Don’t Throw Away Your Long-Term Security for Quick Fixes

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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. Jade Walshaw, number one bestselling author.
Ramsey Personality is my co-host today. Open phones here at 888-825-5225.
Jamie is in Dallas, Texas. Hi, Jamie.
How are you? Hi, Dave. Thank you for taking my call.
Sure. What's

up? I've been a big Ramsey fan since I was young. My dad taught me to be smart with my money and to listen to what you had to say.
Well, thank you. My husband and I, our house burned in January and it was a total loss, the structure and all the content.

And it was paid for, but it was severely underinsured. And so now we're in a situation where we haven't had a mortgage since 2019, but we only got $230,000 from the insurance insurance and it's going to cost us roughly

525 to build a similar house.

And that's just kind of scary for me. I've never,

we've never had a mortgage that large. I don't think, I mean,

I know that we can afford it. We have a nice income.

We're currently debt-free.

But I'm just trying to make sure that I'm making the right decision.

And you don't have any money?

Well, we have the money from the insurance.

Right.

And we have about $5,000.

Go ahead.

I'm sorry.

We have about $5,000 in an emergency fund.

But other than that, that's it.

So what's in your retirement accounts?

There is $47,000 in my retirement account.

And what's your income?

Last year, we made $180,000.

So why do you have no investments if you've been debt-free house and everything since 2019?

We have not been debt-free since 2019. I thought that's what you said.
No, we haven't had a mortgage since 2019. Got it.
We are just recently debt-free. in anticipation of knowing we're fixing to have a substantial mortgage, when I got the money from the insurance, we paid off some debts that we had in order to free up some monthly income.
So what kind of debt did you have? We had two cars and I owed on a mobile home that was my parents. So in 2019, my dad gave us this unfinished house, and we bought my parents a single wide mobile home because that's what they wanted.
Are they living in it? My mother is. My dad actually passed away the same week my house burned down.
Oh, my gosh. What a year.
Sorry. Yeah.
Yeah. Okay.
Well, I mean, the answer to the question is this is a horrible situation. I'm sorry you've been through it.
And you're either going to build a $230,000 house or you're going to take out a mortgage for whatever over that you choose to spend. That's your options.
But making 180, you should be able to reduce that and pay it off very quickly if you'll build some discipline that you haven't had before. Yes.
I recently downloaded EveryDollar, and I've already started working on that. Yeah, what about your husband? No, he's with me 1,000%.
We've been married almost 20 years, so we've kind of grown up together. Okay.
So this go-round, I mean, because you did everything back backwards before, so you got no money. Where are you staying now, Jamie? We are currently living in a rental house because it's going to take roughly a year before our house is rebuilt.
Okay. Are you? Okay.
So if you did this on a 15 year fixed where the payments no more than a fourth of your take home pay, it fits our guidelines. It's a shame you're having to start over, but you're not really starting over because you really never started because you were still using debt.
Even though that nice thing you said at the beginning about Dave Ramsey or whatever, that was just bull crap because you were still doing the stuff. Okay.
You're still in debt. You're carrying around two car payments and car payments and trailer payments and other payments and payments and payments.
You had the house paid off, but the other stuff still hanging around. So you can't go back to that world again.
You don't have that option. So now no more borrowing ever again.
You take out a 15 year fix. It's no more more than a fourth of your take-home pay.
You build your emergency fund of three to six months of expenses. You start putting 15% of your income away in retirement, and then you throw extra money above that out of your every dollar budget and pay off the mortgage in hopefully seven or ten years.
How old are you? Okay. I'm 38.
Okay. Yeah.
So when you know, at 48, you'll be back to a paid for property and you'll never lack insurance again. I bet you don't make that mistake again.
And no more car payments, no more car payments. No, we're done.
We've already decided that as well. Mama needs help.
You can't borrow to help her.

Correct.

No more.

It's over.

Because you get this free.

You got this start now, but you're starting in the hole again.

And so we don't want to repeat this process.

Okay.

That's a big deal.

I understand.

Okay.

So, yeah, if you do that.

So pretty much just start the debt snowball over. No, there is no debt snowball.
You're starting the baby steps over because there's not a debt snowball because there's no debt except the house. The house is baby step six.
Okay. So you're going to build your emergency fund of three to six months of expenses, and you're going to do that out of the 230 when you get off the phone.
Then you're going to start saving 15% of your household income into retirement. And you're going, well, you could even save everything towards the house until you close on the house.
When you close on the house, put it on. We were going already.
Yeah. Every extra opinion we have to pay down.
Yeah. Everything you can.
Let's, let's reduce the debt as much as possible. Get on a very tight budget on the building.
Don't let the building budget get out of control. No scope creep here.
Like, oh, I need one a thousand. I need one of that.
No, just chill. Just get the house back up.
You can add stuff to the house later. Don't let the scope creep hit you on the building budget.
Then let's get in the thing and then put it on a 15-year fixed and then pay it off off as early as you can and then that'll move you back into a position of strength always carry insurance folks and you need to be updating it every year like that's the thing you know it's hard to find insurance that is like complete replacement at the time like you've got to update it every single year it's almost all gone right and so as the equity in your home goes up you've got to make sure that you're on top of that and changing that and updating your coverage. That's everybody.
You need to be looking at what your coverage is every year, especially with values increasing the way they've been increasing. That's right.
And so the cost of construction increasing, like cost of construction, which is one of the elements of value. That's right.
Of market values, cost of construction of construction so yeah you've got to always update update update update and make sure you've got the proper amount of coverage to do full replacement um in the old days you could buy a replacement policy yeah i know yeah and and it would automatically whatever whatever the value of the house was that did that that's what is, yeah. State Farm was the first one to do away with that because they were getting cleaned up.
And State Farm's really interested in State Farm. And so they were getting their clock cleaned with this stuff.
And so they changed it. And they have a large enough footprint in the homeowner's insurance business that it started changing the whole business.
And for a few years there, you could get some of the independents to write replacement costs, but hardly anybody will do it anymore. It's pretty much stated value now.
And, you know, you've got to go back and just revisit it every year and make sure you raise it. You'd think they'd come in and raise it once you raise it because it raises the premiums.
That's true. But they don't follow up, whoever it is.
None of the insurance companies do. So make sure you get a review with your insurance broker every year and raise them.
And that's what Jamie faced there. That's so sad, Jamie.
I'm so sorry y'all are facing that. This is The Ramsey Show.
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Open phones at 888-825-5225.

Well, guys, listen up.

The new book, Build a Business You Love, is officially here.

Launch week was awesome.

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That's a lot of Dave. I'm just saying.
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It is, and it's a little much. But it's huge.
I mean, massive. So there you go.
Thank you to Amazon music. We appreciate it.
You guys heard me say this over and over. Small business owners are the backbone of the American economy.
This book is the exact system we've used to teach people to grow their businesses. Uh, like we grew this one from a card table in my living room to where it is now.
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Abigail is with us in Baltimore, Maryland. Hey, Abigail, welcome to The Ramsey Show.
Hi, Dave. I feel really grateful to get to speak to you today.
I really look up and admire you. Well, thank you.
How can we help today? So I've recently hit a really hard time. I unfortunately have like no income coming in and I am a single homeowner.
You know, and I have a lot of bills that I'm responsible for and I just kind of feel at a loss. I don't really know what to do and I have been praying a lot um, I don't know, something in my gut just told me to talk to you and that you might be able to give me some good advice on how to navigate moving forward.
Why do you have no income coming in? So, um, a few months ago, my coworker on the clock got us into a car accident and, doctors think that that has triggered some type of like autoimmune or like autoinflammatory disease.

