You Can Move From Family Drama to Financial Peace

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

Speaker 1 Jade Washall, number one best-selling author, Ramsey personality is my co-host today. The phone number here is 888-825-5225.

Speaker 1 Freddie starts this hour in Nashville. Hi, Freddie.
How are you?

Speaker 1 Good, Dave.

Speaker 2 Dave, I'm so glad that I got a hold of you. Could really need your help.
Got a 91-year-old mother, and there are five of us siblings, and we're trying to help her. She is in a nursing home in PA,

Speaker 2 and she is going to pass away soon. So we have a cousin who is my my mom's niece who actually is in charge of her estate along with her husband.
Her husband is an estate attorney.

Speaker 2 She has power of attorney and she handles stock transactions or

Speaker 2 brokerage transactions as well.

Speaker 1 If your mother has five children, why did she give her niece the power of attorney? That's weird.

Speaker 2 That's the first part we can't, we can't quite figure that out. It's a little obvious.

Speaker 1 Well, no, you know. I mean, why the heck didn't she give it to you?

Speaker 2 Well, I live far away. I'm in Nashville.

Speaker 1 far away doesn't affect me

Speaker 1 i know it doesn't are you not in positive relationship with your mother no no we're all good no is your cousin like a very good relationship lawyer or something the cousin's husband is yeah the nieces the nieces

Speaker 2 yeah this is what this is what we think happened we think that because she did that for her parents and that led to a lot of issues uh that she basically you know has my mom didn't really have any else to go to once my father passed and then she thought okay well i could use them it's kind of complicated the estate with some of the things that my parents have done as far as investments and things so i think she thought it was a good idea now i know you always say i at least i've heard you say don't do business with family no i didn't say that okay maybe you did okay maybe i heard that incorrectly but either way uh i she's just so in deep with them that um you know she's just um she's got complete control more or less yeah i mean her mother gave it to her though

Speaker 2 okay that's true now here's the thing. They kind of operate from a standpoint of if they can just keep offering you more and more.
And my mother, of course, accepted, so that's on her.

Speaker 2 But my mother is older and she just decided to do a little bit too much with them. And they recently tried to declare her to be incompetent more or less, which she was not.

Speaker 2 after we had all requested through my mother a copy of the records because we were getting suspicious that there was some fraudulent behavior going on. So we wanted to see what the estate looked like.

Speaker 2 My mother agreed to it. She requested that and they did not provide that.

Speaker 1 Okay. And how long ago was that?

Speaker 2 That was about three weeks ago. So we looked into an attorney to you know get some protection for her because apparently my

Speaker 2 My mom's niece had contacted an attorney, sent a letter to the assisted living facility where my mom lives and you know tried to say that we were somehow coercing to get records or try to coerce her into you know not allowing them to see so the facility actually banned them both of them from seeing her because they would always try to meet with her privately which under normal circumstances might make sense but in this case we suspect that there's some funny business going on with her.

Speaker 1 What does your attorney say?

Speaker 2 Well, he said that what we could do is go in there and request all the records, also request the beginning as far as all the records to the very end where we are right now and everything in between, all the transactions.

Speaker 2 Okay, so I set up an appointment. He came, he was going to go visit my mother, and the last second, my mother canceled.
Now, the problem is that my mother feels a strong sense of loyalty to her niece.

Speaker 1 How can we help you today?

Speaker 2 Well, I'm just trying to see if we have any rights as children, whether when she passes or prior to that, is there anything we can do?

Speaker 1 No.

Speaker 1 The only rights you have are the questions that you've got that you can still get answered.

Speaker 1 Okay.

Speaker 1 As the siblings, you could file a suit after her death to see the record still.

Speaker 1 Just to prove, you know, what the flip does the will say and how has these. You know, we are filing suit because we think fraudulent behavior has been involved.

Speaker 1 And you have to file off.

Speaker 2 Yeah, okay, that makes sense because we do not have access to the will. We only have an old will.

Speaker 1 Yeah, but you get access to the will the same way. The will in most states is filed as public unless it's some kind of a trust setup.

Speaker 1 But

Speaker 1 probate files are public files. I've gone and looked at them myself when I was trying to buy property from an estate where somebody died.
I want to know what the will said.

Speaker 1 And so,

Speaker 1 but I don't know about Pennsylvania, but I have no idea. This is a tangled mess.

Speaker 1 And honestly, Freddie, the answer to the question is, y'all should have dealt with this like

Speaker 1 three years ago.

Speaker 1 Like the first time you got an inkling instead of waiting until she's on her deathbed. Because now it just adds drama to everything.

Speaker 1 And if you smelled a rat early on, you should have pulled the plug then,

Speaker 1 stepped in, not, you know, and pulled the plug on this relationship

Speaker 1 because that's where you went wrong. You didn't deal with it soon enough.

Speaker 1 And I got to tell you, you, it's very, the story you're telling is very strange that your mother feels an unbelievable sense of loyalty

Speaker 1 to this niece and a close relationship closer than her own kids. Yeah.
That feels like that's on the kids.

Speaker 1 That sounds weird. I don't know.
I can't tell what's going on in one radio phone call.

Speaker 1 I'm not accusing you of anything. I don't know what happened here, but

Speaker 1 it just feels, the whole story is strange. But

Speaker 1 if things are as you perceive them to be, that you have a great relationship with your mother and she's been co-opted by this cult leader, niece, then

Speaker 1 you just get an attorney and sue the pants off of them until you get enough records and you make their life miserable enough, keeping in mind that their attorney's fees are free because her husband's an attorney.

Speaker 1 You're going to be paying.

Speaker 1 So that's what you're signing up for.

Speaker 1 And please don't expect anything to move fast in the justice system. There is nothing.

Speaker 1 Old Lady Justice is a slow woman. So she is not going to serve you quickly.
So it may take for years. And I don't know how big the estate is.
It may not be worth messing with.

Speaker 1 But apparently it is because everybody's fighting over it. But this is the reason, people.

Speaker 1 This is the reason. Period.
And mom,

Speaker 1 you people out there that are going to be that 91-year-old I'm going to be someday, maybe, your job is to not let this happen. Your job is to tell everyone what the will says, hand out copies.

Speaker 1 If you're going to piss somebody off in the will, go ahead and do it while you're alive. Have a backbone

Speaker 1 instead of sneaking off into the grave and letting somebody else deal with their hurt feelings. Okay? That's so freaking dysfunctional.
It's unbelievable.

Speaker 3 I don't think I've ever heard anyone describe it as sneaking into the grave.

Speaker 1 Well, it probably has never happened before just now, but I may use it again because it worked.

Speaker 1 but you see the point, guys, you guys,

Speaker 1 you create all this drama when you do your estate plan and you keep it a deep, dark secret.

Speaker 1 Like it's a freaking movie or something. This is not a movie.
It's your life.

Speaker 1 And so if you're the crotchety old whatever and you want to give it all to your niece, go ahead and tell all your kids that, you know, you never called me. I'm giving it all to her.
Shut up.

Speaker 1 You can say that. That's perfectly legal, but go ahead and deal with it so they don't have to sit and wonder if the niece is stealing the stuff.
You know, I don't know.

Speaker 1 But tell everybody, get your wills done and tell everybody what the stinking will say.

Speaker 1 Wow.

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Speaker 1 Mel is in Chicago. Hey, Mel, what's up?

Speaker 2 Hey, longtime Ramsey fan here. I had a quick question.

Speaker 2 I've been married, I was, I'm 59, I was married for 29 years, divorced for three years.

Speaker 2 And in our first marriage, you know, I'm, I, you know, everything is a we thing, whether it's kids, finances, it's an hour or a wee thing.

Speaker 2 Okay, now as you move into looking maybe at a second marriage, what happens to kids and assets? Does it say stay the same as a initial marriage? Everything is a we-hour thing?

Speaker 2 You know, you hear about prenups, you hear about, you know, or does everything, it just stays simple. It's just like a first marriage, but it's a second one.

Speaker 2 It's a wee-hour thing, whether it's kids or assets or whatever.

Speaker 1 You know, it doesn't matter. What really matters is that you decide in advance.

Speaker 2 Okay.

Speaker 1 How many kids do you have?

Speaker 2 Well, I have five, but I only have one that is under 18. She has two.

Speaker 1 Are they under 18?

Speaker 2 They are.

Speaker 1 Okay.

