The Ramsey Show - Your Money Isn’t the Problem—Your Plan Is

Starting point is 00:00:02 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 Fair Winds Credit Union Studio, this is The Ramsey Show. I'm Dave Ramsey, your host, George Campbell, number one bestselling author, Ramsey personality and co-host of Smart Money Happy Hour is my co-host today. Thanks for hanging out with us.

Starting point is 00:00:32 The phone number here is Triple-8-8-25. 5-2-25. Darren and Ariel are with us in New York. Hi, guys. How are you? Okay. Thank you for me, better than we deserve.

Starting point is 00:00:49 What's up in your world? It's such an honor to speak to you. You go, Ariel. Well, we've read your books. We follow your plan. However, I made some errors when I went back to school. to obtain a degree and landed myself in almost $300,000 of students' debt.

Starting point is 00:01:15 Ouch. Are you a doctor or a lawyer? I am here. Neither, unfortunately. What are you? What degree did you get? I'm a social worker. For 300 grand.

Starting point is 00:01:29 What do you make? Not nearly that. My plan had been to, and this is, what I was encouraged to do by my professors was to work for the government and do 10 years of working, you know, in a nonprofit sector, but that hasn't worked out. So here I find myself and we are calling for guidance. Yeah. What do you make now? What's your household income between you and Darren? Well, at the moment I'm not working, we have a six-month-old. and Darren brings in

Starting point is 00:02:08 107, right? 100,000, right? Do you hear of 100 a year? 100, but it comes down to 5,000 a month. And you live in the city in Manhattan? No, we live in a suburb. Yeah, we live in a suburb of New Jersey. Okay. We have it paid for a house, so that...

Starting point is 00:02:28 Oh, that's nice. Yeah, that really... What is it working? birth? About 450. Yeah. And Darren, what do you do for a living? I work for the government. As? I have it. I work for data analytics for the Department of Health.

Starting point is 00:02:45 Okay, cool. Cool. Okay. And how long have you been doing that? 25 years. We're older. I'm 50. My wife is 40, so it's, we got married a three years ago, and we have a six-month-old. You know, we want to pay this off in our lifetime, and we know you have very practical advice, so, you know, that's why we go out. I mean, what I always reach for is the basic sixth grade math, right, which is there's two sides, income and outgo. We've got a big hole, which is 300 grand. We've got a medium-sized shovel, which is 107, until you drop it into New Jersey, and that makes it a small shovel, and a brand-new baby. I'm starting to look, you know, where can we get income up and out go down to throw the difference? My husband works, right, my husband works second part-time job.

Starting point is 00:03:43 And as I said, I also have a disability. So for me in New Jersey, I can't drive. So that's also part of the equation where I was, at my last couple of jobs, I was getting a negative return, which is why I didn't go back after the baby was born. And what's the nature of your disability, huh? I have a seizure disorder which prevents me from driving. Yeah, okay. All right, all right.

Starting point is 00:04:11 That's reality. Okay. Wow. Okay. So, you know, if I'm looking at your situation through your eyes for a second, I'm saying the more money we can make, the faster we get out of this. and that involves Darren maximizing his career and Ariel maximizing her career. What is the most money we can possibly make?

Starting point is 00:04:36 Does that involve a move? Does it involve the fact that data analytics is a very hot field and you might be worth 200K in the open market if you got away from the government? It's a very hot field. And so I'm just looking at all of those ideas. With your current take-home pay, this is going to take you seven to ten years. So that's the issue here is the napkin math says you can throw 50 grand at this. It's done in six years. But 50 grand is, you know, four grand a month and you're taking home five. We don't have that. Yeah, exactly. So I'm just showing you the length that will be shortened to a Dave's point if you can make more. And that might mean if Ariel can go make 70 grand as a social worker, it might be worth, you know, finding child care, even if it costs you 30 so that you can get out of this faster. Right. So I've never, like, unfortunately, I'm provisionally licensed, you know, life, et cetera, and finding supervening having unfortunate people.

Starting point is 00:05:39 Yeah, I don't know all the obstacles. You've got a lot of them. But what I do know, what I do know is is you need more income. For sure. And I was looking into possibilities. I've been working freelance doing other things outside my field to try to, bring in some income. But unfortunately, freelance work has not been, I mean, I've made money, but not nearly enough. Yeah. Yeah, I hear you. So I think you both have to sit down and do some soul searching about where we work, where can we work to make the most money to clean this up, because it's not going away. You figured that part out. That's why you called. And it goes away when you pay it off. And so where we work and where we live. And those are the things that to impact this. Where we live has to do with cost of living, has to do with accessibility, two

Starting point is 00:06:28 jobs. This might be the perfect place. I don't know. You might find a place right around the corner that pays him 250 and a place right around the corner that pays you 100 in some other field even. I don't care. But if we suddenly go from 100 to 300, oh, ding, ding, we can knock this out. Now it's two years. And within two or three years. And that starts to get there. But it's going to require some kind of pretty dramatic shifts in your old's career track. because the ones that you're on, you're going to be there a long time, and it's not going to be fun, which is why you called. It just breaks my heart to hear that any school is charging $300,000 for a degree in social work that might net you $50,000 a year. Yeah.

Starting point is 00:07:14 The math on that, the ROI of some of these degrees is just not there. And so it starts with being very careful of where you go to school, why are you going to school, and I would just get the cheapest degree that. allows me to do the work that I want to do. Yeah, exactly. But I mean, that's how we, that's if we could have talked to Ariel 10 years ago. I can turn back time. If we could turn back time. But the, but the rest of you out there take a lesson. So I actually study what the degree costs. Is there other ways I can get it, other places I can get it? Because, you know, this is the job market for this degree. And it's just horrible. You're right, George. That's highway robbery. And, and, it's laughable that her professors, of course, they got a degree in social work, so what do they know?

Starting point is 00:07:58 You know, they're only out as you go take a job with the government, work there 10 years, and that'll be forgiven. Of course, they don't even know how that works, because they didn't do that. They shouldn't be giving financial advice. No, they shouldn't be giving any advice, which begs the question of why are they doing social work, but there you go. Man, I'm sorry you guys are in this, but it is truly a income, outgo, flex on the equation. That's what it takes. That's what's going to take. You know, one of the first things I discovered working in the financial world is how absolutely

Starting point is 00:09:05 devastating it is when the breadwinner of a family dies. And there's too little life insurance or none at all. Grieving families are suddenly left behind, scrambling to pay bills and trying to make ends meet. I also discovered that there are a lot of rip-offs in the life insurance world, like that whole life crap posing as an investment opportunity. What you need is level term life insurance, usually 10 to 12 times your income, which is the smartest, most affordable way to protect your family. The key is finding an independent broker who represents a ton of companies and works for you, not for the insurance company.

Starting point is 00:09:43 This is exactly what my friend Jeff Zander and his team at Zander Insurance are all about. They shopped the term life companies to find you the best options and they've been around for over 95 years. So you know they'll be there when you need them. Zander is the real deal. And that's why they've handled all my personal insurance for over 25 years. I trust them and you can too. Visit zander.com.

Starting point is 00:10:09 For instant online quotes or for a more personal touch, give them a call at 800-356-42-82. Maggie is in Sioux Falls South Dakota. Hey, Maggie, how are you? I am good. How are y'all? Better than I deserve. What's up? Okay, so my husband and I have found ourselves in kind of an interesting position where we differ in opinion at baseline on which route to take.

Starting point is 00:11:00 So we have a condo in California, and we are currently renting it out. It's not on the market for sale, but our tenants have expressed interest in purchasing it. from us because they are looking for a home to buy. What's it worth? We are, it is worth between 375 to 399. Okay. All right. So we are not financially free.

Starting point is 00:11:31 We're currently in baby step number two, nor are we currently receiving an ROI on our rental yet. So we wanted to know is our best overall pay. have to sell this place or should we keep running it out? Yeah. Well, I can tell which one you want to do. That's good. And by the way, you're right.

Starting point is 00:11:52 You're right. You win the argument. So let's talk about this for a second. If in your situation, what do you owe on the condo? We owe 309. Okay. So let's pretend that you didn't own this condo. And you had $100,000 stacked in the middle of your kitchen table.

Starting point is 00:12:10 And you said, okay, honey. we should go buy a condo in California and put $100,000 down that won't rent for enough to pay the payment. Both of you would look at each other like you got one eye in the center of your head and say, that's the dumbest idea I ever heard. Right? Right. I agree. You did not buy this condo as a rental.

Starting point is 00:12:35 It's a leftover from a former life before you moved to Sioux Falls, isn't it? That is correct. Because nobody would do this on purpose. Right. If you were going to buy a $400,000 condo, you wouldn't buy it in California when you live in Sioux Falls. You buy it in Sioux Falls. Right. And you would buy one that actually gave you an ROI.

Starting point is 00:12:58 So there's just so much about this. There's like six reasons to sell this and none to keep it. Long distance landlords that are losing money. Nothing about this sounds fun to me to keep around as a toy. Right. So why does he want to keep it? He thinks real estate's the answer to all your riches. That he thinks that in time, the return on investment will be worth it.

Starting point is 00:13:20 Nope. And I understand that, you know, renting, but the market in California with rent, it's California is the problem for me, because the market there, even for landlords and renting, it's terrible. Mm-hmm. Um, and, but he thinks that property value is just going to go up and there's always going to be inters wanting to rent it. Property values and real estate do not go up fast enough to offset a bad idea. Uh, yeah. And this is a bad idea.

Starting point is 00:13:54 I love real estate. The larger portion of my net worth is real estate. So I'm big on real estate. I want you to own real estate. But this real estate, you don't own this real estate. It owns you. Right. This is a crappy situation.

Starting point is 00:14:09 Yeah. Sell it, sell it, sell it, sell it, sell it. You win the argument, Maggie. But you even knew that before you called. I said, but, you know, and I mean, and it's not a ha-ha. I win and you lose. No, I'm not saying that, and you're not in it. I agree.

Starting point is 00:14:24 And, yeah, because, I mean, I agree, you know, what's the owning properties and rent it out. Yeah, get out of debt. Yeah. Get out of debt. Build you a big old pile of money. Pay off your house. And with your next pile of money, if you want to go buy you a nice condo, in Sioux Falls.

Starting point is 00:14:36 Sufals is a great market. Go buy a nice condo in there and pay cash for it and watch it go up in value and you'll make money every month. And yeah, then real estate is a good investment. But right now, you got freaking consumer debt. And this thing barely breaks even if everything works perfect.

Starting point is 00:14:54 Yeah, and that's if everything works perfect. And it doesn't. And I think we're kind of handed a nice little out of left field type of situation. Yeah, get out of jail, free card. actually want to buy it. Will they buy it at the market value? We have, well, this is super early in the conversation, but they're, what we were told was that

Starting point is 00:15:19 their, their looking price is well over, you know, what the condo is worth on the market. Right. Okay, so here's the thing. I love real estate, and I'm telling you this is a bad deal I would get out of it if it was me. Number one, I don't do long distance landlarding. The most of the time people get into that, it's by default, not by plan, and that's how you got into it. Number two, the thing is not ROIing. Number three, you would never buy it again if you didn't own it today. If you had this amount of money piled in the kitchen table, you would never go do this deal. Not in a million years. No sane person would.

Starting point is 00:16:00 It's a bad deal. And so sell it, sell it, sell it. If this renter doesn't buy it, put it on the market and sell it anyway. Get rid of it. And number four, you guys have a bunch of debt to pay off. And so you need this money to clean up the mess. So how much debt have you got? Yes. So total, it's about four, not counting my house, 108. Oddly enough, you're debt free. Yeah, that's what I was like, we could, you know, if we sell this place. And that's like $4,000 a month in payments. And yeah. You talk about an ROI. $4,000 a month in payments. How long ago did you move out of this condo?

