Don’t Give All Your Money to Banks and Wonder Why You’re Broke

Speaker 1 Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships.

Speaker 1 Rachel Cruz, number one best-selling author, host of the Rachel Cruz Show, and Smart Money Happy, our co-host. My daughter is my co-host today.
Open phones at 888-825-5225. Cody is in Boston.

Speaker 1 Hey, Cody, what's up?

Speaker 2 Hi, Mr. Ramsey and Mrs.
Cruz. Thanks for having me on.

Speaker 1 Sure. I hope the cruise went well.
It did. It was fabulous.
It was good. We missed you.

Speaker 2 Yeah, hopefully next year.

Speaker 2 So I have a question. I'm planning on proposing to my girlfriend here coming up soon.

Speaker 2 But back in November, she told me that her father had transferred all of her parents' investments to her so that her sister could get a larger financial aid package.

Speaker 2 I basically said to not tell me anything more because...

Speaker 2 I think this might be fraud.

Speaker 2 She said her dad talked to someone and he said it was all fine. And then a month ago I went to ask for her hand to her parents.

Speaker 2 They said yes, but her dad kind of led me into saying that I would be willing to sign a prenup and he doesn't know that I know about the asset transfer.

Speaker 2 Then last weekend I brought up the situation saying that I wasn't comfortable combining finances and signing marriage papers with these assets and putting my name under them.

Speaker 2 Again, she tells me their dad said it's above board, but I felt like it was maybe fraud.

Speaker 2 I told her that if she went to a lawyer and basically had him call me and said that it was a all above board I'd be fine with it

Speaker 2 but I've just kind of wanted to get your opinion on this is it fraud or am I just kind of being paranoid about this

Speaker 1 I'm not sure if I can make the judgment on whether it's criminal fraud or not.

Speaker 1 It's definitely morally wrong.

Speaker 2 Yeah.

Speaker 1 Okay. That's what I think.
The Pell Grants that they qualify for by posing to be poor people are for poor people. Right.
And these people are not poor people.

Speaker 1 Correct. So I don't know if it's above board, quote unquote, or not, but it's morally wrong.
It's like saying,

Speaker 1 I'm going to not act like I don't have a job. Well, now that would be fraud.
If I have a job and I collect welfare checks saying I don't have a job, that'd be fraud. But it'd be like,

Speaker 1 I'm not not going to, I have the ability to work and make a lot of money, but I refuse to because that way I qualify for free government, whatever, right? Same kind of thing.

Speaker 1 And it's just, it's morally wrong at a minimum. It is approaching the criminal side.
And the bigger problem,

Speaker 1 let's change the word. It's ethically horrendous.

Speaker 1 Correct. It's ethically ridiculously bad.
This guy has no ethics.

Speaker 1 Okay. He's willing to lie

Speaker 1 to the government to get poor people's

Speaker 1 student assistance.

Speaker 1 Pell Grants are income and asset-based.

Speaker 1 And that's the only thing that quality, that's the only thing in a possible financial aid package that would come up is the Pell Grant.

Speaker 1 Okay, nothing else, unless the local, unless the college had an income-based scholarship program or something, but most of them don't.

Speaker 1 So,

Speaker 1 but yeah, it's ethically wrong. That's what you're saying.
And

Speaker 1 that's why you've got slime on you, and you want to take a shower after you met with him.

Speaker 1 Yes. Yeah.

Speaker 1 So, no,

Speaker 1 full stop.

Speaker 2 Yeah, have a transfer back.

Speaker 1 Full stop. Yeah.

Speaker 1 I'm not going to participate in this. We are going to have a standalone life that does not involve something that I feel like is unethical.

Speaker 2 Yeah. Yeah.
It's it's really been weighing on me. So I really appreciate that that way.

Speaker 1 Pre-nup doesn't cover it.

Speaker 1 You can't pre-nup away a lack of ethics.

Speaker 2 Yeah.

Speaker 3 And what's frustrating is she.

Speaker 3 Yeah. And what's frustrating, Cody, is she's,

Speaker 3 you know, in a sense, possibly the one that's going to be punished in the middle of all of this. Because, Cody, you're going to say, no, I can't.
Like, I'm not signing a prenup. I'm not doing this.

Speaker 3 I can't combine finances right now. Like, this is a sticky situation.
I don't feel comfortable attaching my name to all of this. And so she either has to choose to be between her dad and her husband.

Speaker 3 I mean, yeah, to get grown up and to say, okay, I have to now think beyond what my dad says is okay and actually start, you know, having this like problem solving on my own.

Speaker 1 With my future husband.

Speaker 3 With my future husband and deciding that, which is going to be a, you know, a break. That's going to be a hard thing for her to do.
But if she does it, then that

Speaker 1 kudos to her, right?

Speaker 3 Of like, okay, this would be a.

Speaker 1 You can be gentle and you can be kind. You don't have to accuse him of being a liar like i am or being unethical you can just say you can put it all back on you and just say look

Speaker 1 i don't feel right about this and i'm not and i can't go forward participating i'm so sorry don't don't don't call her dad names doesn't do any good it's not going to change him okay he's never going to he's never going to say oh wow no my daughter's boyfriend told me I was wrong, so now I think I'm wrong.

Speaker 1 The chances of that are zero. Okay.
Yeah, exactly. So, I mean, you know, that's it.

Speaker 3 So, really, it's your relationship with her that's on the line. I mean,

Speaker 1 if you guys have him, you just say, Look, you know, you know, here,

Speaker 1 I'm making this up real time. I'm spitballing here, okay? But you could just say something like,

Speaker 1 you know,

Speaker 1 I got some counsel because I was confused about this and it bothered me. Okay.

Speaker 1 And so

Speaker 1 take all of the weight of the problem on you

Speaker 1 and just say, I just can't go forward with this.

Speaker 1 And here's what I would couch it in.

Speaker 1 All of my understanding of your daughter and I setting up a household is that we are to leave and cleave.

Speaker 1 We're to leave our parent, our mother and father and establish our own standalone household. And this does not allow us to do that.

Speaker 1 Yes, sir. And I have to be able to do that to have a high-quality relationship with your daughter.
And so you guys have got to take these assets back.

Speaker 1 Well, that would probably have to be a lot of prenup doesn't do it. And

Speaker 1 I can't go forward if we can't have a standalone household. The intertwining of these two households

Speaker 1 is not helpful.

Speaker 3 Well, and I think even before that conversation, though,

Speaker 3 he and her need to be on the same page to even go forward with it. Because if she's like, no, no, this is what we're going to do.
My dad says,

Speaker 3 you know, he decided to prenup. Sorry, this is it.
And she doesn't budge.

Speaker 1 Well, and if she says,

Speaker 1 you're making a call here. But, dude,

Speaker 1 let's say she says that and you go, okay, I'm going to cave. I'll sign everything.
We're going to get married. What's the probability you're married 10 years later? Almost zero.

Speaker 1 Yeah.

Speaker 1 So, I mean,

Speaker 2 from a single argument that then brings up everything.

Speaker 1 No, it's not a single argument. This is an argument over integrity.

Speaker 1 It's okay to lie to get a program that I don't qualify for. What else is she going to be lying about because she thinks it's okay to lie? Because her dad taught her this.
Right.

Speaker 1 So, I mean, that's not cool.

Speaker 3 Yeah, she needs to realize what's going on.

Speaker 1 And if she doesn't realize it, she's got some hard conversations. And you can't just cave because that condones the whole stupid thing and makes it look like it's okay.

Speaker 1 And then it extrapolates into other stuff. And 10 years later, you've got an explosion on your hands.

Speaker 3 Yeah, it's more of a

Speaker 3 revelation of character than anything else.

Speaker 1 And so painful that's hard yeah i mean if your parents rob banks for a living and you think it's okay

Speaker 1 maybe we shouldn't get married you know it's kind of where it's about where it lands it'sn't although that is a criminal act this is not a criminal act i get it i'm being melodramatic but still that's the deal this is the ramsey show

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Speaker 1 At the break, I was talking to some people in the lobby from Phoenix. Dr.
John Deloney and I will be in Phoenix on May the 5th doing the money and relationships tour.

Speaker 1 We're going to be talking about raising great kids, handling money fights the right way, making real friends in the 21st century. We're going to six cities, and it's a weird format.

Speaker 1 We've never done this before. We're going to put up about 20 different subjects

Speaker 1 in an app when you're sitting in the audience before the show starts. You're going to vote on some Dave's subjects, some John's subjects, and some Dave and John's subjects.

Speaker 1 And that's going to form the format for the night.

Speaker 1 You're going to build the talks. You're going to build the order of the talk, or not the order, but you're going to select what you want us to talk about.
It's pretty cool. So pretty interactive.

Speaker 1 That's a cool thing. Louisville, Kentucky is just a couple weeks away, April 21st.
Durham, North Carolina, that's on Monday. On Wednesday is April 23rd is Durham.
Friday is Atlanta, April 25th.

Speaker 1 A couple weeks after that, we'll be in Phoenix on May 5. That's a Monday, Fort Worth on Wednesday, May 7th, and Kansas City on May 9th.
Ramseysolutions.com slash tour.