Speaker 2 And there are a difference difference in assets. She has mentioned prenups.
I'm not a favor of them. I feel like any line you draw.

Speaker 1 Who has the assets?

Speaker 2 She does at the moment.

Speaker 1 Okay. What is her net worth?

Speaker 2 Probably

Speaker 2 $3 million, $2.5 million.

Speaker 1 What's yours?

Speaker 2 Probably $700,000.

Speaker 1 Okay.

Speaker 1 I don't usually recommend prenups except in extreme situations. This is pretty much an extreme situation.

Speaker 1 If somebody wants a prenup to protect their classic car, don't marry them, right? Okay.

Speaker 1 But there's $3 million on the table. You've been divorced three years

Speaker 1 and you got $750 on your side. So

Speaker 1 I think you would say what you come into it with is yours. What she comes into it with is hers.
And what we do from that point forward is ours.

Speaker 2 Well, the problem with that is I'm a small business owner, and my income is only going to go up.

Speaker 2 If she retires, hers will do nothing nothing but end so then you end up in a prenup situation where no no the three million dollar income does not end

Speaker 1 pardon she makes three hundred thousand a year if she makes ten percent on three million in perpetuation her income does not end

Speaker 2 yeah right but if my income goes up to my net worth goes up to five or ten in the next 10 years do you see what i mean everything that she had was earned pre pre-marriage everything i assets mine would actually be post-marriage

Speaker 1 Okay. Well, you guys just have to decide.

Speaker 2 Okay. It's not like a right or a wrong or, yeah.

Speaker 1 No, I think what you got to do is,

Speaker 1 number one, the question I always ask myself is,

Speaker 1 am I making a statement with this

Speaker 1 move that says I love stuff more than her? If that's the case, you probably ought to not get married.

Speaker 2 Well, I know that's not me. I mean, I'm afraid that's the other person, but that's never me because that's not how I am.

Speaker 1 Yeah. Okay, but you just said that.
You just said my income and my assets are going to go up and I'm worried about that. That doesn't

Speaker 1 worry about that. Yeah, you did.
You just said it, dude.

Speaker 2 Yeah, I understand, and I did, but that's, I'm probably more concerned about it not causing a dividing line.

Speaker 1 There you go. That's that's good.
I like that.

Speaker 1 So if you had agreed to something on the front end, it would not cause a dividing line for you, right?

Speaker 2 No, that's not. That's the thing I don't want.
I don't want to end up in a roommate situation where I pay this, you pay that.

Speaker 1 No, I'm not suggesting that.

Speaker 1 But I am saying, you know, you come up with something that says a formula on your business, and you come up with something that's a formula on her stuff, and then the rest of it we put in the middle, and we just work it out.

Speaker 1 We take care of the minor children.

Speaker 1 If you love her, you have to take care of them. That's an act of law.
The kids are not a problem at all for us.

Speaker 3 I was going to say, what are the kids? Are the kids on board with this? Do you have weird relationships? What are the kids?

Speaker 3 Because that's the thing that i think of first you guys are the ones getting married but if i were in that situation as the woman probably what i'd be thinking about are will my kids be protected if this for some reason goes south that being said i hold that with a grain of salt because at any point in any relationship if you start thinking like that that is an indicator that something's already wrong.

Speaker 3 I'm in a marriage now. I don't think, oh, gosh, if something were to happen, I want to make sure my kids were protected.
That's not in my brain right now because I'm married.

Speaker 3 So there's part of it that I,

Speaker 3 if I'm being honest, I just hate the discussion because it just feels divisive from the go, but I also understand, like, I also understand it.

Speaker 1 You do need clarity. So the pre-nup would give you click, the prenup can give you clarity in the event of a marriage ending, but also go ahead and state in there what the wills are going to say.

Speaker 1 So her 3 million goes to her kids, or her 3 million goes a million to you, and 2 million to her kids, or whatever the number is. You're 750 and your business goes where and so on.

Speaker 1 In the event of death,

Speaker 1 how is she going to be cared for?

Speaker 1 In the event of death, how are you going to be cared for? In the event of divorce, how is it going to happen?

Speaker 1 And as long as you have that very clearly defined and then talk through the feelings that you have around that, I don't think the kids really get a vote other than the minor children have to be taken care of.

Speaker 1 But they, they, you know, I,

Speaker 1 she, uh, you need to put your spouse, your new new spouse ahead of your kids from the previous marriage that's true that's true but you but everyone does have a concern that i want to leave some of my stuff to them but i'll give you an example if a guy it's a little different than these numbers okay but if a guy says okay i'm coming into this with a whole lot of assets the lady he's marrying doesn't i've had that where he had five or six million dollars and he gets i want to make sure my kids get everything

Speaker 1 Well, you're not very taking good care of your spouse when you die. Exactly.
So that worries me.

Speaker 3 But then on the flip side is if the one spouse dies with a pretty large estate and it's more than enough to take care of the spouse and the kids, but if this, the surviving spouse is a bonehead with the money and just blows through it, then you also feel like, hey, well, the kids shouldn't have to,

Speaker 1 they shouldn't have to come in.

Speaker 1 But I mean, so, you know, in the case of that $6 million guy, I said, hey, you need to set aside enough to make sure your new wife is taken care of in the event of your death. And,

Speaker 1 you know, I think you've got to, you know, what we're trying to do is love everyone well, but

Speaker 1 the fair is where the cotton candy and the tilt whirl is. There's not a fair.

Speaker 1 There is no fair. Fair is your money.
The two of you sit down and you decide.

Speaker 1 And whatever

Speaker 1 process or values you use to decide where she uses to use or her 3 million goes should also be equally that same value or process or principle should be applied to your side. I do agree.

Speaker 1 And so, you know, and I think you figure out in the event of death and the event of divorce. I think divorce is a lot cleaner because in death, you know, I got to make sure everybody's taken care of.

Speaker 1 That's right. But it gets a little weird or, you know, legacy or whatever, all that stuff.
So, but yeah, it's interesting. It's an interesting discussion.

Speaker 3 But much as we talked about on the call before that, make sure that the kids know too.

Speaker 1 Everybody knows. Everybody knows.
You all sit down and decide, draft it, and then tell them. They don't really get a vote.
Tell them this is what's happening.

Speaker 1 This is what we decided, and here's how we came to that decision. And you can sit down and tell them together.
Yeah, that's right. But I wouldn't cut anybody out.

Speaker 1 I wouldn't cut anybody in all the way.

Speaker 1 But there's not a requirement here. Somehow you've got to learn how to join your lives

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Speaker 1 Jade, one of my rules is to not tell people to do something I haven't done or I'm unwilling to do. Agree.

Speaker 3 Me too.

Speaker 1 I was thinking during that break that

Speaker 1 the vast majority of my assets, including the Ramsey Solutions Company,

Speaker 1 and a lot of our real estate, is already in the name of the Ramsey Children's Trust. Wow.
It's already been transferred for estate tax planning primarily,

Speaker 1 but also because whatever is not in that is more than enough for Sharon to be taken care of.

Speaker 1 And the rest of it is intentionally left to the kids.

Speaker 1 And so were I to pass away and Sharon were to get remarried, it's already Divier. It's already been taken care of.

Speaker 1 I mean, she would have a big chunk she would need to think about, but it would not be.

Speaker 3 You wouldn't be going back on the stuff that's already been.

Speaker 1 I'm trying to think of a number, but let's call call it 70% is already in the kids' names

Speaker 1 or more. And so

Speaker 1 that's not even in play anymore, in our case, because we structurally did it for estate tax planning. But it also reflects a value

Speaker 1 that we wanted the legacy piece to go with that. So interesting.
I just had to kind of think through why I was highly uncomfortable there. All right.

Speaker 1 On the debt-free stage in the lobby of Ramsey Solutions, Riley and Claire are with us. Hey, guys, how are you? Hi, doing well.
How are you?

Speaker 1 Great. Where do y'all live?

Speaker 5 Lexington, Kentucky.

Speaker 1 Oh, welcome to Nashville. Thank you.
And how much debt have you two paid off?

Speaker 5 We paid off $65,767.

Speaker 1 Excellent. How long did that take you?

Speaker 5 16 months.

Speaker 1 Way to go. For you.
And your range of income during that year and a half.

Speaker 5 $75,000 was our starting, and then $90,000 is where we ended up.

