Stick to the Plan Even When It’s Tough

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Speaker 1 Live from the headquarters of Ramsey Solutions, it's the Ramsey Show.

Speaker 1 We help people build wealth, do work that they love, and create actual amazing relationships. Jade Washaw Ramsey Personality is my co-host today.
Thank you for joining us, America.

Speaker 1 We're glad you are here. The phone number is 888-825-5225.
You jump in and we'll talk to you.

Speaker 1 Abigail's in Portland, Oregon. Hey, Abigail, how are you?

Speaker 2 Good morning, Jade and Dave. So such a pleasure to talk with you.
Thank you so much.

Speaker 1 Sure. How can we help?

Speaker 2 Well, I am 70 and working a great deal,

Speaker 2 trying very hard to make it possible to retire by 80.

Speaker 2 Recently, so this last year, I've had two offers from a company that

Speaker 2 would,

Speaker 2 if I followed those, they would probably make it possible for me to retire

Speaker 2 within a few years.

Speaker 2 But I feel a need to really

Speaker 2 please

Speaker 2 this company, and I'm not sure how to go about that, to be real thorough and making sure I'm not going to get myself into a big pickle.

Speaker 2 Another thing is that my husband would never approve of this, but he's in very poor health and doesn't expect to live long.

Speaker 1 What are we talking about?

Speaker 1 What are we talking about?

Speaker 2 This is a company that establishes solar farms

Speaker 2 across the nation, and they pay a good rate of rent for your acreage.

Speaker 1 And they involve

Speaker 1 and you've had two different offers

Speaker 2 from the same company.

Speaker 1 Okay. I mean,

Speaker 1 this is basically they want to lease the land for 15 years, right?

Speaker 2 For 30 to 40 years.

Speaker 1 30 to 40 years. Okay.
All right.

Speaker 1 I've looked at these deals. I've had some friends that had some that were a little bit older than you.
And

Speaker 1 the

Speaker 1 only question in the deal is twofold.

Speaker 1 Number one, you've got to make sure the company is solvent.

Speaker 1 And in the event of that they're strong financially, in other words, in the event they go bankrupt, obviously this lease is canceled, and then you've got a bunch of junk on your farm.

Speaker 1 Yes.

Speaker 1 Okay. That's got to be hauled off.
It's very expensive to get rid of it. And so you've got to make sure this company's got 30 years worth of staying power financially.

Speaker 1 You're probably not going to be here 30 years. I doubt I'm living to 110,

Speaker 1 but you might,

Speaker 1 but you're leaving this mess for your heirs then.

Speaker 1 And my friend that was in their 80s was talking to their kids about what their kids wanted to do because it really would only affect the 80-year-old for a period of time, right? That's true.

Speaker 1 And the kids would then have the issue with the family farm having a solar farm on it. So, why would your husband not do it?

Speaker 2 He loves his farmland.

Speaker 1 Okay. Just that simple.
Okay. The other downside is that you basically can do nothing with your piece of ground.

Speaker 1 It now has a lien against it. I mean, you could sell it, but it's still encumbered by this lease.
It's a lien on the property.

Speaker 1 Yes. And so

Speaker 1 if someone wanted to buy it,

Speaker 1 they'd have to accept the lease as part of the equation.

Speaker 1 Yes.

Speaker 1 And so that's how our friend decided not to do it because

Speaker 1 he didn't want the farm tied up for the kids.

Speaker 4 What is the land worth?

Speaker 2 Currently, about $3 million.

Speaker 1 And how many acres are there?

Speaker 2 It would be 45 acres.

Speaker 1 And how many, and what are they offering you for, and how much of it are they going to tie up?

Speaker 2 It would be most of it, but about six acres.

Speaker 2 Well, it would be 45. We would be renting.
But

Speaker 2 it would be about 4 million over 40 years.

Speaker 1 You know what?

Speaker 1 You're not going to like my answer.

Speaker 1 But I wouldn't tie up a $3 million asset for that and have my whole backyard full of this.

Speaker 1 I would instead sell some of it.

Speaker 2 Well, thank you for that. That has been a consideration.

Speaker 1 I would sell 10 acres and use that money to live off of.

Speaker 2 Yes, and we could do that. And it's also something my husband is not eager to do.

Speaker 1 I'm sure he would not want to do either of these things, but that's emotional. And we're talking about how you're going to eat, which is what you're worried about.

Speaker 1 You're working at 70 years old, worried about how you're going to eat at 80.

Speaker 2 Yes.

Speaker 1 Yeah. And so I'm, uh, your husband didn't save enough money when he was young and working to provide for his wife's food.
And so we're going to sell some of his land

Speaker 1 to do that. That I'm sorry.
That sounds cold, but I mean, that's the way my mind works. Okay.

Speaker 1 And so, yes.

Speaker 1 Yeah. I'm going to pick out how I can carve off and make a million and a half on 10 of the 45 acres that are maybe some

Speaker 1 premium cut of the 45, right? And you just got to decide how you're going to parcel that out in Portland, Oregon.

Speaker 1 And I'm going to start talking to a real estate agent about subdividing this and how I can, where I can drop a line in with a surveyor.

Speaker 1 And I'm going to do that to eat with. And you still get to live in the place.
You still got 35 acres, which is very nice.

Speaker 4 And it's the way that he wants it.

Speaker 1 And if you do it properly, you get to configure which 35 it is, right? But we've got to get enough out of the other to sit down with an investment broker and create an account.

Speaker 1 And if you did it right, you probably could get a million and a half. If the whole thing's worth three, I bet you you could sell a fourth of it for a million and a half.
I bet you could.

Speaker 4 And then you think about in the future when her heirs get it, what it's appreciated to, and now they don't have to deal with the red tape of having that solar lease on there.

Speaker 1 Yeah.

Speaker 1 The problem

Speaker 1 with, again, her situation and the situation I looked at was the same one, was not as much the next 10 years. It was the following 20 years.

Speaker 1 That's a long time. Yeah,

Speaker 1 it's a ground lease. You can do long-term ground leases in commercial real estate.
But this is good. It's not a scam.
It's an actual offer.

Speaker 1 But, you know, the one thing we do know about solar is it's technology. And I can tell you this, you know what a 20-year-old solar panel is?

Speaker 4 Useless. Useless.

Speaker 1 Because the technology has advanced dramatically in the last 20 years. And so what you've got is, you know, you've got something the size of a tractor trailer that's doing what something that would,

Speaker 1 the size of a car would now do, right? Right, right.

Speaker 4 And so they've got to dispose of that.

Speaker 1 And it's, it's, you know, it's a big old bunch of junk to haul off. Holy smoke.
And yet we bought it thinking, oh, we're going to make all this money over all these years when people are buying solar.

Speaker 1 Now, you can buy solar. There's nothing wrong with buying solar.
I don't have a problem with that. This is a different discussion here.
This is people leasing her land.

Speaker 1 And then what they do is they sell it to the local, they sell the electricity is created to the local utility. Interesting.
And that's where they make their money back.

Speaker 4 Yeah, it just didn't feel like a fair deal. $4 million over 40 years for a piece that's worth $3 million today felt I'd want more.
At the very least, I'd want more money out of the deal.

Speaker 1 Well, you still own the ground, but you can't do anything with it.

Speaker 4 That's what I'm saying. So at that point, like you said, it's kind of useless at that point.

Speaker 1 Yeah, exactly. Good decision.
It's the lean against it. It's an interesting discussion.
I've not had that on the air before. I did have it obviously off air one time.
This is is the Ramsey Shadow.

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Speaker 1 Well, look who's in the house. Brian Buffini,

Speaker 1 one of the nation's top business experts, founder of Buffini and Company based in Carlsbad, California. The firm is dedicated to sharing the powerful message of lead generation systems.

Speaker 1 Primarily started out in the real estate world. Brian and I met each other probably 20 years ago.
He's a New York Times best-selling author and speaks for us regularly at Entree Leadership.

Speaker 1 He'll be coming back with us in 26 and was in town doing some other stuff. Came over and did our staff devotional this morning and owned it again.

Speaker 1 Absolutely fabulous. Welcome back, my friend.
Thanks to having me.

Speaker 5 Great to be back.

Speaker 1 Absolutely. So, the ones that don't know the story, you came here from Ireland in the 80s and you got this classic American dream rich story with a rags to riches being a legal immigrant.
Yes. And

Speaker 1 is that still possible now?

Speaker 5 Yeah, I'd say more possible now than ever.

Speaker 1 Why is that?

Speaker 5 Well, you know, I have six kids, so they get this seminar all the time.

Speaker 5 You know, I think if you don't have a sense of entitlement, it grew up not having much, have an appreciation for the opportunity, and you get to see the opportunity.

Speaker 5 You know, fish fish discovers water last.

Speaker 5 And here's the other thing. And again,

Speaker 5 if you ask people like myself who are immigrants to America, they're the most fanatical Americans. I became American by choice, not by birth.
My kids are in the military and so on and so forth.

Speaker 5 But I'll say this. I'd say the work ethic in the United States is not what it was 35 years ago, 40 years ago when I came.

Speaker 5 Money is more available than it ever was. And so I think money's available.
Your competition's not working that hard. People are a little bit of entitled.
And I'll say this.