Speaker 1 Or if you're on YouTube or podcast, click the link in the show notes and you'll get your tickets. You don't want to miss this, guys.
It's going to be a lot of fun. John and I will have.

Speaker 1 have a lot of fun. The only thing more fun than John and me is Rachel and John.
But

Speaker 1 they do. Money and marriage.
Yeah, money money and marriage stuff's absolutely fun and hilarious and all that stuff. John, speaking of John, is in San Francisco.
Hi, John. How are you?

Speaker 2 Hey, I'm doing well. Thanks so much for taking my call.

Speaker 1 Sure. What's up?

Speaker 2 Yeah, and look, I've just been listening for the last few weeks.

Speaker 2 Just a recent listener here, and I really appreciate all the advice you've been giving.

Speaker 2 I'm trying to balance a couple things.

Speaker 2 So I have sort of two questions. One is related to a really expensive mortgage I have.

Speaker 2 I bought a house a few years ago, and I discovered soon enough that it was a bit of a lemon.

Speaker 2 Since then, I've been sort of spending all of my time repairing this house and trying to get it up to market value in hopes to, oh, I don't know, rent it or sell it or do something with it that could be profitable.

Speaker 2 The second thing is that, you know, a couple years ago, I also met a lovely lady, and she's just

Speaker 2 some about last year moved in with me and it's been a bit of a struggle trying to have enough time for the relationship manage the finances

Speaker 2 as I sort of continue to progress with this very expensive mortgage

Speaker 1 how much is your mortgage payment

Speaker 2 It's $5,300 a month.

Speaker 1 And what is your take-home picture?

Speaker 2 My take-home is about $7,700

Speaker 1 a month.

Speaker 1 Your mortgage payment is $5,000 and your take-home is $7,000. I don't know how you eat.
That's about right. How do you eat?

Speaker 2 It's been tricky.

Speaker 1 Are you running up credit card debt?

Speaker 2 I don't have any consumer debt.

Speaker 1 Is there money somewhere else coming in or going out? How in the world? That's an impossible budget.

Speaker 2 It's pretty tight yeah um i've had to do right a lot of the house repairs myself i keep things pretty you're cutting in and out talk spot talk directly into your phone what'd you say

Speaker 1 oh uh i have to keep a pretty tight budget that's right no you don't have a budget this is impossible i've done budgets for 35 years your mortgage is 75 percent of your take-home pay i don't i don't this is i mean that's not sustainable i i'm i'm shocked you've done that for more than 12 months and not caved in.

Speaker 1 I agree with you. You need to sell this house yesterday.

Speaker 3 Do you have a lot of savings, John?

Speaker 1 Are you feeding?

Speaker 3 Are you pulling from savings at all?

Speaker 2 Yeah, yeah. So I have about 30 in emergency and about 80 in stocks.

Speaker 1 And how much are you burning through each month of your savings?

Speaker 2 I would say, you know, maybe

Speaker 2 $1,000, maybe $1,500. Yeah, okay.

Speaker 1 Now we got it where you can eat. Now I understand how.
Because, I mean, what you were telling me just wasn't.

Speaker 1 So basically, you're burning up your savings because you bought a house you can't afford. Sell it.

Speaker 1 Yep. Yep.

Speaker 2 Yeah.

Speaker 2 Okay. Yeah.
So that's really it is

Speaker 2 should I jump ship? Should I

Speaker 1 try to bring up the value of it? It's killing you.

Speaker 1 It's eating you alive.

Speaker 1 There's nothing in this home ownership package that is fun. Everything you've described to me is

Speaker 1 extremes, anxiety. You knew this, right?

Speaker 2 It's in a high-value neighborhood.

Speaker 1 It's

Speaker 1 our rental market here.

Speaker 2 Heinz and Mann, San Francisco, Bay.

Speaker 1 Higher than your infantry.

Speaker 2 Not to

Speaker 2 see the stars. And, you know, the grass is always greener on the other side, so to speak.

Speaker 1 But the easier to get out of the way. The grass is always greener over the septic tank.

Speaker 2 Yeah, exactly. Well,

Speaker 3 sell it, John.

Speaker 1 I think it's going to relieve a lot of stress.

Speaker 1 John.

Speaker 3 I think your relationship will thrive. Your finances will thrive.
A lot will thrive when you're not stressed.

Speaker 3 Stressed to the max about this.

Speaker 1 I mean, that's hard. Here's the thing.

Speaker 1 Not only is the arithmetic...

Speaker 1 absolutely ridiculous in this because you're burning through this. You're saying arithmetic.

Speaker 1 You're saying the mathematics of this. You're saying it's, you know, you're burning through your savings.
So that's principle number one.

Speaker 1 But what I want you to breathe in also is what this is costing you,

Speaker 1 the stress level you're carrying around all the time. When you get rid of this house, you're going to feel like you set down 300 pounds that was on your back.

Speaker 1 And you've kind of gotten accustomed to carrying around 300 pounds. But when you set it down, you're going to go, I can breathe again.
I didn't realize you could breathe like this.

Speaker 1 My lungs haven't worked like this since I bought this house.

Speaker 1 I mean, you're physically going to feel the release when you get rid of this burden.

Speaker 1 But you've intellectually and willed your way through this. You're like a bulldog that got a hold of something and won't let go.

Speaker 1 But once you let go, you're like, oh, I can let go and I'm free and I can breathe again. No, dude, this is not.
There's nothing in this equation that's worth it. It's affecting your health long term.

Speaker 1 It's going to destroy your finances. It's affecting your emotional well-being.
And now you said it's affecting your relationships. So this thing, this house owns you.

Speaker 1 And you're going to be singing like, thank God I'm free at last.

Speaker 1 When you get, and you don't even know, you don't, until you set yourself free, you don't even know how much, how awesome it's going to be. This is a horrible thing for you.
It's not good for John.

Speaker 1 I want John to have a home. I just don't want the home to have John.
And this one owns you, my son. It owns you.

Speaker 1 Let it go.

Speaker 1 Are you going to sing little Elsa for us? Little Frozen.

Speaker 1 A little Let It Go.

Speaker 1 Who's Elsa?

Speaker 3 It's from Frozen.

Speaker 1 Oh, okay.

Speaker 1 The granddaughters will teach you that soon enough.

Speaker 1 Soon enough. Let it go, John.
We need to cue the granddaughters to sing Let It Go. That's right.
That's right.

Speaker 3 You know, what's so, you know, it's so common for

Speaker 1 us

Speaker 3 as Americans, though, to be so wrapped up in our stuff. And I would put homes in this,

Speaker 3 cars in this, credit card debt, all of it, that

Speaker 3 for the sake of a thing, right? And a house in and of itself, it's a thing, that we deteriorate so much of our peace and our mental margin and our stress. And like, I mean, so much of it for a thing.

Speaker 1 And it's not worth it. Even a house.

Speaker 3 And again, home ownership is something that like we are all about and we want you to get it and have that be part of your long-term financial plan.

Speaker 3 But to the point that it's completely robbing you of a life and it's eating away at your relationships and your peace, all of it, It's just, it's just a thing. It's not worth it.
It's not worth it.

Speaker 3 So as Dave and Elsa would say, well, and let it go.

Speaker 1 The minimalists, yeah. We can just play their tune right now.
They would love this. Yeah, yeah, yeah.

Speaker 1 Exactly. Yeah.
So, yes, we do want you to own a home. You said you're new to this stuff, but it's much, much less home than you own right now.

Speaker 3 And which is hard too, John, because you're in one of the most expensive real estate areas.

Speaker 1 Yeah, San Francisco, yeah.

Speaker 3 Yeah, in the Bay Area. I mean, you're in one of the highest priced.

Speaker 1 Tokyo, New York, and Silicon Valley. I mean,

Speaker 1 London. These are some of the most expensive pieces of real estate in the world.
And that's where you're choosing to live making $75,000 a year.

Speaker 3 Well, that's after taxes.

Speaker 1 Yeah.

Speaker 3 So California is probably making $140,000, and they're taking half.

Speaker 1 With their taxes, yeah.

Speaker 3 That's true. Sorry, John.

Speaker 1 Sell it. Please.
No, I'm not sorry. I'm happy for you.
I am. I'm going to set you free.
No, what you thought was a dream is a nightmare. I'm going to set you free from your nightmare.

Speaker 1 This is the Ramsey Show.

Speaker 1 Statistics show that half of Americans don't have enough life insurance or they don't have any at all. I don't understand this, John.
Why don't people want to take care of their family?

Speaker 1 They think they're not going to die or something. Well, I used to be one of those guys.
I didn't even think about it.

Speaker 1 And one of my buddies said, hey, the only reason to not have life insurance is if you hate your wife and kids. And I immediately went and got term life insurance.
That's a gut punch.

Speaker 1 For decades, Dave, I've sat across people who've lost a spouse. They've lost somebody important to them.
Me too. They don't know what to do next.
You're going to have a crisis here.

Speaker 1 You know, you got two options while you're sitting and talking to a young widow.