Speaker 1 Yes. Way to go.
What do y'all do for a living?

Speaker 6 I'm a speech therapist, and I'm actually a medical student.

Speaker 1 wow

Speaker 1 how are you paying for that so i'm actually in the air force so

Speaker 1 i'm paying for that excellent thank you i like it what very good what was the 65 000 then student loans my student loans for speech therapy speech therapy yes sir wow what year of med school are you in i'm in third year okay at uk i guess university of kentucky yes okay excellent i'm so glad Thank you for your service to the country, and I'm proud that we're doing that.

Speaker 1 And what a bright guy to get the taxpayer to to pay for this it's a beautiful idea thank you really smart I like it I like it I'm not being sarcastic I think it's a you know these guys ask me all the time how do I go to med school it's too expensive you just figured it out right what made you let me ask before I get sideways what made you go that route so actually it's a whenever I got accepted I got an email from the Marine Corps first and so I was like I saw it.

Speaker 6 I was looking at the email. I was like, what's the catch?

Speaker 6 And so I started looking into it a little bit more. We were just dating at the time, but I saw a future with her.
So I was talking with her about what this process looked like and things like that.

Speaker 6 So I talked with some other people from my hometown church, and they went through the Air Force, and they said it was a great program that they would do it again the same way.

Speaker 6 So I just was like, you know, the catch is to serve. So and

Speaker 1 what is the commitment?

Speaker 6 So after residency, it would be four years of active duty.

Speaker 1 Okay, so when you become an MD,

Speaker 1 four years is your payback. Yes.
Wow. Yeah.

Speaker 1 That's good.

Speaker 6 That's good. And they give us a stipend all throughout medical school, so that's really helped us, and that helped us along this debt-free journey.
So just having the extra income on top of first.

Speaker 1 Yeah. So the stipend is part of it, but basically it's your speech therapy income.
Yes. Yes.
Way to go. Thanks.
And how old are you two?

Speaker 5 I'm 27.

Speaker 1 I'm 25. And how long have y'all been married?

Speaker 5 It'll be two years in June.

Speaker 1 Oh, okay. So you've had this plan since before you got married.
Yes, sir.

Speaker 6 Yeah, pretty much. Pretty much.

Speaker 1 And you were looking at med school debt going, oh my gosh. And then the Air Force appeared.
That's right. Yep.
Exactly. Wow.

Speaker 1 That's exciting.

Speaker 3 So tell me about what it was like getting on to this plan. Was it a lot of sacrifice? Was it something that for the most part you just thought, well, you know, we're just doing this.

Speaker 3 Tell us more about that.

Speaker 6 So whenever we were about to get married, I was trying to figure out what we would do with our finances. I wanted to try to set us up well.

Speaker 6 I think one thing that stressed her out a lot was the debt. I think her family was telling her that's a big thing to tackle.
So

Speaker 6 I thought that it would be a really good thing for us to just hit that hard and really go for it because I knew that was a big thing that was stressing her out.

Speaker 6 And I just wanted to move forward and do the right thing for our family. So that was really where it started.
It may have taken a little bit of convincing.

Speaker 1 I'm a natural spender.

Speaker 5 Got you, Greg.

Speaker 5 It was definitely his push, but I mean, we're unified in marriage, so we're going to be unified in paying this debt off.

Speaker 1 And so that's what we did. Was it worth it?

Speaker 3 Oh, absolutely.

Speaker 1 Absolutely.

Speaker 6 Not only financially, but I think it really strengthened our marriage. As we were going through this together, we had a lot of decisions were made together.

Speaker 6 So we got to know each other much more and deeper. And so,

Speaker 6 you know, going through the first year of marriage and doing this as well was really helped us.

Speaker 1 Oh, it's huge. Yeah.

Speaker 5 And we see how it'll impact our marriage and our family for years to come.

Speaker 1 I mean, you can make tough decisions about money. You can make tough decisions about almost anything.
Right. Together.
Correct. Unification.

Speaker 1 So then the real question is, Riley, now that you're debt-free, what does Claire get to buy?

Speaker 1 So, yeah.

Speaker 6 I think the next thing on the docket would be getting her a new to us car.

Speaker 1 The car is almost as old as I am. Yeah.

Speaker 1 She really definitely needed to upgrade this car.

Speaker 6 She would really sacrifice. She kept saying, you know, all the different cars in the parking lot, you know, are much nicer than hers, but she kept pushing on.

Speaker 1 You're pulling me out a little. Well, it's true.
And they all have payments. Yeah, they all have payments.

Speaker 1 Yeah.

Speaker 5 I just had to to remind myself this is paid off.

Speaker 1 We don't owe anything.

Speaker 1 Wink at those broke people as they get in their car and drive away. Yeah, exactly.
Wow. So what is this car?

Speaker 5 It's a 2005 Honda Accord, and it gets me from point A to point B.

Speaker 1 Does it have a name?

Speaker 5 It doesn't, but we should name it something.

Speaker 1 You should name it something. Make sure you take pictures that you can show your grandkids.
There you go.

Speaker 1 That's what you drove while your husband was going to med school in the Air Force, and that's how we became multi-millionaires. And I just wanted you to know the story.
Right. Yeah.
Yeah.

Speaker 1 I drove a freaking hoop deep. Yeah.
So you guys did it. I got pictures of model cars.
And man, I tell you, it's

Speaker 1 your cars are part of your journey. And

Speaker 1 you are due for an upgrade, no question. Yeah.

Speaker 3 You guys did it right.

Speaker 3 I'm proud of you because we talk to doctors all the time calling in on the other end because they've got so many student loans and it's just not all it was cracked up to be.

Speaker 3 And so to come out of it with no debt, I'm just, I mean, I hope that you come back in how many, five years and tell us, give us the update.

Speaker 1 Yeah, it's going to be huge. You're going to be going ding, ding, ding, ding, ding, ding, ding, ding.
I like it. And your pay is not bad in the Air Force.
No.

Speaker 1 For the four years once you come out of residency.

Speaker 6 Especially without the student loan payments.

Speaker 1 Yeah, exactly.

Speaker 3 Exactly. It's all going to be yours.
Yeah.

Speaker 1 And you're going to be making some good money. Way to go, you guys.
What a great plan. How mature and forward-looking and visionary and all that.
That's pretty cool.

Speaker 1 Were there people in in your friend group or family that were picking on you?

Speaker 6 Not a whole lot of picking on us, but we did have a lot of support. Our families both really supported us.

Speaker 6 I even had some med school buddies who knew about what we were going through and cheered us on the whole way.

Speaker 1 Oh, that's good.

Speaker 5 And Dave,

Speaker 5 you were a common name in my family growing up, so I grew up hearing about you and knowing, like, you need to get on that Dave Ramsey plan.

Speaker 1 Like, you need a so when you were a teenager, my name was a cuss word. Yeah, okay.

Speaker 1 I got it. That's okay.
I like it. I like it.

Speaker 1 It sets you up to be this.

Speaker 1 I like where you are. I'm proud of you guys.
You're pretty amazing. Thanks.
Very cool. Good stuff.
Very good stuff. Man, that's good.

Speaker 1 Riley and Claire, Lexington, Kentucky, $66,000 paid off in 16 months. Newly married, $75,000 to $90,000.
That means they've been on beans and rice, boys and girls. That's what that math says.

Speaker 1 And driving an old hoopty and going to come out of med school, come out of the Air Force with zero med school debt. Just brilliant, brilliant plan.

Speaker 1 Man, it can be done.

Speaker 1 Wow.

Speaker 1 When I see people like you guys, it just gives me a lot of hope for the future of this nation. You're incredible.
Well done. Riley and Claire, count it down.
Let's hear a debt-free scream.

Speaker 1 Three, two, one. We are dead-free.

Speaker 1 Yes!

Speaker 1 Wow!

Speaker 1 Wow. So, med school's $250, 300 grand.
Yeah. I give or take.
I don't know what UK is, but somewhere in there. And the payback is four years of service.

Speaker 1 And when you have good pay while you're doing the four years of service. Yeah.

Speaker 3 Just having a plan. He went in with a plan.

Speaker 1 Stone cold. Yeah.
Yeah. Amazing.
Beautiful. This is the Ramsey Show.

Speaker 7 All right, Dave, you have some strong strong opinions.

Speaker 1 Possibly, yeah.