Speaker 5 If I was 19 years of age and I happened to get hit by a car like I did in 1986, I think I could build my fortune in half the time.

Speaker 1 Wow.

Speaker 1 Why?

Speaker 1 Because there's just not any competition because you've got work on it.

Speaker 5 The opportunity is more than ever. The opportunity, the American economy business is so much bigger.
There's so much bigger markets than ever before.

Speaker 5 You don't need to, you know, with social media and the things that you can do to market and advertise yourself now, you can go so much faster.

Speaker 5 You know, Dave, you building your brand today compared to building your brand when you started out, you know, there was no internet when you started.

Speaker 1 There was no internet.

Speaker 5 Same thing. And then capital is available when needed for certain things.

Speaker 5 So I just think that, and I do think a little bit, and again, that's why a little bit of adversity would be helpful to America is

Speaker 5 folks want the, they want easy, quick, millionaire overnights. That's why internet gambling is huge now.
Bitcoin is big now. I want success.
I want it now.

Speaker 5 And I think one of the things about immigrants is you had to sacrifice to come here.

Speaker 4 That's right.

Speaker 5 I mean, I just left, my mom just passed last week. You know, you had to leave your family and you have to come, you had to pay a price to get here.
You guys teach delayed gratification.

Speaker 5 There's a reason you have a big market because it's a foreign concept.

Speaker 4 So there's like a level of skin in the game that you're saying. I was reading a couple of statistics and it was something like one in three U.S.
millionaires are immigrants.

Speaker 4 At one point, like over 48% on the Forbes 500 were immigrant run companies, firstborn or, you know, child of an immigrant.

Speaker 4 So you're saying that skin in the game and coming from a sense of, not approaching it from a sense of entitlement. You think that's the...

Speaker 5 I wrote a book about it. I'll give you seven principles in 30 seconds.
Number one is a voracious openness to learn. And number two is a do whatever takes mindset.

Speaker 5 Number three is a willingness to outwork others. We just talked about it.
Number four is a heartfelt spirit of gratitude.

Speaker 5 Immigrants are very thankful to America and thankful for the opportunity. Thankful to their customers.
When was the last time somebody said that to you? Thanks for your business.

Speaker 5 They're willing to invest.

Speaker 5 They're willing to delay gratification. And they always remember where they came from.
And I think if you can always remember where you come from, it gives you a great perspective.

Speaker 5 Dave has his old car on display here. We used to sell stuff out of the back of the car.
It's right when you come into the lobby. Never forgets where he came from.

Speaker 1 Don't despise humble beginnings. Yes, sir.

Speaker 1 That's it. Yeah,

Speaker 1 the stats are, the data that we have says if you come to the country legally, you are four times more likely to become a millionaire than someone born here. Yeah, and it's it's a touchy subject.

Speaker 1 Those are the reasons.

Speaker 5 It's a touchy subject. And that's why the legal immigration route is a sacrifice.
If people come here for entitlement programs, you've destroyed the very reason to be an immigrant.

Speaker 1 Wow.

Speaker 5 You actually take away all of the seven gifts you have, you take away that. We proved it in Ireland.
Ireland,

Speaker 5 we had 450,000 Eastern Europeans come to Ireland in the mid

Speaker 5 early 2000s. And when Ireland got into trouble and had to do an austerity program, cut back all the programs, 450,000 people left the country.
So they didn't come to contribute, they came to take.

Speaker 5 You have to be willing to come and make your own. You have to be willing to come and make a name for yourself, make a business of yourself, make a life for yourself.

Speaker 1 And you know, what's interesting, the Americans that I run around with anyway, do not resent that immigrant. They don't resent the one that came here to add value.

Speaker 1 They don't resent the one that comes here legally. I don't hear that at all.
And so it's not a

Speaker 1 racism thing, and it's not a,

Speaker 1 you know, I just hate people that weren't born in America thing at all uh because american is the land america is the land of immigrants for sure it does a terrible disservice to people if you take away the very essence of being an immigrant it does a terrible disservice so the podcast the brian baffini podcast we're talking with new york times best-selling author brian baffini today uh is called it's a good life be sure and check it out

Speaker 1 so what's been your experience doing a podcast because you're you're a speaker a coach extraordinaire yeah and then you sit down behind a microphone like this now yeah well it's a little different you know and i like when i wrote a book i found out as a writer i'm a great speaker and then

Speaker 5 and then i found out when i was on tv i got a face for radio exactly and uh you know when i've you know just because you can buy a microphone doesn't make you a broadcaster you know and being dave ramsey is not as easy as people think um i you know here's what i do i i get a chance to interview people i'm really interested in and ask them things i had you on today and uh i asked you as a business mentor of mine as you have been i got to ask you some questions that helped me in my business today i got a a couple hundred employees I got to take care of.

Speaker 5 I got a pretty good business going. And, you know, so I get a chance to meet some fabulous people and ask them their stories.
And you hear some wild stuff, you know.

Speaker 1 The largest and most successful coaching company in America today coaching real estate agents by far, not even a close second. I grew up in the real estate business.
And

Speaker 1 so one of the things I'm been asked lately, and I was asked this the other day on a podcast that I was a guest on, is

Speaker 1 Gen Z feels like they can't buy a house.

Speaker 4 Millennials do. Yeah.

Speaker 1 And some millennials feel like they can't.

Speaker 1 Talk about that because you're square in the middle of it.

Speaker 5 I'm square in the middle of it and we have some research and I have access to some stuff that isn't really out there in the marketplace today.

Speaker 5 You know, I don't know, how old were you when you bought your first house?

Speaker 1 22.

Speaker 4 36. Great.

Speaker 5 That's that's the world we live in. So I'd give you two words for the real estate business today.

Speaker 1 Older and richer.

Speaker 5 Older and richer. That's who the clients are.
Average age of a first-time buyer three years ago was 32.

Speaker 1 Today it's 38.

Speaker 5 They're putting off getting married, having kids, and having families. Very destructive to the culture.

Speaker 5 The average age of a seller is 63.

Speaker 1 So it's older and richer.

Speaker 5 And so, and

Speaker 5 it needs to shift. And

Speaker 5 Scott Turner is the new secretary of housing and development. Good friend of mine played for the Chargers.
And I'm meeting with him at the end of the month to try to help in this regard.

Speaker 5 We've got to create programs to get younger people in the game.

Speaker 5 But also, younger people got to be willing to do what it takes. And it's this.
You've got to be willing to fight for it. You've got to be willing to sacrifice it.
Are you willing to do a side hustle?

Speaker 5 Are you willing to do a side hustle? Are you willing to save every dime on that side hustle, invest it, grow it? Are you willing to fight for it? It's got to be that important to you.

Speaker 5 I think what needs to happen is people need to understand the value of what it means to a family and a culture and a community when you're a homeowner. And so, are you willing to fight for it?

Speaker 5 You will delay gratification. Are you willing to move a little further out of town to get a start?

Speaker 5 You know, are you willing to have some difficulty in doing it? Are you willing to not have to go out with your buddies or take the trips? Are you willing to go, okay, you know, it's ramen?

Speaker 5 You know, when I bought my, I bought a house, I bought a first house, then I sold it and bought a second one, bought a third one.

Speaker 1 Third house, a nice big home.

Speaker 5 We had three empty rooms of no furniture for two years.

Speaker 1 I understand that.

Speaker 5 Kids could play and they could roll and do whatever. And guess what? Dad invested, dad grew, and then eventually mom could have all the furniture she wanted.

Speaker 1 Dude, I was a teenager before we had living room furniture. Yeah.

Speaker 1 Yeah. And that was a thousand square foot with an unfinished basement.

Speaker 1 Yeah. You ever played volume? I hadn't even thought about that.
You said that. Yeah.

Speaker 1 It didn't bother us. I didn't need counseling because of it.

Speaker 4 It's true, though. You have to be willing to do what it takes to get the real estate.
My husband and I rented for 10 years so that we could afford and save up in order to do that. So you're right.

Speaker 4 It's still attainable. Just have to do what it takes.

Speaker 1 Yeah, you were in the process of seven years and $465,000 in debt to be paid off. So that's what kicked the can on that one.

Speaker 5 Can I tell one story before we go? I know we're tight on time. Yep.
My mom just passed, as you know. Thank you for the flowers from you and Sharon.

Speaker 5 My mom and dad were engaged for seven years back in the day.

Speaker 1 Okay.

Speaker 5 Gonna be promised to be pure, one another, one of us. Seven years they were engaged.
They wouldn't get married until they could buy a house. Wow.

Speaker 1 There it is.

Speaker 1 There it is. Brian Buffini, ladies and gentlemen, check him out.
It's a good life is the podcast. And you can follow him at Brian B-U-F-F-I-N-I.
Brian Buffini. Thank you, my friend.
Thank you, guys.

Speaker 4 Hey, guys, I'm Jade Warshaw, and I want to talk to you for a second about student loan refinancing.

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Speaker 1 James is in Miami. Hi, James.
Welcome to the Ramsey Show.

Speaker 3 Hi, thank you.

Speaker 6 So I just had,

Speaker 3 I just was wondering if I could get some advice. So I'm about to finish school and me and my fiancé are currently going to be about $700,000 in debt.

Speaker 3 And now that I'm finishing up,

Speaker 3 I'm starting to get a little

Speaker 3 worried.

