taking out debt. You know, like the parents have kind of lost their minds a little bit. And this is their... Resentment starting to show. parents have kind of lost their minds a little bit and this is their resentment this is their their toxic methodology to solve a failure to launch hmm and we can get them to pay a way of kicking you out but because we don't know how to do it and we're we're all and we're all really frustrated so that's probably

where some of this is coming from but But to answer your question, no, you do not owe the money. Yes, you should be gone by the end of the month. At the end of next month for sure. And you may need a new job by that time too. And you may need a new state to live in by that time too. You need to live in an affordable area, make a pile of money, and clean up the mess. Because while you were living in a place with no rent, You need to live in an affordable area make a pile of money and clean up the mess

Because while you were living with a place with no rent you made no progress or no sustainable progress. No measurable progress Tom is in Chicago. Hey Tom, how are you? David George is it it is an honor to speak with you both you too. What's up? I Been renting town home for many, many years and the homeowners through their property manager have informed me that they now want to sell and have asked me if I'd like to purchase it before they list it. I, I don't know how to handle it in that situation without, without it being listed. Of course, if we're just a house that I was looking after, um,

going after in a novel situation, no, I'd get a realtor. Do I get a realtor in this situation? Um, since it's not being listed, I don't know if I'm allowed to do that. You're allowed do anything. It's just a matter of who's gonna pay for it and whether you actually need it or not So you need a mortgage? Right. Mm-hmm, and you need someone to guide you through the contracting Process and the mortgage process and the appraisal process and all of that. Are they giving you a price on the property? Yes process and all of that are they giving you a price on the property yes they give me a price of 330 based on some comps that the property manager pulled up

who is a realtor I didn't like the cops I wasn't I didn't agree with those comps they were in area not very close to me and when I looked at them the homes were much nicer than this home. So I don't know how to combat that. So they have a real estate agent. It's called a property manager. It's a licensed real estate agent. Yes. And they're probably going to list it with this person. licensed real estate agent. Yes. And they're probably going to list it with this person.

Eventually. Uh, but they're asking me before they list it. Yeah, but it doesn't, what's the benefit to you? It doesn't, there's no benefit to you. There's no bargain. I guess the deal, I guess the benefit is that no one else would be able to make an offer on it. Oh yeah. Okay. Um, I I mean if you had a transaction you were comfortable with and you can go through and get your mortgage and everything you can go to a title company get a contract drawn up and do this. I think this transaction is so far from happening that you probably do need a

pro in your corner to help you navigate the negotiation and then help you navigate the closing, help you navigate the appraisal, help you navigate the getting of the mortgage and all the different things, all of things you don't know how to do. So, but if you had all those things already lined up you could, you don't have to have a real estate agent, but you can in this case I think you benefit from one and just say you know they were going to if they list it typically what happens is the listing agent in this case the property manager they're going to put a six percent commission on it or something about like that and then the the agent that represents the buyer is going to split

that with the selling agent typically that That's a normal transaction. And so, you know, if you get a real estate agent to represent you and they work with the selling agent before it actually goes on the market, but a commission is still paid, it didn't cost you anything, it cost them something. And, you know, let me tell you, if you just buy it right now, I think this agent is going to get both of the commissions. They're probably going to charge that seller a full commission. So yes, the answer is I'd go get a real estate agent. Yes. In your situation

I would. Yes. I mean, it's kind of borderline but I think there's I think there's a lot of there a there's another real estate agent already involved okay B you don't like the comps so you got some negotiating to do see you got to have somebody walk you through the closing process and the mortgage getting process and the appraisal process so all of those things tell me yeah I put a real estate agent in your corner. It's just worth it for the stress factor at this point. Well, and the expertise to guide you through a journey that you've never been on.

Now I negotiate and save you 30 grand to where it was worth it. ramsysolutions.com slash agent will help you find a Ramsey trusted agent in your area to help you do that. This is the Ramsey Show. Hey guys, no matter what your goals are in 2025, our new year's sale has tools and resources you need to get the year started strong, with prices starting at just $9.99. Whether you wanna make progress with your money,

grow in your career, or create a more peaceful life, you can achieve your goals. And these books and products can help. Shop the New Year's sale now at ramsysolutions.com slash store. That's ramsysolutions.com slash store. George Campbell Ramsey personality is my cohost today. Open phones at triple 8 8 to 5 5 to 2 5 Danny is with us Danny is in Boca Raton hi Ben Danny how are you I'm doing all right how are you better than I deserve sir how can we help so I

have a three-year-old and a six-week-old. Me and my wife would like to put some money away for them. We were wondering what the best thing would be. Okay. Are you... Well, we teach folks a thing called the process for becoming wealthy and taking care of all the different components of our life called the baby steps. You may have heard of that, you may not, but the first thing you would do is not put money aside for your kid. The first thing you would do is to set money in an emergency fund of $1,000, a beginner emergency fund. The second thing is to get out of debt, everything but the house. How much debt. We only have two credit cards but there there's no debt on them. We have about three thousand dollars in emergency fund. Okay no car debt, no student loan debt? No. Good. What's your household income? Together is about 80, 85, 90. Cool. Well, once you've done