Speaker 3 I think so.

Speaker 7 Okay, because you really prefer credit unions over big banks.

Speaker 1 Well, credit unions, for one thing, are

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

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

Speaker 1 And but that's what's more important than that, though, is the fact that that the customer is the owner changes the spirit on the credit union.

Speaker 1 So I find very few credit unions that aren't very customer-centric.

Speaker 7 Well, and I think we have found one that is incredible, and that's Fairwinds. They are an incredible credit union that is really out with the heart to help the customer.

Speaker 1 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.

Speaker 1 Yeah, absolutely.

Speaker 7 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. And I'm not kidding.

Speaker 7 It took less than five minutes. It was so user friendly, like the step-by-step approach was unbelievable.
And then the next day, my phone rings and it says fair wins on my phone.

Speaker 7 So I answered it and talked to someone there. And they said, yeah, they give calls to every new customer.
And so again, they just really care about your experience. And I, I so, so appreciate that.

Speaker 7 Plus anything that you can do at a traditional branch, you can do with them at fairwinds.org or on their app. And you'll have free access to over 33,000 ATMs.

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

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

Speaker 7 Yeah, you guys, it's so easy to join Fairwinds no matter where you live. So go to fairwinds.org/slash Ramsey.

Speaker 1 glenn is in toronto canada hi glenn how are you good how are you better than i deserve how can i help

Speaker 2 i want to know should i sell my paid off truck it's kind of expensive and buy an older truck to save money

Speaker 1 to save money

Speaker 2 well it's just like a depreciating asset and i just feel like it's too much truck

Speaker 1 okay is it it's paid for you have debt it is no debt what's the truck worth

Speaker 2 69 000.

Speaker 1 wow what do you make

Speaker 2 uh last year 260.

Speaker 1 you like the truck

Speaker 8 yeah it's okay

Speaker 2 It's kind of faded, but it's a good truck.

Speaker 1 I like it.

Speaker 3 So you're like, let me offload this before it depreciates further and get something else, basically?

Speaker 2 Yeah, yeah, it's actually worth a few more bucks than it was when I bought it a year ago.

Speaker 3 Yeah. Okay.
So what would you get instead?

Speaker 2 Just an older truck, like something, you know, 20 years old that's in good shape.

Speaker 3 But what would you spend, I mean?

Speaker 2 How much? Oh, like 20.

Speaker 1 Are you married? Yes. Well, what does your wife make?

Speaker 2 She makes a hundred.

Speaker 1 On top of your 260?

Speaker 2 No, that's combined.

Speaker 1 Oh, okay. All right.
And what does she drive?

Speaker 2 She drives an 18 Murano.

Speaker 1 What's that worth?

Speaker 2 $12,000. Okay.

Speaker 1 Do you have a boat?

Speaker 1 Nope. A C-dew?

Speaker 1 I have nothing. Snowmobiles?

Speaker 1 No. No toys with motor.

Speaker 1 Okay.

Speaker 2 Just a snowblower.

Speaker 1 Okay.

Speaker 1 Well, you probably need that.

Speaker 1 Yeah.

Speaker 1 Well, the rule of thumb that we have run numbers on is that you're probably not doing serious damage to your finances if you keep the things that you have with motors and wheels.

Speaker 1 Okay.

Speaker 1 Anything with motors and wheels goes down in value. Or just wheels.
If it has a battery, like a Tesla, it goes down in value. Okay.
So if it's got wheels and or a motor,

Speaker 1 it goes down in value. And so you don't want all of those things added together to be more than half your annual income because you have too much invested in things that are going the wrong way.

Speaker 1 You do not.

Speaker 1 You've not

Speaker 1 even close. You're not even close.

Speaker 3 So what's I'm just curious of your emotion around this because it's obviously something that you're just, I'm wondering why you're even batting this around.

Speaker 3 Like what happened or what are you thinking you can do with the money,

Speaker 3 you know, the extra money?

Speaker 2 Well, I have three children. One's going to university this year.

Speaker 1 Okay, well, there you go.

Speaker 3 And that's, that's what you're thinking thinking you'll do with the money is pay for college?

Speaker 2 Well, there is money for that, but just having

Speaker 2 more of a buffer, I guess.

Speaker 1 Okay. You're not doing anything wrong as long as you're able to pay cash for college and run your household budget keeping the truck.
If you want to sell it, though, you can sell it. It's your truck.

Speaker 1 You're not stupid for keeping it and you're not stupid for selling it. But what we're fighting against is people that make $65,000 a year and they're driving a $65,000 truck.

Speaker 1 Right. And then they can't figure out why the flip they're broke.

Speaker 2 Sure.

Speaker 3 Or people who just feel guilty. Then it's the opposite end of people who are doing really well and they just feel guilty about being able to have nice things.

Speaker 1 Yeah, I regularly talk to millionaires on the Millionaire, Babysip's Millionaires theme hour, and I regularly tell them to get a better car.

Speaker 3 Yeah, you got to. That's the first time.

Speaker 1 But if they're still driving a piece of crap. And you don't need to do that when you get a million dollars.
It's okay. You don't have to drive a piece of crap.

Speaker 1 And you make, you know, 200, 200 you make a quarter million dollars a year you make enough money to not worry about it yeah and so in a 69 000 truck but if you call me up and tell me you want to buy a four hundred thousand dollar limbo i'm going to tell you no that's stupid if you make 260 that doesn't fit the budget some people also just don't i'm talking to myself right now i feel called out i just don't care about cars then there's people who are like i i could drive no that's sharon she has no idea what her cars are called she's like what kind of car is that what kind of car is that gray one that she doesn't care i don't care yeah i buy sharon's cars because i want them not because she does that's what will happen in our family yes i don't care yeah that's i mean because it's a car that i because i get to drive them occasionally you know it's something that's sitting in the garage there and i'm picking up the grandkids or whatever so i don't want you know so there you go that's it yeah that's it yeah yeah but the rule of thumb is that guys and and if you have debt on it the other formula that goes with the half of your income on things that have wheels and motors, the other formula is can you be debt-free everything

Speaker 1 except the house in two years if you keep the stupid truck?

Speaker 1 And oddly enough, it usually is a stupid truck. I don't know why, but occasionally it's a car, but it's usually a stupid truck.
It's a big truck. Yeah.
Yeah.

Speaker 1 You're not required to put a lot of money if you don't care anything about it.

Speaker 3 But you'll spend that money in other ways.

Speaker 1 It's fine. I mean,

Speaker 1 my point is you can buy something that goes down in value mathematically, and it doesn't keep you from getting ahead if you stay with that formula. That's the only thing I'm coming up with there.

Speaker 1 All right.

Speaker 1 Derek is in Kansas City. Hi, Derek.
What's up?

Speaker 2 Hey, sir.

Speaker 2 I just got out of the service. I'm trying to get my financial setting in.
I'm looking at buying a home and getting into the real estate business.

Speaker 1 Thank you for your service.

Speaker 2 Thank you for your support, sir.

Speaker 1 How can we help?

Speaker 2 So I guess I just have.

Speaker 2 I'm unsure of what the steps should be. So I went from I'm going to do 20 years in the service to getting irreversibly injured.

Speaker 2 And now I'm just looking at a life where I don't have to work for anybody else. And I just kind of live a life that I want to live.
So I'm looking at into real estate and going that route.

Speaker 1 Oh, interesting.

Speaker 1 You mean like a real estate agent selling houses?

Speaker 2 Either buying and selling houses or just buying homes and then renting them out.

Speaker 1 Do you have that kind of money laying around?

Speaker 2 Not yet, no.

Speaker 1 Okay. All right.
So you're not going to be a real estate investor because you don't have any money.

Speaker 2 Yes, sir.

Speaker 1 Do you have

Speaker 1 your own home yet?

Speaker 2 No, ma'am. I'm currently, I just got out March 5th.

Speaker 1 Okay.

Speaker 2 Yes.

Speaker 1 So you get full disability or did you go out on 20-year retirement?

Speaker 2 I am fully disabled. I'm making about $48,000 a year,

Speaker 2 tax-free.

Speaker 1 Yeah, for the rest of your life. Okay.
What's the nature of your disability, sir?

Speaker 2 My back is destroyed. Long story short, they told me that I will just have to learn to live with the pain.
It doesn't get better, I will.

Speaker 3 If you were to buy properties and rent them, who would manage the properties with your back issues?