Starting point is 00:16:41 We moved out in the summer, July. Oh, good. So you can still take personal residence, no capital gain on it. Right. It hasn't been, yeah, it hasn't been a rental for that long. Right. You need to get rid of it before you lose that capital gains right. Okay.

Starting point is 00:17:00 Yeah, because you could take all this money that you can get on the table and pay zero taxes and throw. it all at your debt and have a $4,000 a month changing position. This is a no-brainer. That R-O-I is much faster. It's not like, ha-ha, Maggie, I'm right. But Maggie, ha-ha, you are freaking right. I mean, my gosh.

Starting point is 00:17:17 I guess her hope is to play it back, and she gets to say, well, Dave said. Well, and George said. I don't know if that's going to work. All of America said. I wish you the best. The math says. It doesn't even matter what my opinion is. What matters is the math, this is just dumb math.

Starting point is 00:17:33 It's dumb. You would never put $100,000 in an investment in a three states over that breaks even. And if something breaks, you go in the hole while you have $100,000 in consumer debt. It's almost as if you borrowed money on a credit card and a car to go buy this condo. That's the way the balance sheet looks. Crazy. Don't do it. Don't do it.

Starting point is 00:17:55 Get rid of it. Bethany's in Salem, Oregon. Hey, Bethany. Hi. How can we help? I'm just looking for ideas. for something I can do from home. I'm a full-time stay-at-home mom and wife over a four-month-old

Starting point is 00:18:08 and just needing some extra income for some different things. And I was wondering if you guys having ideas to throw at me that I could try. George has got much better ones than I do. Yeah, are you looking for something completely remote that you can do during nap times, that kind of thing? Well, if she's taking a nap, she's not working. Well, not you, that baby. So here's the problem. Everybody wants the remote job they can do from the couch in their spare time.

Starting point is 00:18:35 But the thing is, the stuff that actually makes money. Even if it's all day long, I can keep my baby here and my husband works remote too upstairs. Okay. So between the two of us, like the baby can be between us doing something or nothing or just playing. I did CNA for about four years. Okay. Is there not some telemed stuff? That's pretty lucrative.

Starting point is 00:18:57 Maybe. Telemed? I haven't looked into that too much. The few things I've tried looking remotely as I've researched a few things. I don't have enough experience at the resources I've looked into, or I don't have enough degree because I don't have any college, like formal education or anything. I just have my CNA's license in the different places I want X amount of years of working or they want this degree plus this or different options.

Starting point is 00:19:29 So it's been kind of annoying trying to find something. CNA remotely, you're going to have to shift completely to something else, which would be like virtual assisting, consulting, bookkeeping. So you might need to pick up some new skills if you want to do this from home. Oh, I'm totally fine with taking up new skills. My caveat is I can't find someone that will take me without. We've got a side hustle quiz to help you out. Go to ramsysolutions.com slash side hustle. It'll start to give you some ideas on things you could do, and I would try a few. Hey, let's play a quick game of Would You Rather? Would you rather keep overpaying your phone company every month or save $600 a year with no contract and no price hikes ever.

Starting point is 00:20:32 Easy answer. That's why I love Boost Mobile. With their low rates, you can unlock up to $600 in savings over the so-called big carriers. You can bring your phone, keep your number, and pay just $25 a month forever on the Unlimited plan, because you've got better things to do with your money. So go to BoostMobil.com slash Ramsey to make the switch today. Based on average annual payment of AT&T, Verizon and T-Mobile customers, compared to 12 months on the BoostMobil Unlimited plan as of January 2020.

Starting point is 00:20:58 See website for full details. Are you sick and tired of working so hard but having nothing to show for it? Feel like a rat and a wheel, run, run, run, run, run. Get nowhere, have a heart attack and die? Yeah. Well, you don't have to live that way. Our every dollar budgeting app helps you find extra money every month, build you a personalized plan to get out of debt so that you can become wealthy and outrageously generous.

Starting point is 00:21:34 We're going to walk you through the whole Ramsey plan on this app. It's just 15 minutes you're going to find thousands of dollars in hidden markets. margin to get you started, you'll feel like you have a raise. And then we teach you how to not be normal. Be weird. Live like no one else, so later you can live and give like no one else. Start the every dollar app for free in the App Store or Google Play. Courtney's in Seattle. Hi, Courtney, how are you? Hi, good. Thank you. Good. How can we help? Thank you for taking my call. My husband and I are on Baby Step 2 and we have $86,000 in debt that will be paid off next year.

Starting point is 00:22:10 My husband is almost 40 and is worried about the fact that we only have a pension right now towards retirement. At our age, how hardcore do we go towards retirement once our debt is paid off? And so do we still do the 15% even though he has that pension? You weren't putting money in retirement two years ago, right? No, we have not been able to put anything except we just have the pension. And so after you start working on the debt, then you decide to worry about retirement? That's weird. I agree.

Starting point is 00:22:41 Okay. So, I mean, it's not logical. And here's the thing. We're talking about one year. You guys are going to be multi-millionaires if you follow this process through. You're not 60. You're 40. You've got another 25 years at least of a working career.

Starting point is 00:22:55 That's plenty of time to build wealth, especially if you're debt-free. Think about how much margin that will free up for the rest of your life. Hey, have him, you and him get on the Ramsey Solutions website. Jump on the calculator for retirement and put in 15%. of your household income? What's your household income? This year, we just both got the raises. This year will be $200, but he's actually getting another commission. So $30,000, $2,500 a month for 20 years. And so that means you're going to start in two years, right? So it's 65.

Starting point is 00:23:30 That's 20 years, from 45 to 65, right? $2,500 a month in good growth stock mutual fund. We suggest you put it in four types, growth, growth in income, aggressive growth in international. You've probably heard all this. Yep. And when you invest in that, put that in the calculator, and you're going to see $2.5 million. Wow. Okay.

Starting point is 00:23:53 That makes it sound much better. That's if you start a year from now. Yeah, that's if you wait until you're 45 years old because you followed this process and got out of debt. And guess what? You can't put $2,500 away right now because you got $86,000 freaking dollars in debt sucking the bone marrow out of your life. Right. Yeah.

Starting point is 00:24:12 So let's get the patient healed and then let's turn the offense on. Okay. That makes sense? Thank you. That's very helpful. Yeah, I know that gives me a lot of, for sure. Because what most people do, Courtney, is they go, well, I'll put 3% in my investments and I'll try to throw some at the debt, and they end up doing nothing because there's no

Starting point is 00:24:30 progress being made. On that basis, with $200,000 and $86,000, I want you debt free in under 18 months. We will definitely. We're able to sell the truck in June when my husband gets a promotion. He gets a, he gets a work vehicle. So that will be 25,000 gone in June. That will be huge. I already sold my car. I'm driving a 20-year-old Camry at this point. So we're definitely making progress. This is the first month where we're really able to shove everything we have towards it. I just started working full-time. I was a stay-at-home mom until my youngest went to kindergarten. And here's the thing. Here's the thing. You're not going to only. make 200K for the next 40 years. Right. Or 20 years, 20 years. You're going to get raises.

Starting point is 00:25:15 We did that with no raises. So you're not going to end. If you follow through and do exactly what we teach you to do, get out of debt, put 15% away, save for your kids' college, get the house paid off usually in about seven or eight years, and then you load up on this. You're going to have between $5 and $10 million. Then you're talking about maxing out retirement accounts, catch up contributions after 50, and so you guys are going to be just fine if you follow through with this plan.

Starting point is 00:25:42 Yeah, but it all starts with getting rid of the debt. Okay. Yeah. Okay. Thank you so much. We've never been so motivated as you are now. We tried to do this multiple times, and this is the only time we've actually started to succeed. You're going to do it.

Starting point is 00:25:55 You're going to do it. Because I can tell you're going to do it. You got it all over you. You're going to go do it. And I want to hear from you when you're debt free and I want to hear from you when your baby steps millionaire because you are on your way. Way to go. I'm proud of you. Hope is in Greenville, South Carolina. Hi, Hope. What's up? Hi, Dave. I'm good. How are you? Better than I deserve. How can I help?

Starting point is 00:26:18 Awesome. So my husband and I are going through Financial Peace University and are on baby step two. We've paid off our first bet in the snowball and want to continue with gazelle intensity, but we're expecting our first child in May. Yay! Post delivery. Yes, thank you so much. We have four and a half. pay in the emergency fund to act as a buffer for those no bills, but not knowing the full cost is difficult to plan for. After a baby, we will become a single-income family in ministry. What are some practical ways for us to approach our emergency fund and the debt snowball and also becoming a single-income household after the baby is born? What do you make?

Starting point is 00:26:59 Current cash take-home between the two of us is 55K. What do you make? And I make 30, 85 of that in cash take home. So you're planning on this baby being skinny? I hope so. But you're the breadwinner right now. He's making 20K take-home. You're going to cut your income by 60%. I want you to be a stay-at-home mom, but this is not a good plan.

Starting point is 00:27:27 Because what you just told me is, how do we live on $1,600 a month? So part of that is my husband's job provides us with housing and pays all of our utilities. While you live at the poverty level? Yes. Okay. Again, I don't know that you can do that on $1,600 and build wealth. Eighty-two percent of America's pastors are bivocational. They have two jobs because of what we're describing here. So your husband's going to be taking a second job. Okay. I don't want you living at the poverty level. That's not my dream for you. And believe me, I love pastors and I love ministry and I love people that are called to the ministry. I spent last week with three of my favorite pastors.

Starting point is 00:28:16 They were my buddies hanging out with me. And I just love them. And I'm a big fan of everything you're doing and who you are. I'm a Christian. I support with my tithes, our church, and make sure that they feed their people there where we're not having people on food stamps. And you guys are right there, though. And you're just getting started in the ministry, right? Yes, sir.

Starting point is 00:28:41 Yeah. So I think the two of you've got to talk about what God's call on your life looks like while you're doing this. Does it involve you going back to work? I hope not. I don't like that one. Does it involve him taking an extra job? Does it involve his ministry playing out in a different way for now? Because first goal is take care of your own household, not the flock.

Starting point is 00:29:07 His first job, your first job, is, feed that household, that baby, and that rent. And you guys are, this is tight, kiddo. This is really, really tight. That doesn't factor in the debt payments because you guys still have a little mess to clean up. And so that just scares me to go, day one, we're going to live off 1,600 while trying to pay off debt. So I'm not going to tell you that that's a good plan, because it's not. And the blessings of the Lord have no sorrow added to them. Hmm. So what part of this whole thing is a blessing?

Starting point is 00:29:44 Because I sense sorrow in the future here. I think there's wonderful things happening. A baby, a young marriage, a call to ministry. There's a lot of wonderful things happening. But the mind of man plans his ways, but the Lord directs his steps. So you've got to lay out a game plan here. Work like it all depends on you and pray like it all depends on God. All right, God, I know you called me to this ministry.

Starting point is 00:30:05 So, God, how are you going to fund our family? show me what I need to do as a work, what harness do I need to put my shoulder to so that I can get this done? What tense have I got to make, if we want to use the Paul analogy, so that I can prepare for my ministry. But, you know, I'm not even with pastoral housing, I'm not going to consign you to the poverty level and call that God's call on your life. I'm not going to do that. If you're looking for a more budget-friendly way to save on medical costs and stay true to your values, Christian health care ministries is a great option to think about. CHM is not health insurance.

Starting point is 00:31:16 It's a health cost-sharing ministry, a biblical community-based way for Christians to share each other's medical bills. That means no enrollment deadlines, and you can choose any doctor or hospital you want. That kind of freedom is big, especially if you're self-employed between jobs or you just need something that fits your budget better. CHM has been around for decades,

Starting point is 00:31:38 faithfully serving the Christian community. And many members save hundreds of dollars a month compared to traditional health insurance. And that margin gives you breathing room when you're working the baby steps and trying to steward your money well. And right now, CHM's offering new members a 50% credit towards their first month of membership. Get started at CHMinestries.org slash budgets and use promo code Ramsey. That's CHministries.org slash budget and promo code Ramsey. Chris is in Seattle. Hi, Chris. How are you?