So I'm seeing a specialist in a little while, but I've been having really horrible pain, like to the point where I struggle with just ordinary everyday tasks and also the medications I take, you know, I can't drive on them. Is it something that impedes you from doing some sort of like a work from home or something where you're not leaving your home and not having to drive? I definitely could do a work from home.
I just am unable to find anything. Also, the things that I can find, it's just not really even enough to cover my bills.
What was your previous employment? What did you do before? So that's kind of a long story. Before I was actually in management, I did HVAC, So I was an operations manager.
Unfortunately, the owner was very unprofessional and inappropriate. So I had to leave the company.
And then I had another incident with sexual harassment. So they terminated me.
I did file for unemployment and I did win. And then I actually got a blessing to do some political initiatives in the swing state last year.

Once that ended in November and I came back home, I was just kind of doing side gigs like DoorDash just to kind of make ends meet until I could find something.

And then I took the first job that I could find, which was in housekeeping.

And then that's when I got into the accident and I've been out of work since.

OK. Well, the the answer to the equation is income, right? You're a homeowner, you're a single person, so there's no other money coming in.
So the answer to that is what kind of employment can you do with your current limitations, right? And it's out there. I think that you're going to have to spend more time kind of deciding what is it that I want to do? What is my background? Is it management? Is that really what the area is? And kind of finding that one area and that's where we're looking for jobs.
Because yeah, if you're not looking for the right thing in your specialty, maybe it won't pay enough, but we know that there's remote work out there. And so my guess is that you maybe did a couple and it didn't pan out and you got discouraged am i wrong or am i right um i mean you're you're kind of right um you know just right now like the job market kind of sucks um you know i do what's the name of that company that just hired you right now that could i work from home's like two or three of them yeah there's several of them so you don't know that george is always quoting it and i don't know the name of it i don't know the name of his but there's a lot out there i mean there's several uh like you could try like something like arise i don't want to say i'm not giving them a endorsement but there's lots of them out there where you can do different customer service jobs from home.
By the end of the day? Yeah, literally. When I was getting out of debt, the one I used was called Arise, arise.com.
You go on there, all you need is a headset and a computer, and you're working almost instantly. And so it's out there.
I think that's just what you've got to do to get started. And let me also encourage you that some money is better than no money.
How much is your house payment? So right now it's $889, but that's going to go back down in October. So basically my escrow, there wasn't enough because the taxes went off.
So it's very low. So we've added that.
How much other debt do you have?

I think about like 13,000.

So it doesn't take a lot for you to stay afloat.

Are you behind?

Not yet, but I'm very close to it.

A couple of grand a month and you're afloat.

Yes, yes.

But that's the problem is just getting that money.

No, it's not really a problem.

I mean, she just told you what to do. There's online work you can sign up for with a headset by the end of the day.
And you can make two grand a month. Yeah, you can make 100% you can.
Okay. Yeah, that's what you've got to do.
So you said you were praying about this. So are you involved in a good church? I am.
Yes. Okay.
Have you contacted, uh, them about, um, sitting down with you and coaching you and counseling you? Um, so I did speak with a pastor, uh, during the summer last year. I'm talking about right now you're in the middle of the soup.
So here's what I think I heard, and you can tell me I didn't hear it, and I'll be just fine with that, okay? As I heard your whole story, I think I heard someone who has been hurt somewhere in the past, and that hurt has stolen some of your confidence um yeah i think you might be right okay all right and i don't want to go into that on a broadcast that's not fair to you nor is dr john here who's the only one qualified to go into it not me but i just could smell could smell that in the way you told your story because you've had so many different things come at you in a fairly short period of time. So I want you to sit down and unpack some of that hurt with your pastor.
I want you to call them today and set up a counseling appointment if they've got a counseling department or they've got pastoral counseling that they provide. And it may just be a good listening ear, but it may be someone that is more trained too.
I don't know. But I think if you unpack that while you jump on a headset and work 40 or 50 or 60 hours a week sitting at a computer or walking around, whatever you're able to do with the limitations you've got from home.

But $2,000 a month keeps you alive right now.

That's not your long-term goal.

It's not your career aspiration.

But until you can get your health back and sit down with your pastor,

I just want you to have some eating money and some shelter money coming in, food, shelter, clothing, transportation. That's all I'm worried about right now.
And so, yeah, our assignment would be to jump online, check Arise and their competitors, other people that do what they do. We're not endorsing them and find something you can plug into the computer and sit there without driving and without, and you can, you can check in and check out on those type of things if you're hurting.
And also jump on the phone and get the pastor. And let's sit down and start to unpack some of that pain, kiddo.
And we can go from there. And we appreciate you being in our audience.
I think you're going to have a good year. You need to get some of this in your rear view mirror to do it though.
I understand what you're facing. It's scary.
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deal, and we really appreciate it. Jordan is in Spokane, Washington.
Hi, Jordan. How are you? Hey, how are you doing, sir? Better than I deserve.
What's up? Hey, so I'm just calling. I've been watching the show last night.
I would like some help maybe figuring out negotiation tactics with collectors. I've had a few things in question for a couple years now that I've been paying on.
But a repot car hit a collection company, and he's just coming at me hard. He wants like five grand down to make it like a monthly pay, lower monthly payment I can afford, or $800 a month or a year and a half.
And, you know, I'm the sole provider of a family of four. And so that kind of makes it difficult.
So what do you make, Jordan? About $ 92,000 upwards. I make footage.
So really just kind of what the construction. Why did you get behind? So I found a new job.
The construction fell behind where I was at. And just kind of lost some hours and, you know, stuff like that.
I can make excuses all day to really just being irresponsible with my money. Okay.

That's a fair answer.

Is the repo the only thing or are there other collections?

I have some like checking accounts that I overdrew going into collections

and some like Xfinity bills and insurance bills, just stuff like that.

Okay.