Speaker 1 Like, how would you take care of it?

Speaker 2 That's the my back isn't so bad that I can't do basic lawn work or work yawn places. I also come from a lower milk-ass family, but a working family nonetheless.

Speaker 1 So you can't.

Speaker 3 Okay, so you can, you've identified the level of work that you can do.

Speaker 1 Physical work. Okay.
Yeah. You're not required to do the painting if you're managing a property.
You can hire a painter. That's not the end of the world.
But

Speaker 1 I promise you I will.

Speaker 3 Let's see. Getting started, though, did you do a lot of the work with your hands?

Speaker 1 No. You didn't? Never touched it.
No, I know how. I grew up, mom and dad, you know, we always working on some old house because that's what they did.

Speaker 1 So I know how to do it, but that's what made me not want to do it.

Speaker 1 The

Speaker 1 lot of black fingernails from hitting them with a hammer.

Speaker 1 The,

Speaker 1 let's see.

Speaker 1 You know, I think I'd go into the real estate business and go make some money as an agent before I started trying to flip houses with debt.

Speaker 2 So my only

Speaker 2 thoughts were with my home loan, or no, I'm sorry, with the VA home loan, there's a lot of benefits that come with it. No, there's not.

Speaker 1 It's horrible.

Speaker 2 Disregard.

Speaker 1 So the VA home loan is a nothing-down loan. that is a higher interest rate and higher funding fees than any other loan.
It's higher than FHA and it's higher than FannieMae. It's not a good benefit.

Speaker 1 Your other benefits are good benefits, and they're great. I'm glad they're there.
And I'm sure you've got someone in addition to the VA looking at your back. I hope.

Speaker 1 Yes, I do.

Speaker 3 People just hear the zero-down and think.

Speaker 1 Yeah, I wouldn't do the zero-down, nothing-down real estate flip thing. That's something that you see on TikTok.
Real people don't get rich doing that, they go broke doing that. And so

Speaker 1 yeah, I'd stay away from that. But I do want to encourage your entrepreneurial spirit.
I want you to

Speaker 1 plug in

Speaker 1 and start something

Speaker 1 to start earning an income in addition to the 48.

Speaker 1 You've kind of got the basics of life covered. And so now you can kind of tinker with monopoly money, right?

Speaker 1 Without going into debt. So you could start something pretty easy.
and move in that direction. I'm going to send you a couple of business books to get you started for small business.

Speaker 1 It's the brand new one that comes out this week, Build a Business You Love, and the book Entree Leadership, which is the playbook of how we grew Ramsey from a card table in my living room.

Speaker 1 I think maybe you'll get some ideas out of both of those.

Speaker 1 Oh, I'm also going to give you Ken Coleman's book, Find the Work You're Wired to Do, and take the assessment in that, and it'll probably give you a wink and a nod in a certain direction.

Speaker 1 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 build wealth, do work that they love, and create actual, amazing relationships.

Speaker 1 Jade Washall, number one best-selling author and Ramsey personality. She's my co-host today.
Andrea is in Philadelphia. Hi, Andrea.
Welcome to the Ramsey Show.

Speaker 8 Hi, Dave. How are you?

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

Speaker 8 Yes, I am in a really tricky situation. I am babysand number two with my husband.

Speaker 8 And I just received a call today in the morning, actually.

Speaker 8 My brother and my mom asking me to borrow my brother,

Speaker 8 three that will lend my brother $3,000.

Speaker 8 But my mom knows about the Snowball and

Speaker 1 for what?

Speaker 8 For what? For his business.

Speaker 8 Because he needs to pay stuff for his business.

Speaker 3 Why doesn't she lend him the $3,000?

Speaker 8 Because she doesn't have the money.

Speaker 1 Neither do you. You're broken in debt.

Speaker 3 I was going to say, it's the same answer.

Speaker 8 Exactly. But this is the catch.
I talk to my mom sometimes, you know, telling her, like, we save money for the kids, right?

Speaker 8 So the kids have money. So her idea was to take the money from the kids' savings account to give my brother.

Speaker 3 She has a lot of ideas about what you should do with your money.

Speaker 4 Why do you

Speaker 1 do you feel

Speaker 3 like you're in

Speaker 3 some way you have to listen to what she's asking you to do?

Speaker 8 I mean, my brother helped me when my me and my husband were like in really tough situations at the beginning of our marriage.

Speaker 1 How'd he help you? How did he help you?

Speaker 8 I mean, sometimes like buying our kids' stuff

Speaker 8 if they need it without asking. And he was like, okay, you know, I can do it.

Speaker 1 That was not $3,000.

Speaker 2 No, no, no, $3,000.

Speaker 1 That was $100.

Speaker 8 Kind of like that.

Speaker 8 $50 here. $50.

Speaker 1 What's your cultural background what's this accent

Speaker 1 um well i'm from ecuador okay and your mom is your mom and brother are in ecuador

Speaker 8 no they're from they're live here but yeah they're ecuadorian so of course and they live here right now we're all most of my family live in the united states right now your brother is he single or does he have family and kids

Speaker 8 and he is single and he does have a kid back in Ecuador. Okay.
He has a business that he does not open. Like this is how.

Speaker 3 Can you tell me more about this morning?

Speaker 3 Can you tell me more about, did your brother come to you and you said, sorry, I can't help you. Then he went to your mom and then your mom tell me how that happened.

Speaker 8 I received a call today in the morning that my brother asked my mom.

Speaker 8 And then the call came from my mom.

Speaker 1 Okay.

Speaker 8 So she was listening because she knew about my kids' savings account. So her idea was

Speaker 1 that

Speaker 1 there's two possible answers, okay?

Speaker 1 In your culture, it is more normal for you to share with extended family than it is in an Anglo family.

Speaker 1 Okay. In my culture, the answer is a hard no and instantaneously, and you're weird for even asking.

Speaker 1 Okay, correct. But in your culture, this is not quite as weird.
Am I correct in saying that?

Speaker 8 Correct. Yes.
Yeah.

Speaker 1 Okay. Yes.
Because I got to tell you, in my world, when grandma asks for the kids' money for the brother, that means grandma needs to be smacked in my world. Okay.

Speaker 1 No, you're not getting my dadgum kids' money for the brother's business because he's run a business poorly. No, thank you.
That's the world I'm in, but that's a little different world than you're in.

Speaker 1 And so we have to answer the question thoughtfully because there is a cultural difference. Is that fair?

Speaker 1 Correct. Okay.
But I still think the answer is a hard no.

Speaker 3 I do too, because I think all of us get to choose the things culturally that we continue on with or the things that we go, I know everybody did it that way. That's just not for me.

Speaker 3 Or that's, I'm not going to go with that moving forward. I think you can do that in a way that's not disrespectful, but it's just a.

Speaker 1 change. Yeah, one of the reasons I work my butt off is so I would never be a burden to my kids.
But in some cultures, it's normal for you to be a burden to your kids when you get old. It's expected.

Speaker 1 And you're paying honor

Speaker 1 when grandpa moves in and because grandpa has no money because grandpa didn't take care of himself. That's a normal thing in some areas.

Speaker 1 It is not normal in an Anglo-Saxon African-American United States culture. Okay.

Speaker 1 And even, you know, but,

Speaker 1 you know, again, a Hispanic culture, that's going to have a tendency to go that way. I've learned some of these things the hard way as we've tried to help folks in different communities.

Speaker 1 And I stepped in it because I didn't know there was a cultural difference. So I'm trying to acknowledge that, but still tell you the answer is no.

Speaker 1 No, mom.

Speaker 1 I do not, I am not comfortable with my children's money going to my brother. That makes me uncomfortable.
And it really kind of makes me uncomfortable that you would even ask.

Speaker 3 What's the implication of you saying that, Andrea, to your mom and to your brother? What'll happen next?

Speaker 8 Well, they are, they actually live together, so they're really close. And I know my brother doesn't know about my savings.
It should have been my mom's idea because that's not something that I just.

Speaker 1 Yeah, I think this is all on your mom.

Speaker 1 And I think your mom has a lesson to learn here that your household is separate.