Starting point is 00:32:25 Hey, Dave. How's it going? Better than I deserve. What's up? Good, man. Hey, so my question is, my wife and I, we've been married for about three months. We just bought a house this past weekend at around $1.1 million outside Seattle. It's on five acres, really close to her parents, close to my work. Nice. Nice piece of property that we want to start homesteading on. The thing that's on my mind is before we got married, she bought a home in eastern Washington for about 500,000. She still owes, or we still owe about 350.

Starting point is 00:33:06 And it's on about 38 acres of mostly forest with a nice pastor. It was kind of like a COVID buy for her, you know, when things got a little bit crazy. She wanted a place that she could escape to. The issue is there was a bad side. plumbing leak because of no heat and burst pipes. So now the home is uninhabitable, and it's costing us about $18,000 to $2,000 a month. Wait, wait, minute, wait, wait. Did she not have insurance? That's a good question. I never thought about that, actually. I think the thing is the home is pretty run down as it was. So they were planning on gutting it anyway. Okay, so the value here is the

Starting point is 00:33:52 acres, not the lot, not the house. 38 acres, I'm sure. So you could push the house down and sell the 38 acres. Yes. I just don't know if it's worth what cheap. We still owe on it. Well, I would find out. Okay.

Starting point is 00:34:11 So you don't think it's, yeah, you think it's worth, you don't think it's worth keeping as a... No. It's a mess. Yeah. No, it's a money pit. Mm-hmm. You owe $175,000. If you had $175,000, let's just pretend you didn't own this.

Starting point is 00:34:30 And you woke up in the morning and you said, I found a place we can get for $175,000, $38 acres with nothing down and pay payments on it. You wouldn't do that? Sure. That's what you've got. You think even if we're underwater on the house right now? Is it your time still try to get rid of it? I'm sorry, house and acreage. We don't think we're underwater, do we?

Starting point is 00:34:54 You don't think it's worth even $3.50. It's hard. I don't think so now because she bought it during the craze where everyone was trying to get out of the city. Okay. You're not operating on facts. You're operating on feelings. You need to have a real estate agent go out and tell you what this piece of property will bring. Go to ramsysolutions.com and click on Ramsey trusted for real estate agents

Starting point is 00:35:18 and have one of them go out and look at it for you and say, Chris, I think we can get $210,000 for this. I think it's going to bring $110,000. And here's why. And then based on that, you can start making some decisions on – but this does not sound to me like it's something I want to own. How longer you hang on to it, the more money you lose, because you said you're bleeding $2,000 a month. Yeah.

Starting point is 00:35:42 Just to hang on. Yeah, interest rates around 2%. I don't care what the interest rate is. Yeah. It's an alligator. It eats money. It doesn't produce money. Right.

Starting point is 00:35:53 Yeah. Right now, yeah. Yeah, right now. I mean, it's going up in value, I hope, but not lately because the house is rotting down now. It's full of mold and everything else. Right. Okay. This is, you just got married, you got a wonderful house, you have a wonderful life.

Starting point is 00:36:09 Don't let this be a distraction, this money pit, throw a grenade in the middle of all the good stuff you're doing. Sure. Cut it loose. The definition of sunk cost fallacy. Exactly. I'm going to keep dumping money in, hopefully get out of the other side. Andrew's in Cleveland, Ohio. Hi, Andrew. How are you? Pretty good. How are you, Dave? Better than I deserve. What's up?

Starting point is 00:36:32 I have a CTW and I carry insurance for that CCW. Me and my wife, we are in Baby Step 2 right now, but we just learned about the insurance baby step in the class that we're in with our church. And I'm wondering, do I keep it or do I get rid of? of it. For those out there that don't know he's talking about, it's concealed carry. Okay, and so you're carrying a firearm and you're carrying insurance in case, God forbid, you use the firearm and got sued, correct?

Starting point is 00:37:07 Correct. Yeah. Okay. Well, there are varying degrees of cost on those things. There's a couple of them that we've looked at. We actually endorsed one for a while. that the cost is reasonable. There are some that the cost is unreasonable based on what I think you're getting for it.

Starting point is 00:37:34 I'm paying $25 a month for it. And what's your household income? Household income is about $40,000. Okay. And it starts to be a lot at that point. So what you have to ascertain is not whether you're going to carry. or not, because I think you are going to carry. Then the question is, are you going to do that without insurance, meaning that if, God forbid,

Starting point is 00:38:01 something happens, you're just going to work through the consequences of that? Or are you hoping to have some, basically, this is lawyer insurance. It buys lawyers. Correct. What it does. Or do you want somebody on your side? So I don't know what circumstances you're in and so forth. I carry every day and I have for 35 years and I don't have the insurance.

Starting point is 00:38:29 And if it was Dave Ramsey, good God, can you imagine the lawsuits? You know, and so my process is if something's going on, you know what I'm going to do? I'm going to run instead of shoot. I'm leaving, okay? I don't, I would never, you know, I have extra mental barriers to me pulling a firearm out beyond other. people. And so you've got to just ascertain your position in that because I'm truly, I've done a bunch of training with handguns and a bunch of people that really do know what they're doing. And I love it as a sport. I love it as a hobby. I love it as an American right. All of those

Starting point is 00:39:08 things. But the chances of me shooting someone unless they were killing one of my family members or me would be zero. And so I'm just not going to engage those situations. So, that lowers my need for insurance, you know, by my attitude about all of that. And so you've got to decide, you know, what situations are you going to be in? What risk are you actually taking? And then making $40,000 a year of what's worth $300 a year. And you've got to make that call for yourself. But I will tell you, and the CCW insurance people that know their stuff will tell you that by far the best insurance you can have is have your brain screwed in.

Starting point is 00:39:51 if you're going to do this and really have done some training and I'm serious run away from situations. Don't be, you know, you're not freaking wide. And if you get that stuff dialed in, it changes the need for this, the level of need. But, you know, the people in the gun world say if you, if a round leaves your weapon and hits someone else, whether they're guilty of something or not, it's probably a million dollars. if it's me it's 10 million so it'll cost me in legal fees to

Starting point is 00:40:26 not because I'd be wrong not because the law doesn't protect me not because all the but it's just the stinking law the lawyers and the court system are all just set up to screw people and it'd be a horrible situation so I gotta tell you man it's not there's very few things I'm going to invest 10 million dollars in

Starting point is 00:40:44 has a bullet coming off of it I mean it's not just not going to do it so the life of someone I I love. And I'm going to look at them and go, do I really like them? No, I'm kidding. I mean, if I've got to really protect someone, maybe, but that's, oh, scary. Yeah, it's a scary scenario to think about. But, you know, the peace of mind, if $300 buys you the piece of mind right now and you need that, fine. It's not going to make or break your debt payoff schedule. Agreed. At $25 a month. Now, if it was $100 a month, making $40K, that is a serious amount of money. So the goal will be,

Starting point is 00:41:17 can we get our income up and eventually sort of have our own insurance policy to help out with this. And auto, home, umbrella, all of that. There's other ways you can also kind of stay protected. But outside of a firearm situation where someone sues you because of that, that's a different situation. I don't know how often that happens, how many a year. Yeah, I can't even imagine. It's almost nothing. But wow, it's a scary, scary thing to think about.

Starting point is 00:41:42 That's for sure. And it makes lump come up in my throat just to think about the possibility of something like that. This is The Ramsey Show. Hey guys, George here. Listen, 99 times out of 100 when people say, I don't know where my money goes. It's not a math problem. It's a behavior problem. They're not budgeting.

Starting point is 00:42:21 Then they're shocked when their bank account hits triple zeros. Well, here's the deal. Winning with money is about doing the boring stuff consistently. And that includes banking someplace that helps you stop guessing with your money. Like Fairwin's Credit Union. They're not going to fix your habits. That part's on you. But they do support people who are ready to take control of their money.

Starting point is 00:42:39 At Fairwinds, you get a high-yield savings account with a great rate to help grow your emergency fund, a checking account that won't nickel and dime you, and up to 10 free savings accounts so you can organize your money on purpose. Because when you stay disciplined, your money gets predictable, manageable, and boring in the best way. So if you're ready for a bank that helps you be intentional, open your smart bundle today at fairwins.org slash Ramsey. And get the Ramsey B-Weir-Weir-D debit card to go along with it. That's fairwins.org slash Ramsey, insured by the NCUA. Welcome back to the Ramsey Show in the Fair Wands Credit Union Studio. George Camel Ramsey Personality, number one bestselling author, is my co-host today.

Starting point is 00:43:32 I'm Dave Ramsey. Amber is in Tulsa. Hi, Amber. How are you? I'm good. Thank you for speaking with me today. Sure. What's up?

Starting point is 00:43:41 I have been married about 20 years, and 15-ish years of that marriage, my husband was an alcoholic, and he has his own business, and he was able to maintain that. He is now three years sober. Good. And yes, thankfully. And he is back on track. But in the midst of the chaos, we have not filed our taxes since 2020. And I'm not even sure.

Starting point is 00:44:09 In midst of what chaos? He was drunk for 20 years. When did the chaos happen? Well, he just, it really was a downward spiral. It just got worse and worse. He even had a couple of DUIs. So it just kind of reached a peak. So,

Starting point is 00:44:23 20 to 23 was him going to the bottom, and 23 to now is coming back out. Yes, exactly. I got you. And now his business is thriving, and we're doing really good. But this is just like a looming black cloud over us because I know we have to pay the piper. Yeah. Okay. So the first thing to know is this, and it's very, very serious.

Starting point is 00:44:46 Failure to file income tax returns is a federal criminal offense. Yes. Failure to pay taxes is not. Okay, yes. Okay. People do not go to jail in America for not paying taxes. They do go to jail around 2,500 to 3,000 of them each year for not filing. So we've got to get that off of you. The number of times that the IRS prosecutes someone who comes out of the cold off the grid on their own, is almost zero. So you're going to initiate this filing immediately.

Starting point is 00:45:29 Okay. I don't want them accidentally finding you in the next 30 days and really screwing up all of the positive progress he's made in the last three years. Yeah. Okay, so go to Ramsey Solutions.com and get one of our tax ELPs, and they will help you. Typically, what happens is you need to reconstruct the last three years. maybe four, and do the best you can to reconstruct those years and file those, and then all of those taxes will be due.

Starting point is 00:46:03 Okay. And that's another thing. I don't even know that during that time period he kept a very good record. I don't care. We have to reconstruct something. Okay. Okay. The best you can do, you're going to have to pull it together because you need to file

Starting point is 00:46:16 something. Okay. Because they're probably not going to look at it. They're probably just going to be happy that somebody just showed up and started giving them money, okay? Right. But that's if you go to them. So do not put this off another year.

Starting point is 00:46:30 Okay. Danger, danger, danger. Yes, I don't want to go to jail. Well, it's not you, it's him. Yeah. Are you working outside the home during this time? No, I'm a stay-at-home, but I do help him with the business. I know, but there's no other tax bill other than the profits from the business.

Starting point is 00:46:49 No, no. And you're not an employee of the business? I'm just a co-owner. Does he have employees? He has two, but they're just $10.99, so they do their own taxes and everything. Okay. Well, I think you're going to find when you delve into this that they're not really $10.99. Okay.

Starting point is 00:47:10 Because you have to meet several guidelines to be $10.99 employee, and I've got a feeling these guys don't. $10.99, but sometimes with entrepreneurs, I just don't want to file taxes. So I'm going to make the team. do it. But a 1099 is for a self-employed person. Your employees are not self-employed. Okay. So I don't think. You know, but you're, again, your tax, that's a minor thing, but your tax advisor can tell you about, or your tax preparer can help you figure that out. But you need to get two or three, I mean, three or four years with a, with a Ramsey trusted tax preparer and get it filed immediately. And then if you owe some money,

Starting point is 00:47:47 you can put that on a payment plan with them and or use some. money you got in the bank and just pay them. Yeah, and I'm ready to do that. I just want to be in good standing. What's your financial situation now? How much debt do you guys have and what's the income? We don't have a ton of debt, maybe a hundred grand, and that is in houses and cars and a little bit of credit card, but we're bringing in close to 20,000 to 30,000 a month. A month? Net profit or gross? Gross. There is some like equipment purchasing and paying a employees in that amount. Yeah.