Okay. Well, let's go back to the beginning, and then I'll answer your question.
Okay. The beginning sounds like this.
I want you to make a list of everything you're going to put on your budget, and I'm going to give you the order by which you attack it. Because you've been disorganized, now we're going to go to the other extreme.
We're going to get extremely detailed, extremely organized. Like this is the detailed blueprint of the building you're building over there at the construction site.
Okay. You with me? Yes, sir.
Okay. All right.
So the first rule is you take care of your own household first. Now, what that means is the number one thing in your budget before you buy anything else is food at the grocery store.
No food in restaurants when you're in collections. You're broke.
You don't get to go to a restaurant. A restaurant is a luxury.
Mama be at home. You're a sole income provider.
So mama be cooking. Mama be home economist.
Coupon clipping. She's going to be carrying all the economic weight she can carry while she's got those babies.
Okay. Yes, sir.
All right. She going to sign up for that? You okay with that? She okay with that? Yeah, I think we can come to an agreement.
Yeah. All right.
No eating out, no vacations. You're broke people.
Until you're not broke people, you don't do that anymore. Food is first before you buy anything else.
You feed your little kids before we talk about any idiot at the repo company. He's way down on my list of things to worry about for you.
Big deal that you get these priorities straight. Second thing is you take care of water, lights, gas.
You have the ability to operate your household with the utilities. Are you behind with any of them? I just throw an electrical bill, but I have a plan to get that caught up.
Okay, you have a new plan. You're going to catch it up in the next check before you do anything else other than food.
Yes, sir. It's the most important thing other than food.
Lights, water, basic utilities. I don't give a crap about the cable bill.
You can cut that junk off. You can live without Netflix.
I'm not talking about that, but I'm talking about electricity, lights, water, gas, however you're heating your house, right? So your family is now warm, and they have lights and water, and Mama's stove works so she can cook, and you've got food. This is a big deal.
Because this emotionally sets the table for you to fight these goobers that you've got on the other end of this thing. Okay.
The next thing you do is you pay your rent or your mortgage. How much is that? My mortgage is $16.55.
Is it current? I've gotten a trial repayment plan, so I pay three months to get caught up. They put the on the back end.
Okay. Until you do that, I don't care if repo man ever gets another dime.
You keep your house repo man can jump in the freaking Creek. Yes, sir.
Tell him to bite. Tell him I said to bite me.
He's also threatening to sue me by the 20th. Oh, just have, tell him to have at it.
at it just get in line buddy right now i'm getting my mortgage current where my babies live you get to you get to be at the back of that line bite me no you don't get any money until my babies are fed and they have a place to live and the lights are on that's your first job man yes sir because you're not gonna make it emotionally if you if you keep putting these idiots at the front of the line because they threaten you. If he wants to sue you, tell him to have at it.
We'll just file Chapter 7 bankruptcy. He'll get nothing.
Bite me. I'm serious.
Okay? Yes, sir. All right.
This is how you've got to talk to him, and you've got to get it straight in your head what's most important. He makes his job is to make you angry or afraid, and that moves him to the front of the line.
I want you angry and afraid of nothing because your kids are fed, your house is current, and your lights are on, and mama's got food in the pantry. Then you live to, you can throw back your shoulders, and now we can fight like a man, but right now he's got you against the wall with his hands around your throat emotionally.
This is what these guys do.

It's their job to get you on your heels.

And I'm getting you back flat-footed with your fists doubled up again.

You ready?

Yes, sir.

All right.

So you've got a good, strong base here.

And do you have a car payment currently?

Yes, sir.

Currently?

Yes, sir.

How much is it?

$231.

Okay.

Is it current? Yes. Really? I'm shocked.
Yeah. Good.
One down, baby. All right.
We keep it current then. Okay.
So if you've got a car to drive and gas in your car, you're not going out to eat, you've got food and you've got a place to live, do you feel emotionally more stable? Oh, definitely. That's where you've got to get to.
We call that building the four walls. Then and only then do we negotiate with other collectors.
Okay? Now, when was the car repoed that Repo Man's bothering you about? February. And who is the money owed to? Uh, Associated Credit.

Okay.

Uh, collection company.

Yeah, they bought the collection.

Like, uh, the car, original car company that I was buying the car from.

Yeah.

They told me they would settle, come up to a settlement with me.

Mm-hmm.

Right after they auctioned the car.

But literally right off the bat, they just sold the thing to the auction.

Yeah.

Yeah.

Okay.

They sold it to the collection company. So here's what you tell the guy.
You call him back. You can call him if you want to, or you can not call him.
I don't care, but I want you to call him and I want you to say, Hey, I talked to my financial coach and he just told me to file bankruptcy. So here's what you're going to get.
It's nothing bite me. You get nothing, not a zero.
That's what you got. Okay okay or you can shut the crap up and stand over on the sidelines until i get my family caught up and then i'll come over and make you a cash offer but these days of you telling me how my household runs are over bubba and hang up right after you say that don't even negotiate with him him.
Just hang up. What you're doing is you're resetting the emotional table here to where we now know who's in charge of your money, and it's you, not him.
You following me? Yes, sir. These guys are specialists at emotional terrorism.
It's what they do for a living. Okay? Because if he comes and sues you and takes your paycheck, you can file Chapter 7 bankruptcy.
He'll get zero. I'm not recommending that because I think you can settle for this idiot for probably $4,000 and he'll go away.
Do you remember what the deficit was on the repo? Yeah, I only got $55,000. No, no, the total owed to them after the sale of the car is what?

Yes, sir.

I can't remember.

Okay.

But he wants $5,000 up front and then $800 a month, right?

So it must have been $10,000 or $15,000.

Yes, sir.

Okay.

So they'll settle for a quarter on the dollar.

So he'll probably take about $4,000 for this whole thing and walk away

once you get him back on his seat. But now he's standing over the top of you.
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All right, Jade, it's worth unpacking a little bit, this idea of dealing with collectors, okay? Let's do it. Number one, if you have the money laying around to pay a bill,

you're going to pay a bill, you owe the bill legitimately. Pretty simple.
Pay the bill. Pay what you owe.
Yeah. Otherwise you're just carrying around a mental load for no reason.
Yeah. Why? And so I have a friend who's going through cancer treatments and they've've got $5,000 worth of bills laying there already early in the process, and asked me, should I pay these bills? And I went, well, you've got like a half a million dollars in your investment account.
Yes, you should pay the bill. Well, but should I put them on payment? No, you don't need to put them on payments.
You have the money, pay the bill.

Yeah.

It's not, well, I don't know.

I'm worried.

Well, don't worry.

It's $5,000.

You have 500,000.

You're okay.

Pay the bill.

Yeah.

You know, or if you've got $10,000 and it's $5,000, pay the bill.

Otherwise it's just taking up space.

Well, and you owe, you owe the bill.

Hello.

You owe the money.

That's right.

It's a thing.

It's a, it's a debt you owe.