Speaker 1 She's concerned about how she's going to invest all this money properly and not mess this up, or she's concerned how she's going to eat tomorrow. That's exactly.
These are the two options.

Speaker 1 It's saying I love you to your family. Term life insurance.
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Speaker 1 The Ramsey Show question of the day is brought to you by YReFi.

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Speaker 3 Today's question comes from Craig in Delaware. My wife and I are looking to buy a new home.
We own our current home outright and are looking to continue that debt-free lifestyle.

Speaker 3 We've been paying ourselves a mortgage as a saving technique and have saved a lot of money over the years.

Speaker 3 Our friends have been telling us not to put so much down, liquid cash, down for a new home, but rather take out a mortgage and invest a big chunk of that money instead.

Speaker 3 We were thinking that living mortgage-free will give us freedom that we enjoy and allow us to invest with the money that we make going forward. Are we making a mistake by doing this?

Speaker 3 Craig, no, you are not making a mistake.

Speaker 1 You are correct.

Speaker 3 And

Speaker 3 this has always been an argument of paying off the mortgage or not, because if you do have a great rate, which if you buy a new home, you won't have, you know, you won't have a 2% or 3% rate like a lot of people do right now.

Speaker 3 But they say, you know, we'll invest that. And if if you make 10% in the market, you'll make, you know, an 8%, 7% spread and you'll make more money in the market than having a paid off home.

Speaker 3 And that's always kind of been the math that

Speaker 3 we get

Speaker 3 cursed by, people would say.

Speaker 1 But the truth is... They leave out risk.

Speaker 3 Yeah, the risk, the peace of mind.

Speaker 3 And then also, if you turn around and go back and invest the mortgage payment, like what he's doing, you know, and you don't have a paid off home over time, like you're, you're still going to build wealth.

Speaker 3 So

Speaker 1 it's the piece that's not in the Excel sheets of what let's go to the let's go to the proof of what really happens okay number one

Speaker 1 if your broke friends are making fun of your financial plan you're on track

Speaker 1 if your fat friends are making fun of your workout plan you're on track okay

Speaker 1 think about it these are broke people throwing around financial advice it's hilarious the second thing is this Ramsey did our Ramsey research team did the largest study of millionaires ever done on the continent.

Speaker 1 We found a couple of things that are key to this. Number one, we found that 89% of America's millionaires are not millionaires because of inherited money.
Nine out of 10.

Speaker 1 Okay. Now, once we establish that, then we have to establish the question, if you're doing good critical thought, okay, what made them millionaires? if it wasn't inherited money.

Speaker 1 Well, it was their habits and their decisions around things like this discussion. So then we go to those millionaires and we say, okay,

Speaker 1 how many of you became a millionaire by borrowing all you could on your house

Speaker 1 so that you could invest your cash?

Speaker 1 Out of 10,167 millionaires that we asked that question, did you become a millionaire using your broke friend's plan? In other words,

Speaker 1 how many of them said they used your broke friend's plan? And how many of them said they used your plan?

Speaker 1 The number that used your broke friend's plan of millionaires that became millionaires on their own that borrowed all they could on their house to invest the money because the spread is there, the number out of 10,167 that did that is precisely zero.

Speaker 1 None of them.

Speaker 1 So, what does that tell us? That your broke friends have a theory that is unproven by data.

Speaker 1 The data of actual millionaires, people that actually build wealth, not have a theory, not drink too many beers and have a discussion about this, but instead that actually freaking do it, the data, the facts are they worked your plan.

Speaker 1 And they got out of debt and stayed out of debt. And they used the increased cash flow.
to build with no debt payments going to the stupid bank to increase and create wealth.

Speaker 1 Your most powerful wealth-building tool is your income.

Speaker 1 Don't give it to freaking mortgage companies, Lexus Motor Credit, Toyota Motor Credit, MasterCard, student loans, and then wonder why you're broke. That's what it comes down to.

Speaker 1 So, no, you are exactly right, Craig.

Speaker 1 Do your plan and just nod and wink and smile at your broke silly friends.

Speaker 1 You're probably not going to fix them, but don't take their advice for sure under any circumstances because the data, the facts are that it's wrong.

Speaker 1 And see, you know, Rachel, when we first started doing this stuff, I started doing this before you were born. I mean, it feels like you were baby when I started on the microphone.

Speaker 1 And I've been asked that question for 30 years.

Speaker 1 And based on, I would say, well, the borrower is slave to the lender and biblically speaking, you know, and the stress and, you know, the freedom.

Speaker 1 And, but now I'm starting to understand as I get further into this, and I actually have millions of millionaires that have been created by the baby steps out there.

Speaker 1 And the ones we studied were not just ones we created.

Speaker 1 We didn't create them, but not the one, they weren't Dave millionaires. They weren't Ramsey millionaires.

Speaker 1 But some of them were Baby Steps millionaires, some of them weren't. But

Speaker 1 my theory then was that

Speaker 1 what would happen is that

Speaker 1 you would have less

Speaker 1 physical stress,

Speaker 1 anxiety-based disease called blood pressure and heart attacks, right?

Speaker 1 Goes away when you're debt. I mean, it largely goes away.

Speaker 1 And Deloney pulled this up the other day on some of the research that they've done in the mental health world that you can track the debt increase, the percentage of our incomes going to debt, and track it like a hockey stick on a graph over the years.

Speaker 1 And with it, you can follow the increase in anxiety medications. The increase in suicides.

Speaker 3 Well, technology is a good thing.

Speaker 1 The increase in other stuff. And phones.

Speaker 1 You can find.

Speaker 1 As soon as the iPhone hit, it spikes again. Yeah.

Speaker 3 Oh, yeah. Yeah.

Speaker 1 That's all under the books.

Speaker 1 The point was there's a real correlation between debt and your physical health. Yeah.

Speaker 1 That's the bottom line. And so, and no one considers that.
No one talks about that. Oh, by the way, what's the number one cause of divorce in North America? Money fights and money problems.

Speaker 1 Guess who has money fights that doesn't have a mortgage?

Speaker 1 Not many.

Speaker 1 Not many. Money fights usually come from from like we're broke and we can't afford to buy something.
When you have a mortgage, you can just go get the stupid gun.

Speaker 1 You can go get the stupid purse and you don't have to fight about it. Matter of fact, you can get one of each.
You know, you don't have to fight about it. Right.

Speaker 1 And so

Speaker 1 it's, it's the, you know, relationally, physically.

Speaker 3 Well, and I would say, yes, that. And then just the autonomy of owning your life.
Like so much of the financial space, someone else has a say in your life.

Speaker 3 I mean, and that's everything from, you know, if you have a boss, but especially if your actual income that is yours now has 15 other things that it has to go to because of debt, like the autonomy of just being able to make your own decisions.

Speaker 1 All the money comes in, all the money goes out, only the names are changed to protect the innocent.

Speaker 3 Well, and that's the stuff that, yeah, is not an Excel sheet, right? Like that, that level of bandwidth emotionally as well.

Speaker 1 I mean, it's huge. It is.
Yeah, Deloney would call it locus of control. Bloom was on here with his new book about wealth yesterday, and he called it agency.
Yes. You lose agency.
Yes.

Speaker 1 You lose the power to make your own decisions.

Speaker 1 I am trapped. I keep it.
Oh, here's the other one. Your career, when you don't have that,

Speaker 1 you make more money. You know why? Because you might put up a crap.

Speaker 1 You don't have to live in a toxic situation to make your bills. But you look up and there's an ethics problem or you are not aligned with leadership because leadership's stupid.

Speaker 1 You can go work somewhere else and people make, you know, when you are not trapped in a job by your debt, you can make moves in your career and people that don't have debt make more money.

Speaker 1 Oh, and guess what? People that don't have debt are more generous. And guess who? Guess who ends up with more money? Generous people because they're highly attractive people.

Speaker 1 As a, you know, givers are more attractive than takers. Can we agree? Yeah.
If you add value to people's lives,

Speaker 1 you just carry yourself different.

Speaker 1 The whole thing, it's a whole picture. It's not just I can invest the money and make a little more on the mutual fund.
Oh my God, Kermit the Frog. What is wrong with you? This is the Ramsey Show.

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Speaker 1 We're going to try something new that we've not done,

Speaker 1 well, anytime in the recent memory.

Speaker 1 We may never have done it before. It's possible.
So you guys call.

Speaker 3 I don't know if you've done it.

Speaker 1 Well, it's possible I've done a lot of things.

Speaker 3 No, we, personalities have.

Speaker 1 You did it. This is your first.
Yes. Oh, I've not done it.

Speaker 3 Welcome to the segment, Dave.

Speaker 1 Oh, okay. So this is something that's happened while I wasn't working.
Okay.

Speaker 1 So anyway, what's funny? People call and leave voicemails, and so let's play one of them.

Speaker 4 My name is Jared. I have been looking into the baby stuff, and I know one of the things is to sell everything quickly as you can, get yourself out of debt, which I do totally understand.

Speaker 4 I have about $16,000 saved up, and I also do have debt, and I was wondering, like, why does it feel better to have that safety net of the $16,000 than pay off the amount of debt, even though I totally understand numbers-wise, that the debt is costing me more than the savings is keeping me in savings.