Starting point is 00:48:23 Okay. So you're probably making five brand a month. Yeah. Yeah. So $60,000 a year. So, and I'm guessing in the bad years, you might not have made anything. Yes. It may not be as bad as you think when you actually go to file.

Starting point is 00:48:38 So that means there's not going to be much taxes on it if you didn't make much. Okay. That's what I'm hoping. Yeah. So, yeah, let's just get all this pulled together and be proactive and approaching the IRS. And I make fun of them and pick on them all the time, but they're actually pretty good to work with in these situations. if you come to them. Don't wait for them to come after you.

Starting point is 00:48:55 You don't want the men in black showing up with a gun, right? But that's, you know, that kind of thing. But that's, yeah, go, come in out of the cold as quick as you can. Todd is in Lexington, Kentucky. Hey, Todd, how are you? I'm doing great. How are you? Better than I deserve.

Starting point is 00:49:12 What's up? So, me and my wife, we were looking to buy a new Harley. How much? And it's 50,000. Got 50,000? Yeah. Okay. Yeah, it's $50,000, Harley.

Starting point is 00:49:28 And you've got $50,000 cash? Yes, we do. Okay, all right. Yeah. We have, well, like $450 in retirement and $350,000, about $350 or a little more. And I just, you know, I just wanted to retire. I'm looking to retire in about five years. She's already retired.

Starting point is 00:49:50 And I just want to be, you know, just want to be smart with my money. Yeah, have you gained debt? No, none. What's your household income? About three to 350. Yeah. I would buy the Harley, but I also would tune up my investments and make sure we're putting a good amount because you're making really good money. And you could really stack some cash and buy a lot of things later that you want to buy.

Starting point is 00:50:18 But right now you can afford the Harley for sure. Okay. What kind of vehicles and toys do you have right now? Really, no. I mean, well, I actually do have a Harley now that's worth about $15,000. I'd probably just sell outright. And then we have a paid-off 23 Tahoe and a paid-off 22 Silverado pickup. And then I have a vehicle that I use for my business.

Starting point is 00:50:46 I just work a full-time job for the federal government. and then I'm an electrical inspector on the side, and then I also build houses and sell. Do you understand that your motorcycle is going to be your most expensive vehicle now? Right. Your toy is worth more than your other cars that you drive every day. Yeah, that's what – that's one of my – I mean, that's what – And it's going to be worth $15,000 when you go to sell it.

Starting point is 00:51:14 So just know that going into it. You're going to lose the money, but you've got the money to burn it. Okay, you've got the money to enjoy. it and it's not out of line. I might have pause in doing it, but it's not out of line. It's not a, you know, you're not too broke to do it. But I want you to sit down with the SmartVestor Pro and make sure all of your money is invested. And if you're making $350, you should have more money stacked than what you've got stacked. So I want you to increase your investment goals so that you have got millions later to do stuff with.

Starting point is 00:52:11 When you've saved up and paid cash for a reliable used car, You want that thing to last. And the best way to keep it running for the long haul is to take care of it with people you trust. That's why I'm proud to welcome Christian Brothers Automotive is the official auto repair partner of the Ramsey Show. At Christian Brothers, they treat you like family. You'll get digital vehicle inspections so you can see exactly what your technician sees, a complementary shuttle to keep you moving, and every repair is backed by the. their nationwide nice difference warranty.

Starting point is 00:52:49 They've even been ranked number one by J.D. Power for customer satisfaction among aftermarket, full service maintenance and repair providers six years in a row. Visit jd.com slash awards for the details. So if you want your paid-for car to keep going and going, trust Christian Brothers Automotive, Visit C-B-A-C-com slash Ramsey to find your local shop and get an exclusive Ramsey discount of 10% off your visit. 10% off, up to a $250 value. See store for details. Megan is in Charlotte, North Carolina.

Starting point is 00:53:51 Hi, Megan, how are you? Good. How are you doing? Better than I deserve. What's up? Love it. I was hoping to hear you say that. That's awesome.

Starting point is 00:54:00 I've been listening to you guys for years. So I'm just wondering how it is possible to go from surviving to thriving to thriving with a disabled husband. What's the nature of his disability? Since he was 19, he has chronic pancreatitis with all kinds of complications that have resulted as a result of that, multiple surgeries and all kinds of things over the years, just making it where he's completely unable to work, you know, reliably. It happened when he was 19. He went in for a surgery and came out with an acute bout of pancreatitis, and it's just been downhill ever since then.

Starting point is 00:54:39 Wow. Okay. And what do you do? I am a human resources manager. What do you make? Right now, take home about 3196 per month. Okay. How many kids have you all got?

Starting point is 00:54:58 We have three. We have a 15-year-old and an 11-month-old and a 2-year-old. Cool. How much debt have you got not counting your house? Only about $1,600. That's good. Good. Okay. Yeah. That's a good basis to start from. Well, obviously surviving to thriving is an income issue and an outgo issue. If you spend everything you make, it doesn't matter if you make a lot.

Starting point is 00:55:24 And if you don't make anything, that's going to be tough, right? So is it easier to thrive on 36,000 or 336,000? Well, obviously, 336,000, right? So how old are you guys? We'll both be 40 this year. Okay, all right. So there's an old book probably really old. I'm not sure if you can find it anymore, but I'm more about the thesis of the book than the book.

Starting point is 00:55:50 It's called What Color Is Your Parachute? and the book had in it a ton of stories of people who were overcomers and created incomes in spite of physical and even mental disabilities. And the thing that I took away from it was two things. One is a lot of these people, your husband in this case, found a way to, found a workaround to be an entrepreneur and own their own business. And that enabled them to take the downtime that they had to have because of the physical limitations. Okay?

Starting point is 00:56:33 But the interesting thing about entrepreneurs is that ADHD and dyslexia occurs about eight times more often among entrepreneurs than it does the general public, meaning this, that people with ADHD or dyslexia, occurs about eight times more often among entrepreneurs than it does the general public, meaning this, meaning this, that people with ADHD or dyslexia, dyslexia or any kind of limitation, learn their whole life is about a workaround. And oddly enough, that's what business is all about. Yeah. The definition of an entrepreneur is find a need and fill it. It's a workaround. We've got to find a new way to do an old thing or a new way to do a new thing and figure out a way to do that in spite of all these people and things and crap coming at us,

Starting point is 00:57:15 those of us that start and run businesses, right? So that's what he because his mental toughness to deal with the medical limitations that he's had will actually work in his favor to start a business versus someone who's perfectly healthy. Because he's already got calluses on his brain in this area. Does that make sense? Very much, yeah. So to me, that's encouraging. So I'm going to start thinking about what he can do as a business and, you know, how. can he delegate some of the things, hire employees and get somebody to do that he's not able to do?

Starting point is 00:57:53 Where can we start out of the garage? Obviously, it's not going to be something that's physically taxing on him, but it does have to be something that can come and go because he needs to have some down days, some down hours. Yeah. He can't work a nine to five. Right, right. Yeah, not reliably. Right, right. And you don't want to set up a business that requires him to be present nine to five.

Starting point is 00:58:16 That's what I mean by a workaround. So anyway, I'm going to encourage him to find a way to create maybe the most money you guys have ever seen in your life if he happens to strike goal with this. And kind of come out with that attitude. And really the same thing for you. You're a human resource manager. Mm-hmm. And you make $30,000, $40,000 a year? Well, I do have some retirement coming out of that.

Starting point is 00:58:41 And I do have like one small insurance coming out of that. So there's a little bit coming out. Yeah. but you're not making much money for HR manager. Not really, and honestly not for the area that I'm in either. The reason that I'm still here is because the people are really wonderful. Honey, your family needs money. I don't give a crap how wonderful they are.

Starting point is 00:59:01 We'll find wonderful people elsewhere. Right now we need to double their income. We'll pay you twice as much. Yeah. Okay. So you've got a few levers to pull on here. If he can get something going, you can increase your income. Now we've got some serious margin.

Starting point is 00:59:15 Because right now you're expensive. are probably three grand a month, and that's what you're taking home. So it's going right back out to the bills. It really is, yeah. Because it seems like we start to build up a few hundred dollars in an emergency fund, and then it all goes away, and then we have to kind of start back over from scratch, like, every month. So it's just, we're just not getting anywhere. That's why I've been putting a little bit more into that retirement, because I was just terrified, like, what if we get to 60 and have nothing to show for it, you know? Well, right now you're doing five good things at once, and you're not making progress. You're trying to pay off that $1,600 bucks in debt.

Starting point is 00:59:45 you're trying to throw summit savings, you're trying to invest. I would just focus on one thing at a time. And for you guys, that's a $1,000 starter emergency fund. So my assignment for him is I want him to start a business that in the first year makes $50,000 profit and the second year makes $100,000 profit. My assignment to you is go find a job that doubles your income. Okay. Yep.

Starting point is 01:00:06 I think we're going to have to do that. And I think those are doable. They're doable. I believe in you. Yep. Okay. Thank you so much. I appreciate it.

Starting point is 01:00:14 You call us back as you're going on this fight now, and we'll help you. Hang on, I'm going to send you a book called Building a Business You Love. It's my latest number one bestseller. It's how to start and run a business, and we'll help him with that. So, George, when I first found that statistic, that dyslexia in particular is, I forget the number, it's way more prevalent among entrepreneurs than business owners than the general public, like light years. like 30 times or something.

Starting point is 01:00:45 It's crazy. I can't remember the number, but it was just mind-blowing. And then as we sat and talked about it and thought about it, and I talked to a couple guys that got dyslexia because we work with 10,000 small businesses in Entree leadership. And they're like, hey, man, my whole life's a workaround. Everything I do, I have to figure out a way to do...

Starting point is 01:01:01 Overcome an obstacle. It's overcome an obstacle that is just normal for you other people. And y'all are just lazy. And so I go get it, you know. Because he said, everything, I have to figure out a weird way and abnormal way of doing everything. everything. And he goes, so it's natural to me. And he was making a lot of money. He's running a big business. But he said, reading is a challenge. He goes, I'm really glad you put stuff on

Starting point is 01:01:25 audiobook, you know, because, but he goes, it's a workaround. What's the, you know, how are we going to do this in any way? And my whole spirit has been reformed with a recognition that I have to do things differently than the average person. And that is a secret superpower in business. grit to that. Oh, there's a grit to it and there's a part of your brain that functions to create workarounds that no one else has. You know, I don't have to do the workarounds he has to do. I can just walk up to it and touch it, you know, but he has to go around the barn three times. And so it's, but it's, there's a lot of data coming out on this that that's a lot of the reason for the successes, the number of people that are, you know, on the, uh, functioning

Starting point is 01:02:10 into the autism spectrum and so forth. And so it's interesting to me that what is perceived as a disability is an ability. There's an opportunity there. There's an opportunity there. And so to me, that's really encouraging. I've never faced something like that personally. Faced plenty of other challenges and stupid butt stuff I've done to myself. But when I meet people like that that are like they busts.

Starting point is 01:02:40 through whatever it is and become a big deal. It's inspiring. Our friend John O'Leary that was burnt heavily as a child, and the movie just came out, Man on Fire, and he's just created an entire career out of telling people they can do something. Using his story. Yeah, using his story. Owning a business can be a heavy load. You want to serve your customers well.