Speaker 1 I'm worried. And I just met you.

Speaker 1 What are you? Who's the doctor? Who's the lawyer?

Speaker 3 So I am finishing law school here tomorrow, actually. And my girlfriend is in her third year of medical school.

Speaker 4 Oh, my gosh.

Speaker 1 Both of you. Okay.

Speaker 4 So you're not done. Like, for her, she still has schooling to go, and this could even get greater, right?

Speaker 3 So these are the, so her debt is what it will be at the end.

Speaker 1 So her debt currently is less.

Speaker 1 That calculation is with. When are you supposed to get married?

Speaker 3 We are planning to get married next May.

Speaker 1 Okay. And well, we don't do anything together until we're together, number one.

Speaker 1 I mean, we could talk about it, which is fine. I don't mind planning for what we're going to do, and that's very wise on your part.

Speaker 1 But you're graduating now.

Speaker 1 Yes, sir. And you're going to sit for the bar this this summer.

Speaker 3 Yes, sir, in July.

Speaker 1 Okay.

Speaker 1 Good. And she graduates when?

Speaker 3 It's going to be 2026 or 2027.

Speaker 1 Okay. Two years.

Speaker 3 Yes, sir.

Speaker 1 Okay.

Speaker 4 When is there the opportunity to start making money? And what do you think you'll come in at?

Speaker 3 So,

Speaker 3 you know, God willing, I will pass the July bar and September is when I would get those results. I have already signed a contract with a firm for $150,000.

Speaker 4 Okay, that's good.

Speaker 1 Okay.

Speaker 3 And her income, obviously, during residency, they don't pay them very well. She's going to be coming in about $55,000, $60,000 a year.

Speaker 1 And she's in residency now, right?

Speaker 1 Third year.

Speaker 1 I'm sorry. She's in her third year.

Speaker 3 She's in her third year of school. She'll be in residency in two years.
So it would just be my income for the next two years.

Speaker 1 Okay, and then she'll have 50. So you're going to go 150, 200, and then when she gets out, hopefully 400.

Speaker 3 Yes, sir.

Speaker 1 Yeah. Okay.

Speaker 1 Well, obviously, those are the numbers, the income numbers are what we're going to use to clear up the $750, I can't breathe, $1,000.

Speaker 1 So

Speaker 1 here's the big, I mean, if you said, okay, we're going to live like two college students until this is paid back, you're going to have it paid back fairly quickly after she graduates.

Speaker 3 That is

Speaker 3 that's the goal. And one of the questions I was wondering, so you know, out of that $700,000, $350,000 of that is the student loans.

Speaker 3 The other $350,000 is the mortgage that I have on a property that we live in.

Speaker 1 Oh,

Speaker 1 so $350,000? I thought you had a. Okay.
Oh, you thought you had $750,000 in student loans. I'm feeling much better now, but not that much better.

Speaker 3 It's $350,000 in student loans and $350,000 in a mortgage that we have have about...

Speaker 1 When did you buy this house?

Speaker 3 So I bought this at the beginning of law school.

Speaker 1 Oh, boy. How have you paid for it?

Speaker 3 I've been working and living off of student loans.

Speaker 1 Oh, you've been paying for the house on student loans?

Speaker 3 So

Speaker 3 the... The rental market down here when I came to law school.

Speaker 1 What's the house worth, James?

Speaker 3 The house is worth currently around $390,000, $400,000.

Speaker 1 Oh so you don't owe you don't you owe almost on it what it's worth and you've owned it three years

Speaker 3 no I mean

Speaker 3 so the way I

Speaker 3 the loan is not through a bank it is through a family member and they deferred my mortgage for the three years that I was in law school

Speaker 3 So I have not collected any interest nor have I made any payments on the property.

Speaker 1 But the property's not gone up in value while you've owned it for three years.

Speaker 3 Yes, sir. It's gone up about 45,000.

Speaker 1 Nothing. Okay.
So I'm shocked.

Speaker 4 How easily can you get out of this? Like, what's this? Is it sell it like a normal? Like, what's the terms of this?

Speaker 1 You can sell it and pay off the family member now, right?

Speaker 3 Yes, sir.

Speaker 1 Okay.

Speaker 1 Yeah. Do that.

Speaker 4 You can't have a house right now.

Speaker 4 Yeah. You have no income.
You've got $350,000 of debt.

Speaker 8 And here, do you want to know where my mind goes?

Speaker 4 In July, when you have to sit for the bar and you realize the stress and the pressure that's going to be on you,

Speaker 4 do you see what I'm saying? That plays into how you're going to test. It plays into everything.

Speaker 4 So if I'm in your shoes, I'm trying to offload half of this debt immediately so I can go sit for this bar and realize that I can have, do you see what I'm saying?

Speaker 4 And alleviate some of that pressure along with some of the debt because this is a scary situation.

Speaker 1 You can get your one-bedroom apartment, dude, and eat beans and rice and go to law and go to work as a lawyer, making $150 and start cleaning up the remaining debt.

Speaker 1 We just got rid of half of it by selling it off. And you're not going to do that because you still think this is a good idea.

Speaker 1 But you called the wrong show because we love you enough to tell you the truth. It was not a good idea.
And,

Speaker 1 you know, and whoever your relative is

Speaker 1 helped you step into a bear trap. And

Speaker 1 bear traps take your leg off.

Speaker 1 They're not for playing. And so you need to get,

Speaker 1 you're not going to do it. But what you should do mathematically, and the fastest way for you and your fiancé to become wealthy is for you to live on nothing, get a tiny little studio apartment

Speaker 1 that's costs nothing there in Fort Lauderdale. Yeah.
And

Speaker 1 then go

Speaker 1 and you don't need to live in downtown freaking Miami Beach. You can't afford it.
No, no, no, no.

Speaker 1 And so get out there in the burbs and get you a deal and then work your tail off and live like a college student sitting on a beanbag with concrete blocks for your law books and boards between them.

Speaker 1 And

Speaker 1 whatever living like a college student looks like in your mind, but not the college you went, not the way you've been going to. No, not a luxury.

Speaker 1 And then you clean up as much of your debt as you can before you all get married and before she graduates.

Speaker 1 And the instant she graduates and her kicks in, if yours isn't gone yet, then you use her additional income and you all are married to, at that point, to combine everything and attack them in this order.

Speaker 1 But you should be, if you'll do all of that,

Speaker 1 you could be 100% debt-free in three and a half years from today, including her graduating two years from now.

Speaker 4 Dave, talk about this for a minute because I think it's worth it. So here we offer a benefit called Smart Dollar.

Speaker 4 You can have it in your business, but the point of it is the stress that you feel in your life when you have student loans, when you have debt, the stress that it takes on you working at your job.

Speaker 1 You were the one sitting with $200,000 worth of it. You know what the stress feels like.

Speaker 4 I do, but I feel like people forget about that.

Speaker 4 I feel like people forget about the toll that it takes on you to perform every single day and to show up as the person that you want to be.

Speaker 4 Because without knowing it, your debt drives you to make decisions that you would not normally make. It drives you to choose a job that you might not have normally taken.

Speaker 4 It drives you to do all of these things because it is now the number one factor. I have to pay off this debt.

Speaker 4 To sit for a bar with $700,000 of debt weighing on your shoulders and think that you're going to perform the way you would have if you didn't have that debt.

Speaker 4 Like these are the things that we've got to think about when we make these decisions.

Speaker 1 And James, I'm going to

Speaker 1 insult you now, also,

Speaker 1 potentially. So hold on.

Speaker 1 In 35 years of doing what I do, the hardest people to convince to use common sense are the smart people

Speaker 1 and lawyers and doctors.

Speaker 1 the level of arrogance that comes with that often that I think I'm smart.

Speaker 1 I'm in the top echelon of the society and the rules don't apply to me. They apply to you, son.
You are a broke freaking lawyer that is way over leveraged and you ain't even a lawyer yet.

Speaker 1 So act like it.

Speaker 1 Some humility to approach this table of common sense is necessary. And it's the hardest group of people I have to talk into it.
Uh, it is, um, and medical doctors out there.

Speaker 1 I'll go ahead and make you guys pissed too while I'm at it. You're not even in the top five category of millionaires.

Speaker 1 The top five, you're number six on the list of people that become millionaires because medical doctors are about as notorious as people in the music business or the acting world for being stupid with money.

Speaker 1 Only they add a level of arrogance to it because they're so freaking smart.

Speaker 1 And so, don't be too smart for your own good is my point and if you're not then you're gonna end up with a lot of money here son when you're 30 years old you guys are gonna be very wealthy if you'll go through and follow through on what we're saying but i don't know if i got you or not i don't i don't have any idea this is the ramsey show

Speaker 9 When you go through a job loss or job change and lose your employer-sponsored health insurance, there's no better time to try Christian health care ministries.

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Speaker 9 So find out more at chministries.org slash budget. That's chministries.org slash budget.

Speaker 1 Jade Washall Ramsey Personality is my co-host today. Thanks for hanging out with us, America.

Speaker 1 Let's face it, our money and relationships work together to help us win, or they work against us, cause us to lose. You don't have to stay stuck in this area.
I'm going out with Dr.