Speaker 4 Thank you. Appreciate your time.

Speaker 1 Yeah, that's a good question. It does feel better to have the $16,000

Speaker 1 and have the debt because you have the illusion of security. You have the illusion that you're safe.

Speaker 1 And it's an illusion because over a 20-year period of time, you're not safe because you're broke and in debt.

Speaker 1 But you've got this sense that in the moment, if something happened, because it's true, if you had a $5,000 car engine blow up and you've only got $1,000, you're not safe.

Speaker 1 But what you also don't realize is that because you're carrying all this debt, you're not safe. That's right.

Speaker 1 But your emotions, because you're a saver, Jared, tell you that as a saver, I'm safer if I have savings than,

Speaker 1 but if you were looking at it the other way and said, oh, the debt scares me more than the illusion of the savings, then you're going to pay it off. Until then, you're going to sit there in that.

Speaker 1 So, yeah, we always teach to just pay down to $1,000 and start your baby steps. Baby step one's $1,000.

Speaker 1 Anything above that that's not retirement goes at your debts in baby step two, listing them smallest to largest and attacking them in that order.

Speaker 3 Yeah. And what's interesting is usually with, especially savers.
So I get this, Jared, on this end, that, again, you don't feel the risk of the debt.

Speaker 3 But if something were to happen, there's other people coming to knock on your door and that doesn't feel safe either, right?

Speaker 3 So like if you're not able to pay these things, it's scarier to have your, you know, your financial peace, if you will, in other people's hands and in other people's situations.

Speaker 3 And so being free from all of that by being out of debt and then building back the emergency fund actually gives you a level of deeper security. But I don't think people think about that as much.

Speaker 1 You know, the difference is you haven't experienced the risk. So like with me, it's a no-brainer because I have been foreclosed on.
I have been sued.

Speaker 1 I have had people take money out of my account that sued me and won before we went broke, before we filed bankruptcy.

Speaker 1 In the process of two and a half years of fighting that, we were foreclosed on multiple times.

Speaker 1 We were scared several times that they were going to repo our car that night, walk out in the driveway, and it's anybody's guess if it's going to be there.

Speaker 1 Then you start to go, oh, wait a minute. I don't feel safe

Speaker 1 forever. for the rest of my life.
I don't feel safe with that.

Speaker 1 And so it's an that's what I mean by it's an illusion.

Speaker 1 I've got that benefit of that experience because whatever sense I had that that was okay was completely stripped away by the extreme experience we went through. Okay, play the next one, James.

Speaker 5 We had a question about tithing.

Speaker 5 Is tithing specifically supposed to be used for the church?

Speaker 5 Or if we are in a church that's currently declining, is it okay for our tithe to be donated to Christian organizations such as a pro-life organization or something of that sort?

Speaker 5 I just wanted to kind of find out what you believe is a biblically sound answer to that question.

Speaker 2 Thank you.

Speaker 1 Yeah, good question. Well,

Speaker 1 I studied the Bible through the lens of an evangelical Christian, which means someone who believes the Bible

Speaker 1 on instructional things like this, literally. Evangelicals for the last 500 years have taught and backed it up biblically that the tithe goes to the local church, a tenth of your income.

Speaker 1 Tithe, the word in Hebrew means tenth.

Speaker 1 Doesn't mean 5%. If you want to give 5%, that's fine.
The tithe is not a salvation issue.

Speaker 1 God doesn't love tithers more than non-tithers.

Speaker 1 Tithers don't automatically get into heaven.

Speaker 1 That's not what this is. It's It's a baseline instruction from your heavenly Father that teaches us to give to our faith community 10% of our income first.

Speaker 1 And the model is the Old Testament storehouse. And the Old Testament storehouse took care of the widows and the orphans and the Levites.
The Levites were the pastors.

Speaker 1 And so the preachers get paid well, not overly paid. The minister of music, the...
children's minister gets paid well but not overly paid they never get overly paid and

Speaker 1 you know the bills get paid and we keep the lights on in the house of worship with the first tenth of our income. Anything other than that tenth is an offering and it can go anywhere.

Speaker 1 So it's tithes and offerings. Then I would just say that if you're uncomfortable giving your money to the church because it's in decline, I'm uncomfortable trusting the spiritual welfare of my family.

Speaker 1 More. I'm more worried about that than I am the money.

Speaker 3 Yeah, but if it's just a sweet church that there's not a lot of givers and they're like, well, we're not going to be able to keep it open.

Speaker 3 But they're great Bible teachers. Do you know what I mean? Like there is, I don't know.
There's a part of me that I'm like, what if it is a great church? And they're just...

Speaker 1 It's not in decline.

Speaker 3 But what if all the people...

Speaker 3 And we don't know where Seth lives, right?

Speaker 1 I do. And we are

Speaker 1 in the church.

Speaker 3 And they, so all that to say.

Speaker 1 We've worked with 50,000 churches in America. We love churches.
We love pastors. That's not the question.
It could be. But the question is usually if if there's a decline.

Speaker 1 If you say your church is too much indeclined to give to, I worry that it's too much in decline to trust your spiritual health of your family to.

Speaker 1 That would bother me. That's the answer.
I mean,

Speaker 1 if I can't trust them with my money, I don't need to trust them with my family.

Speaker 3 No, so it's not that they're doing anything immoral.

Speaker 1 I wasn't talking about immoral.

Speaker 3 But you say I can't trust them with my money. I'm just saying that

Speaker 1 they're not

Speaker 1 doing well.

Speaker 3 Because maybe they don't have a lot of givers.

Speaker 1 I don't know.

Speaker 3 I always hate making that statement. Wait a minute.

Speaker 1 Listen, churches.

Speaker 1 Here's the thing. Churches that do well don't have a shortage of givers.

Speaker 3 Ooh, that's a strong statement.

Speaker 1 No, they don't. It's an accurate statement.
I don't know. I'm not.
Okay. We'll argue about it.
That's fine. I don't know.

Speaker 1 You'll be wrong.

Speaker 3 And then I'll find the stat and bring it on next time on there.

Speaker 1 This is the fatherly story. Good luck with that.
Good luck with that. Rick is in New Orleans.
Hey, Rick. Welcome to the Ramsey Show.

Speaker 2 Hey, how's it going?

Speaker 1 Better than I deserve. What's up?

Speaker 2 Yeah, I just had a question on how I should start preparing to possibly take over a business from my boss.

Speaker 1 He's going to give it to you or sell it to you?

Speaker 2 Sell it.

Speaker 1 Okay.

Speaker 1 So how is that going to happen?

Speaker 2 Currently, with current discussions with them, we're looking at possible owner finance.

Speaker 1 Okay.

Speaker 1 Make it a percentage of net profit.

Speaker 1 A large percentage of net profit until he's paid out in about two or three years. Don't take a set payment for 20 years, that'll get you in trouble.
That's thing one.

Speaker 1 Thing two is

Speaker 1 then if there's no profit, he doesn't get money until there's profit again and you don't go out of business and he can't sue you. That's my point.
So,

Speaker 1 thing two is then how long have you been working there?

Speaker 2 Five years.

Speaker 1 Okay, and how many people work there?

Speaker 2 It's seasonal, so we have

Speaker 2 yearly we have

Speaker 2 six people working there.

Speaker 2 Seasonally, we have upwards of 28.

Speaker 1 Okay. Are you the senior guy?

Speaker 2 Yes.

Speaker 1 For how long?

Speaker 2 Actually,

Speaker 2 there's me and one other person in our maintenance department.

Speaker 1 Okay. You need to be the senior guy

Speaker 1 immediately.

Speaker 2 The person that would also be me is not interested.

Speaker 1 No, that wasn't what I said.

Speaker 1 They all need to be reporting to you as step one before

Speaker 1 the transaction occurs.

Speaker 1 He needs to sit you in the president's seat while he's the CEO, and you walk in that and he shows you every detail of every part of the business that he's running for at least a year and then the transaction occurs.

Speaker 1 Not he tosses you keys and goes, I hope you can figure this out. That's not a good plan.

Speaker 3 All right, Dave, you have some strong opinions.

Speaker 1 Possibly, yeah.

Speaker 3 I think so. Okay, because you really prefer credit unions over big banks.
So why is that?

Speaker 1 Well, credit unions, for one thing, are non-profit, which means that the members, the customers, own the credit union. So any profits that the credit union makes goes back into customer pricing.

Speaker 1 So you get better interest rate on savings, cheaper checking, and so on, that kind of thing.

Speaker 1 And what's more important than that, though, is the fact that the customer is the owner changes the spirit on the credit union. So I find very few credit unions that aren't very customer-centric.

Speaker 3 Yes. Well, and I think we have found one that is incredible, and that's Fairwinds.
They are an incredible credit union that is really out with the heart to help the customer.

Speaker 1 You know, that's why we're partnering with them. because

Speaker 1 they've got a scope to be able to handle the Ramsey audience, and they're the right kind of people with the right kind of values. And they've done a really, really good job with customer service.

Speaker 1 And the deals that they're offering, the Ramsey tribe is incredible. Yeah, absolutely.