Okay. That's thing one.
Thing two, then, is once you don't have the money, most companies would rather have something than nothing. That's right.
I have a company, oddly enough, that has the word integrity in their company title that owes me $45,000 from 25 years ago. I'm not bitter or anything, but I do remember it just because the irony, the company was called integrity and they didn't pay me.
And so if they call me up today and given the fact, I'm probably never going to see that money ever, but if they call me up today and offer me five thousand dollars a settlement for that 25 i'm gonna take it so fast it's gonna be unbelievable just because i'm gonna be happy i just found five thousand dollars on the sidewalk you know that's the way companies look at this and so if you've got a credit card bill that you haven't paid for three years they probably have sold that to a debt buyer for pennies on the dollar, usually around a nickel on the dollar. And you can probably settle that for around 20 cents on the dollar.
If you're broke and you don't have the money to pay your bills, you can settle. Now collections agencies, there are several situations with those.
The best of the bunch are the local hometown collection agency. They're people that your kids play ball with.
They're kids. They live there and they're just trying to collect a bill that is legitimately owed and they're calling you.
And most of them, they'll put pressure on you. They'll say, you need to pay your bill.
You need to be honest. They'll challenge you, but most of them are pretty decent folks at the core.
All the way on the other end of the spectrum, and it goes downhill from there, is a credit card collector. Credit card collectors 100% are scum.
If your child is a credit card collector, you should call them and tell them to stop and get a different job. Cleaning out septic tanks is noble.
Credit card collectors, there's nothing. They lie, they cheat, they steal, they break federal law every single day.
They're the worst of the worst. And their job, or a repo guy like this other guy calling this other guy, Their job to get the person on the phone and if you are owed money most people have some sense of honor some sense of integrity that if i owe this money i feel bad because i've not paid it 99 of the people walking around that aren't psychopaths have a sense of i owe this money and a little bit of shame that i haven't paid it.
And their job is to use that and get you emotional. Now, they have two possible emotions they can evoke from you, fear or anger.
If they can get you doing either one, your brain, your critical thinking skills in your brain quit working because you're pissed off or you're afraid.'re in fight or flight and your brain coats and you go into lizard brain mode and then you will move them from their correct position of priority in your budget and you'll move them ahead of your children's food you a logical person will that with good critical thinking skills would never deny their family food or lights or water while paying the repo man. It's not logical.
The only way you get there is if you become afraid because they're going to sue me. Oh, no.
No, they're not. They're lying.
You can tell they're lying if their mouth is moving. They're lying.
They're lying. They make up stuff.
They can sue you, but they never do. Because if they sue you, they have a 98% probability you're going to file Chapter 7 and they're going to get zero.
No, what they're going to do is harass you to God's green earth to the end of it. They're going to harass you and harass you to make you angry or afraid so that they can reprioritize your budget and put you at the front.
It's so absurd that they even use bizarre names. I had a lady call me.
Her name was Mrs. Savage.
That was not her name. That's not real.
That's not her name. Another one called me.
Her name was Mrs. Baskerville, as in the hounds of Baskerville.
I mean, they make up crap. And they sit around in their little cubicle land laughing about all of this, like it's some kind of bad movie.
And meanwhile, I got a guy trying to feed two kids that's working construction over here who's worried more about the repo man than he is the fact that he's behind on his light bill. The only way that happens is you become emotional.
So I'm trying to teach you right now. Once I got this, I'll tell you when it happened.
American Express call owed him $1,164. It was 40 years ago.
And I still remember the amount. Here's why I remember it.
The guy calls me. He pissed me off.
I hung up on it.

My wife calls about two hours later, and she's crying.

My wife never cries.

I mean, she's got the constitution of a Navy SEAL.

She does not cry.

It's a hillbilly woman.

If she cries, somebody died.

I mean, you know, it doesn't.

She's not a crier.

She's crying. And she goes, he said, he said, he he said why would i stay with a man that wouldn't

pay his bills and i was kind of thinking the same thing well you weren't laughing then oh i got so pissed you weren't laughing the guy was in jacksonville florida i called him i threatened to drive down there and whip his butt and i got so mad i couldn't breathe and i paid him who won he. Except the fact that now 40 years later, I've trashed American Express regularly on the air for 40 years.
So maybe he didn't win after all, at least that company didn't win for having people like that working there because they have one of the worst, most egregious collections departments of anybody. If you do business with American Express, God help you.
That's awful. You're asking for it.
They're a pitiful company. I still believe that not just because of that one event, but I've dealt with them so many times over the years since then on behalf of clients and they're horrible, but that's just one example.
There's many, many examples, but I figured it out then. And then I went, Oh wait, this is a game and I'm losing the game.
And so I just started turning it back on them. When they would call, I would just, I would just start laughing at them and just start messing with them and go, dude, I'm like, Mrs.
Baskerville, you're like a well-read collector. Who knew that? I mean, you like read books and stuff.
You can do sentences that string together. That's pretty amazing.
I'm so proud of you. Yeah.
So here's what you're going to get, Mrs. Baskerville.

Nutting.

Nutting, honey.

Nutting, honey. Nutting, honey.

You get nutting.

Good try, though.

Call back someday.

Hang up.

Yeah.

And you just start having fun with it because you realize it's a game for them.

And for you, it's life or death.

And you can't let them make it life or death or you're going to lose the game.

Listen, I've had some choice words for 1-800-PAY-ME.

I'm not proud of it, but I've had them. Yeah.
Well, they got you mad. Yeah, they did.
They get you mad. They get you upset.
They get you because you're trying. You're trying to be honorable.
You're trying to have integrity. You're trying to do the right thing.
You got no money. The guy had no money.
He's broke. A car got repoed.
Your car does not get repoed if you're rich. Okay.
It's a pretty simple formula here. And they will settle car repo deficits for somewhere around a quarter on a dollar all day long, every day, lump sum, no payments.
Never pay a collector payments, ever. That's how they get the most out of you.
Pay them a lump sum, settle it for a dime, a quarter on the dollar, and get it in writing that that's a settlement in full or don't give them any money. And do not, for God's sakes, give them electronic access to your checking account because, again, they lie.
They will clean you out. So there's your credit sharks and suits.
We used to have a lesson in Financial Peace University a thousand years ago. I remember that.
Credit sharks and suits. That was the lesson.
And there was a lot of stuff in that little rant there that was in that lesson. But it's what we used to do.
I mean, I used to sit personally when I was doing financial counseling, call these people on behalf of the clients and rip them to shreds and get the deals done. But we, you know, now we teach you how to do it and that's fine too.
So that way you'll never have to do it again. And you never have to do business with companies like American Express again.
I've never even accidentally done business with American Express ever again, ever, ever again. This is the Ramsey Show.
You want to know more about something you heard? All right, Dave, you have some strong opinions. Possibly, yeah.
Yeah, I think so. Okay, because you really prefer credit unions over big banks.
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.
So you get better interest rate on savings, cheaper checking, and so on, that kind of thing. But 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. 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. 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. And the deals that they're offering, the Ramsey Tribe, is incredible.
Yeah, absolutely. And I love that the things that we teach, they so line up with.
And you're right, their customer service is unbelievable. Winston and I just signed up and we got an account.
Yeah. And I'm not kidding.
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 Fairwinds on my phone.
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. 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. Hey, you guys know how much I hate banks in general.
And so for me to do this is a big deal.

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live from the headquarters of ramsey solutions it it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. Jade Walsh, our number one best-selling author, Ramsey Personality, is my co-host today.
Hannah's in Los Angeles. Hi, Hannah.
How are you? I'm doing fine. I'm glad I

need some advice on this subject that we are sad to be into, but it happened. 2016, we went through the university program, and in 2017, we became debt-free and was able to purchase our mobile home debt-free completely.
But since then, we have obtained three major personal loans and 13 credit cards, which has put us into a hole of $46,000. Yesterday, we did talk to a loan officer that has helped us, has got us into it.
We didn't pay for it. We haven't bought it yet, but we were able to obtain a loan of $29,000 that will put us into a debt relief loan.
And that's why I'm calling. I'm wanting to get advice.
And granted, what concerns me is that every loan and credit card, we have had 100% in our paying the bills on time. I don't know how we've done it.
It has to be the Lord completely. Why did you go into debt after you were out of debt?