Speaker 1 John Deloney on a six-city tour. We're going to do the money and relationships tour in this coming Monday.
I'm going to be, we are going to be in Louisville, Kentucky, April the 21st.

Speaker 1 Durham, a week from today, April the 23rd, on Wednesday. Atlanta, week from Friday, April the 25th.
Phoenix, May 5th. Fort Worth, May 7th, and Kansas City, May 9th.
Tour starts next week.

Speaker 1 Kansas City and Fort Worth are almost sold out. Do not wait.
Get your tickets right now and go to ramseysolutions.com slash tour or click the link in your show notes. Either way.

Speaker 1 Spencer's with us in Dallas, Texas. Hi, Spencer.
How are you?

Speaker 3 Doing great. Hi, Dave.
Hi, Jade. Thanks for having me on.
on. Hope you're doing well.

Speaker 2 I got a question for you.

Speaker 3 So I'm currently on step two and expect to make it through step four within the next 12 to 15 months.

Speaker 1 Great.

Speaker 3 I'm looking ahead here and I've got kind of a unique mortgage situation. And that's kind of what I'm wondering and kind of wanting some insight on.

Speaker 3 So about four and a half years ago, my in-laws helped us purchase a house and essentially bought the house for us. And they're our lender.

Speaker 3 And so we pay them a mortgage every month, which doesn't include any type of escrow or anything like that. But I set up the payment based on what we could afford and we're never going to pay it off.

Speaker 3 And my in-laws have had that conversation with us and they're they're in their late 70s now. So it's basically going to get folded into some sort of inheritance.

Speaker 3 Is it in my best interest to essentially avoid SEP six in this situation. I'm a little conflicted because it's not really in our benefit.

Speaker 1 So what do you owe your enemy?

Speaker 3 So we owe them $348,296 right now. The house of the world.

Speaker 1 And they have no intention of receiving that from you before their death.

Speaker 3 No, not at all.

Speaker 1 And what's the size of their estate?

Speaker 3 I don't know that exactly. I've never had that conversation.

Speaker 1 Millions or tens of millions?

Speaker 3 I would venture it's probably in the millions I mean he retired in his late 50s and how many siblings does your wife have

Speaker 3 she has one sister older sister okay all right

Speaker 3 and

Speaker 1 my suggestion is you all quit pretending that this is a mortgage all of you

Speaker 1 And so what I would do is sit down with them and say, look, we need to restructure this.

Speaker 1 Okay.

Speaker 1 We either need to go get a mortgage and pay you all off, and then we'll get the money, of course, when you pass away as an inheritance, or

Speaker 1 you guys can just take, advance us

Speaker 1 a portion of my wife's inheritance by just forgiving this loan.

Speaker 1 Of course.

Speaker 1 That's what should happen.

Speaker 7 I've thought about it, but it's certainly an awkward situation to have.

Speaker 3 You know, no one ever wants to have that conversation.

Speaker 1 Yeah, I don't want to have it, but y'all all signed up for this awkwardness.

Speaker 1 And

Speaker 1 it makes sense.

Speaker 4 It feels presumptuous to go in and say that. I understand that, but it does make sense.
And if they were logical people, I feel like they would understand that.

Speaker 1 And they can do that with what's called the Unified Estate Tax Credit file, a one-piece of paper with their tax return. There'll be no gift tax on it.

Speaker 1 And then just your wife's portion of the estate is reduced by $350,000.

Speaker 1 And then you have a free and clear house, and we have jumped ahead to baby step seven.

Speaker 1 Of course. Which is a wonderful gift.
And then you guys say we promise to pay, put the equivalent of house payments into investments so that your grandchildren are multi-millionaires.

Speaker 3 That is the goal.

Speaker 1 That's what you would tell the parents.

Speaker 1 You tell them their grandkids are going to be multi-millionaires because we're going to pay a house payment and then some into investments. almost immediately because you guys are just pretending.

Speaker 1 This is not a real mortgage. It's a form of denial.

Speaker 3 Exactly. No, it is.

Speaker 3 It's kind of an oddball situation. I'm not sure how often you've counseled somebody in this type of situation.

Speaker 1 Well, I've counseled them plenty of times where they had a regular mortgage with the in-laws, which is a mistake, too. But because it changes the flavor of Thanksgiving dinner, have you noticed?

Speaker 1 The borrower is slave to the lender, and it's weird, and it's awkward. And now, every time I'm looking at my father-in-law, I'm looking at my master,

Speaker 1 not just my father-in-law. And it's weird.
I borrowed money from Sharon's dad one time when we were broke, and he's the sweetest, nicest guy possibly to ever live. He is a sweet man.

Speaker 1 And I felt like dirt drug into the floor every time I walked in that house until I got that thing paid. He never said an unkind word.
He never rolled his eyes. He never did, but I felt like poop.

Speaker 1 Same. And it's just awful.

Speaker 4 That's so true.

Speaker 1 It just, I mean, and Sharon, she didn't care as her daddy. She didn't bother her.
I was the only one with my panties in a while. You know, I mean, it was just, my God, I felt awful.

Speaker 1 And so, y'all, you know, and that's kind of, he's being pretty chill about it, but he's got a little bit of that going on. So, y'all.
You can't avoid it.

Speaker 1 I would say, look, I would say this is an awkward conversation, mom and dad. I want to have it because the plan is for us to never pay it off.

Speaker 1 So let's just change the structure of it and reduce the thing and go ahead and release the lien and make it a gift, an advance gift against her portion of the inheritance.

Speaker 4 And she needs to lead that conversation, no?

Speaker 1 I agree. I agree.
Agreed. But you need to be sitting there too.
And mom and dad, look, it's silly because you don't ever expect to get the money.

Speaker 1 So since you're never going to get the money, we don't have a plan to get out of debt. We have to wait on you to die to be debt-free.
And we don't want to do that.

Speaker 1 So we're either going to get a mortgage and pay it off ourselves,

Speaker 1 or we're going to pay you guys off, or you're going to forgive it. So what do y'all want to do?

Speaker 1 Because this thing of we're going to pay a payment that's not enough, that's not enough to do anything, and I'm just stuck like a rat in a wheel. No, thank you.
Yeah, it's a mess.

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Speaker 4 Okay, in honor of Financial Literacy Month, today's question comes from Ava at Agape Christian School. She says, is it necessary at some point to get a credit card?

Speaker 4 My mom says it is, but I want to think otherwise. Well, you are very wise, Ava, to want to think otherwise.
Yeah,

Speaker 4 it's not necessary. And it's not wise, really, to get a credit card.
If you're getting a credit card, you're probably doing it for one of three reasons.

Speaker 4 You're doing it, A, because you think you're going to build credit. B, you're doing it because you you have no money and you're relying on credit cards to fill the gap.

Speaker 4 Or C, you've convinced yourself that the points are worth it. And so my guess is that you're probably thinking about building credit.
And I would tell you that.

Speaker 1 Your mom is.

Speaker 4 Yeah, your mom is. And the truth is, people don't talk about it enough.
We're some of the only ones out here saying that you don't need, you don't need credit to get through life.

Speaker 4 You can get through life just with the cash that you earn from your income. And a lot of times people fall back on, well, how are you supposed to get an apartment?

Speaker 1 How do you get a car? How do you get a house?

Speaker 4 Those are the three things that people are looking at. And the truth is, you can't have an apartment without a credit score.

Speaker 1 Not a big deal. Most of them will take you to the bank.
Most of them, yeah.

Speaker 4 If you, if one doesn't take you, you go to the next one. Uh, obviously, when it comes to buying a car, we would say the best way to do that is to save up and pay cash.

Speaker 1 The first car that you buy is probably going to be the only way to do that.

Speaker 4 Yeah. What did I say?

Speaker 1 Best.

Speaker 4 Oh, the only. Yeah, they've got me on that.
The only way. Yeah.
Your first car is probably going to be a junker.

Speaker 4 Maybe you pay $5,000 for it, but you save up and you trade it in and you add cash with it every time. And before you know it, you're going to be driving the car that you want to be driving.

Speaker 4 And then, of course, with the house, Ava, we suggest manual underwriting, okay? And that's just them looking at your actual income to decide if you can borrow this money.

Speaker 4 And they're looking at things like trade lines and they're looking at things like your income, your actual money. And so that's how that works.

Speaker 4 I say all the time, credit. It's a product.
It's something that's being sold to you and people benefit from that. What we're teaching, the only person that really benefits from it is you.

Speaker 4 It is for you. We don't get paid because we tell you to live a life with a zero credit score.
So that's one good way to sniff it out.

Speaker 1 Only one reason to have a credit score, borrow money.

Speaker 1 If you don't want to borrow money, you don't need a credit score. Pretty simple.
This is the Ramsey Show.

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Speaker 1 Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people

Speaker 1 build wealth, do work that they love, and create actual, amazing relationships. Jade Washall, Ramsey Personality, number one best-selling author, is my co-host today.
Chris is in Cincinnati.

Speaker 1 Hey, Chris, welcome to the Ramsey Show.

Speaker 6 Hi, Dave and Jade. How's it going?

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

Speaker 6 Yeah, so I'm just giving you guys a call just because i'm trying to follow your plan i've been listening for a few months and it's just at a point where i'm in baby step one and my wife and i were making more money than we ever have but our expenses keep going up and we just seem i can't get to the point where i'm able to you know build that emergency fund up and even start to pay down debt more than just the minimum payments which are a lot right now what's causing your expenses to go up without you well yeah.