Speaker 3 Uh-huh. And when you tell them no, are you feeling like, hey, they're never going to talk to me again, or I'm not going to be invited to, you know, dinner, family dinner? Like,

Speaker 3 is is there a consequence to you saying no that you can foresee

Speaker 1 yes and what is that

Speaker 8 my brother's that he's more like resentful he's that type of person that if

Speaker 8 he just you tell his son that he doesn't like it his wife hasn't even approached about his business and the poorly way that you guys bet that he is managing it it's because then he's not gonna talk to me So I'd rather just be, you know, on the side.

Speaker 1 Yeah, I don't,

Speaker 1 if you don't want to interfere in him doing his business poorly, that's that's fine but when you tell your mom no jade's asking mom no i think we're going to keep our kids money with our kids

Speaker 1 what does she do

Speaker 1 hello did you drop your phone

Speaker 1 hello yep yeah hello yep did you hear me hello did you hear me yes i yes i heard your question what's the answer

Speaker 8 the answer is like yeah but

Speaker 8 he can pay you interest.

Speaker 1 Well, no, what is she going to do to you? The answer is no to your mother. Then what is she going to do?

Speaker 1 No is a complete sentence.

Speaker 8 Yes. She will try to talk to me like a way into it.
Yeah.

Speaker 1 And so the answer is still, mom, I love you. I love him.
That's not in question. But this money is set aside for my children.
And the answer is going to be no, no matter how long we talk.

Speaker 1 So, let's not talk long because it's going to aggravate you, mom.

Speaker 3 And what I'm trying to show to you, Andrea, is there's not really a there's no consequence here other than adults choosing how they're going to behave next.

Speaker 3 And if your brother chooses to give you the cold shoulder, that's not something you can control.

Speaker 3 All you can control is your response in this, and you can stand by it, and your mom can have an attitude for a while. But that's about it,

Speaker 3 yeah, exactly. And you get to keep your peace, exactly.

Speaker 1 This is the Ramsey Show.

Speaker 1 I've been helping people get out of debt and change their lives for over 30 years. So I know change isn't always easy, but it's worth it.
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Speaker 4 You know what's crazy to me? Two things. One, that we're already down to the wire on the tax deadline.
And two, statistically speaking, most people haven't filed yet.

Speaker 4 And if that's you, I'm not trying to shame you or anything, but just know that taxes don't have to be stressful.

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Speaker 1 Our question of the day is brought to you by YReFi. YReFi refinances defaulted private student loans,

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Speaker 1 That's the letter YREFY.com/slash dot com slash Ramsey might not be in all states. That's right.

Speaker 3 Today's question comes from Chelsea in Kentucky. She says, my daughter is a senior in high school.

Speaker 3 She came home from school recently and said that her personal finance course teacher quote educated them on credit cards and loans and how to manage and build credit appropriately.

Speaker 3 She's very aware of our stance on not using debt and the school is obviously not using your Ramsey curriculum.

Speaker 1 Yeah, you bet.

Speaker 3 How would you deal with

Speaker 3 an instructor forcing your child to participate in their quote process?

Speaker 3 I mean, in many ways, it sounds like Chelsea, you kind of answered your own question because education starts at home.

Speaker 3 So, what you're telling them at home and that you're continually baking into them, you know, this is a good chance to kind of stress test that, in my opinion.

Speaker 3 It's like, okay, tell me what you learned today. What did they tell you? And then you're kind of opening up that dialogue because the truth is, a lot of the world does run on that.

Speaker 3 And it is kind of good to understand that so that you see how your pathway is a better pathway. Right.
And so

Speaker 3 I, you know, Dave, you can say what you're going to say, but for me, I think that if I've told my kids, here's, here's a way to do life. Here's the way we're doing life in our household.

Speaker 3 They're able to see the fruit of that day in and day out. It's like any belief system.
If you're a Christian, you're going to see things in the world that counteract that.

Speaker 3 And your friends and people are going to tell you things that counteract that. And you're always stress testing what you really believe.
And I think this is just another example of that.

Speaker 1 It's a teachable moment. Yeah.
Yeah.

Speaker 1 Because when we're raising, one of the things we try to do when our kids are starting to hit that age group, we said, Andy Andrews says, we're not trying to raise great kids.

Speaker 1 We're trying to raise kids that become great adults, which means we have to teach them critical thinking skills. They need to be able to think for themselves.
On doctrine issues

Speaker 1 in their faith walk, their Christian walk, they need to be able to think for themselves. What's a doctrine issue? And Rachel can have a good doctrinal argument with you.
I'll just tell you

Speaker 1 with herself. You can just get her arguing with herself.

Speaker 1 It's a good argument on anything. It's a lot of fun.
Rachel argued with a dog, with a fence post. I mean, it's just, but anyway,

Speaker 1 I don't know where she gets that, but

Speaker 1 anyway,

Speaker 1 she would come home or they would come home with something, as you said, that they learned somewhere.

Speaker 1 It could be school, it could be somewhere else that didn't line up with the way Ramseys do things. As for me in my house, we don't do that.

Speaker 1 And you could just go slam your fist down and go, we don't do that. And you could go yell at the teacher, but it's not going to change the teacher.
And it's not going to help your kid.

Speaker 1 So teach your kid why credit scores suck. That the only way you build a credit score is going debt.
That the credit score is not a measure of net worth. It's not a measure of financial health.

Speaker 1 It's a measure of how much you've been playing kissy face with the bank. And pull it out and show her the lesson.

Speaker 1 Pull out Financial Peace University and show her how Fair Isaac developed the credit score, what the history of it it is. It's set up to promote debt for banks, by banks.
That's right. So learn.

Speaker 1 And so just say, and honey, your poor little teacher has fallen into that. Bless her heart, which in the South could mean we're going to slit your throat, but bless her heart, right?

Speaker 1 And so we're just, here's what you're going to do. You're going to take a test and you're going to pass the test because you're going to answer it the way the teacher needs it answered.

Speaker 1 But you know what the truth is because the real test is what you're going to do in the world. The real test is going to be what you're 27 years old.

Speaker 1 So the niece, my oldest child, when she was in college, took a personal finance class. The guy started the class, you know, 100 people in there.

Speaker 1 He doesn't even know who's in there, started the class with a 20-minute lecture on how stupid Dave Ramsey is.

Speaker 1 And she called, she said, what do I do? I said,

Speaker 1 what are you going to do?

Speaker 1 And she goes, well, I know that this is going to be a tough class because I'm dealing with an idiot. Uh-huh.

Speaker 3 Get smart on her. Yeah.

Speaker 1 So she's like, I can either drop the class or I can take it and answer the questions and get the credit. Yeah.
It's up to you. I said, I don't, I'm not making this decision.

Speaker 1 You're the one who's got to go to class. Yeah.
And so she took the class, passed the class.

Speaker 1 At the end of the class, when she was turning in her final paper, the guy looked down, saw her name, and realized what he'd done. Uh-oh.
So

Speaker 1 he's like, oh, God.

Speaker 3 Oh, yeah, that was enough.

Speaker 1 Because I'm an alumni that has donated substantially to that

Speaker 1 the University of Freaking Tennessee. Sure.
And so, and this guy's teaching there under tenure, maybe,

Speaker 1 maybe not now. I don't know.
No, I'm kidding. Did you push it?

Speaker 1 But we didn't do anything. We just let the guy be.
And then, boy, did he get to

Speaker 1 you've never seen anybody crawfish as fast. That guy backed up like he was hiding under a rock.
Michael Jackson moonwalking, I'm sure. So, I mean, but that's that's what you do.
You just

Speaker 1 teach your child how to think. Yeah, I think it's positive.
And then you don't have to worry about it.

Speaker 3 I think think it's positive. I think if you take a hard stance on anything, you should know very clearly what the other side says as well so that it's a smart argument on your side.

Speaker 1 And the other side is Hank, who is a Ramsey Financial Literacy Teacher in high school

Speaker 1 in Alabama at Russell County High School. Hank, how are you?

Speaker 2 I'm great, Dave. I know you're doing better than you deserve.
How's Jenny doing?

Speaker 1 She's doing great.

Speaker 1 So did we give her the right advice? Just Just leave that other high school teacher that doesn't know what they're doing alone? Yes.

Speaker 2 Yeah, just leave her alone. Pass the test.

Speaker 1 Do what you got to do.

Speaker 2 But we don't teach that way at Russell County High School.

Speaker 1 No, you're teaching the Ramsey curriculum, teaching them the truth.

Speaker 1 I love it. How long have you been teaching the curriculum, Hank?