Because we were like paying off the credit cards to pay off the credit cards to pay off the credit cards. I thought you said you were debt-free 100% earlier.
We were. Then why did you even have a credit card? Because of emergency, because of certain emergencies that came up.
You had an emergency fund? We did, but then we had medical bills and things like that. But it came up, and we went to the university, but we didn't have a big enough fund.
What's your household income, hon? Well, right now I make $1,600 a month. My husband makes $1,600 a month, and that's only Social Security, and that's all our income.
So you have Social Security income. How old are you guys? I am 69.
My husband is 71. I just turned 72, excuse me.
Okay, so you have a $3,100 income, and you have a mobile home in Los Angeles. Actually, we're in Hemet, but Los Angeles is, but we go there a lot.
It's like my grandkids that they live, so we're constantly traveling. How were you paying for the travel? Through gas.
I mean, we pay. My husband is like a handyman for a friend of ours, and my husband's constantly getting paid to do it.
He gives odd jobs. So that's kind of what we do, what he does.
So we just get paid a little bit every month, which isn't a lot, but it does help with a lot of our bills, which is not a lot of bills, but we do have them. You have $46,000 in debt, and you have a paid-for mobile home.
Yes. You live in the mobile home still? Yes.
Okay. Do you own the land under the mobile home? Yes.
Yes. What is all of that worth? We paid $70,000 for the mobile home at the time.

What is it all worth today?

The land and the mobile home.

$175,000.

Okay.

$175,000.

Okay.

And I'm still confused.

This is not in Los Angeles.

It's where?

It's in Riverside County. Wow.
Okay. Yeah.
We live a hundred miles from my family, but that's where everybody lives. And so the constant, our church is in Valley County.
It's, but we watch it a lot most of the time online, but. Okay.
And you ran up $46,000 in credit card debt. Yes.
And someone's offered you a $19,000 loan.

$29,000.

A $29,000 loan.

Okay.

Do they want the trailer as collateral?

No, no collateral.

It's a debt relief.

Oh, it's debt relief.

Yeah.

No, it's not a loan.

Where I'm worried about you, Hannah, is you're still looking to debt as the solution for this.

I don't know. Oh, it's debt relief.
Yeah. Oh, it's not a loan.
Where I'm worried about you, Hannah, is you're still looking to debt as the solution for this. You haven't learned your lesson that debt is the issue, and Financial Peace University didn't get it through to you, and you're still – no, no, no.
You're still borrowing money. You're still borrowing money.
You called me about borrowing $29,000. And so So even if we said to you today, We're going to close all of our debts.
Even if we said to you today, Hey, sell this Landon mobile home and take $46,000, pay everything off, and then take the little bit and get yourself a modest, put it as a down payment on your next thing, you'd get yourself in the same trouble again. And so there's something that's got to change in your mind in order to make this right.
You have to have a new commitment to have an income that's large enough that you live on less than it. That's right.
And you've got $3,100, but you can't even pay the payments on what you've got $3,100 and eat and buy gas to run back and forth to see grandkids that you're describing. So I don't know what your husband is making on top of the 3,100 as a handyman, but he needs to be making at least double that.
I mean, living in L.A. County on $3,000 is pretty tough.
And I don't know how long they've been retired from not working job jobs. You know what I'm saying? Well, 69, 71, but yeah, I don't know.
I don't know. But Hannah,

the situation is you don't have what we keep hearing. What Jane's saying is we don't have math that is sustainable here because the pattern keeps you spending more than you have coming in.

And that's not a pattern that's sustainable. And you're telling yourself, you're telling yourself a lie which is you're telling yourself we always made payments we always did it on time we all you're still telling yourself that story like it's a miracle you know that's not a miracle it's just you paid the stinking credit cards before you did anything else and that's how you did it and then you barely ate and then you barely bought a little gas money and your husband swung a hammer enough to get it done or turned a wrench or whatever he was doing.
But still, I mean, that's so, yeah, I think what we need to do is consider the trailer in the land. I don't know if that's sustainable.
I don't know what the cost is on all of that. Where you're living is one of the most expensive areas in America to live.

And it's near your grandbabies. I heard that part.
I get that. But you got, you cannot borrow your way out of debt.
So no, do not take the $29,000 loan. Yes.
Increase your income, get on a detailed budget where every dollar has a name before the month begins. And the two of you find enough work to do on top of your social security to get this 46,000 cleaned up.
So an example would be if you did $2,000 a month, you would be done in 23 months towards the debt. Yeah, that's right.
And that's an example. If you did twice that, you'd be done in 10 months.
So, you know, that's the kind of thing I'm looking at.

What kind of a sprint can I do with odd jobs, part-time jobs, full-time jobs, whatever,

for a short period of time to get this in the rearview mirror?

And then you've got to keep this in your rearview mirror.

And you can't say, well, we had an emergency.

You have an emergency, you've got to figure out a way to pay for it because you can't borrow money. No more credit cards.
You have to stop it because you're going to wake up at 81 in the same situation and then 91 in the same situation because the math you keep and the excuses that you're using to get into debt, those are not sustainable. That's exactly what Jade's pointing out to you.
So you can still do it, but you've got some tough choices ahead of you, kiddo. This insurance costs are only moving one way, and that way isn't down.
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What if one night could change your future? You don't have to stay trapped in the same old patterns that have left you stuck in your money, relationships, and your life. You can break the cycles that have kept you from moving forward.
Dr. John Deloney and I will show you how live the

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slash tour. That's RamseySolutions.com slash tour.
Folks, if you didn't know, we have the Ramsey Network app that you can download and watch and listen to all of our shows that the Ramsey Network puts on for free. It's completely free.
And the third episode of the daily show that we do here is only on the app or on talk radio. So you can do it.
You can get that always by listening and watching on the Ramsey app and a lot of other things that are available there. You can search different questions there and you can leave us a question.
Today's Ramsey Network app question is from Richard. Yeah, he says, my ex-wife and our 21-year-old daughter want me to co-sign a $4,500 student loan.
My ex has already co-signed $75,000 for our daughter's tuition. I offered to give her $2,000 and have her pay the rest to give her some skin in the game, but that was quickly dismissed.
My daughter doesn't associate tuition with actual cash, and she's amassed all this debt without a degree. She drops classes on a whim, and having to use her own money might make her more responsible.
I'm buying my dream car today with cash, and I feel a bit like a schmuck. Good word.
Am I right to make and take this stance with my daughter? Okay, so I wish I had you on the phone because I want to know more, but part of me thinks, I like the idea. Yeah, I do think that students should have some skin in the game, whatever that means, whether it's they're spending their time getting scholarships, whether they're working part-time, whatever that is, I do think that that's really healthy.
Second part of that is, yeah, during the baby steps, there is a step devoted for saving money for college. We never say how much that is.
We never say that parents have to pay all of tuition. That's not required.
So on that note, Richard, you were not required to pay for all of your daughter's tuition. I like the fact that you're trying to come up with ways where she pays part and you pay part.

But I think that you're feeling like a schmuck.

I'm not saying you are a schmuck, but I think you're feeling like that because you're like, hey, I'm about to buy my dream car.

I don't know what it costs, but dream cars, it's probably at least $30,000 or $40,000 is my guess, at least.