Speaker 3 And you're right. Their customer service is unbelievable.
Winston and I just signed up and we got an account. And I'm not kidding.

Speaker 3 It took less than five minutes. It was so user-friendly.
Like the step-by-step approach was unbelievable. And then the next day, my phone rings and it says fair wins on my phone.

Speaker 3 So I answered it and talked to someone there. And they said, yeah, they give calls to every new customer.
And so again, they just really care about your experience. And I, I so, so appreciate that.

Speaker 3 So again, you guys, I know it can be a pain to switch banks or to open up new accounts, but Fairwinds, again, they make it so easy.

Speaker 3 Plus, anything that you can do at a traditional branch, you can do with them at fairwinds.org or on their app. And you'll have free access to over 33,000 ATMs.

Speaker 1 Hey, you guys know how much I hate banks in general. And so for me to do this is a big deal.

Speaker 1 Talk to our friends at Fairwinds and check out the combined checking and savings bundle that they created just for the Ramsey tribe. You guys, it's incredible.

Speaker 3 Yeah, you guys, it's so easy to join Fairwinds no matter where you live. So go to fairwinds.org/slash Ramsey to learn more.
That's F-A-I-R-W-I-N-D-S dot org slash Ramsey.

Speaker 1 Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual, amazing relationships.

Speaker 1 Rachel Cruz, Ramsey personality, number one best-selling author, host of the Rachel Cruz Show, and co-host of Smart Money Happy Hour on the Ramsey Networks. My daughter is my co-host.

Speaker 1 Thank you for joining us. Triple 8-825-5225.

Speaker 1 John is in Indianapolis. Hi, John.
Welcome to the show.

Speaker 2 Hi, Dave.

Speaker 2 Hi, Rachel.

Speaker 1 Hello, hello. What are you guys today?

Speaker 2 Better than you deserve. Don't say it.

Speaker 1 Better than you deserve. You're right.
Got it, John. Yes.

Speaker 2 I'm so glad it's both of you today. My father approached my wife and I about

Speaker 2 moving in with him. I'm one of eight siblings, and it's a home that is now, as siblings are growing up, getting more quiet than he's used to.

Speaker 2 And I have four kids of my own, and he's one of these really old guys who was born in 1960.

Speaker 2 And he said that he would love for us to inherit his house at some point and be able to fill it up with our kids.

Speaker 2 And I don't don't know the best way of approaching that with my siblings who are many scattered throughout the country and want to make sure that we do right by everybody there.

Speaker 3 With the value of the home meaning, if it goes to you guys.

Speaker 2 Correct. Yeah.
Yeah.

Speaker 3 Is he, how's his health?

Speaker 2 He is in good health.

Speaker 2 He just retired last month. Okay.
He was a he was a doctor his whole career and it has imparted really good financial wisdom on us throughout our lives.

Speaker 1 So he's just lonely is what it sounds like.

Speaker 3 And he just wants you guys around.

Speaker 1 It's in your town?

Speaker 2 Yes, it is.

Speaker 1 Okay, that's good.

Speaker 1 Well, I mean, the obvious thing is it's his house. And if he wants to deed it to you in return for you all living there to

Speaker 1 have him

Speaker 1 keep him company or whatever we want to call this, that's his choice. Okay.

Speaker 1 The right way to do that

Speaker 1 is to make sure that this is all talked about with the brothers and sisters.

Speaker 2 Okay.

Speaker 1 The wrong way to do it is to hide it from somebody, and then they discover later that you own the house that they thought they owned an eighth of at his death.

Speaker 1 And that would make everybody angry, right?

Speaker 1 So

Speaker 1 these things sprung on you later is how people get mad at the reading of the will

Speaker 1 when they discover that the house is no longer in the estate.

Speaker 2 Is there any merit into if we were to sell our house and just using that equity as essentially a down payment into this house?

Speaker 1 I'm sorry, I thought he was giving it to you.

Speaker 2 Well, that's what I'm trying to figure out.

Speaker 2 Would I buy it from him, or could I buy it from him, or is he giving it to me? Or basically eliminate the questions from the siblings is trying to buy it from him that way.

Speaker 1 Oh, yeah, exactly.

Speaker 1 I mean, if you pay market value, if you don't pay market value, then

Speaker 2 which

Speaker 2 I can't pay market value for that home.

Speaker 1 So

Speaker 1 then the siblings are going to have an opinion.

Speaker 2 Okay.

Speaker 1 Agreed?

Speaker 2 Yes.

Speaker 1 I mean, because

Speaker 1 I'm getting, you know,

Speaker 1 if I'm the sibling, I'm going to go, hey, more power to you. You're taking care of dad? Yes, that's what I'm going to say.
Have at it. Do you have good relationship with them?

Speaker 3 Because they may say, John, like, thank you. Thank you, John, and wife and kids, and taking care of dad.
Like, I mean, if Dave called us and was like, please come live with us, and Denise,

Speaker 1 Denise was like, I'll do it.

Speaker 3 Great job, Denise.

Speaker 1 Yeah, good job. Denise will be the one.

Speaker 1 Rachel's like, nah, no chance. I'm kidding.
I'm kidding. I would take it.

Speaker 1 No, seriously,

Speaker 1 you have to clear it with the sailings, and everybody has to be okay with whatever the deal is. Okay, there's a couple of ways to structure the deal.

Speaker 1 One thing you could do is he just deeds you the house now and you leave him with no protection and you just own the house.

Speaker 1 Another thing you could do is he deeds you the house now and he could you could have give him a life estate, which means as long as he lives, he's allowed to live in that house.

Speaker 1 And you can't sell it until he dies, unless he signs off on that and releases that. Okay.

Speaker 1 That's the second thing.

Speaker 1 The downside of him deeding it to you now,

Speaker 1 he's only 64, so I mean, he could live 30 years. This is a long time

Speaker 1 for you to not ever sell this house or not ever move.

Speaker 2 That would be

Speaker 1 not okay with you being trapped.

Speaker 2 Okay.

Speaker 1 Okay.

Speaker 1 Because things change.

Speaker 1 And sometimes they change tragically. Sometimes they change from prosperous.

Speaker 1 Okay.

Speaker 1 Let's pretend that something happened and you at work had a breakthrough and started a business and all of a sudden you had

Speaker 1 a complete change of net worth

Speaker 1 and you wanted to build a house twice this size because you had the money. 30 years? That could happen.

Speaker 1 That's prosperous. Okay.

Speaker 1 And,

Speaker 1 you know,

Speaker 1 that's why I always laugh when someone says my forever home.

Speaker 3 Or your wife's family gets ill and you guys want to be close to them and you want to move out of state or something. You know what I mean? Like anything can happen in 30 years.

Speaker 1 Well, God forbid something happened to you or your wife before he dies.

Speaker 1 And then you got to, you know, and then you're deciding, okay,

Speaker 1 here's a really weird one. What if you died in a car wreck and she stuck there?

Speaker 2 She said if I died in the car wreck, she'd sell our house and move in before

Speaker 2 the funeral.

Speaker 2 My father and her get along so well

Speaker 1 that way. Today.
Today. Yeah, that's where you live together.
But yeah.

Speaker 1 I'm serious. I don't want you to do something that doesn't have an exit path.
If you need to get off the exit ramp, you need a place to get off. I hope you don't.

Speaker 1 I hope it plays through the way you want it to play through.

Speaker 3 But you're not against the idea.

Speaker 1 The idea is: fine, give yourself a release valve. That's right.
That's right. So it's not that.

Speaker 1 If the pressure's on, give yourself a release valve and let everyone know what the release valve is and give yourself a way out of this thing. Yep.

Speaker 1 Dad's been in the nursing home with

Speaker 1 early onset for eight years.

Speaker 1 And

Speaker 1 one of your kids, all your kids move to another city, and your grandkids are all now in another city. You can't sell the house.
You're stuck with it.

Speaker 1 That's not okay. Yeah.
You know, there's just life is going to happen. That's all the people that call this show is life happened to them.
Yep. Over and over and over and over.

Speaker 1 So, no, you just don't want to get there.

Speaker 3 So, what would you do then? You would deed it, not deed it to John right now.

Speaker 1 I'm trying to, what's confusing me? What I don't know, I don't know how to protect dad and protect John and give John a release valve

Speaker 1 that's what's bothering me I can't figure out how to do that so you got to think through that though if you can get that if you can solve for that you're okay the last thing you got to solve for is if they deed it to you now your basis in this house becomes what he paid for it versus if you receive it at his death your basis is market value And if you sell it, you got no capital gain or, you know, you got no gain.

Speaker 1 If this house is worth $600,000, you're married filing jointly, and his basis is close to zero,

Speaker 1 and you're married filing jointly and can do a $500,000 write-off. You now have capital gains on a house because it was deeded to you.

Speaker 1 Oh, and by the way, he needs to work on the unified estate tax credit. So you got some estate tax planning to do if he's going to deed you the house now.
If he's not going to deed you the house now,

Speaker 1 that might be a way to do it. Maybe you don't own it.
Maybe you just bank your equity. Keep it up.
And you live there.