Speaker 2 This is my third year, and it's my second. The first year, I didn't know how to access the videos or anything.
So I really taught from your total money makeover financial piece book.

Speaker 2 So for two years, we've been doing the full curriculum, and the course is getting more and more popular.

Speaker 2 The first two years I had to teach some algebra one and because I'm a math teacher I incorporate it into my math class, but I had to teach some algebra one in there too. So

Speaker 2 the last two years the class is,

Speaker 2 I've got all, this is the only thing I teach.

Speaker 2 We teach finite math and I incorporate it into it. Next year we're changing to

Speaker 2 financial algebra, which will the standards will line up a lot better. But man, it is great.
Love Love teaching it. I never have a student ask me, Ms.
Austin, when are we ever going to use that?

Speaker 2 I would get that sometimes about Pythagorean theorem.

Speaker 1 I bet. I bet.

Speaker 3 Well, yeah, that's the question that students always want to know is how does this relate?

Speaker 3 And so you've done a really smart thing by putting it to something that's actually relatable in everyday life.

Speaker 1 How do you calculate the

Speaker 1 footage of a parallelogram? Yeah.

Speaker 2 Most fun I've ever had teaching. Wow.

Speaker 3 How many students do you have?

Speaker 2 We're on a block schedule, so I teach about 80 each semester.

Speaker 1 Wow, that's a lot of lectures.

Speaker 2 That's a lot of course in a semester. So I have about 160 a year.
So I figure I've been doing it for three years, and I'm probably teaching seven more years before I retire, maybe.

Speaker 2 And so I'll have about 1,600 students come through this.

Speaker 1 Wow, very.

Speaker 2 And here's the thing: we live in a county, 73% of our students, we're a Title I school, 73% of our students are free or reduced lunch. Countywide, about 20% live below the poverty line.

Speaker 2 So if I can take those 1,600 students and I can teach them how to manage money, I can teach them how to be wealthy, how to not go into debt, do all the Dave Ramsey stuff and teach them to be generous, we can change the demographics of our county.

Speaker 1 You can. You're right.
You really can, and it'll be all your fault.

Speaker 2 I tell them all the time, we've got a lot of generational poverty here.

Speaker 2 I say, you know, you can change this not just for you, you can change it for your children, your grandchildren, because you learn to do things like your parents did.

Speaker 2 Your children will learn to do things like you do. So we've got to break some generational curses.
And

Speaker 1 you had a sponsor pay for the curriculum, a local builder, right?

Speaker 2 Yes, we did. We did.
And we weren't sure. We had a different sponsor for the first two years.
We weren't sure we were going to get that.

Speaker 2 I was fixing to start looking for grants and trying to raise money because I cannot imagine not teaching this. If I can't teach this, I'm probably going to be ready to retire.

Speaker 1 Wow. So

Speaker 1 Houston Homes, is that how it's pronounced?

Speaker 2 Yes, sure is.

Speaker 1 All right. Very cool.
A local, local homebuilder bought the curriculum for the high school.

Speaker 2 Thanks to them.

Speaker 1 In a county that's title, or in a school that's primarily Title I, meaning free lunch. Wow.
Wow. Right.

Speaker 3 And for any teachers listening, we're also doing that teacher appreciation giveaway, Dave.

Speaker 1 Yep, that's right. $5,000 vacation, and two or more teachers are going to win a $3,000 vacation.
Go to ramseysolutions.com/slash teacher to enter.

Speaker 1 We want to celebrate heroes like Hank, not the other kind of teacher. Way to go, Hank.
Thank you, brother. Thank you, Hank.

Speaker 2 I appreciate it. Great talking to you guys.

Speaker 1 You too, brother. Thank you so much.

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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Speaker 1 In the lobby of Ramsey Solutions on the debt-free stage, Steve and Michelle are with us. Hey guys, how are you? Hello.
guys. Doing great.

Speaker 1 Welcome. Good to have you.
Where do you live? Lake Tahoe, Nevada. All right.
Welcome to Nashville. And how much debt have you two paid off? $210,000.

Speaker 1 Yay. And how long did that take? Four and a half years.
All right. Love it.
And your range of income during that time? It was $180,000 to $250,000. Cool.
What do y'all do for a living?

Speaker 1 She's a teacher, and I work for her local fire department. Awesomeness.
Very cool. What kind of debt was the $210,000? It was the house.
Yay! Look at it, weird people.

Speaker 1 Yeah.

Speaker 1 Love it.

Speaker 1 And Lake Tahoe real estate's not exactly cheapo. Yeah.
So

Speaker 1 what's the price point on this puppy? What's it worth?

Speaker 1 Right around $1.6, give or take.

Speaker 1 Nice.

Speaker 1 And it's all paid for. Yes, sir.
And on top of that, you've got retirement savings.

Speaker 3 Yes, sir. Holy smokes.

Speaker 1 And how much have you got in your nest egg?

Speaker 1 Not including the pensions. Yeah, pensions are substantial.
Right around 500. Wow.
How old are you guys? 46. Yeah, we'll be, or 46, be 47 soon.
Nice.

Speaker 1 Way to go. Baby Steps Millionaires.
Yes, sir. How much of this did you inherit? None.

Speaker 1 None. All right.
There it is. I like it.
So you did it. A fireman and a teacher with a $2.1 million net worth at 47 years old.
Tell me the story. How in the world? Well,

Speaker 1 we were living the American dream.

Speaker 1 Which is our nightmare? Yeah.

Speaker 1 In our last house, and we were

Speaker 1 house poor,

Speaker 1 had too much of a mortgage and all the cool toys that the Americans get.

Speaker 1 Like firefighters might get them. Well, yeah.
Like the cool truck and the RV and the dirt bikes and everything. He's the spender.
And

Speaker 1 so, you know, we got sick and tired of being broke broke and started thinking about our twins at the time. We're getting ready to finish high school.

Speaker 1 And so we're thinking more and more about college or trade school, whatever the next steps might be. We wanted to set them up for success.

Speaker 1 And so we decided to make some big changes and just get after it. When did y'all run into Ramsey stuff?

Speaker 1 It was

Speaker 1 right about the time we started, really.

Speaker 1 About five years ago. Yeah.

Speaker 9 Yeah, about five, six years ago. I had the book

Speaker 9 Financial Peace sitting on a shelf for many years, but never opened it.

Speaker 9 And then we got really nervous about the idea of paying for college or trade school, got out the book, and started realizing that we needed to make some changes in order to be able to help fund them once they graduated high school.

Speaker 1 So

Speaker 1 we started.

Speaker 1 Started, I worked all the overtime I could. She was tutoring on the side, and I started selling everything I could get my hands on and that kind of became its took a life of its own on and

Speaker 1 I've kind of put a book together on selling things on Facebook Marketplace now. I love it.

Speaker 1 Ended up with a little bit of an alter ego and

Speaker 1 so now I've got a book finishing up in the phases of editing and design to

Speaker 1 publish soon. Good for you.
All right.

Speaker 3 So all $210,000 was the house or was there other debt mixed in?

Speaker 1 Just the house.

Speaker 3 So, you know,

Speaker 3 what did you have to, what mindset did you have to have? Because a lot of people would go, you're crazy. Like, you're sacrificing to this level to pay off your house.

Speaker 3 Can't you just, you know, keep it around like the rest of, you know, how did you combat that in your mind?

Speaker 1 Yeah, well, you know, we

Speaker 1 when we dove into

Speaker 1 the

Speaker 1 what I'll deem the Ramsey lifestyle,

Speaker 1 you know,

Speaker 1 we just, we just decided that we didn't, we didn't want to live as a slave to anybody. I know, that's right.

Speaker 1 And so we just

Speaker 1 really buckled down and decided, it doesn't matter what anybody's saying, we're ready to be weird

Speaker 1 and

Speaker 1 own everything that we've got.

Speaker 9 We got rid of any and all car loans and people thought that was crazy because that's normal. Right.

Speaker 9 And that really was huge.

Speaker 1 And it all started, the spark that lit the flame was the oh crap moment on college.

Speaker 9 Yeah, exactly. But what's so cool about that, though, is that once our kids graduated high school, they both actually chose trade school.

Speaker 9 Our son's a diesel mechanic in Idaho, and our daughter is in cosmetology. But there's tons of scholarships out there for trade school.

Speaker 9 Like, for example, Mike Rowe funded probably the biggest piece of pie for our son.