And you're probably thinking you could have maybe done more in the past is what I'm thinking. And that would be true.
But you're here today. I also think there's like four angles on this.
I also think that your daughter and your ex, you can't control them and they're going to do what they're going to do. And that's also a really tough position.
Um, yeah, your mom and I aren't married for a reason because your mom's not a very smart woman and I'm not going to participate in her stupidity. And so I would love to teach you a better way to live and a better way to get your education.
And I'll be happy to put some money towards your education, really as much as you need, as long as you're doing it in a way that is wise. When you're borrowing money and dropping classes on a whim, none of that is wise.
And I'm not going to participate in that. And if you feel like a schmuck because your ex-wife is a travel agent for guilt trips, she doesn't get a vote anymore.
That's why we call her the ex. I think he feels schmuck because it's a shoulda coulda woulda like it sounds like he's well he doesn't like telling his little daughter no i don't know it sounds like he was fine too because he was like i'm not giving you this 4500 no he said he's not co-signing no he's not co-signing but he also didn't offer to give her the cash the 4500 cash yeah because she's not wise she's under the direction of a not a very smart woman known as her mother yeah so yeah I mean it's I know I don't I have no idea why the guy feels like a smug there's a lot of possibilities I'd also love to know how long the daughter's been in school your ex-wife doesn't get a vote and as long as your your daughter is like a little puppet hand puppet for your ex-wife and her she's opening her mouth and your ex-wife is coming through your daughter being channeled through your daughter's lips she still does she didn't get a vote either then and so if i can sit down with her and separate her from this stupidity and have a clean conversation as an adult i'll help her but i'm fine not helping this kid i'd also i don't feel like a schmuck at all I'm not going to participate.
You're doing cocaine. I'm not giving you the money for cocaine.
She also might need some better counseling because it sounds like. Yeah.
Sounds like her mother's an idiot. Yeah.
You guys didn't set her up. She doesn't know her options.
College might not be for her. If she's already taken out $75,000, she's probably already been in college four years.
And she's still not doing anything. And she's not even, you know, without a degree.
Without a degree. She's run up all this this data yeah yeah and she drops classes on a whim does not associate tuition costs with cash and this kid's you know and that's why that's why this woman's ex so ex means you don't get a vote anymore yeah you lost your vote it's like it's like a felon you don't get to vote anymore it's ex that's what you call it that yeah i don't i don't know enough about it but i'm looking at this it sounds like just looking at the daughter forgetting about the x for a minute sounds like school is not really the daughter's deal she's been in it sounds like at least four years she's a party girl yeah she's over there drinking she didn't worry about class yeah she's gonna beer pong beer pong and dates that's what she's doing.
Am I wrong? No, you're not wrong. No? You just said beer pong like you know a decent bit about it.
It wasn't invented back then. I've come into that knowledge since college.
But, oh, my gosh, yeah. All right, Randy's with us.
Randy's going to help us. I hope Randy's in Springfield, Missouri.
Hey, Randy, what's up? Dave, Jay, thank you for taking my call. Real quick.
I was recently listening to your show on the way to a networking event at College of the Ozarks. And on the walk in from the parking lot, I was telling my coworker all about your show.
And lo and behold, I walk inside and there's three giant Dave Ramsey posters up on the wall.

And I said, hey, that's the guy. Wow.
So now he's a listener too. Wow.
I spoke there one time a few years back. That's a wonderful place.
Yes, it is. My question is, my wife and I recently got out of debt, everything but the house.
And I'm wondering if an employee stock purchasing program is a good vehicle to fund things like emergency fund and sinking funds. No.
Single stocks, because single stocks are too volatile for those things. There's no single stock on the planet I would put my emergency fund in.
I agree. Okay.
So even if you sell it right after it's purchased, the math doesn't work out? No, very seldom. Here's the deal.
Because what happens if you'll, if you pull up your company stock, they give you a 15% discount. That's regulation, right? Right.
Yeah. That's standard.
Everybody gives that. So if you pull up the company stock and look at the 52-week high and 52-week low, it generally is greater than a 15% swing back and forth.
So you could lose the money as easily as you could make money on it. It's just not, it's too volatile.
It's not a game I want to play. And if you find a stock that goes up every single week for 52 weeks, you found a very unusual stock that you happen to work for that company.
But the 15% discount is not enough for the volatility for the risk that you get. If you had a 50%, yeah, you probably make some money on that and you could roll in and out of it in 90 days or 30 days or whatever the window is.
You have a certain hold time on it when you get it. You can't just sell it the next instant, but most of the time anyway.
But so yeah, no, I don't, I just don't play with the single stock game. I don't play the single stock game, even if it's the company you work for.
I agree. Too much risk, too much risk, particularly for your emergency fund or sinking funds, particularly those ought to be just high yield savings.
Kelsey's in Amarillo, Texas. Hi, Kelsey.
How are you? Hey, Dave. I am blessed.
How are you? Better than I deserve. How can I help? Hey, so long story short, we live next door to my in-laws.
I have a handicapped brother-in-law that will end up being living with my husband and I after his parents are unable to take care of him. And we need a bigger house.
Because of our situation, we can't move too far away.

But a house across the street is available, and we can afford it.

But my question is, should we do it?

Am I making a decision that's from the heart, or is it logical?

Does that make sense?

Yeah.

You need a bigger house.

Why?

Well, because we already have two kids.

And if we end up having to – his parents are in their late 60s, early 70s.

And then it's... bigger house why um well because we already have two kids and if we end up having to his parents are in their late 60s early 70s and if we need to take my brother-in-law in we'll need a bigger house because right now we only that would be like a decade from now that's what i was going to ask do you see a reason that that's going to happen really soon um well my husband's parents parents died in their 70s early 70s we.
We're just trying to be prepared. Are these people sick? Are they sick? No.
No, not that we know of. I think you're jumping the gun, and I think you see an opportunity because there's a for sale sign in the house next door.
Across the street. Across the street, yeah.
And you're thinking, oh, here's our chance. It feels very premature to me.
I'm not going to lie. If you want a bigger house at Baby Steps, four, five, four five and six and it's still 15 of your take-home pay or 25 of your take-home pay on a 15-year fixed and you still have a game plan to get it paid off that's fine but i don't think you use the reason that you were using to go get a bigger house because you don't really need a bigger house today but if you want one that's different you could go do it mathematically and it still be inside the baby steps.
But the fact that you might get another person in the next 10 years, no, we don't need a bigger house for that. Hey guys, what's up? It's Jade Warshaw.
And look, if there's anybody who knows about student loan debt, it's me. My husband and I had $280,000 of it, but we were able to dig ourselves out and you can too.
If your student loan payment and interest rate are burying you, refinancing could be the solution. Now, I recommend contacting my friends at Laurel Road today.
Through their online application, you can get an initial rate quote in less than five minutes. And if you have a more complex situation, you can schedule 30 minutes to talk to an actual human being.
Thank goodness. Laurel Road makes it simple.
There are no fees involved and you could save thousands over the life of your loan. Remember, you should only refinance if it makes sense in your situation.
So if you're looking for a low rate or a shorter term so that you can pay off these student loans fast, talk to my friends at Laurel Road about their competitive interest rates and how you could actually get a lower rate by signing up for auto pay. Listen, nobody's coming to save you from your student loan debt.
If you want it gone, you can't mess around. Go to laurelroad.com slash Ramsey to find out more about student loan refinancing.
Again, that's laurelroad.com slash Ramsey. Hey, George Camel here.