Speaker 3 And if you needed the exit, you still have to go to the house.

Speaker 1 No rent because you take care of him.

Speaker 1 And then if you need to to leave, you can leave. That might be even cleaner.

Speaker 1 And if he dies, it comes to you.

Speaker 3 You're dated out of your estates, your portion.

Speaker 1 Well, or the whole thing, and

Speaker 1 the siblings are okay with that. I might be okay with that one.

Speaker 1 That might be a way for you to get out. If you get stuck, I just don't want you to get stuck.
They call here all the time stuck. This is a Ramsey show.

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Speaker 1 This is not a podcast about business theory, it's real insight from a practitioner who actually does this stuff. Find it anywhere you listen to podcasts.

Speaker 1 Or if you're listening on YouTube or podcasts now, just click the link in the description.

Speaker 1 From the Ramsey Network app, app, Isaiah steps in it.

Speaker 1 You keep saying to invest $100 a month beginning at age 30 and you'll be worth $5 million at 70 years old. That's the most ridiculous thing I've ever heard

Speaker 1 because the life expectancy of a white male is 72 and for a black male it's 68. That means most people will never live to see $5 million.
Help me make sense of this advice.

Speaker 1 Well, you don't really want me to make sense of this advice because you think it's ridiculous.

Speaker 1 So let's start with your belligerency to start with.

Speaker 1 But the answer to your question is, number one, you have all of your numbers wrong.

Speaker 1 So it's hard to make a cogent argument when you have your numbers all wrong. We have never said $100 a month from 30 to 70 is $5 million.
It's not.

Speaker 1 It's $1,176,000.

Speaker 1 And that would be true of 20.

Speaker 1 to 60 or 25 to 65, any 40-year period of time you wanted to pick. And so you could align that with, okay, start when you get out of high school saving $100 a month at 18,

Speaker 1 and at 58,

Speaker 1 you would have 1 million, not 5 million, I never said that, 1,176,000. Also, the average life expectancy of a white male is not 72 years old.

Speaker 1 I don't know where you're getting your data, but the National Vital Statistics System at the National Center for Health Sciences says in 2023, the average male death age is 75.8 years, 76 years.

Speaker 1 Period.

Speaker 1 Average female is 81 years old when they die. Now, that includes infant mortality and teenage death,

Speaker 1 which we can all agree that most teenagers are not saving and most infants are not saving. So once you make it to age 65, my age, and you're healthy, well, not even healthy.

Speaker 1 Once you make it to age 65, on average, you will live another 18 years.

Speaker 1 So the average 65-year-old has a death,

Speaker 1 all males, 76 years.

Speaker 1 Add 18

Speaker 1 to that, it's going to be 86, 92 years old.

Speaker 1 So I'm sitting here at 64. The average is that I make it to 92 once you make it to 65.
Okay. So

Speaker 1 all your numbers are wrong to start with, Isaiah. But at the core of your belligerency belligerency and

Speaker 1 claiming our process is ridiculous is the idea that somehow you're supposed to get rich in 10 minutes or that somehow you're entitled to something

Speaker 1 or that I'm angry because I don't feel like it's possible for me. And you even throw the race card in there because color of skin hasn't got anything to do with your ability to build wealth.

Speaker 1 Skin pigmentation doesn't cause wealth building one way or another.

Speaker 1 It doesn't. And so, you know, you just got to, you got to throw that in there, though, to go ahead and try to create some kind of social justice argument that's bullcrap here.
So the truth is

Speaker 1 that anyone who saves $100, but by the way, almost no one saves, like I would say really close to zero people save $100

Speaker 1 for 40 years a month. Like I haven't saved $100.

Speaker 1 I've saved a lot more than that.

Speaker 1 Rachel hasn't saved $100.

Speaker 1 She wants to save a lot more than that.

Speaker 3 Right. So just the idea of the investment calculation saying, it's an example.

Speaker 1 It's an example saying if you'll save money, you can build wealth. You can build wealth.
That's what the example says.

Speaker 1 But you're like, oh, well, no one can get there because they're all going to be dead. It's like, oh, geez, son.

Speaker 1 Roll up your sleeves, live on less than you make, get out of debt, deny yourself a little bit of pleasure because you're acting like a four-year-old here and stay out a happy hour and go put some money in the bank.

Speaker 1 Quit smoking so much pot. Seriously.
And so, honestly,

Speaker 1 this is ridiculous, Isaiah. No, I mean, the belligerence on this is victim-based.

Speaker 1 It's victim-based. This is the most ridiculous thing I've ever heard.
It is not the most ridiculous thing I've ever heard.

Speaker 1 What's ridiculous is your argument, because you don't know anything about the numbers that you presented. They were all wrong.
That's what's ridiculous.

Speaker 1 So, what's ridiculous is you've used some twisted version and inaccurate numbers to justify your victim existence. That's ridiculous.
So you're not a victim of anything but your bad thinking.

Speaker 1 That's your only victimization. So the truth is, is that the, you know, 89% of America's millionaires are first generation rich.
Go get you some, boy. It's your turn.
Roll up your sleeve.

Speaker 1 Quit your whining. Be a victor, not a victim.
And quit trying to figure out some way that if the whole thing's stacked against me, the little man can't get ahead.

Speaker 1 I grew up with people my whole life saying the little man can't get ahead. You're always going to have a a car payment.
We're stuck.

Speaker 1 These numbers only work for people that aren't like us, people that are different than me, people that are my race, my color, my neighborhood, my educational background, my history, my family.

Speaker 1 People like me can't, oh, shut up.

Speaker 1 Was Eeyore your spirit animal? Come on, man. That's ridiculous.
I'm the little man. I started with nothing and I was a millionaire twice.
I'm so stupid I had to do it twice.

Speaker 1 I got a PhD in DUMB and I had to do it twice. So this just, this victimized, and it's just seeping in these words right here.
It's just running off this page. And I'm not going to tolerate it.

Speaker 1 It is not, it's hopelessness that you're spreading. You are a hope stealer when you tell people that they can't make it.
And that pisses me off because I spend my life giving people hope.

Speaker 1 And you can do this in America right now. It is the best place, the best economy, the best situation in human history for the little man to get ahead.

Speaker 1 If at any time you wanted to drop into any society in human history and you wanted to start from nothing and build wealth, this is the best place ever, any time. It's better than 30 years ago.

Speaker 1 It's better than 60 years ago. It's better than the Roman Empire.
It's better than anywhere you want to drop your little butt and think you can't get ahead. Little man can't get ahead.

Speaker 1 I promise you, freaking Karl Marx isn't going to help the little man get ahead. He helps the big man get ahead.
That's who gets him ahead.

Speaker 1 And so your broke college professor that's teaching you communist technique has got to stop it. This is crazy, y'all.
So if you want to win, you can go win. We'll help you.
We'll show you how.

Speaker 1 But we are not going to participate in this mess ridiculous. It means people will never see their money.
They're going to die before they get their money. Oh, that's just dumb.
It's just ignorant.

Speaker 1 So, hope I wasn't unclear.

Speaker 3 Nope.

Speaker 1 That's why I wrote millions. That's why we did.
I was not going to do another book in the space. That's why that baby steps millionaire.

Speaker 3 What's the stat of people that come legally into America? They end up winning.

Speaker 1 Four times more likely because they come and they're like, you know, if you come here from another country under the law, legally, not illegally, you are four times more likely to become a millionaire than

Speaker 1 someone born here who believes crap like this. Like the dick stacked against the little man.

Speaker 1 You just can't do it. You're going to die.
You die before you get your money. Oh, brother.

Speaker 1 So, no,

Speaker 1 do the stuff, man.

Speaker 1 Do the stuff. Live on less than you make.
Get out of debt. Get your butt on a budget and act like a grown-up and stop your whining.
And you can go do almost anything in this country.

Speaker 1 It's going to be hard, but it's easier than being broke and mediocre.

Speaker 1 And at the end of the story, you get to win this way.

Speaker 1 The other way, at the end of the story, you just die broke and wondering what you, I don't want to work in McDonald's at retirement, unless it's the one I own in St. Thomas.
You know, seriously.

Speaker 1 You can do this stuff.

Speaker 1 And you don't have to be, I'm not extraordinary. I'm far from extraordinary.

Speaker 1 But I've had extraordinary results following God's ways of handling money, having hope in my life, having a sense of abundance instead of a sense of scarcity, and going and apply.

Speaker 1 If you plant corn, the most magical thing happens, corn grows. And if you plant more corn, more corn grows.
So if you plant a hundred bucks, you'll get this.

Speaker 1 If you plant a thousand bucks, you'll get 10 times as much. And, you know, most of you are making so much money, 100 bucks, you waste driving past.
some fast food restaurant or Starbucks.

Speaker 1 You just drive past. They take 100 bucks from you and you even got your food yet.
This is, man, this is so doable, y'all. It's so doable.

Speaker 1 And I'm not going, you can get pissed at me if you want to start another Reddit page on Dave Ramsey. Have at it.
I don't give a crap. Just stack it up there.
You know what? Because you're wrong.