Starting point is 01:03:34 Make a healthy profit and grow. And your team, family, and customers are all counting on. you. And now everybody's talking about AI like it's magic. And you're wondering how to keep up. You're carrying a lot, but you don't have to do it all alone. That's where NetSuite comes in. Over 43,000 businesses, including Ramsey Solutions, use NetSuite to lighten the load by bringing all their numbers into one system, accounting, inventory, CRM, payroll, the works. And now NetSuite's AI takes it further, automating busy work, flagging inventory issues. spotting cash flow problems in real time and catching risks before they hit.

Starting point is 01:04:16 So you're not just closing the books faster. You're making decisions confidently. And when your numbers are right, that takes a lot of pressure off your shoulders. And yeah, switching systems is a big move. But NetSuite's sweet success process gets you up and running fast. Go to NetSuite.com slash Ramsey for a free product tour and to schedule time with a NetSuite rep. That's netsuite.com slash Ramsey.

Starting point is 01:04:44 If you've got a simple tax situation, like you haven't had any major life changes or big investments, use Ramsey Smart Tax. It's affordable, keeps filing really simple, and it has built-in support in case you do need a little help. Filing early means you get the best deals, and you get that tax stress off your shoulders. So as soon as you get all your tax documents,

Starting point is 01:05:14 go to Ramsey Solutions.com. slash smart tax and start filing. And there's not a bunch of gotchas in there like the other people, like Termitax. It's quote unquote free until you have one extra document. And then it's like $468 million then. It's like crazy. The little add-ons will get your boys and girls. All right, not with us.

Starting point is 01:05:34 Hey, David is in Los Angeles. Hey, David, what's up? Hey, guys. Thanks so much for taking my call. Sure. How can I help? Wanted to ask a question. My wife and I have been given an opportunity.

Starting point is 01:05:46 to move to Alaska for a job that sounds like it's going to be much better for our family in terms of time, getting to spend time together. I'm a little nervous because it's technically a title lower than the one I'm currently working. I'm wanting to make sure I'm not giving up too much opportunity, but also want to improve my family's life in the immediate situation. So kind of get a little guidance on that. What is your field?

Starting point is 01:06:11 Why does title matter? Yeah, so I'm a marriage and family therapist, and I'm currently working as a clinical director at a treatment center down here. What's the new title? So the new title would be a clinical manager rather than clinical director. It does come with a little bit of a pay raise, about $6,000 a year, so nothing too crazy. But just want to make sure that, you know, I don't know if it's a horrible idea to be taking, a lower title in the long run. Well, is your cost of living going to be much lower in Alaska versus L.A.?

Starting point is 01:06:48 So it is. Essentially, we would be able to live for a bit cheaper out there, and we'd be making more money. So on that end, it feels like a no-brain. Yeah. Well, yeah. Well, it's cold, though. It's definitely cold.

Starting point is 01:07:02 That's the trade-off. And there's bears. Yeah. But there's a few bears. So. I am not an expert on the clinical field. I wish Dr. John Deloney was sitting here with me. Sorry, George.

Starting point is 01:07:21 He has a PhD in counseling, and he knows all those people, he knows all that stuff. He knows the titles. My perspective, looking in from the outside as a layman is, I don't think there's two people on the planet that will notice your title change. I don't think it matters. Okay. I mean, Henry Cloud is one of my best friends. He's a clinical guy, one of the most famous in the world, and others I've known. in that world because we've been around that world for 30 years because we deal with so much

Starting point is 01:07:47 mental issues around money stuff. So we're become friends with that world. And I have never, in 35 years, I've never had the occasion to go, oh, that guy is a manager, not a director. He runs the dadgum place or he doesn't run the dead gun place. It's the way I look at it. So that's an outsider outside the industry looking in. So I'm not sure how valuable my opinion is. But I personally have never been someone that collects titles. I collect the ability to get things done and get paid for it. And so it sounds like that's what you're doing. You're being a little bit more utilitarian rather than esoteric, right?

Starting point is 01:08:26 That's true, yeah. Are the responsibilities the same? Yeah, I mean, responsibilities are essentially exactly the same. I'm still running the place. I'm, you know, I still have the same oversight just about the same amount of employees. Okay, let's fast forward. Let's try to change. Let's put the mugguses on the foot for the first.

Starting point is 01:08:41 fun of it. You've been doing this a while. You know the world. So if someday you were a regional director of eight different mental health centers, and someone came to you for an interview, and they both had done the exact same job, would you care what their title was? I can't say that I would. I wouldn't. I think that I would be able to say this is the same thing. Exactly. You would look at it and go, you know, just in Alaska they named it this and in L.A. they named it that and it's the same, same job description, same duties, same responsibilities. Crud, the Alaska one may have a bigger budget that you're managing. I don't know. I mean, there could be actual more qualifiers. The only other thing I throw out is I would ask for more

Starting point is 01:09:23 money. Alaska generally pays a premium to get people to live there. Yeah. And you're getting a little bit of a premium, but I, and I wouldn't just say, I wouldn't ask for a set amount. I would just say, hey, I was talking to my financial counselor, and he said he's not sure this is a good idea. Is this the best you can do? And just see what they say. The worst thing they can say is, yeah, that's the best we can do. And you go, okay, I'm coming. Right. Or they go, oh, no, you know, we could actually do 20,000 more. And you go, oh, that one silly little question just made me 15 grand, you know. Or maybe it's a kind of sign-on bonus or extra relocation. And don't do it with a belligerent personality. That's not what I'm talking.

Starting point is 01:10:06 about. I'm just saying, just go, hey, I'm just wondering, I know Alaska sometimes pays a premium, and is this all you all have in the budget? Is there anything else you can do? Yeah. And asking a gentle, open-ended question, you might be blown away with how much they add to that $6,000. And it's a general negotiating posture to take anyway, folks, on anything. Is that the best you can do? And it's like, oh, no, I can do a whole lot more. It's like, I really want to get rid of this think. And then you just shut up and let them speak. Let them talk. You don't over talk. Being really quiet. You ask a question and shut up. First guy speaks, loses.

Starting point is 01:10:42 So, again, worst case is, they say, no, this is the best I can do. Sounds like a fun, Alaskan adventure. Let's go. I mean, let's do it. Why not? Worst case is, you don't like it. It's too cold and you go somewhere else later. Nobody said you had to stay there for 25 years. You're just going up there to take a job. Jordan is in Nashville. Hi, Jordan. How are you? Hello. Hi.

Starting point is 01:11:07 Hey, Dave. My mom has been listening to you since I was in the third grade, and I'm 41 if that makes you feel old. I was already feeling old and you help. Thank you, brother. We're fossilizing Dave here soon. Yeah, no, she was on today, originally. I think before a lot of people caught on. Back when I had hair.

Starting point is 01:11:24 Yeah, I got it. Okay. What's up today, man? My question is I am 41 years old, and I have got my house and everything. paid off. I don't have any debt. Mom's brown. Yep. And I've got a nasty egg that I've been saving for a while.

Starting point is 01:11:41 And basically what my question was, I do have, I am working towards a pension, and I'm 15 years in towards retirement on a city pension. Mm-hmm. And my question is, would you use all the capital I have now

Starting point is 01:11:57 to make an investment in a real estate and business that I've been kind of wanting to do? or would you just focus on investing in smart stocks and stuff that will further secure retirement? Okay, if you're sliding everything, all the chips to center of the table on one deal, I would not do that. I don't do that. But I do buy real estate, and I like real estate. What are you talking about doing?

Starting point is 01:12:25 Well, I didn't want to do like an event center. I didn't want to do an event center in my town and kind of have like all in one where it's kind of a Kitchen, bar, event center for weddings, birthdays, events, and concerts. I've been kind of messing around with that for a couple years. In Nashville? I'm a job on the weekends. No, I'm not in Nashville. I live about an hour and a half from Nashville.

Starting point is 01:12:46 Okay, which city? Cookville. Okay, all right. Because in Nashville, I would just tell you there's 26 of them. I mean, you don't, it's like, how do you get the next country music star's attention? A waiter. You know, so, but in Cookville, what's the event centers like there? How many of them are there?

Starting point is 01:13:02 There is a few event centers. I was actually one to do it in my hometown of Sparta. Now we're getting small. Is there enough population there to support one? You know, the local, they don't have a whole lot going on, but the local places that they do, for example, since I've been doing events, every time I try to call and book one of these places,

Starting point is 01:13:24 they're six months out, they're four or five months out. So it seems like all the rental and venues places are doing well, and then our local bars is only a few of them. It seems like they do real. well, too, as far as the amount of people that's always in them. What's the cost going to be on this if you did it right? Well, I've been looking into it. So, like, right now I've got, you know, a pretty good chunk saved up.

Starting point is 01:13:45 The properties I've been looking into, there's a couple different options. There's some out there right now that you could buy a turnkey ready pretty much for around 350, 400, which is, I think, really high for our area. You know what I would do? I would lease one of them for five years. and start your business and run it with the option to purchase it and put a price on it and buy it later if this works. If it doesn't work, you're just a tenant and you ran your lease out.

Starting point is 01:14:14 A lease with an option to purchase. That reduces your risk. Instead of dropping $3.50 into it, drop $50 into it. And let's go try your dream without it turning into a dead gum nightmare. Cole is in Boise, Idaho. Hi, Cole. How are you? Hi, Dave. It's really good.

Starting point is 01:15:19 How are you? Better than I deserve. What's up? Hey, so my wife and I are both doctor of audiology students, and currently right now, we don't have any debt. We've been following you for quite a few years now, and so we've maintained no debt through school, through our undergrad, everything like that, and we're now having to make a decision just because our scholarships have kind of run out the money that I saved up when I worked, and she went to school is running out. And so my question to you is, is would you take on a student loan if it may expense or would you do all that you can to just not take on any student loans at all? Preface with that, we do have money saved up. I'm sorry, you're already doctorate in audiology, or are you just studying?

Starting point is 01:16:04 So we're studying. So my wife is a third year student going into her fourth year. So she has one year left, and I'm a first year student. So I've got three years left. Okay. All right. And how does that world work as far as work goes? As a third-year student, can she work in the field while she finishes up?

Starting point is 01:16:25 She is. Both of us are. Oh, good. Both of us have part-time jobs in the field. So we're both working part-time or taking advantage of any school scholarships that we can. But, I mean, our school cost about. So we made $50,000 last year, but that was when I was working full-time. This year, I think we're projected at like 30,000.

Starting point is 01:16:48 And what does it take for her to finish the next year, her last year? So it's going to cost us 30,000. Each? Yes. Okay. And you've been able to get scholarships for none of it or what? For all of it up until now. Oh, why did the scholarships go away?

Starting point is 01:17:10 So she's going to call her externship, so her clinical rotations. So there's no scholarships there. And then I'm in the current application period for scholarships, but nothing's been granted yet. And when I look at the numbers, I'm like, if I don't get any scholarships, we're going to have to make a decision on dip in to our savings, take out a student loan. Oh, wait, wait. How much savings do we have? So my wife and I have a brokerage account with $50,000.

Starting point is 01:17:40 and then we currently have savings for 20,000. So if it's worth borrowing for, why is it not worth using your savings for? I agree with that. My wife thinks that we should keep our brokerage account the way that it is because it made us 20% last year. So we should borrow money on a student loan to put money in a brokerage account? That's dumb. Well, that's why I called to make sure that I wasn't, you know, misunderstanding. You're not misunderstanding.

Starting point is 01:18:08 You should pay cash and finish your degree. By the way, this is a license to print money. You know that. Say that again? Audiology. You're going to do really well. Oh, yeah. Well, and that's where what her take is, is that leave everything there,

Starting point is 01:18:26 take out the student loan, and then when she gets out and making $90,000 to $100,000, we'll just pay it off. Yeah. I have just done everything. No. Except that and said no debt whatsoever. We're going to pay cash or we're not doing it. We're going to pay cash or we're not doing it. You have the money.

Starting point is 01:18:40 No, we do not borrow money on student loans to invest. Right. Well, so then one other question with that. So because I have three years left, when we get to the point that we would be forced to take out a student loan. You're not. She's going to be making 90. Well, right. She has one year left and then starts cash and checks.