Speaker 6 So we just had to start paying for child care full-time because I work full-time during the day and work a variable schedule. And so does my wife.
It's very on demand.

Speaker 6 And so if that's about $2,068 a month.

Speaker 1 And

Speaker 1 our minimum payments.

Speaker 6 Yes. Yeah.

Speaker 6 Two girls.

Speaker 6 And I'm just having to you know, pay for that.

Speaker 6 And our minimum payments are large and they're toned into our debt because a lot of them them are like zero percent so low APR because I'm on payment plans.

Speaker 4 What's your housing? What are you paying every month for housing?

Speaker 6 Uh, five hundred dollars a month. I live with my aunt and uncle, and uh, they have some health issues, so we we do that for them, they help us out.
It's a good thing.

Speaker 1 Okay, so what's your income then?

Speaker 6 Uh, my wife and I we make about 103,000 a year gross between us two.

Speaker 1 And how much debt do you have?

Speaker 6 About ninety-six thousand dollars in debt.

Speaker 1 On what?

Speaker 6 Uh, so we got about 30 000 on one car 17 on another

Speaker 6 and uh about 25 in student loans

Speaker 6 and uh

Speaker 6 about

Speaker 1 um a few in credit card debt uh probably about um 10 000 in credit card debt and about 12 000 in personnel

Speaker 6 you're going to speak directly into your phone you sounds like you dropped into a barrel sorry about that it was about twelve thousand dollars in personnel loans and about $10,000 in credit card debt.

Speaker 1 Okay. All right.
How long have y'all been married?

Speaker 6 We've been married since August of 2020. So it's about...

Speaker 1 So you made most of this miss in five years?

Speaker 6 Yeah, we made some dumb decisions that I'll own buying a

Speaker 4 cars. The cars are the biggest problem I see.
The $30,000 car, what's it worth?

Speaker 6 It's worth about $23,000. I'm upside down, but and I know like when number one thing is like sell the car, get a personal loan to pay off the

Speaker 1 negative equity.

Speaker 6 But the problem I have is my job, I have to drive my own car and I have to drive around and it has to be like something reliable. So I can't like

Speaker 1 you don't think they make cars less than $30,000 that are reliable?

Speaker 6 No, I'm saying they do, but my credit is also really bad where it's hard for me to get approved for a personal loan.

Speaker 1 Yeah.

Speaker 1 Okay, that's a different issue.

Speaker 1 And who's the $30,000 loan with?

Speaker 6 General Electric.

Speaker 1 Okay. And you also called us and said you're stuck, so you're going to have to do something, agreed.

Speaker 6 Yeah.

Speaker 1 And, you know, my number of people. What is your, are you guys putting money in retirement?

Speaker 6 No, we stopped doing that.

Speaker 1 Okay.

Speaker 1 When?

Speaker 6 Probably about a couple of months ago. We weren't, I was only contributing about 3%.

Speaker 1 What's your tax return going to be this year?

Speaker 6 Last year it was like $4,500, but this year I'm trying to lower that.

Speaker 6 So I'm hoping.

Speaker 1 So you got a $4,500 check coming?

Speaker 6 No,

Speaker 6 it already came.

Speaker 6 We already filed and got that.

Speaker 1 Yeah, and you've adjusted your W-2 by $400 a month, right?

Speaker 6 Yes. I've adjusted my

Speaker 1 already done?

Speaker 6 Yes, I already adjusted it.

Speaker 1 Okay. All right.
That's good.

Speaker 1 How much do you have in savings? None?

Speaker 6 No,

Speaker 6 no, we have nothing. Okay.

Speaker 1 And what kind of work does your wife do?

Speaker 6 She's a

Speaker 6 assistant general manager at a fast food restaurant.

Speaker 1 Okay.

Speaker 4 And so the most of the income is on your end? Like split up your income so I can see

Speaker 6 it's yeah it's pretty split. I'm I make about $45,000 a year and her income is about $50,000 about $58,000 a year.
So she makes more.

Speaker 4 And what kind of, you said you drive for your work?

Speaker 1 What kind of work is it? What is it?

Speaker 6 I work in fire protection. so it's a lot of driving to job sites, doing inspections, service calls.
I'll eventually have a van where I won't be on my personal vehicle.

Speaker 1 Are they reimbursing you for the use of your car?

Speaker 6 I'm only getting about $5 for every 25 miles. It's not a lot, so it doesn't, it just gives me my money back.

Speaker 1 No, it doesn't.

Speaker 1 Your fuel is more than that.

Speaker 6 I've talked to them about that before, but they just say, you know, that's, you know, that's just the tax money.

Speaker 1 That's not.

Speaker 4 I don't think these are your long-term career tracks. Am I right?

Speaker 1 Well,

Speaker 6 I'm working at a very small company right now, and there's potential, you know, to eventually, you know, be in management and to own it and help it grow beyond where it's at now over time.

Speaker 4 And that's what you want to do, or that's just the opportunity in front of you.

Speaker 6 I like what I'm doing. Okay.

Speaker 6 I don't know if it's going to work out with this employer for the majority of the time but i enjoy the work i do and yeah you get to use your own car and we don't pay you enough and the answer is tough

Speaker 1 not i'm not excited about your employer um

Speaker 4 yeah i see i see

Speaker 4 i i i'd like i'd like to be able to see opportunity for growth or at least opportunity to side hustle opportunity to expand your income because it's it's two pieces of this equation right it's getting the expenses down we're going to give you every dollar we're going to make sure you go through your budget with a fine-tooth comb to do that but the other side of this is you've got to get your income up And with what you're doing currently, it didn't seem like there is a path there.

Speaker 4 I don't know if your wife can do overtime, but you've got to get more money coming in here as well.

Speaker 1 So your take-home pay is $6,500, right?

Speaker 6 Per month. We're getting about, it's probably closer to $6,000 every month is our take-home every month.

Speaker 1 Okay.

Speaker 1 You shouldn't have $2,300 in withholding.

Speaker 4 Yeah, that feels high.

Speaker 6 I think

Speaker 6 mine's like, I have about 10%

Speaker 6 coming out my check, but are you doing any investing?

Speaker 4 I don't think so.

Speaker 1 You said no.

Speaker 6 No, no, I'm not. I have about 10% going to taxes every month out of my check, and my wife.

Speaker 1 Because $100,000 is $8,300,000, okay?

Speaker 6 Yeah.

Speaker 1 And you're wondering.

Speaker 1 You're only getting, and they're taking out $2,300. You don't have a tax bill of $2,300.
There's something wrong with it. You get a bunch of health care coming out of that?

Speaker 6 No, no, there's not

Speaker 6 any health care.

Speaker 1 How much is your car payment on the $30,000?

Speaker 6 The car payment is $620,000 on the $30,000.

Speaker 4 And the other one, $17,000, what's that one?

Speaker 6 $400 a month.

Speaker 1 Okay, that's $1,000, and you got $1,500 out of $6,000. And we got two cars paid and $2,000 for daycare.

Speaker 4 And you're probably not paying anything on your student loans.

Speaker 1 No.

Speaker 1 They're in hardship deferral, probably.

Speaker 4 So where's the other half of your income going, basically, is what we're asking for?

Speaker 1 $1,500,

Speaker 1 $3,500 is daycare daycare and two cars and the rent. And then you got to eat.

Speaker 1 I don't think you guys are living on a tight budget. They need every dollar.
Yeah, I think you need to get on every dollar.

Speaker 4 Yeah, you do. So we're going to have Christian pick up, make sure you get every dollar, and we're going to make sure you have Financial Peace University.

Speaker 4 I think that you need a crash course in financial literacy, personal finance, how you manage your money. You and your wife go through it together.

Speaker 4 But your homework is tonight to create that every dollar budget. You can create it in five, 10 minutes.

Speaker 4 Go on YouTube and George Camill and I will show you exactly how to do that on our YouTube channel.

Speaker 1 Yeah, and if you find that your car gasoline bill is what's breaking the

Speaker 1 back of this thing, tell your employer you're looking for a job.

Speaker 1 Yeah.

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Speaker 1 Real change in your money and relationships is possible. You can break the cycles that have kept you from moving forward.
You can build a better future for yourself, and it starts here.

Speaker 1 Hang out with Dr. John Deloney and I live in a city near you for the Money and Relationships Tour.
Starting next week, we'll be in Louisville, Durham, Atlanta, Phoenix, Fort Worth, and Kansas City.

Speaker 1 Time is running out, so grab your tickets while you can at ramseysolutions.com slash tour.

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So, well, business owners, it's here.

Speaker 1 The Build a Business You Love book is officially out. It's launched officially yesterday.
It's available to start reading today. This is not just another business book.

Speaker 1 I started this company with nothing on a card table in my living room. We're now doing $300 million in revenue with 1,100 team members, 650,000 square foot campus.
How did we do that?

Speaker 1 What are the five stages of business? We coach over 10,000 small businesses in entree leadership. How do we coach them? What do we show them to do?

Speaker 1 Well, there's five distinct stages of business and six drivers that drive them. So we can show you every bit of that.
It's pretty much the baby steps for small business.