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jade washaw ram Personality, is my co-host today. Raquel is with us in Los Angeles.
Hi, Raquel. How are you? Hi, folks.
I'm great. Thank you.
Thank you guys for taking my call. How are you guys? Better than we deserve.
What's up? Amen. So the question I have for you is my husband and I are 33 and we are possibly considering buying our first home.
We would like to put an offer in, but we have the possibility of borrowing $110,000 from my in-laws in order to not touch our last nest egg, which would be a Bitcoin that hopefully will increase in value in the next few years. We can use that Bitcoin, but we are wondering whether or not it would be wise and we would like your advice.
So you're brand new to the show? Brand new. Okay.
Well, not brand new to Dave Ramsey. I know that you're not a big Bitcoin.
I've been listening to you on and off my whole life since, you know, my mother. So you kind of expect me to tell you to sell the Bitcoin.
Yeah, we kind of, we kind of. That would be fairly predictable if you've been listening at all.
For different reasons, though. I mean, first off, yeah, Bitcoin is not a great investment.
We would never suggest it. It's speculation at best.
It's not an investment. And the second reason is if you have the money, use your money.
Why take a loan and risk a relationship being tainted by this, right? From the in-laws, especially when you've got the money today. Let's reframe it for a second, Raquel.
Here's an interesting way to look at it. If you didn't have a Bitcoin, would you go and borrow $110,000 from your in-laws to buy a Bitcoin? No, for sure no.
That's what you're doing. Okay.
By not selling it and instead borrowing to do the other thing is the exact same movement. You just skipped a step and acted like it didn't happen.
but in essence, you have borrowed the money to buy the Bitcoin since you could have sold it and not borrowed the money. See what I'm saying? Yeah.
From a decision framework perspective. And so, yeah, that reveals how much risk is involved here.
So a couple of things we've discovered is there's a difference between investing and speculating. Investing is when you have a five-year or 10-year time horizon with an investment that has a track record, a history of 10 years or so or 30 years or whatever.
For instance, if you're buying a rental property, you property you would say okay i can look at properties in that general area and say over the last 20 years or 30 years they've done this so and i'm gonna and i have a holding period of five or ten or twenty years on a rental property that's an investment a mutual fund that's been open 10 or 15 20 years and you say the track record is X, and based on that, I'm going to buy it

not for a short hold but for a long hold. When you buy something for a short hold to flip it,

that's called speculation. It's not called investing.
It's not called domestic,

and so you're giving the wrong names to these things, and that tells us that you put the wrong

weight on it, and the fact that the only money that you have is a high-risk speculative

Thank you. That's point number one.
Point number two is the borrower is slave to the lender. When you borrow money from someone, you by nature change the quality and the texture of the relationship with them.
Your Thanksgiving dinner tastes different when you owe your in-laws $110,000. Right.
They look at you going on a cruise differently when you owe them $110,000 than if you don't owe them $110,000. grand.
And even if they don't say anything, you can feel the eyes bearing into the back of your soul. You know what I'm talking about? Right.
And so don't change the quality of that relationship. Number one, number, like Jade said, number two, don't have your nest egg in something that's built for speculation.
If you want to speculate on Bitcoin, it would be a small percentage of your portfolio because you're trying to make quick money on it.

It's not a long-term investment horizon.

And that doesn't make – so if you want to speculate on it, I'm not going to yell about it.

But where I get upset about Bitcoin is when you've got everything you own in it.

Right.

And you're counting on that.

And if you go back and look at what short track record we do have on Bitcoin, it's extremely volatile. Right.
So, I mean, you like went to Vegas with your nest egg. This would be like the last thing.
Like we have our assets and like our savings in mostly other things. But like this Bitcoin is like the last thing we're like, Oh, we could keep it because it's speculation.
How much do you have in your real nest egg? You called that. Yeah.
And our real like savings, which would be cashing out most of our like gold and silver. And like, that's mostly where our money is, is going to, is 250,000.
Do you have 250,000 in gold and silver? Yes, we do. And how much is the Bitcoin? It's $100,000.
Yes, and then the Bitcoin is just like $100,000, and that's why we do have... So you could cash all this in like $300,000 towards the property.
Yes, for the down payment. That would be a really good move.
Do you have anything in just like mutual funds or just like? You know, we're not, we're newer to mutual funds, but, and we know we listen to the Ram Show, but we haven't, we mostly are like the tactile, like gold and silver. What bothers you about them? What, what, what spooks you about mutual funds? I'm just curious.
Nothing, nothing spooks us. I just don't think that, like my husband's an administrator.
I don't think he's just like gotten to the point where he's like, okay, let's sit down and like, actually, you know, like invest in them and buy them. Cause we've just done everything else.
Like, you know, you've done, you've done ultra high risk things that are extremely volatile in all three categories, um, compared to more standard investments. And the tortoise wins the race every time I read the book,

the tortoise and the hare.

And you've got everything over in the hare bucket instead of in the tortoise bucket.

And the people that build wealth are not the ones

that take as much risk as you all are taking.

So if I could talk you into it, and I doubt I can

because I've got the wrong person on the phone,

and the other guy's the one doing it. But if I could talk you into it, Jade and I both instantly said, sell it all.
Yeah, that's right. And pay, you know, pay a huge down payment on this house and get you something that's stable.
I mean, investment, I mean, owning a home in Los Angeles, freaking great investment, a great investment. And that's the direction we would go if we woke up in your shoes.
I don't know if I can get you there in one phone call. Yeah.
Well, yeah, she didn't seem like she had any aversion to it. It sounded like the spouse was kind of the one.
Yeah. He's the administrator.
Yeah. And so that's, yeah, he's the one that's doing all this stuff.
So he's not going to let go of it as quick as she did. But I have a a thought and i don't know if i'm i mean

they're 33 they're trying to buy their first house and my guess is they're trying to make a lot of money fast it's get rich quick 100 yeah and they've been lucky so far but that is the word yeah look yeah because again if you chart gold silver and bitcoin and you look at the peaks and the valleys that that jump up and jump down, that represents risk. And you put an overlay on that, like with real estate, real estate would look seriously boring.
If you put an overlay on that with a good growth stock mutual fund, compared to the peaks and the valleys, you'd just see these huge mountains and huge valleys on Bitcoin, gold, and silver, and you would see mutual funds going, it's real steady over like a 10-year period of time. And you would just be dizzy with the craziness of gold and the craziness of Bitcoin.
And so it's just a high-risk speculative thing. It's not a good investment for that reason.
If you want to play roulette, if you want to play Texas Hold'em,

if you want to speculate, if you want to do house flips, if you want to do day trading of single stocks, those are all things that fall under the heading of speculation. Speculation is not gambling, but it's more akin to gambling than it is investing.
We use the Vegas metaphor, but it is closer to a Vegas roulette wheel than in terms of risk profile, than standard investing. And that's why we would always take you there.
So it's an interesting call. Thank you, Roquel.
Good call. Yeah, and thanks for clarifying with us where you were.
But yeah, I don't own any Bitcoin. I don't own any gold except one watch.
That's it. And I own real estate that's worth probably $600, $700 million worth.
And I don't buy gold, and I don't buy Bitcoin, and I don't speculate. I don't day trade stocks and I don't do, I don't do quick flips.

I'm just to go. People ask me all the time, George, what's your number one money-saving hack?

I'm glad you asked.