Starting point is 01:19:05 Right. She can pay for you to finish. Right. Okay. Well, I just, like I said, I wanted to make sure I understand that correctly. So you got 70K. It's going to cost you 60 for both of you to do another year, right? So you got 10K left. Then she's working. So now we can cash flow the next 30K for you. Right. So that would be the game plan. That's the option that you would do.

Starting point is 01:19:27 Yes. Absolutely. A hundred times. Zero times, I'm going to tell you, take out a student loan ever. But particularly when you've got a way at your fingertips to not do it, and you're just doing it to keep your investments in. which has the same effect of having borrowed money on student loan to invest it. No. And just because it did 20% last year does not mean that's going to happen again this year. It could go down this year. And then she's going to be real heartbroken.

Starting point is 01:19:51 Yeah, we could bomb Iran and the stock market could drop. That's a wild thought. Who knew that would happen? Yeah. All we knew is what was going to happen is all we knew. So, yeah, no, no, no, no, no, no, no, no, no, no. And to assume that George is right. I mean, the last two years, 25 and 26 were 23 to 23 to 20,

Starting point is 01:20:10 26%. Both of them were incredible years. But that's not normal, folks. And you don't, you don't make your decisions based on a 20% rate of return because it doesn't, we don't tell people you're going to get 20% average. We just know what actually happened in the last two years. So, eish, ish, eish. No, we're not borrowing student loans. Matthews in Hartford, Connecticut. Hey, Matthew. Hey, how's it going? Thank you for taking my call. Sure. I max my 401K out, like three, four months left in the year, put in the 15% in, like, you guys, like, tell us it's a good idea, too. And my company has an after-tax account that I can continue to put a percentage of my check-in after-taxes that rolls into my 401K Roth.

Starting point is 01:20:53 Do you have a mortgage? I do have a mortgage. Put it on that. Don't put it in that. Pay your mortgage off. That was the only question I had. Okay, it's easy. Yeah, we tell people, but when you're in baby steps four, five, and six, four is 15% of your income going into retirement, five is kids college, any other money we can find above living life well, we're going to throw out and pay off the mortgage next. Because what we found, Matthew, the data tells us that the typical millionaire in America, and we've done the largest study on them of anybody, has a paid for home and a healthy muscle-bound 401k account.

Starting point is 01:21:30 You're going to have both if you go this route. Now, when the house is paid off, you can go back and play some of these other games. you can max out, you can, you know, you get to this year be 24-5. If you're over 50, you could do, or over 60, you could do 11, 250 extra. Do all those kinds of games. I do every bit of that. I do everything I can do. I'm 66, but I don't have any debt and hadn't had in 20, 30 years.

Starting point is 01:21:53 So I'm just, I'm always maxing that stuff. I don't have any mortgages. It's a baby step seven item to start. Item, exactly. Going above and beyond all of that. But yeah, you got the backdoor Roth IRA for incomes too high. for the normal, and then you get the megabacter Roth 401K, which is what he's talking about, where you can do the after-tax contribution and an in-plan conversion.

Starting point is 01:22:13 And we have that at Ramsey. Very few people do it around here. Because they're not Baby Step 7. But at that point, it's a good option to have. But again, to your point, I'd rather have the house paid off first before I'm adding extra to retirement. Because likely he's going to be a multi, multi-multimillionaire in that retirement account. Exactly. So in the meantime, until we get there and can access it, let's have it paid off home.

Starting point is 01:22:33 because that is an element of the typical data point of the typical person in their first $1 to $5 million in that worth. Now beyond that, people do other things. They don't borrow to do it, but beyond that, they're doing more than just 401K in a paid-for-house. Other rental properties, they've got businesses, they've got other things to run a net worth up above that. But so a backdoor Roth, explain that, George. So a backdoor Roth, if your income is too high to contribute,

Starting point is 01:23:03 to an IRA, traditional Roth, you can do a backdoor Roth IRA, which is when you use after-tax dollars contributed to a traditional IRA, and then you pretty much immediately roll it over, convert it to a Roth IRA. Just didn't mind the other day. Oh, nice. I do it every year. Before tax season rolls around. Yeah, it's great.

Starting point is 01:23:21 And you can do a spousal as well. And so you can, now this year is $7,500. Yep. And for you guys, even more. We're old. $85. $86. Woo-hoo.

Starting point is 01:23:30 8600 now. It's a good day for days. So I just moved another $17,000. thousand. That's fantastic. And, you know, and all the growth on that for the rest of my life will not be taxed and it will not be subject to inherited IRA rules, not taxed to my heirs. So when the grandkids get this money, they're not going, oh, I got to pay taxes on it. Nope. Papa Dave did it for you guys. Papa Dave done a Roth. So there we go. You can thank him now. And so everything in my name is 66 or 65 is in a Roth.

Starting point is 01:23:57 And so that's the route we're going because it keeps no minimum distributions, no required minimum distributions at 72 and a half, 74 and a half. Which statistically, you and Sharon are going to live into your 90s if you made it this far. That's a lot of time. My plan is well beyond that. I think sheer will power and spite, Dave will outlive us all. That's my greatest fear.

Starting point is 01:24:16 I'll be on here spreading hate and dissension long after the rest of you are now. 104 years old, Dave still in the air. Get out of debt. I've always said he's the Methusel of Personal Finance. Sell the truck. Welcome to the Ramsey Show in the Fair Winds Credit Union Studios. I'm Dave Ramsey, your host, George Camel. personality. Number one, bestselling author is my co-host today. Melissa's in New Orleans. Hi, Melissa.

Starting point is 01:25:18 How are you? I'm doing well. How are you? Better than I deserve. What's up? Well, my question is, I'm considering separating my income from my husband. We've been married for over 13 years. Why? Well, okay. For the most of our marriage, I've been, I started off mostly at home. And he went to work. We had babies. And I would like, you know, manage the household, manage the finances. He knew he wasn't very good with money.

Starting point is 01:26:04 And he let me do it. My dad taught me a little bit. And my dad even gave me, like, the baby steps book. like our first year of marriage. Mm-hmm. So I haven't managed it all. So now you want to separate your money. Why?

Starting point is 01:26:22 Well, when I went back to work full-time, I'm a school teacher, and about five years ago, once our youngest got into kindergarten, it was actually first grade. But it just got too hard for me to manage, you know, the finances, the household, the children, full-time work, especially teaching. And I started asking him, like, hey, I, like, I need help. And I felt like

Starting point is 01:26:52 the biggest stress was always managing the money. And that was because we didn't agree on that area. Like, I'm always trying to save. And I was always trying to get us out of debt and everything. And he really didn't agree with the name. So, Melissa, is he misbehaving with money? You haven't answered the question. What problem does it solve for you to separate your money? Well, I feel like it would eliminate us fighting if he just spent his money and I did that. No, it'll cause him to be broke and you'd be broke too. He'll drag you down with him. Right now, you're the only thing holding this together.

Starting point is 01:27:31 But it's just really hard on the marriage. Like, if that's like our... No, the money isn't hard on the marriage. The selfishness is hard on the marriage. But he's worked really hard. Oh, bull. We all work hard. Call the wambulance.

Starting point is 01:27:47 He worked really hard So that gives him permission To constantly be at odds with his wife Instead of coming into agreement And deciding on what our future goals are together Bull crap That's selfishness He wants me to agree with him

Starting point is 01:28:01 And I just... I know, that's selfishness You don't agree to stupidity And so separating the finances Is not going to give you a better marriage It'll just brush the problem under the rug Makes it worse It'll separate you guys further

Starting point is 01:28:13 Okay, yes sir Yeah, because he's going to burn all of his in the corner. And then you're going to be trying to run the whole family on yours. And then are you going to split expenses and split the mortgage and split the utilities, like roommates? I considered, like, doing, like, you know, I make significantly less than him, like, like, doing like a percentage.

Starting point is 01:28:37 You do not have a money problem. You have a marriage problem. So let's not fix a marriage problem with a money solution. Let's fix a marriage problem with a marriage solution. You guys need to go see a marriage counselor. You need to sit down with your pastor, and it's time for you all to put this marriage together the first time completely that you ever have. Before you were the mommy taking care of the little boy.

Starting point is 01:29:04 Now the little boy's rising up and saying, I want to vote, and I don't agree with everything you're doing, and the two of you can't find a language to reconcile in your relationship on your disagreements. That's not a money problem. That's a marriage problem. Yes, sir. So you guys get on the phone and get your marriage counselor booked. And it's not, Sharon and I went to marriage counseling, Melissa, when we were, been married 10 years. We were married 43 now. We went broke when we were seven, that's seven years. And so three years later, all the pissed off came to the surface from going broke because we about killed each other. And, but what we got at marriage counseling was not,

Starting point is 01:29:44 not like we're broken, you need to fix us. I looked at it as like I hired a tutor. I hired a personal trainer to give me skills and knowledge about marriage that I didn't have from the home I grew up in. So I need you to teach me something to be married as a better husband. I need to teach her something to be married as a better wife and teach us language and processes to get through arguments like this and come to a conclusion. And so I just looked at it as I hired a personal trainer. I hired a tutor. You know, and I'm trying to get knowledge tools in my belt because I didn't know how to do it.

Starting point is 01:30:24 I didn't know how to fix it by myself. And you all don't know how to fix it by yourself. But it's not separating the money and you go off to your corner and he goes off to his corner. That's going to make it worse. So I would say the two of you, not because you're broken, not because you're all screwed up. But you have some things you need to learn that you've never learned in 13 years. about how to talk to each other, how to, some, Bible says, submit yourselves one to another, how to put the other person first.

Starting point is 01:30:53 That's what I was talking about selfishness. And, you know, I've been doing this 43 years and it's still hard because I'm still right and she's still wrong. But I told her if she leaves, I'm going with her. So there you go. But that's it. I mean, you know, it's hard, you know, and to navigate through this. You guys, you and Whitney had a bit of an advantage in that you started out as financial peace test tube babies here.

Starting point is 01:31:19 That's right. She worked here at Ramsey. And I thought if she's good enough to work for Dave, she's good enough for me. Probably too good for me. And I was right. Well, that's true. But yeah. It was easy. But I have found Dave. People get married, they're not unified on money. But they go, well, he's just bad with money. It's a personality trait. And then when you, then when I start picking on him, she says, oh, he works hard. Oh, give me a problem. I think he works too hard to be this broken, selfish and childish. Oh, there we go. So there's one. Boom, drop that mic on it.

Starting point is 01:31:46 Yeah. So, folks, here's the thing. What we found in 35, almost 40 years of helping people build wealth, get out of debt so that they can build wealth, build wealth so that they can change their family tree and be outrageously generous. You know, there's a couple things we're sure of. Very few, if almost none, of the married couples that build wealth do it separately. when we did this largest study of millionaires, we said, how many of you work together with your spouse and how many of you work separate? 83% said we work together.

Starting point is 01:32:22 The general public says less than 50% says we're worked together. But the general public's normal, and normal sucks. It's broke. You don't want to be normal. And so, you know, if you want an advantage to building wealth, it's learned to work together with your spouse, be unified in a desired future, as our friend Henry Cloud says. and then you say, okay, how does this discussion we're having affect that future? You know, you're wanting to buy something we can't afford, it affects that future. You want to be irresponsible with money? It affects that future.

Starting point is 01:32:53 We've agreed that this is the future we want. We've got an agreed upon desired future. And anything that affects that negatively, hey, we need to look at it. It's a wealth multiplier to be on the same page financially sharing the account. That's just the facts of it. Melissa, all the years of doing this show, your call is the number one call we get. How do I get my reluctant spouse on board with your Ramsey stuff? How do we get agreement in our house?

Starting point is 01:33:21 It's the number one call we get. When people hear my story of paying off debt, they say things like, dang, that must have been so hard. I can never do that. And I tell them, sure you can. It's a short-term sacrifice for a long-term gain. But do you know what's really hard? Working your whole life and never having anything to show for it?