Speaker 1 A little more complicated than that, a little different system, but it is at least a clear path towards success.

Speaker 1 You can grab your copy of Build a Business You Love anywhere books are sold, but certainly ramseysolutions.com or click the link in the description.

Speaker 1 Hayden's with us in Tampa, Florida. Hi, Hayden.
What's up?

Speaker 7 Hey, guys. Thank you so much for taking my call.
I really appreciate it. Sure.

Speaker 7 My wife and I are starting over back in baby step number two, and she feels our budget is too restrictive without any room for fun fund money and so my question is what amount of our income should we budget for Wow and baby step two and how do I get her fully on board without making her feel quote unquote controlled why are you starting over

Speaker 7 yeah so in 2023 we took FPU through our church and we had a really great success with it got off all of our debt besides one vehicle and at the time our house we hadn't moved in yet but we had a house also that was in the future okay and um anyways yeah so unfortunately what happened was my wife started to kind of um feel very controlled um and because she was not able to say yes to things like giving gifts for baby showers and not able to go out to eat for you know uh dinner with friends and stuff and so she found herself always kind of calling me and being like well can we do this thing for 50 and i was like it's not in the budget and so then she started to kind of you know get mad at me as her you know spouse so it sounds like you did a budget and told her what to do

Speaker 4 yeah what's different this time

Speaker 7 yeah well so ultimately um since then we've had a baby boy who was born in 23 2023 okay and um we have another baby that is coming uh in may at the end of may um and so we're really excited yes uh but ultimately i am i'm freaking out and i've told her many many times about this.

Speaker 7 And I said, listen, like,

Speaker 3 we need to,

Speaker 7 we need to do something. And I, you know, John Deloney said it great.
He said, I feel like a gazelle that is anchored down. And that's genuinely like how I feel.

Speaker 1 Right. But what changed with your wife? We know how you feel.
I think she's never been on board.

Speaker 7 Yeah, it's always been kind of my idea to do this.

Speaker 7 And she's been supportive at times.

Speaker 7 No, she's not.

Speaker 4 It's only to a point, right? She doesn't want to feel that.

Speaker 1 until she hears the word no, she's supportive. She's not involved at all.

Speaker 4 Can you tell us more what the debt is and your income so we can see a clearer picture?

Speaker 7 Yeah, yeah, the debt's pretty bad. So, credit card debt, we have 19,300.
Okay.

Speaker 7 Cars, we're at 64,000.

Speaker 4 Can you break them down from one and two?

Speaker 3 Yeah, yep.

Speaker 7 Car one is $27,000 and car two is $37,000. Okay.

Speaker 1 Car two is hers and you bought it since you went through FPU.

Speaker 7 Yes, that is correct.

Speaker 4 Is it a minivan? Yes.

Speaker 7 No. It's a TV.

Speaker 1 It's a Tesla. Okay.

Speaker 4 And can you tell me what they're worth? What's the $27,000 one worth?

Speaker 7 I don't know. I think the $27,000 one is a Hyundai Santa Fe, so it's probably $18 to $20,000.

Speaker 1 Okay. So now you have that prior to FPU?

Speaker 3 Yes.

Speaker 1 Okay.

Speaker 4 And the 37, what do you think? It's fairly new.

Speaker 7 It's, yeah, it's fairly new. It's probably, you probably could get 28 for it to 30.

Speaker 1 So, Hayden, here's the deal. Okay.

Speaker 1 She's not involved in this at all, emotionally. And so you've become her parent, and she doesn't like it when you tell her, no, she can't go to the movies.

Speaker 1 No, I can't do this.

Speaker 1 And you're getting tired of being the parent. So ultimately, you two probably need marriage counseling.
You need to sit down with somebody.

Speaker 1 Not because of FPU and not because of Ramsey stuff, but because you're the only grown-up.

Speaker 1 And

Speaker 1 you're trying to raise a kid now, and it's freaking you out. And it's good that you were freaked out because you need to address this issue.
And so she's

Speaker 1 because it...

Speaker 1 And a part of that goes all the way back to when you all were in Financial Peace University.

Speaker 1 She went against her will because her husband begged her to and she loves her husband and she wanted to try to do what he wanted to do.

Speaker 1 She went in there and listened, but she did not buy into a different future that you saw.

Speaker 1 And once she gets the why

Speaker 1 you're wanting to do this, why you're wanting to do this, why you're freaking out, then the how will change.

Speaker 1 But until she's in agreement with you about the future vision of where we want to go and why we want to go there,

Speaker 1 you're going to struggle. And, you know,

Speaker 1 you didn't have the marital chops to defeat a $37,000 car purchase that was absolutely asinine.

Speaker 1 It's asinine. Yeah.
And you knew it when you did it. But you went along with it trying to make someone happy by buying them stuff.

Speaker 1 And it doesn't work, hon. It doesn't work.
So if you can't get with her and the two of you say, say, number one, I'm freaked out, honey.

Speaker 1 I'm carrying all the stress and all the load of these ridiculous purchases that I have allowed to be made in this house. And I'm freaking out.
And I'm not doing it anymore.

Speaker 1 Number one. Number two.

Speaker 1 The two of us need to start thinking about what our future looks like in HD and what it's going to take for us to get to to that future. If we cannot get aligned on that in the next 10 days,

Speaker 1 we need to sit down with a marriage counselor because I'm not going to be your daddy until you know anymore.

Speaker 1 And I'm not going to participate in a situation where you're whining to your daddy that his budget is too restrictive.

Speaker 1 Because you're imposing this on her and she's not got any adult ownership in the sacrifice that has to occur for you all to swim on this because you need to sell her car yesterday.

Speaker 1 It should have never been purchased.

Speaker 1 And you guys need to get on beans and rice, rice and beans, and don't talk to me about baby showers when you've got dead up around your neck and you've got a one-year-old.

Speaker 1 The only baby shower is showering this kid in food and diapers. That's it.
Right, right. Your kid, not other people's kids.
And don't talk to me about your Instagram life.

Speaker 1 I couldn't give a crap less about your Instagram life. But that's, that, that's, that's me being mean

Speaker 1 and

Speaker 1 forceful because that's what I see in your all's lives. You guys have, you, you've got to want a bright future more than you want a false present.
That's right.

Speaker 4 Yeah. My guess is there's something behind this.
I think Dave is right.

Speaker 4 You go to counseling, you're going to figure out what that is because there is something stopping her from wanting to go all in on this.

Speaker 4 And usually we see, Dave, that kids kind of trigger something in you. It's not done that for her.
So my guess is there's something deeper in here.

Speaker 4 And I do think that counseling is going to reveal that. But at the end of the day, like we're the only ones that can change.
You can't make somebody change. So she's got to get on to it.

Speaker 1 Yeah, but you've been talking about what way too much and not why. Why.

Speaker 1 And you've got to work on that. And then

Speaker 1 she's going to have to take an adult position in this relationship where we sacrifice together for the greater good of our overall family.

Speaker 1 I want something.

Speaker 1 You've got a long life if you don't fix this, dude. This is the Ramsey Show.

Speaker 9 There's a time in your life and at the baby steps for renting, but you don't want to do it forever because when you rent, you're still paying for a mortgage, just somebody else's.

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Speaker 1 In the lobby of Ramsey Solutions on the debt-free stage, Matt and Laurie are with us. Hey guys, how are you? We're well.
Good. Good.
Where do y'all live?

Speaker 10 Oregon City, which is just south of Portland.

Speaker 1 Portland, Oregon. Portland, Oregon.
Welcome to Nashville on the other side of the United States. Very cool.
How much debt have y'all paid? $94,504.30.

Speaker 1 Good for you. And how long did that take? 24 months.

Speaker 1 Ooh, two years straight up. And what was your range of income during those two years? $123,500 to $162,500.
Cool. What do y'all do for a living?

Speaker 10 I'm in real estate. I manage commercial properties.
Cool.

Speaker 1 And I'm a project manager with a building envelope Consulting Firm. Oh, wonderful.
Very good. Very good.
I think I found out how y'all met.

Speaker 1 Yes, indeed. Very good.
Good. Well, welcome, guys.
Good to have you. So what kind of debt was the $95,000? We had some medical debt, some car loan.

Speaker 1 We had credit cards and a personal loan and a lot of student loans. Wow.
Wow.

Speaker 1 You were normal. Very.
We're normal. How long have y'all been married? Two years.
Two years. Oh, okay.
So we come into the marriage full of normal.

Speaker 1 And you looked it up and said, 24 months ago, boom, we're going to knock this out. Tell us the story why you decided to turn on a dime like that.
That's pretty cool.

Speaker 1 So we actually, before we got married, we got engaged and we really wanted to be intentional in our marriage and do everything we can to have the best marriage possible.

Speaker 1 So we went through marriage mentoring with our local church and it was an amazing experience.

Speaker 1 It's also very eye-opening in things that we were very harmonious in in our relationship, but also things that were potential conflicts. And finances were one of those things.
And so we were like,

Speaker 1 Yeah, we don't want that to become an issue. It's one of the highest reasons for divorce rates, but we don't want that.

Speaker 1 So my work actually supports with our education credit paying for the Ramsey Solution membership. Oh, wow.
We're like, hey, you want to do this? And so we did. Yeah.

Speaker 10 And he brought it home. He set up the budget meetings.