Nothing makes me happier than helping another frugal friend.

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Get on a budget.

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So how much money are we talking here? Well, the average every dollar budgeter frees up $395 in their first budget. That's the hack.
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every dollar app for free and start saving more money right now. Our question of the day is brought to you by Y-Refi.
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That's the letter Y-R-E-F-Y dot com slash Ramsey. Might not be in all states.
All right. Today's question comes from Meredith in New Mexico.
She says, does the suggested four different mutual funds strategy apply when a couple is older? My parents are 75 and 72 and have $1.5 million in investments plus a paid off house and no debt. Their monthly income between Social Security and pensions is $7,500, and they're also withdrawing monthly RMDs from their investments.
They have no debt and a paid-off home. So just to catch people up to speed on the four investment types, Dave, that's the teaching around here.
You invest across four, growth, growth and income, aggressive growth, and international. And so that's what we've been saying for years here.
In this case, I want to I want to know more about the 7,500. Is that enough for them to live off of? What's their lifestyle like? Are they traveling a lot? Basically, are they looking to invest more? It sounds like they're really only living off interest, like they're not touching the actual nest egg.
So Dave, I don't know that I would tell them that they have to continue to invest. I suppose if they wanted to, they could still use that strategy.
But the biggest thing that I'm thinking about is are they putting this money, let's see, they can't put it into a Roth because it's not. Well, I don't know that she's asking about investing.
Does the suggested four different mutual fund strategy apply when a couple is older? She wants to maybe put it in something else, the million and a half. Is that what you drew from that? That's what I get from that.
Yeah. Instead of not, you know, because of course the asset allocation model says that as you get older, you should move towards bonds and money markets, which I disagree with the asset allocation model.
I think it's a bad theory. So here's the reality, Meredith.
These people are not really running this million and a half investment portfolio for themselves. They're running it for the next generation.
That's right. They're never going to touch it except for the RMDs that they have, the required minimum distributions that they're taking off.
They're living on that and on the 7,500. And so they've been, they're actually at 75 and 72 investing it for the next generation.
So they have a long investment horizon for you. She said it's her grandparents, right? Or no, her parents.
Her parents. Yeah, they're investing it for you.
And so I'm 64. I will not move anything out of those four before I die.
I'll be in those four categories all the way to death because I likely will never touch it. And so I'm actually investing it for Rachel, Denise and Daniel, my kids.
And so, um, they will get that, uh, upon my death or upon mine and Sharon's death anyway. So, um, you know, that's what that million and a half is doing.
So it's going to grow better across those four than if you start dumbing it down using this stupid asset allocation thing. And that's what that's what she's heard about, I'm sure, is to change the mix of the portfolio.
Interesting. I'm wondering also about how much of the one point five million is just in traditional IRAs versus says investments.
I don't know. Yeah.
Yeah. I don't know.
I feel like that'd be the thing I'd be wondering most about. I would have it.
I'd have that 1.5 across the foreign mutual funds. I do have that 1.5 across the foreign mutual funds and I'm slightly younger than them by about 10 years, but still same, same theories apply in that situation because they're not going to draw this all out in the next five years.
I promise you they're not going to draw it all out in the next five years. They're multimillionaires.
They're in great shape. They can do anything they want to do without even touching it.
I mean, they already have $150,000 a year income. And so they're fine.
They're fine. And that's what I would do.
But I think that's the essence of the question. I could be wrong.
So good question. Thank you for writing that in.
Luke is in Harrisburg, Pennsylvania. Hi, Luke.
How are you? Hi, Dave. I'm good.
Thanks for taking my call. Sure.
What's up? I own and operate a small construction business. My wife is a is a stay at home mama and we got two kids, um, and got some bad treads going on.
I think, uh, past couple of years, I've acquired a serious, pretty serious amount of debt and we ate through all our savings. Wow.
You're not making money. Not enough, I guess.
And, uh, what are you spending it on um i have i have quite a bit of well i had last year i had quite a bit of uh business expenses that were you know fairly irresponsible and it kind of you know drove me down and also uh the business doesn't have a a real clear plan at this point which i think is hurting my productivity a lot. So I don't, you know, my hours aren't up there.
What do you build? Uh, just general remodel construction. I do a lot of, I do some of my own jobs and I do, uh, just tools.
Yeah. Tools.
And I bought a truck for the business. Um, I already had one, but I upgraded it and that was pretty a pretty big expense.
Yeah, what did you buy? What kind of truck?

It's a Chevy Silverado 2500.

Brand new?

No, it's a 20.

So, 60 grand?

Yeah.

Okay. Sell it.

Okay.

The guys in the construction business that make real money drive five thousand dollar trucks yeah they don't they don't prove their uh construction ability with the truck they drive they've proved it with a hammer they swing yeah right the guys that have been doing business for years you know the one i'm talking about they're grizzled yeah their hands are gnarled they can build anything they can see stuff in their head that nobody else can see and then they can make it come to life you know those guys oh yeah yeah i do too i grew up in the business and they're they're incredible human beings but they drive all junk trucks because they don't give a crap what you think about your truck yeah right right right, right. You get rid of the truck.
What else did you buy? Well, I bought an investment property last year. Sell it.
Okay. You're broke.
You don't need an investment property. Yep.
What else? I'm feeling so much lighter already. I was heavy for a minute, but now you're getting lighter.
I have one question with that investment property. I have a renter in there that I have a lease signed.
Should I wait until that lease is up next January? No, if you can sell it to another investor, sell it. What do you owe on it? I owe $110.
It's worth $150. Okay.
See if you can get somebody to buy it. Maybe somebody wants a renter until next January.

Gotcha.

Or you could pay the renter to leave if you put $60,000 in your pocket or $40,000 in your pocket. Yep.
And pay the renter $5,000 to go away. Yep.
I'd do that. Because, man, you've been buying crap instead of working.
Yeah. uh and that you know on that note, do you think I should start from scratch with my business, try to specialize in something to get my hours up? Or do you think I should kind of take a hit to my pride and just get a full-time job and scale the business back to like a part-time? I would give yourself six months of new zeal and enthusiasm to learn how to run a business.
And during that six months, if I can't get my act together on running the business

properly, then I'm going to go to work for somebody that knows how to run one. Because I know several

people doing what you're doing that have a net taxable income of in excess of $300,000 a year.

You have the ability to make a lot of money, but you've got to learn how to run the business. Yeah.
And that involves like you're estimating has to be on your times. How long is it going to take to do the job? And you're estimating on the cost to do the job, the cost of materials, the cost of the labor to do the job has got to get so dialed in that it's almost perfect.
Then you're delivering the job to the customer on time and on budget, and they're going to love you, and they're going to send you so much business, you won't be able to beat people off with a stick, and you'll make so much money. But you need to learn to run what's called a job cost, which is a P&L on each job, a profit and loss on each job, so that you learn your estimates and where you're off on your other estimate, and then you can correct and get your estimates dialed in.
If you could push that button for six months, I think you could get this moving. If you can't, then it's okay to go to work for somebody.
There's no shame in that, and go watch them learn, and learn from them on how to do it, and do it, you know, do this on the side. But yeah, you've been, you went in business and then you went and bought a bunch of stuff and you need to sell all that stuff to get your life back.

Right on.

There we go.

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