Starting point is 01:34:06 never having the long-term gain, just feeling broke and stressed and maxed all the time. And sadly, that's the hard that most people choose. Listen, you're capable of transforming your situation and living a life of freedom, but you need the right tools to do it, like our every dollar budget app. In minutes, it'll build you a step-by-step plan that's tailored to your money situation. And every day, it finds ways you can free up extra money in your budget so you can get rid of your debt and actually build wealth. So make the choice today. Short-term sacrifice, long-term gain. Choose the tool to help you get it done fast. Download the every dollar app and start for free today.

Starting point is 01:35:04 Today's question of the day is brought to you by YREFI. If defaulted private student loans are wrecking your budget, it's time to deal with them. YREFI helps you refinance defaulted private student loans with a low fixed rate payment based on your ability to pay so you can stick to a budget and work the plan. Go to Y refi.com slash Ramsey. That's the letter Y-R-E-F-Y.com slash Ramsey might not be in all states. Today's question comes from Nikki in Idaho. What is a dividend stock? My co-worker has two houses that are completely paid off by using dividend stocks to increase her income by several thousand dollars per month and then reinvesting that income. Bull. This sounds too good to be true. Is it possible to do this? That's a lie. Is she trying to sell you a course on this?

Starting point is 01:35:52 Yeah. I mean, you've got to, let's put it this way. Dividend stock versus a growth stock is just a company using their profit sharing to pay you a little bit instead of reinvesting that. So if I own stock at Home Depot and Home Depot makes a profit, they have two options. One is reinvest it back into the company and grow Home Depot and then the value of my stock might grow. Or they can pay the profits out in the form of dividends. A dividend stock is a company that is mature. It's not in a growth phase. It's in a mature phase. And they pay out all their profits.

Starting point is 01:36:28 So it's an old big dinosaur company like an alkalo aluminum. Johnson and Johnson. Johnson and Johnson. Procter and Gamble. Okay? This type of thing. So, dividend stocks do not have as good a rate of return as regular stock that's growing in a company. You're basically pulling it out. It's not going to grow any of it.

Starting point is 01:36:51 You're cashing in your chips at the end of the game. You're saying I'd rather get the money now and not continue to let it. And so you didn't, you know, so for instance, if the stock market went up 20% in one year, that as like last year went up 25% in 25, okay? But there was not a dividend payout associated with that at all. Dividends had nothing to do with that. Dividends were companies made a profit in 2025 and they paid it out or they didn't to their, constitute to their stockholders.

Starting point is 01:37:22 So point being, your coworker did not pay cash with the dividends off of a stock. So let me just give you an idea. If you had $100,000 invested and your dividend stock paid out 10%, that'd be $10,000, and that would be a huge. Usually it's like 3%. Massive payout. So for them to get enough to buy two paid four houses, they'd have to have millions of dollars in dividend stocks. Which in that regard, it didn't happen from dividend stocks. It happened from investing over a long year.

Starting point is 01:37:56 They got the money somewhere else. So dividend stock is a done. down way to invest. It's not a magic way to invest. It's not a magic trick. It's just math. But it's not even good math. I'd rather have that money continue to grow.

Starting point is 01:38:10 I am worth several hundred million. I'm 65. The number of stocks I have that are dividend stocks are precisely zero. I want a better rate of return than that. I mean, we've heard you say on air for 30 years now, good growth stock mutual funds. Yeah. Not dividend stock. Yeah.

Starting point is 01:38:24 And the reason is the returns. It's pretty simple. And those dividend income, that's taxable. Let me reread it. What is a dividend stock? We just explain that. A coworker has two houses that are completely paid off by using dividend stocks to increase her income by several thousand dollars per month. Okay, that did not happen.

Starting point is 01:38:42 And then she said, and then reinvesting that income. Yeah, well, that's the income off of the houses. Okay. We got the two houses paid off by using dividend stocks. So my point is, if you did that, you either cashed in the stock or you have millions and millions of dollars to buy $100,000. house or $200,000 house. So that's not, something's wrong that doesn't pass the smell test. You're not going to follow her strategy and do this.

Starting point is 01:39:10 Yeah. At least in this lifetime. It's still a good question. It's good to educate people on what a dividend stock is. That's why we took the question. And there's nothing wrong with dividend stocks. But it's just an ultra-conservative lower rate of return way of messing with the stock market. It just makes you feel good to get that little check in the mail every quarter.

Starting point is 01:39:26 Yeah. And it typically is done by folks that are retired and they, would place a chunk of money so that they could get a steady income off of these steady income companies. But again, it's a reduced rate of return. And it takes a big bankroll to make some serious money. In order to pay off two houses, you know, there's something, we've got a chicken egg problem with this thing, with this story. So this is somebody that read something on TikTok and then lied to you. All right, Julie is in Omaha, Nebraska. Hi, Julie. How are you? I'm good. How are you, Dave? Better than I deserve.

Starting point is 01:40:00 What's up? So I have an interesting question. I am interested in buying a new camper. We currently own one worth about maybe $11,000 or $11,000 or $12,000. But my husband works on the road out of state for our wind and solar farm company and I'm a stay-at-home mom with our first son. He's one years old. You live in the camper?

Starting point is 01:40:27 He lives in a camper. Oh, he lives in the camper. I live in our home that we own in Nebraska. And how long is he gone every week? All the time. I would say 90% of the year. What does he make? He makes about last year it was, I think, 80,000,

Starting point is 01:40:49 but we had just had our son last year, and he took off a great deal of time. So what is your long-term plan? What's your long-term plan with his career? Because that doesn't sound sustainable. Right. his father and family work for the company also, and they have made a living off of that. His mother's side of the family owns a business here in town, and that's another option that he could work there.

Starting point is 01:41:21 What is his plan to do 10 years from today? Just, I guess, it's to make money for our family, to be, aspire to be millionaires. So wherever this is a city. He's gone 90% of the time, and you have a brand new baby. And he makes $80,000 a year and he lives in a camper. So how does a new camper fix this? Sorry, say that again. How does a new camper fix this?

Starting point is 01:41:46 Are you just going to live on the road with him? You live together, yes. Oh. And you can't do that in the current camper. No, it's $11,000. She has a one-year-old. No. No, it's a small camper that has, like, a bunk bed in the back that is much small for any

Starting point is 01:42:03 clothes or anything for his needs. Okay. Okay. So if you buy a $30,000 camper, now he has a $50,000 job. Yeah, that would be true. I do make a small income. It's about $2,200, $300 a month from the VA. I was in for about six years and was medically retired.

Starting point is 01:42:29 Thank you. Thank you for your service. Okay. I appreciate that. We also make an income from our previous home that we own. The mortgage is about minimum 500. We pay 800, and we rented out for $13.50 a month. Where is that home? Also here in town with us.

Starting point is 01:42:51 Okay. I would simplify your life, truthfully. I don't know if it's worth keeping this rental with the mortgage on it, and you have a mortgage on your primary home that you're living in? Correct. What's left on the mortgage? About 2000 hours. We just bought it December of the year prior. So are you going to keep this while you live on the road?

Starting point is 01:43:15 That would be the question also. Yeah, I don't know if this is a long-term job, if we're going to stay for just a couple more years. So that we can pay it off. We're 26. Okay. I'll give you a prediction. Five years from the day, you're not going to be doing this. Okay.

Starting point is 01:43:33 because what you're doing the gypsy life is very strenuous and little babies on the road are you know it just doesn't work for most people some people do it but very very few there's a reason people have a home and settle in for the mental health

Starting point is 01:43:54 of the relationship and the quality of life for the kids and all that for a short period of time it's an adventure but after that it becomes drudgery So I think this camper question really comes down to a career question of what's he going to do in the next stage of his life and when's that stage going to begin ready set go. If it's going to begin sooner rather than later, then no, we don't need to move up in camper. If you move up in camper, you have to pay cash and it's going to become worth nothing by the time you finish this adventure. Hey guys, Dave Ramsey here.

Starting point is 01:44:50 Every day on this show, we help people work through real money problems and figure out what to do next. you can get that same kind of help any time with Ask Ramsey. Ask your money question and get answers built on Ramsey 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. Well, we wish we could get to every call and question here on the show.

Starting point is 01:45:44 Some of them, we're glad we don't get to. So if you have a money question and you want an answer for your situation, head on over to the website and use Ask Ramsey. Ask Ramsey's our free AI tool that's built and trained on the proven Ramsey principles. To say the least, we have a bazillion hours of this show that we downloaded into AI, and so it knows how to answer the question. Exactly the way we would have answered it. You get the same answer we'd give you right here on the show.

Starting point is 01:46:11 So ask your question today at ramsysolutions.com for free. Or just click the link in the description if you're listening on a podcast or YouTube. It's here, it's big, and it's popular. Ask Ramsey. Charles is in Fort Myers, Florida. Hey, Charles, how are you? Dave, how you doing? Better than I deserve.

Starting point is 01:46:31 What's up? Wonderful. Let me tell you about my situation here. So I am 34 years old. I just sold my first home to move. back in with my parents. I have about 70 grand sitting in an S&P mutual fund and my 401K's in a good step. And the only debt I have is a car note. What's my next step? Why'd you move back in? I was originally from Pennsylvania. They moved down to Florida just to get back in with my family.

Starting point is 01:47:01 I took a layoff, didn't make the money I was making. So it seemed like no better time. So you don't have a job? No, I currently have a job and I start a new job next in like two weeks. Oh, good. Okay. All right. And so you're debt-free. You have money in an S&P, right? I have money in an S&P. The only debt I have is a car note. Okay. How much do you owe on the car? 18-5. Okay. Well, what we teach is to be debt-free and have an emergency fund of three to six months of expenses and then start talking

Starting point is 01:47:37 about buying a house. Okay. So I guess how long should I hang out until I just get real, real aggressive on the car note? I mean, you don't need to be aggressive. I would sell enough from the S&P 500 brokerage account, pay off the car today, cash out more to cover your emergency fund, and then whatever's left becomes your down payment. On your house. Start stacking on top of that.

Starting point is 01:47:57 What are you going to be making at the new gig? They're quoting me starting anywhere from 70 to like 95 at the commission-based sales. If you live there for four or five months and you just try to figure out of that. out the neighborhoods and you, you know, and you're just doing all that kind of thing. That's not the end of the world. They probably like having you around. But I just don't think it's probably a good thing for your personal life and your personal future to be living in Mommy's basement at 34 for very long.

Starting point is 01:48:23 I agree. That's why I wanted to see what you would advise. Yeah, I'll put a time on it. I'd say, you know, 120 days, 90 days. Put a date on it and say, I'm out by that date. I'm paying off the car today. I'm going to move like George said. enough over to a money market account that is three to six months of expenses of what it takes to

Starting point is 01:48:41 operate if you had rent and have that as your emergency fund. Then you've got the balance for a down payment and just add to that down payment during that 120 days with this great income and no payments in the world. And don't increase your lifestyle because you get comfortable because you don't have housing expenses. That's what most people do when they move back in with mom and dad is they go, well, I'll save a lot of money by doing that. And then I ask, well, how much have you saved this year?

Starting point is 01:49:01 They go, uh, $2,000. I go, well, yeah, that plan sucked. So actually put this amazing income to work by setting it aside for that down payment. Yeah, I'd stack another 10 or 20 grand in there right quick during this 120 days on top of what you've got after the car is paid off and after the emergency fund. And then look for, you know, get you a nice little condo of some kind and get started back out in the real estate world and get yourself a place. And it could be near mom and dad. You still see them a lot. And all that'd be great.

Starting point is 01:49:28 But I would set up a separate life in 90 to 120 days if I were in your shoes. And that's how we answer questions. If I were in your shoes, what would we do? Ryan is in Virginia Beach. Hey, Ryan. Hey, guys, how you doing? Thanks for taking my call. Sure.