Speaker 10 We stayed firm on the budget. We set up the every dollar budget and just really followed it through the process.

Speaker 4 Yeah. No, no objections.
Was there any part of you that was like, I want to do this, but maybe I don't want to do it this way?

Speaker 10 You know, we kind of struggled with our opcon meetings. We called them opcon meetings because it just was quicker.

Speaker 1 Opcon. Opcon, operational confab.
More fun way to say it than a budget meeting. Yeah.

Speaker 10 So we turned it into, you know, how are we going to look this month? We, we, we set out our schedules. What are our priorities? Do we have family meals? Do we have, you know, bigger expenses?

Speaker 10 Do we have work expenses? Do we have meetings that will keep us out late night sometimes?

Speaker 10 And just really prioritized what was important to us at the time, which was paying off our debt, but also being able to live like no one else so we can live like no one else.

Speaker 10 And so trimmed the fat on our budget, cut out, you know, Starbucks, restaurants, the non-necessities, and really

Speaker 10 paid off our debt.

Speaker 1 Cutting out Starbucks for her was a lot. That was a big

Speaker 1 thing.

Speaker 10 It was quick and easy, but yeah.

Speaker 1 The good news is not forever. No.
No. It's just no for now.

Speaker 10 Yeah. Exactly.
But it was great.

Speaker 10 It was a wonderful experience to communicate and go through this experience as a married couple, as a young married couple, and do the hard things so we can do hard things later.

Speaker 10 And we prove to ourselves that we can communicate. We can be prescriptive in what we want and do the hard thing.

Speaker 1 Yeah. See, this is the exact opposite of what I just hung up with.
Yeah, thinking the same thing. We had some advice.
I heard that.

Speaker 1 You know, and so because what happened here, though, is exactly what we prescribed to that other couple is that you were both aligned on why.

Speaker 1 Your big why, I heard it, was the number one cause of divorce is money fights. We're not going to do that.

Speaker 1 We're going to, if the number one cause of bear attacks is going to the mailbox, we're going to send somebody else. I mean, we're not, you know, we're not going to do this.
It's, it's a danger zone.

Speaker 1 And so that our why is.

Speaker 1 And then you look at it as two grown-ups and you say, okay, for a short period of time in order to live like no one else later and to not have this money stress over our marriage, I can give up Starbucks or I can give up eating out or I can give up whatever, but you're deciding this as two grown-ups together to get to a unified goal that was a bigger why than the momentary I want it right now thing.

Speaker 1 And

Speaker 1 to get a girl's unity is very evident. It's very clear.
Yeah.

Speaker 10 We were very intentional on these are the large expenses this month,

Speaker 10 be it infertility treatments, be it doctor's appointments, be it he's got a car repair.

Speaker 10 We set those priorities early in the month, so we set our budget according to that. So we knew we had to prioritize, here's our debt, here's our big payment, and here's what we can do elsewhere.

Speaker 10 And we changed our habits. We no longer ate out.
We had game night.

Speaker 10 found a new recipe online and we cooked together.

Speaker 10 We did a lot of meal prepping. That was kind of a natural thing that I did, but I brought it into our relationship to cut out going out, going out and eating lunch out.

Speaker 1 It's interesting.

Speaker 1 You can do anything for a short period of time. And you paid off $50,000 a year for two years, basically.

Speaker 1 And you did that on $123,000 to $160,000. We did.
I mean, and that's pretty impressive.

Speaker 1 You had a good life during that time, but still had substantial progress.

Speaker 4 What I hear you saying that you guys did a good job on is with the budget, you had foresight. So all of these things that

Speaker 4 come up that people think, oh, this, I didn't know this was coming, or this felt like an emergency, or this felt like something.

Speaker 4 You guys had the foresight to look ahead and go, really, what is our life? Really, what, like, well, let's be honest. And there is a reality there.

Speaker 4 And I think that that's what helped you guys plan to be not only pay off the debt, but to do the things that are just normal parts of your life during that time.

Speaker 4 So they weren't things that were thousand, I got to dip into my thousand dollar emergency fund. And that, I think, was really smart on you guys's part.
What was the hardest thing?

Speaker 10 Saying no to gifts.

Speaker 4 Yeah.

Speaker 1 We're big givers. We're both givers.
So Christmas time was tough. The first Christmas was really hard.
But

Speaker 1 yeah, saying no to trips, saying no to. Did you get any pushback from the person that was expecting to get gifts?

Speaker 10 No.

Speaker 10 We had to cut out family travels. My family's not close by.
So going to see my family meant, you know, $1,000 a pop plane ride.

Speaker 10 And so we had to say no a couple times and say, you know what, this just isn't the budget. And our parents were very supportive.
They said, you know, we know you have those priorities.

Speaker 10 We still want to bring you out. You know, we'll cover, we'll cover your flight this season.

Speaker 4 And you learned that adults don't need gifts. Yeah.
That's great. Yeah.
Firsthand. Yeah.

Speaker 1 They survived. Yeah.

Speaker 1 Yeah.

Speaker 10 And we changed our lot of our habits. You know, eating out is kind of just, it's a luxury nowadays.
And on occasion, he works late. I work late.
So food is just, you need food.

Speaker 10 But it didn't have to be, you know, $100 a pop restaurant. I know that's right.
We changed it.

Speaker 10 And we put it in the budget because we knew it was a necessity of just how we live our lives, but we didn't make it the only way to live our lives.

Speaker 1 The abundance of the heart, the mouth speaks, and these two cannot talk without saying we. Yeah.

Speaker 1 They're very we.

Speaker 10 Yeah, you guys are very unified.

Speaker 1 Very unified. It's very impressive.
It was very uncomfortable. I mean, you can be, it's like God gave us this contrast to a minute ago.
I mean, it's just, it's the exact opposite.

Speaker 1 And it's what I desire for that other couple. I hope they get that.
I hope they can find their way to that because it changes everything.

Speaker 1 You guys are set relationally for the rest of your lives because you've already killed a large dragon and you did it together. We did.
You're like, hold his head. I'll chop it off.

Speaker 1 You know what I mean? It's like, we're going to get this boy. He's going down, right?

Speaker 1 And very wise. I'm very proud of you.
Very cool. I bet your parents are jumping up and down excited for both of you.

Speaker 10 We can't wait to sign you off.

Speaker 1 Yeah.

Speaker 1 Yeah.

Speaker 10 They're thrilled.

Speaker 1 Yeah. Well, we're thrilled for you.
You're impressive. All right.
What do you you tell people the secret to getting out of debt is?

Speaker 10 Do it together.

Speaker 1 Absolutely. Do the budget.
You can do the budget, but if you do it alone, you're not going to get anywhere like you will when you get it doing it together. Yeah.

Speaker 1 And those first couple of budget committee meetings, whatever you called them, I don't know. Hop con.
Hop con, operational confabs. Hop confabs.
But yeah.

Speaker 1 They can be a big fight. They were hard.

Speaker 10 They were not the easiest thing. He works differently mentally than I do.
So I'm the planner. I do, you know, month calendaring ahead, and here's what we have planned.

Speaker 10 He's the analytical mind who likes the data, that likes the budgeting. So while he's coding things, I'm looking at the budget and thinking, okay, well, we have the family dinner.

Speaker 10 We have ex's, you know, birthday. Yeah.
So

Speaker 1 it worked.

Speaker 10 We had to change it to

Speaker 1 us. All right, Matt and Laurie, Portland, Oregon area, 95,000 in 24 months.
123 to 162. Count it down.
Let's hear a debt-free scream.

Speaker 1 Three, two, one.

Speaker 1 We're debt-free.

Speaker 5 Way to go, you guys.

Speaker 1 Heroes, baby. Heroes.
I love them. This is the Ramsey Show.

Speaker 11 People ask me all the time, George, what's your number one money-saving hack? Glad you asked. Nothing makes me happier than helping another frugal friend.
So here's the hack.

Speaker 1 Get on a budget.

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Speaker 11 So, how much money are we talking here? Well, the average Every Dollar budgeter frees up $395 in their first budget.

Speaker 1 That's the hack.

Speaker 11 And if you ask me, I think you're way above average and you'll save even more. So, what do you do when still listening to me?

Speaker 11 Go download the Every Dollar app for free and start saving more money right now.

Speaker 1 The Ramsey Network app is the only place to get all the episodes of the Ramsey Show every day. You can download it for free and listen for free.
It's all free.

Speaker 1 Did I mention it's free using the link in the show notes or by searching Ramsey Network in your app store?

Speaker 1 If you're on the radio, you're going to get what you've always gotten. But what is effectively the third hour of the show for talk radio is on the Ramsey Ramsey Network app for free.

Speaker 1 We do not charge for it. It is free.

Speaker 1 You can download the app for free, the Ramsey Network app. Jade? It's free.
It's free. Okay, there we go.
Just making sure. Okay.
Pete's in Bozeman. Hey, Pete, what's up?

Speaker 3 Mr. Ramsey, is that app free?

Speaker 1 I couldn't see it. Hey, I got my point across.
I like it.

Speaker 1 What's up in your world, brother?