Speaker 1 The proof is in. The social proof is out.
10 million, millions and millions and millions of people are doing this stuff. And it's not, so if you're not doing it, you're just wrong.

Speaker 1 It's not even harder than that. You're just wrong.
This is the Ramsey Show.

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Speaker 1 Robertson, Denver. Hi, Robert.
How are you?

Speaker 1 I'm good. How are you, Dave and Rachel? Better than we deserve.
How can we help today?

Speaker 2 Thanks for taking my call.

Speaker 2 I found you guys in 2020,

Speaker 2 and after paying off all my debt, I'm now on baby step six.

Speaker 2 I've been dating the same woman for four and a half years.

Speaker 2 She's absolutely amazing. I love her to death.

Speaker 2 The one thing we struggle with is money, and we pretty much see it kind of opposite.

Speaker 2 We're getting to a point in our relationship where, you know, we're heavily discussing marriage and what all all that looks like and

Speaker 2 we're we're kind of in a spot where um

Speaker 2 you know i try to help her as much as possible and and as much as she wants me to i guess to set up budgets and stuff like that and it just never works out um

Speaker 2 you know she she always goes way over budget or whatever and um

Speaker 2 If we were to get married, like she, you know, she would sell her house and move in with me and the profits from that would pay off all of her debts. She has about 65,000 in debts.

Speaker 2 So it's not really like a concern from that aspect. It's more just,

Speaker 2 I guess, I'm scared to move forward with someone that I've never seen can stay within a budget.

Speaker 2 You know, and I'm worried that it's the number one reason people get a divorce. I'm worried about becoming a statistic because we fight about money all the time.

Speaker 3 Can I ask this, Robert? Is she not being able to stay into the in is she not able to stay on budget because the budget's not realistic for what she's set up?

Speaker 3 Or is it that she truly spends more than she makes and she's just says that's just how it is?

Speaker 2 Yeah, she just spends more than she makes. I mean,

Speaker 2 she brings in more money than I do, honestly.

Speaker 1 What does she spend it on?

Speaker 3 What's she doing? Shopping, vacations? Like, what's up?

Speaker 2 Yeah. Yeah.
So, like, in her every dollar, you know, she's got a food category

Speaker 2 that's supposed to be $600.

Speaker 2 Last month, she spent $1,100. And then, like, her shopping, you know, it's supposed to be, I think, $400, and that includes even like unnecessary fund purchases that, you know, everyone has to have.

Speaker 2 But instead, she spent like $900.

Speaker 2 You know, she wants to she's a mom of two. She wants to get a mommy makeover.

Speaker 2 And so like in her head, she's justifying, well, if I can pay off these two debts that's payments equal what the mommy makeover payments will make, then I can do it.

Speaker 2 But she's never once made like that extra debt payment to even pay those debts down. She just, she's more of like a,

Speaker 2 you know, you got to spend the money that you make to have fun kind of thing than I am.

Speaker 1 Hmm.

Speaker 1 It's interesting to me that you started doing this stuff in 2020 and you've been dating her four and a half years. So you started, you met her about the same time.

Speaker 1 Yeah, I met her. So she's watched you adopt all of these things.

Speaker 1 Correct.

Speaker 1 The more you got engaged, the more you got engaged with the stuff that we teach,

Speaker 1 she's watched it. She's had a front-row seat for the whole thing.

Speaker 2 So I was debt-free by the time I met her. I started January 1st as a New Year's resolution, and I met her December 4th.
So within that year, I was out of debt.

Speaker 2 So she never really saw me aggressively attack debt, but I still live the lifestyle. I still budget every month.
I still, you know, so she's seen that lifestyle and where it's gotten me. And

Speaker 2 she just, she just, she doesn't have like the mental mind. Like I see things in numbers and statistics.
I'm a spreadsheet nerd. She's the complete opposite.

Speaker 1 Yeah, I don't want, I'm not asking her to be a nerd. I am asking her to quit being immature and just buying stuff she can't afford.

Speaker 1 And I just deserve it. I just want to get it.
And so I'm just going to get it. I mean, she doesn't tell herself no, ever.

Speaker 1 The category breaches you talked about, the purchase breaches you talked about, those are all, I just look at it and I'm going to do it anyway.

Speaker 1 Like

Speaker 1 there's a sense of entitlement or immaturity or something there that's bothering me in this. I can't tell what it is exactly.
So what would we do in this situation?

Speaker 1 You guys have got to resolve this before you go forward.

Speaker 1 Not necessarily she has to become the nerd that you are or she has to stay on a budget, but whatever the core issue is that she's struggling with here, immaturity, entitlement,

Speaker 1 just

Speaker 1 because you can't just, she's not acting like an adult in the sense that you can't just spend 900 bucks

Speaker 1 when you say, I'm going to spend 400.

Speaker 3 Yeah, that's where I was trying to figure out with. That's weird.
Yeah, is she not budgeting correctly? Because there are some people that are like, oh, I'm going to make $200.

Speaker 1 Well, then change the budget.

Speaker 3 That's what I'm saying. But this sounds like it's above that.
It's like that she could live within the numbers that she set, correct? Like she that or that she has to mathematically.

Speaker 1 She makes enough money to pay to do it right. She just chooses not to have any boundaries for herself.
Yeah. And that's what I'm hearing.
So what would I do?

Speaker 1 If I were in your shoes, I would say, look, we have to resolve this and get aligned on it to go forward because it's not going to, we're going to have, you're going to have, you're going to have a long life because you're going to treat, you're going to think I'm just picking on you all the time.

Speaker 1 And I don't want to be the bad guy in this all the time.

Speaker 3 And it's a value.

Speaker 1 I'm not going to sign sign up for the bad guy role.

Speaker 3 Yeah. And it's not, again, we've said it twice in the call, but I think this is important for couples to hear.
You're not trying to form her into you, right? Because I'm the free spirit.

Speaker 3 As you're speaking, I'm like, oh my gosh, that would so be me if I wasn't doing the Ramsey plan. I am.
I'm just a spender. Emotions.
I'm like, yep, we're going to have fun. We're going to enjoy.

Speaker 3 But having to learn a value system of boundaries, a value system of living below your means, a value system that stuff is not going to make me happy. There's a contentment issue there as well.

Speaker 3 Like all of these things are values where I still month to month spend more than Winston, my husband, because I am more of a spender than he is, but it's in the budget.

Speaker 1 So from again, you're easy because Winston doesn't spend any money.

Speaker 3 Yeah, he doesn't spend a lot.

Speaker 3 But it's like the idea is, again, it's the values that we agree upon, not the personality trait necessarily, but if we can't have boundaries and limits to our money and we keep going over and over and over and over and over, that's a problem.

Speaker 3 Then there's an issue there, you know.

Speaker 3 And even with debt, I would say debt's a value system that if you are so, if you are uncomfortable with living with debt, that it gives you stress, that like the risk of it, it's not worth it.

Speaker 3 It is, it is, I want the autonomy. And she's completely okay with it.
And it's totally fine to live by my means.

Speaker 3 And I'll live on credit cards and just try to pay the minimum balance every month or the minimum payment.

Speaker 3 Then again, that's a, there's a value system there that will be really excruciating to walk along life with. And this is your partner, right?

Speaker 3 Like when you go into when you get into a marriage, like this is the person that you're going to, you're going to make all these decisions with. And that should be fun and it should be enjoyable.

Speaker 3 This is someone that you don't want to constantly be picking picking apart and adding stress right to the relationship.

Speaker 3 And that's what these big issues, money is one of them, but you could throw in in-laws, you could throw in parenting. I mean, right?

Speaker 3 There's all these other issues, but with money specifically, yeah, like you would tell the kids no and she won't.

Speaker 1 You know, that's how this should be.

Speaker 3 Yeah, that causes, yeah, that ruffles feathers.

Speaker 1 That's how that's going to translate. So here's what I would do: I would schedule a pre-marriage counseling session.

Speaker 1 And I would sit down with the counselor and tell the counselor on the phone before you meet with them, with her present

Speaker 1 that

Speaker 1 the premarriage counseling session will have failed if you can't help us get aligned on these subjects. Your job as

Speaker 1 in premarriage counseling is you have to give the counselor instructions.

Speaker 1 I am not moving forward in this marriage unless we can get aligned on these things. And so your job is to guide us through that.

Speaker 1 If you think your job is to make me okay with her being off off the rails one way and me being off the rails the other way, I'm not going to be okay with that, that you failed as a counselor.

Speaker 1 Because sometimes counselors will do that. You go, it's all okay because they don't think they don't see it the way that we're doing it.

Speaker 3 So you need to give the counselor will dig in and understand. The good one.

Speaker 1 Yeah.

Speaker 3 You need to know the root of it because so much of who we are in our existence, the good, the bad, the ugly comes out on how we handle money. And so there's, there's things in there, right?

Speaker 3 And I would say for extreme savers.

Speaker 1 Similar origin. Yeah.

Speaker 3 And extreme savers, right?

Speaker 3 There's a level of hoarding and control issues that come from people that are, and people call this show, and they're so anal, and you're just like, oh, my God, chill, you're okay.