Starting point is 01:49:44 What's up? Hey, so my wife and I are moving down to Florida in August, and I just finished baby step one. I got a side job made next to, and started listening to your show about a few months ago. I've got a side job made about a thousand bucks just doing my side gig, made some money. Now I'm wondering if I should start tackling my debt or if I should say, give up a little bit money for our move. Why are you guys moving? Job opportunity for her, and for me there's actually a lot of opportunity for myself down there as well.

Starting point is 01:50:18 And what's the move going to cost? And we're going to be paying probably a little bit. I haven't calculated the cost of the move yet, but we are going to be paying less than rent, and both of us are going to be making more money. Okay. Well, right now you don't have the money for the move, so we definitely need to save up for that. Sure, yeah. before we start tackling more than minimum payments on the debt.

Starting point is 01:50:37 I mean, if you pay off debt and you don't have money for the move and it goes in debt, that was a, you just swapped ends, right? Sure, yeah. So when is the move? August. Okay. And do you know a ballpark what it's going to cost? No.

Starting point is 01:50:52 That's probably going to cost three to six grand. Okay. So now we have a goal. Six grand by August. Correct. And how much debt do you have? 18,000. Okay.

Starting point is 01:51:05 On what? Credit cards. Okay. Truck is paid off. And what do you do for a living? I'm a golf professional. Okay. And so.

Starting point is 01:51:16 Not in terms of playing, more of coaching. Gotcha. And, yeah, PGA use and a little bit of that going on in Florida. A little bit more than Virginia Beach. Yeah. Probably land a gig in 30 minutes down there, yeah. Yeah. Assuming you're any good.

Starting point is 01:51:32 Good. Okay. And what does she do? She works in the hospital field. She's an office director. And what do you average as a PGA golf professional? I make my salary is about 35 a year, but I make probably 34 in terms of less compensation. Okay. So 75, 80, and you'll probably do better than that in Florida. Yeah. Okay, good. Yeah, yeah. Good, good, good. So game plan, save $1,000 a month until the move.

Starting point is 01:52:05 And then once you guys are settled in, let's start attacking this debt and knock it out fast because that credit card debt, the APR on that alone makes you want to throw up. So I want your calendar for lesson availability to change today to you're available anytime. I want you working all the time. Got it. All the time. I don't want to pull your calendar up and go, oh, he doesn't work Thursdays. No, you work all the time. You need Monday.

Starting point is 01:52:33 Yep. And go pile you up some money and get enough to cover the move, figure out and calculate what the move is going to be, anything above that cost, go ahead and throw it at this debt and just keep working your way. It'd be really cool if you just went crazy and got debt free and had the money for the move. Oh, I like that. By August. Wouldn't that be weird?

Starting point is 01:52:50 But that's both of you working all the time. And that's what I want to do. So that sounds cool. Sounds like an adventure. Do it, Ryan. Way to go, man. Eric's in Indianapolis. Hey, Eric, what's up?

Starting point is 01:53:03 in your world. Hey, Dave. Thanks for taking my call. Sure. How can we help? I had just completed baby step three and was moving on to four, five, and six. And I started hearing different personalities talk about sinking funds, like for cars or maybe home repairs.

Starting point is 01:53:22 And I'm curious if I should be basically growing a larger emergency fund, you know, on top of the emergency fund, start those sinking funds as opposed to. or before or during 4, 5, and 6? During 4, 5, and 6, you need some sinking funds that are not an emergency fund. And so home repairs are typically a minor sinking fund because you're setting aside, you're saying, okay, if we have a $3,000 event this year with a hot water heater or a heating and air item or something like that, you know, if we set aside $2.50 a month, we've got a little money for that.

Starting point is 01:53:59 that's a planning a future reasonable thing. You're going to have things like that happen. The dishwasher goes out. Washer and dryer blows up, whatever it is, right? And that kind of thing. Car replacement, I don't start that until I see the car into the future. So, in other words, I look and say, okay, two years from now, we're going to buy a car. Okay, what's the car going to cost?

Starting point is 01:54:22 24,000. All right, it's 24 months, $1,000 a month. Okay, I'm going to do that that way. But if today I don't really see buying a car in the next two years or so, I'm probably not going to do that. But I'm going to do my sinking funds in time to be able to pay cash for whatever I'm going to do. So non-negotiable, invest 15%. Money beyond that, if you want to set up a few sinking funds for things you know are coming up, absolutely do that.

Starting point is 01:54:45 But you don't need 17 of them eating up all of your take-home pay. How, you know, saving out 30 years for a roof or something. 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 01:55:58 Proverbs 31, 8, and 9 is our scripture of the day. Speak up for those who cannot speak up for themselves for the rights of all who are destitutes. Speak up and judge fairly. Defend the rights of the poor and needy. Benjamin Franklin said it takes many good deeds to build a good reputation and only one bad one bad one to lose it. David is in San Antonio. Hi, David. How are you?

Starting point is 01:56:49 I'm good. my wife and I are having a discussion. I want to retire in May of this year at 58. She wants me to work for four more years for one, a tenth of a percent on my multiplier for my retirement. I'm sorry, this is a pension? Well, it's a federal pension, and I'll get, I'm maxed out. I'm basically as high as I can go.

Starting point is 01:57:13 Okay, so what is the pension if you retire now, and what is it if you work four more years, in money? $9,100 before any coal. right now if I retire in May, it'll go up to like $9,780 a month if I wait four years. Okay, so you get $800 or more a month if you work four more years? Yes. For life. For life. Okay.

Starting point is 01:57:41 And you would be 62. By the way, statistically, if you live to be 62 and you're a male, you'll make it into your 90s. So average death age of 76 no longer applies to these kinds of discussions. So we've got a 30-year-plus time horizon on average. And then that's not even taking into account my TSP or my brokerage account, or brokerage account. Yeah, but that's not the point.

Starting point is 01:58:11 The only question is you're giving up $700 a month, $8,000 a year for 30 years. Or so. That is a lot of money. Okay. That's her, that's what she, is she doing this because she doesn't think you're going to be able to live on it, or she thinks it's mathematically smart? She thinks we won't be able to live on it. You can't live on $9,000 a month? What do you all make now?

Starting point is 01:58:38 We make $150, but everything we have is paid for. We can live on it, and then we have plenty of money to pull out if we need to. And you got the TSP. How much is in it? Almost $3.2 million. Oh, good God. Okay. And then there's our broker.

Starting point is 01:58:51 account. Okay. So what does the extra $8,000 a year do for her that she's going, hey, this is worth you work in another four years? I think she wants me to work because she has to teach for four more years to retire. So that's the real reason. You got nothing to do with the money. So she said, if I have to work, you have to work. You don't get to lay on the couch while I'm out here. I started working before. Actually, I keep telling her jokingly that I started working before you did. Yeah. All right. So you have 3.2 million in the TSP. You have $9,100 coming in. In addition to that, you currently make 150. What does she make? She makes about 72. Okay. And how much in other accounts other than the TSP? And then in our Victory Funds account, I've managed to save almost $2.8 million

Starting point is 01:59:47 in our investment accounts. If neither one of you enjoy what you're doing and you both desire retirement, you should both quit. That's what I keep telling her, because she keeps saying she wants to go on all these trips to Bali and to Africa. And I think you should load up the truck and head to Beverly. You ought to do it. Well, I saved a lot because I grew up early for.

Starting point is 02:00:14 I know. But you have $6 million. dollars if you make an average of 10% if that's invested in decent mutual funds that's 600,000 dollars a year plus you have 100,000 plus coming from the government and I bet you she's got a pension too. Yeah. And so you got a seven or an $800,000 income without touching the $6 million. That's what I keep trying to tell her.

Starting point is 02:00:39 Yeah. And so I think you ought to go to Bali in May. That's what I'm thinking. For a month. Thank you, Mr. Ramsey. For a month. Well, thank you. I don't think you guys will be able to spend this money fast enough to even run out.

Starting point is 02:00:56 If you sit down, you need to sit down with your financial advisor and unpack all this and show that if this is all invested, what the income is going to be throwing off without even touching the nest egg, just living off of the income only where you would be. And it's going to blow it. I think I will make an employment with our wealth advisor. Yeah. And both of you sit down. and let him or her say, here's the math. Not emotion, not I grew up poor, so I think one way. But here's what the math says.

Starting point is 02:01:27 The math says you can spend $500,000 a year, and your investments will continue to grow. I think that's another concern is she wants to leave something for our children. I think you probably are going to. Unless y'all start doing cocaine or something, I think you're going to have plenty of money. Okay. Are they grown and successful on their own without you guys?

Starting point is 02:01:50 Oh, yes. We've gotten them out of college. They all have careers on their own. Our daughter is a nurse anesthetist. They're fine. She's making $400. Oh, my gosh. You guys are killing it.

Starting point is 02:02:01 I'm so proud of y'all. She makes like $2.10, but she's doing good. Yeah, way to go, David. This is awesome. I think both you need to loosen up and go enjoy some of this money. Yeah, it's time. You lived like no one else. Now it's time to live and give like no one else.

Starting point is 02:02:13 There's no reason for you all to work unless you are in. enjoying it, and it's what you want to do with your life. That's why I work. But I haven't worked in years because I needed money, years, decades. So I work because I like doing this. And then sometimes I like being gone and I'm gone. And so you're good at that too. I'm good at that too. I've got them both down. Got it dialed in, baby. I love it. That's a good lesson. Man, way to go, David. Tyler's in Columbus, Ohio. Hi, Tyler, what's up? Hey, Dave. I'm calling because I'm just trying to make the right decision here. I got three properties. One is my primary residence. That's about 350. I got another one that's a rental producing about 500 bucks a month in cash flow. And then I have another one that's an Airbnb. That one's breaking even. And I'm trying to decide, trying to work towards a baby. step number two. And we're doing that with my wife's student loans. And I'm just trying to

Starting point is 02:03:22 figure out if I should sell these houses, make somewhere in the realm of like a hundred plus grand. The two houses that you don't live in? Everything. Yes. And how much do you have in debt that's not mortgage debt? I have about 70 grand in my life student loans and 20 grand on a truck. Okay. So you'd sell two rentals and Airbnb that's breaking even, another one that's making 500, and be 100% debt-free and have your household income and be working your system to build it to pay cash for your next rental properties somewhere out in the future. Would that be a plan? That might be a good plan. It seems a scary venture to sell an app set or something. Well, let me just tell you, owning an Airbnb that breaks even as hard as a big a pain in the butt as those things. are to manage. Breaking even on that does not sound appealing. Not even remotely. That's a lot of headache and stress on top of 100 grand in debt. So I would definitely sell these, clear the debt,

Starting point is 02:04:25 get an emergency fund, and then just move slower next time. Yeah, and just pay cash as you go. And let's get your house paid off. And I'm going to guess and say you're in your 20s. 31. I've done a lot or been in the military for the past 10 years, finally got out, moved on to a bigger, better career, and it was a great investment at the time, got it under COVID time, and right before COVID, and they've only appreciated. So you can make some money on it and clear up everything, and now you've got no payment in the world and just stack cash and start talking about how we can get the mortgage paid off and pay cash. for some rentals in the future. That's what I did, Tyler, and I pay cash for everything, and it has been a wonderful life building a portfolio paid for real estate. And I can't recommend it enough.

Starting point is 02:05:16 And it sounds like you're good at it and you like it, except for that Airbnb part. Now you don't have to clean up after the next Bachelor party. That sounds nice, too. Oh, that just gross me out. Sorry, Dave. I'm just saying, that's who's booking these Airbnbs. I don't even want to know about it. I don't want nothing.

Starting point is 02:05:32 Wow. That puts us our of the Ramsey show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace Christ Jesus.

The Ramsey Show - Your Money Isn’t the Problem—Your Plan Is

There aren't comments yet for this episode. Click on any sentence in the transcript to leave a comment.