Baby Step 2, which is debt-free but the house, all that means is you need to place some scissors across those credit cards and cut them up. Start using debit cards so you don't accidentally slip into debt, which people do all the time. Then we would go on to Baby Step 3, which is finish the emergency fund and you're short on that you got three thousand dollar now account and needs to be three to six months of expenses once you have that then you would begin investing in your retirement fifteen percent of your income going away for retirement

and what you got that started then you start saving for the kids college which is what you're calling about and uh... but the best thing you can do to stabilize the the family for the kids is to you know to be to be out of debt and be building your investments and then in addition to that we can start saving for kids college if you click on smart Vester at Ramsey solutions comm you might find a smart Vester Pro that you will find a smart Vester Pro that we recommendVestor Pro that you will find a SmartVestor Pro that we

recommend. Sit down with one that you like that has the heart of a teacher and you'll want to learn about 529s and ESAs and putting money in mutual funds for your kids future. Is that what we're talking about here? Yes sir. Okay it says on my screen something about an IUL. Yeah we were looking into those because um. But you got a friend in the insurance business. Yeah. Yeah. Guess what? Which by the way is gonna make way more money off of that. Yeah so IULs are awful. It's an indexed universal life you never do investing inside of an insurance policy it is the world's worst place to do

investing the only people in all of the financial world that recommend that you invest inside of a life insurance policy are insurance people nobody else does nobody else believes that crap it's so so outdated, so outmoded, it's covered in fees, horrible product. Don't do it. Was I unclear? No sir. Okay. And by the way, your kids don't need life insurance. Life insurance is meant to replace your income in case something happens to you. So you, your wife, you both need a good term

life policy, meaning it's not for your whole life. We're talking about a 15, 20 year level term life policy, 10 to 12 times your income. If you have those in place, you can rest easy at night. Yeah, and then if something happened to the two of you, your kids would be taken care of, right? Right. But the, and you get that at ZanderInsurance.com.

They'll shop a gazillion companies, get you the best deal. That's who you deal with, so. And it's way more affordable than these IUL policies. It'll be 5%. $5.00. If your IUL is $100, this will be $5.00. Literally, it's 5%. It's horrible, man.

Just stay away from that. So, you know, walk your way up into investing in real investments, and in the meantime, make sure you've got term life insurance in place and you've got the whole thing taken care of. Dave, I'm seeing this all over social media. I don't know why, but the young people are gravitating towards these universal life policies, and here's how it's marketed. They go, you know it, you're supposed to use your life insurance while you're alive. Did you know that?

And everyone's like, oh my gosh, this is brilliant. This investing policy inside of my whole life. Oh my gosh, this is amazing. I'm gonna become a millionaire. And the commissions and fees these guys are making selling this crap is insane. And the amount of time you have to spend pulling that premium every single month in order to make any amount of money is absurd. I don't know how it's legal. The indexed universal policy is, it's a newer version of an old bad idea, is what it amounts to.

And so what you're gonna find if you take this product apart and look at the components of it, the insurance portion goes up every year. It's basically what we call an ART, an annual renewable term. Term insurance, all life insurance gets more expensive every year that you're alive, period, because you're statistically more likely to die every year

you're alive, right? Brilliant. So if you're 51, you're more likely to die statistically than if you're 50, period. End of story. Now, how do you get then a 15 or 20 year level term insurance? Well it is cheaper than the average of the 15 year of increases. The ART would start out cheaper and it would end higher and the lines would cross right in the middle hypothetically if it was exactly how you see I'm saying so the ART would go it'd go straight up and the 15 year would be level and it would cross right in the middle at seven and a half years. However it doesn't do that because it is cheaper for an insurance company to produce a 15 year policy that because they keep you for 15 years then it's called persistence in the real insurance business than it is

for them to try to get you to stay with a policy that goes up every year. Can you imagine that if you get a bill and every year it goes up you're probably more likely to cancel that. So that policy doesn't stay on the books so it's more expensive for them to sell ARTs. So, net result is a 15-year is way cheaper than the average of 15 years of ART. Okay, now the index universal goes up every year inside the policy but you don't see it. So if you got a $400 premium a certain portion like on your you know if you ever look at your mortgage your mortgage payment a portion goes to interest a portion goes to principal the further you go along more goes to principal less goes to interest

this is exactly the opposite the further you go along more goes to insurance less goes because the ART is going up every year inside there less is going to your investments and so if you keep the stupid thing long enough it will begin to be the point that the premium you're paying will not even cover the insurance cost and so it starts to eat back into your savings just to keep the policy alive and the thing gets what we call upside down in the insurance business and so now you've got a real piece of crap that's that's eating itself from the inside out but they pitch it as this

really sophisticated nuance listen it's so complicated you don't understand just trust me yeah as your insurance guy i'm gonna make you lots of money may give you a clue okay when you drive past most cities the skyline has banks and life insurance companies. These are the two towers in every skyline. Santa Claus didn't build those. And those people didn't build them with wealth they inherited. They built them with money they took from you.

Banks screwing you. Life insurance companies screwing you. This has been going on for decades. Nothing new. It's not a new song, not a new dance. And just because you put it on TikTok, for God's sakes, doesn't make it smart. Matter of fact, that kind of dumbs it down.

That's a trigger word for you, I'm sorry. I shouldn't have mentioned anything. I mean, it's just like. What we teach is that you should take the difference. If you pay five bucks for term life versus 100 for whole life, take the 95 bucks you would have spent and invest that and you're gonna be way better off

than having touched one of these crappy policies. Oh, here, by the way, after you paid extra on this, all these years, and you die, they only pay the face value. They don't pay the face value plus your savings that you've been paying extra to bill. So it's like a savings account with a crummy rate of return. They get locked up.

That when you die, they keep your money. I mean, who would bank with that? Oh, people that buy stuff on TikTok. I think Danny needs better friends. Yeah, well. It's time. No, I mean, that happens to everybody. Because that's how most, particularly whole life, permanent life, crappy life insurance

is sold is some old friend from college suddenly remembers you. My buddy from Northwestern Mutual said, let's be done with that. Oh that's horrible. That happened to me. That happened to me. I bought it when I was a child boy. Yup, sure did. I did the same stupid stuff and I have a degree in finance and I fell for the crap.

Now he's a grown man, America. He made it. This is the Ramsey Show.