Speaker 3 But they're so wound up on that side, and that's unhealthy. But then being on the other far side where she is, that's unhealthy.

Speaker 1 And so kind of getting to that place. Give the counselor some instructions.
And the instructions are, you are to help us get aligned.

Speaker 1 If you can't help us get aligned, then we're either going to call it or you failed in your counseling.

Speaker 1 We are not leaving your office with you saying, oh, it's okay.

Speaker 1 That's not an okay thing for the counselor to think because sometimes pre-marriage counseling is a bit of a rubber stamp and you don't want that's what I want you to I want them digging in on this I want you to dig onto this and y'all find out what's what's driving these things

Speaker 1 and that way you don't turn Ramsey into a cussword in your new household this is the Ramsey show

Speaker 1 Are you sick and tired of being sick and tired? You can take control of your money and your relationships. And it starts with just one night.
Join me and Dr.

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Speaker 1 Or if you're on YouTube or podcast, click the link in the description. Seth is in Virginia Beach.
Hi, Seth. How are you?

Speaker 2 Hey, David and Rachel, how are y'all?

Speaker 1 Better than we deserve. What's up?

Speaker 2 All right. So I'm 27 years old, and I'm married with three kids.
And me and my wife have been on baby steps four, five, and six for the past few years.

Speaker 2 And I'm currently in the military, and we live in military housing, so we're renting. But we're trying to figure out the best way to kind of save for a down payment on a house.

Speaker 2 Since we move every three years, we're not trying to jump on buying a house right away. But if the opportunity presents itself, then we would like to maybe be in a place where we could do so.

Speaker 2 So over the past few years, we've saved about $25,000

Speaker 2 down payment.

Speaker 2 Yeah, so also while

Speaker 2 saving for retirement and kids college.

Speaker 1 Which branch are you on, the Navy?

Speaker 1 I'm in the Marine Corps. Marine Corps.
Thank you for your service. All right.
Very cool. Yeah.
Thank you. And your question was what?

Speaker 2 So we're trying to figure out the best approach to saving up for a down payment on a house.

Speaker 2 My wife's taking some time off work to stay home with the kids, with the birth of our kids, but she's a nurse and she's going to be starting a job here in the fall as a school nurse.

Speaker 2 And we were thinking like potentially going back to baby step 3B and just pausing retirement in kids college to just back up cash for a year.

Speaker 2 We just don't know if that would maybe be the right move with, you know, still trying to invest steadily for retirement.

Speaker 1 That's fine.

Speaker 1 The first thing that popped into my head was I'm under the impression a school nurse does not make near what a nurse makes.

Speaker 2 Correct. So she used to work like in a hospital on the floor.

Speaker 1 But why would you take a job that pays less when you're trying to hit a financial goal?

Speaker 2 So because of with our three kids, the schedule is a lot easier with having three kids instead of working at a 12-hour shift. Yes.

Speaker 2 And so, like I said, we're not trying to jump on like buying a house.

Speaker 1 How old are your children?

Speaker 2 There are five, two, and then about to be one.

Speaker 1 A school nurse doesn't have anything to do with a two- or a one-year-old.

Speaker 2 Correct. They would have to be in daycare.

Speaker 2 But our oldest is in kindergarten.

Speaker 1 Okay, so the schedule thing's bogus.

Speaker 3 It's not true. Well, she'd have summers off.

Speaker 1 It's not, well, I mean, you can take summers off whenever you want. I mean,

Speaker 1 you can go work three twelves and be done for the week and make three times more than she's going to make

Speaker 1 while the other two kids sit in daycare.

Speaker 1 So it's not logical. Anyway, I think that's a bad choice.

Speaker 1 Anyway, back to your question. You're not in a hurry, so you can do whatever you want to do.

Speaker 1 And you've done a great job so far with your money.

Speaker 1 But I, you know, I'm a huge fan of nurses because it gives you the potential to earn a lot of money and work a very, very flexible schedule and do a lot of different kinds of things.

Speaker 1 And I think you're not getting good use of that opportunity with what we're talking about. But, okay, back to it.
Now, the

Speaker 3 I wouldn't pause babysitters.

Speaker 1 No, I don't know what I was saying.

Speaker 3 You can pause the kids' college, though, if you guys were putting in a certain amount of money every single year. You got a one-year-old and a two-year-old.

Speaker 3 Yeah, if you want to pause that to save up some extra.

Speaker 1 Well, or just drop it down to 50 bucks or something. I wouldn't stop it, but I'd drop it way down.
Okay. And you use that.
I really wouldn't because you're not on

Speaker 1 a tight schedule to buy. You don't have an urgency to buy.

Speaker 1 And so I don't want to build up a down payment over here in a high-yield savings account while I'm missing out on good mutual fund returns over in my retirement accounts.

Speaker 1 No, I'm going to leave that at 15. Now, if you want to turn up the urgency and you say, okay, in 24 months, we're going to buy a house.
If you want to shut it down for that, that's okay.

Speaker 1 But just in general, just I'm going to just want to build a slush fund so someday I can buy a house. No, I would not do that.
And then I want to add one more thing before I let you go.

Speaker 1 Like you said, you guys move every three years, and it's going to be very unusual market that you can buy a house and sell it quickly and make money on it in three years.

Speaker 1 Okay, so here's how, I mean, I'll teach you how to do it. I talk to military guys and gals all the time.

Speaker 1 I love what you guys do, and thank you for protecting our country.

Speaker 1 The thing you do when you get ready, your next stop and you think, okay, we got the money, let's buy a house.

Speaker 1 What you want to do is you want to look at two different statistics with the local real estate agent.

Speaker 1 And just go get one of your Ramsey Trusted Real Estate Pros off the website at the ELP site, okay, on our website, and ask them two things.

Speaker 1 Number one, in the area I'm looking in, within a five-mile radius of the houses I'm looking in in that area, what is the average DOM days on the market?

Speaker 1 And if it's an average of 27 days, well, you have got a hot market and you'll be able to sell the house. If it's an average of 270 days, that's nine months.

Speaker 1 You're going to be stuck with this thing when you move next time. And it's going to end up a rental property in another city.
Bad idea. Okay.
So days on the market.

Speaker 1 The second thing you want to look for is average appreciation rates in that five-mile radius. For the last five years, four years, what have the houses gone up? in this area.
If they've gone up 2%

Speaker 1 a year,

Speaker 1 in three years, that's 6%.

Speaker 1 You're going to lose money when you sell this house with commissions and closing costs.

Speaker 1 But if they go up 10% a year, that's going up 30%. You're going to make money.
I will tell you that you will find these two numbers

Speaker 1 will

Speaker 1 only appear together and give you the right answer. In other words, if you see high appreciation rates, you're probably going to see short days on the market.

Speaker 1 And if you see long days on the market, you're probably going to see low appreciation rates.

Speaker 1 And so what happens is if the town is a military-only town and the military is the economy, you've got a bazillion houses on the market all the time because the people are moving in and out all the time.

Speaker 1 There's always a glut in the market. You don't see a lot of appreciation.
It's very hard to sell. You're going to get burned.

Speaker 1 But if you're in a metro area like you are right now, Virginia Beach is a vibrant economy, separate and apart from the military, heavily influenced by the military, but separate and apart from the military.

Speaker 1 It's got its own economy. So you could, that could be one of the markets right there that you could make money on.

Speaker 1 San Diego would be a market you could make money on and get in and out if you're military. But if you're in the middle of whatever cornfield and it's all military,

Speaker 1 you're going to get stuck with the house, dude. So be careful what you're doing.
We do talk about renting a lot for families. No, just rent.
Just rent.

Speaker 1 If you're going into the cornfield market,

Speaker 1 if it's not a vibrant market for whatever reason,

Speaker 1 and you're going to get stuck, you're much better off financially to rent for that three-year period of time. And your stress level is way down.

Speaker 1 Because if you're buying and you've got to move in, fix up, and you're selling, you got to move out, fix up. And

Speaker 1 it's a lot more stress to be an owner than it is to be a renter on the short-term basis. So that's what we're looking for.
So good question, man. Thank you.

Speaker 1 And again, thank you for serving your country. Last thing I'll throw out because I got just a second is don't use the VA loan.

Speaker 1 The VA loans suck.

Speaker 1 The Veterans Administration was formed to be a blessing to veterans and to active duty, and they may be in some areas, but in the real estate world, they're not.

Speaker 1 A VA loan is more expensive than an FHA loan. The interest rates are higher and the fees are higher.
But veterans do it. In active duty, people do it because I can get nothing down.

Speaker 1 It's one of my benefits. Well, nothing down is not actually a benefit.
It's causing you to buy something you can't afford. And so don't do the VA.
Don't do it. Do it.

Speaker 1 You know, do a traditional, conventional Fannie Mae mortgage. Don't do an FHA either.
It's the cheapest. Fannie Mae is the cheapest.

Speaker 1 A standard conventional mortgage is much cheaper than either one of the two government programs. Well, there's a shock.
And so

Speaker 1 don't fall for that either, for those of you that are out there military. So we've done a bazillion hours of work with the military folks and love them and try to help them any way we can.

Speaker 1 So thank you guys.