Speaker 3 i got a real estate i got a real estate question for you um i don't believe in any kind of personal debts if you can't afford it you can't afford it uh except for buildings and i got i got about uh eight hundred thousand dollars worth of personal debt on buildings a house and a vacation house and then i got a commercial building that pays me about fourteen grand a month but costs me just shy of nine thousand a month in interest And I turned a cool million in the last two years.

Speaker 3 And the Mrs. thinks we should pay off the personal stuff.
but the personal stuff is financed at two and a quarter, and the commercial loan is financed at almost nine.

Speaker 3 And so, I think we should pay off the commercial and then let the commercial tenants pay off the personal.

Speaker 1 Okay, let me think we should pay off the personal and take a deep breath. I got it.
So, the commercial, did you know you didn't personally sign for it?

Speaker 3 Oh, yeah.

Speaker 1 Okay, it's all personal. Okay.

Speaker 1 All right. Yeah.
So,

Speaker 1 so, so, how much is owed on the home?

Speaker 1 The house.

Speaker 1 About $800. About $800.
The other property, the big one, the big one you're calling commercial, what do you owe on it?

Speaker 3 Just over a million.

Speaker 1 Okay, $1 million. Okay.
And what was the other property?

Speaker 1 Lake House.

Speaker 1 Vacation house. Vacation house.
Okay. And how much on the vacay house?

Speaker 3 Oh, oh, the $800 was the house plus the vacation house.

Speaker 1 It's all together.

Speaker 4 We'll break them out.

Speaker 3 300 and 500.

Speaker 1 Okay, gotcha. All right.
And you have a million sitting in savings right now?

Speaker 1 Yep. And that was one year's of income or two years?

Speaker 3 Just shy, two.

Speaker 1 Okay. All right.
What does the next two years look like? Same thing?

Speaker 3 I would like to not have to work so dang hard.

Speaker 1 Well, I'm trying to get your debt paid off.

Speaker 1 And you're doing pretty good i'm proud of you fair enough you're making a lot of money but so let's pretend that you could make another five uh you said a million over two years so 500 a year so you can make another million in the next two years so then the question becomes only which one we pay off first

Speaker 1 because

Speaker 1 um

Speaker 1 you know in the next two years the other one's going to get paid off anyway agreed in four years it's all done

Speaker 1 yep okay all right

Speaker 1 So

Speaker 1 the point is, we're not really arguing about what's more important. We're just arguing about two years.

Speaker 1 Okay.

Speaker 3 I believe so. Okay.

Speaker 1 All right. If I'm getting, assuming you're working as hard as you used to work, so I don't know.

Speaker 1 After that, you can do whatever you want because you're sitting on a couple million dollars worth of paid-for real estate and other investments and an income potential that's incredible.

Speaker 1 So if you want to crank it back a little, oh, well, that's great. But I'm probably going to keep the fires burning and knock these puppies out if if it's me.

Speaker 1 I don't know what you're doing, but you're doing it well. Congratulations.
I'm proud of you getting that income in. I'll tell you what I would do, and then I'll tell you why.

Speaker 1 I would pay off my home and my vacation home. Okay, and I'm going to do that for two reasons.
Number one, when where you lay your head is paid for, it changes your swagger.

Speaker 1 It changes

Speaker 1 the way you're doing this. You're doing some kind of self-employed business, I assume?

Speaker 3 Yes, sir.

Speaker 1 Are you selling?

Speaker 3 I'm in media.

Speaker 1 Okay. Okay.

Speaker 1 So

Speaker 1 the

Speaker 1 way I run my business is affected by the fact that I don't have any debt in a positive way.

Speaker 1 Okay.

Speaker 1 The swagger is just different.

Speaker 1 I don't have to worry about anything with my lake house or my personal residence or my office building in this case too because I don't have any debt but so I'm gonna pay off your house and your lake house for that reason or your vacation house first

Speaker 1 and I'm gonna do that today because where you lay your head is the most important place the second reason I'm gonna do that is

Speaker 1 Proverbs in the Bible says who can find a virtuous wife for her worth is far above rubies the heart of her husband safely trusts her and he he will have no lack of gain.

Speaker 1 Your wife is saying, pay this stuff off, and I'm going with her, in other words, because you'll have no lack of gain if you learn to listen to a virtuous wife. And that doesn't make you henpecked.

Speaker 1 It makes you wise to make decisions with your partner in life.

Speaker 1 And

Speaker 1 so

Speaker 1 I'm going with her for those two reasons. I'm going with the payoff the house first for those two reasons.

Speaker 1 And the math doesn't matter to me because the math difference over 24 months, which is all we're discussing, is negligible.

Speaker 3 Well, if you're going to quote scripture to me, I guess mama wins.

Speaker 1 No, I did worse than that. I quoted scripture to you about mama winning.

Speaker 7 I always say, happy wife, happy life.

Speaker 1 And you were going to be the tiebreaker.

Speaker 7 So I appreciate it, sir.

Speaker 1 Thank you, Pete. It's a good discussion.

Speaker 4 Good for him. Yeah, good for him.

Speaker 1 He's killing it, man.

Speaker 1 And he's having fun. He is.
And he's fun. He is fun.
It's so great. He's about to have a lot of fun.

Speaker 1 He's got a million-dollar net worth already. Good for him.
And or more. Because I don't know what that building's worth above the million.
Yeah, he didn't say. He didn't say.

Speaker 1 And he's getting ready to have an excess of a $2 million, $3 million, $4 million net worth. And he's killing it in Bozeman, Montana.
Way to go, Pete. I'm so proud of you.
That's so fun.

Speaker 1 The true answer to the story is you really can't screw this up if you do either one first.

Speaker 4 No, he's fine.

Speaker 1 There's no big, like, you're stupid if you don't do it thing. I don't think so.
But

Speaker 4 I do think that they'll have more peace if their homes, where they're at most of the time, is paid off first.

Speaker 1 Yeah, let me help you guys with something too. Let me teach you something.
When you think you're doing an analysis based on interest rate, which he said this was lower interest rate, right?

Speaker 1 That we just paid off. When you actually multiply out the difference for a short period of time and turn it into dollars,

Speaker 1 how many actual dollars are different in two years only? It's not much. It'll buy you a chicken biscuit.

Speaker 1 It's not a lot, right?

Speaker 1 So sometimes

Speaker 1 interest rates really matter a lot over a long period of time. But

Speaker 1 in a very short period of time, like I'm going to pay this thing off in six months or something like that. Some of you're looking at these things.

Speaker 1 It's like, I'm going to pay off the highest interest rate. But in six months, it doesn't matter.

Speaker 4 Especially with his income. He could care less.

Speaker 1 Yeah,

Speaker 1 he's slaying it, man. He's just slaying it.
That is so cool. And that's one of the reasons that the debt snowball has has continued to

Speaker 1 survive is the thing, the idea that the interest rate doesn't matter because it's a short period of time. Because we teach to list the debts regardless of interest rate.

Speaker 1 And we're not talking about his situation. We're talking about everybody else out there.
Smallest to largest.

Speaker 1 Pay minimum payments on everything but the little one and attack the little one as if your life depended on it. with a vengeance.

Speaker 1 When you knock that out, you get a positive feedback loop, psychologists would call it. In other words, you get an attaboy.
You get some success.

Speaker 1 You go on a diet and you lose five pounds the first two weeks. You're going to keep doing it.
Yeah. You're going to keep doing it.
You're going to lose your free up.

Speaker 1 You go on a diet and you don't lose anything for two weeks. But I'm promising you, you're building muscle.

Speaker 1 You know, it doesn't feel right. That one just doesn't, that promise doesn't hold it.
That won't keep me out of the donuts. I know, that's right.
So, you know, you got it.

Speaker 1 You got to have, I need something.

Speaker 1 I need some quick wins, especially on something new to give me the hope to continue. And that's why the debt snowball works.

Speaker 1 But truthfully, I would say when people get intense, like super high intensity, which is what we teach, and they're working together, they're paying off all of their debts except their home typically in two years and less.

Speaker 1 That's right.

Speaker 4 And then it really does, like you said, that interest really doesn't matter.

Speaker 1 It doesn't matter. I mean, the 24% one, whatever, versus the 6% one, it's just, it becomes irrelevant.
And it was on $500.

Speaker 1 It wasn't on, you know, it wasn't like it was, it's not big money in those situations. That's right.
So that's right.

Speaker 1 One of the reasons that the debt snowball arguments against it are humorous if you were to actually do the mathematics. That's what you're looking at.

Speaker 1 This is the Ramsey Show.

Speaker 1 No matter what you want to do with your money.

Speaker 1 social media

Speaker 1 for a restaurant.

Speaker 8 Hey, what are you still doing here? You know, the rest of the show is happening on the Ramsey Network app, right? So you got to jump over there to continue watching.

Speaker 1 You can download it for free.

Speaker 8 Just go to your app store, type in Ramsey Network. It's completely free.

Speaker 11 And I'll drop a link in the show notes to make it easy for you.

Speaker 8 So if you're watching on the app, you're in luck. But if you're watching anywhere else, this show is over for you.
So jump onto the app and let the fun continue.

Speaker 1 All right. By the way,

Speaker 1 go on now.

Speaker 8 Don't make it weird.

Speaker 8 Okay, I got nowhere to go, so you need to go.

Speaker 1 Okay. But bye now.

Speaker 1 All right, this is getting weird over there, guys. What do we do?