Speaker 1 Oh, wow. To go to...

Speaker 1 With MicroWorks. Yes.
With MicroWorks. Yeah.

Speaker 1 So Mike's a good friend. That's a wonderful, wonderful program they've got.
Yeah. Amazing program.

Speaker 9 Yes. Yeah.

Speaker 9 So both the kids, we just started discovering that there's a lot of scholarships out there for trade school. And so

Speaker 9 it's helped them be able to continue with some of the extra money that they didn't have to spend on tuition to be able to get started in their adult life.

Speaker 1 That's exciting. Wow, very cool.

Speaker 3 What are you going to do to celebrate?

Speaker 1 Well, we came to Nashville. So

Speaker 1 we're going to do some more traveling.

Speaker 1 Yeah.

Speaker 1 And then just

Speaker 1 try to give back.

Speaker 1 Now the saver over here,

Speaker 1 where are you buying the saver? Because the saver needs something.

Speaker 1 She doesn't spend money. She's learned to spend a little more now.
Good.

Speaker 9 So

Speaker 9 we've been completely debt-free for about six months now.

Speaker 9 And I'm turning into this spender.

Speaker 1 No, you're not. You just rely on.

Speaker 3 What'd you get? What'd you get?

Speaker 1 What'd you buy? Just more trips. A lot more trips.
Trips. Okay.

Speaker 1 What do you drive?

Speaker 9 Well, I drive a 2020 Lexus.

Speaker 1 That's not bad.

Speaker 9 But he drives.

Speaker 1 She's like you were saying about Sharon. She drives the gray car.
I don't care what I drive. I've got a 1996.
She almost couldn't answer the question. Yeah.
She was struggling. I've got a 1996 F-250.

Speaker 1 Now, how many times has that been redone?

Speaker 1 It's in the process still.

Speaker 1 It's been a slogo. I got a feeling this is not a junk truck.
It's a baby. Yeah.
Okay. All right.
The pavement princess, my son calls her. All right.
Pavement princess. That's funny.

Speaker 1 Well done. Very fun, you guys.
Congratulations. We're so proud of you.
Thank you.

Speaker 1 Baby Steps Millionaires at 47.

Speaker 1 Couple million dollar net worth. And by the way, folks,

Speaker 1 that's a teacher and a fireman.

Speaker 1 Just write that down. Making $180 to $250 between them.
They took on extra jobs, did everything, and the house went up in value dramatically while they were paying off the house in dramatic fashion.

Speaker 1 So

Speaker 1 all of this dramatic happens together here. There's a whole series of formulas happening at the same time in this story that are all beautiful.

Speaker 1 And the main one is that you guys looked in the mirror and said, oh, we're not doing this anymore. Yeah.
And that changes everything. I'm so proud of y'all.
Well done. Thank you.

Speaker 1 How's it feel to be free? Unbelievable.

Speaker 9 It's amazing.

Speaker 1 Will you ever go back? No, never. The stress level is way too low living like this to go back to what it was.
Do anything you want to do.

Speaker 9 And even our marriage, it just feels like we've grown closer together and having to communicate the budget each month and consistently talking about upcoming expenses and how we're going to afford it and what should we do.

Speaker 9 So that's really been a relationship builder for us.

Speaker 1 Well, you get to tell him which trip you're going on next. next.
Okay.

Speaker 1 That's what happens at my house. I'm just saying.
All right. I love it.
Steve and Michelle, Lake Tahoe, Nevada. $210,000.
House and everything paid off. $2.1 million.
Debt-free net worth at $47,000.

Speaker 1 True baby steps millionaires. They paid off the house in four and a half years, making $180 to $250.
Count it down. Let's hear a debt-free scream.

Speaker 1 Three, two, one.

Speaker 1 We're debt-free.

Speaker 1 You're right.

Speaker 1 Jade,

Speaker 1 mathematically speaking, in America today, there is no reason that everyone listening to this cannot become a millionaire. I agree.

Speaker 3 I agree.

Speaker 1 It's very possible. Wholeheartedly.
Those two are very sharp individuals. They are.

Speaker 1 But neither one of them are doctors or lawyers. Neither one of them have an expensive whatever.
That's right. They just work.

Speaker 1 And they believe they can do it. And did it on purpose instead of consumed and consumed and consumed.
That's right. They looked up and said, toys are not the answer.

Speaker 1 He with the most toys when he dies is dead. Excellent stuff, guys.
Proud of y'all. Well done.
This is the Ramsey Show.

Speaker 1 All right, business owners, last call. The pre-sale for the brand new book, Build a Business You Love, ends April 15th.

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Speaker 1 Well, it's tax day.

Speaker 1 Y'all ready?

Speaker 1 Yeah.

Speaker 1 Don't wait until the final hours to discover your missing forms or other important info you need to file. You need to get on this now.

Speaker 1 You can file an extension. Some states have been given extensions by the IRS this week due to natural disaster.

Speaker 1 But if you're not in one of those, it's time to file your taxes. And

Speaker 1 an extension will give,

Speaker 1 not the IRS extension for natural disaster, but a normal extension does not keep you from owing the taxes. The taxes are still due now.

Speaker 1 And the penalties and the interest will kick in now if you don't pay the taxes, even if you file an extension. The extension is only

Speaker 1 on filing your taxes. Again, that's a normal extension, not one on natural disasters.
So don't risk getting hit with these penalties. Get everything done.

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It's very, very inexpensive. It's 100% accurate and it's easy.

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Don't put this off.

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It's a river. Okay.

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Speaker 1 in Egypt. So you need to check that out.

Speaker 1 Get your taxes done. Ramseysolutions.com slash smart tax.
Jasmine is with us in Washington, D.C. Hi, Jasmine.
How are you?

Speaker 8 Hi, Dave. How are you?

Speaker 1 I'm good. Good.
How can we help?

Speaker 8 Hey, so actually,

Speaker 8 you mentioning the taxes what precipitated this whole entire question. So I realized through doing my taxes that I had paid about.

Speaker 8 8.8k in interest this year and then I got a little bit of a return but not 8.8k back.

Speaker 8 And I've always heard a lot of people say, like, oh, like, your interest is like a tax write-off. And I have been thinking about paying my mortgage off for quite a bit.

Speaker 8 So numbers basically, I have $165,000 on my principal. I have $185,000 currently in a high yield savings account.

Speaker 8 That's not all my savings. I do have about 40K in a Roth IRA.

Speaker 8 I don't have a lot of money.

Speaker 1 Do you have other debt?

Speaker 8 No, I don't have any car payment.

Speaker 1 What's your household income?

Speaker 8 It's just me. I'm about 131.

Speaker 1 How old during the year?

Speaker 8 I'm 30.

Speaker 1 Good for you. Well done.
Yeah, great job. Okay, so you owe 165.
You have 185 in the high yield savings plus other money. You have no debt.
You make 131.

Speaker 1 And your question is, should I pay off my mortgage because somebody said I need the tax deduction for the interest rate?

Speaker 8 Well, it's that, but my other concerns are

Speaker 8 just the six months that I have. That leaves me with about 20K.
I've always had like 30 at my six months savings just to.

Speaker 1 I thought you said you had 40 in the other account.

Speaker 8 That's in my Roth IRA.

Speaker 1 Oh, I see.

Speaker 1 So

Speaker 3 why couldn't you leave the amount in your high-yield savings that you would denote as your, what makes you comfortable within the three to six-month range, pay off what you can, and then cash flow the rest?

Speaker 1 Wait a minute. Why would three months not be 30K?

Speaker 8 No, I did six months.

Speaker 1 Sorry. I know, but why would three months? It's three to six months.

Speaker 8 In my head, I think I'm just like an over

Speaker 1 like you're a really good saver.

Speaker 8 Like, I want to feel safe that that's fair. Like, I know at one point I definitely

Speaker 1 paying on your house every month.

Speaker 8 My mortgage is $14, a little bit more than $14,000. My HOA is $400, so about $1,850 if you want to.

Speaker 1 Do you pay extra on it?

Speaker 8 i do how much i honestly pay like

Speaker 8 it just depends on spurts of like i like to see my numbers even so if it says it's at like 16.527 i'm going to pay 527 extra just to keep numbers even

Speaker 1 though you're average paying about 500 bucks a month extra on a 1400 principal and interest payment plus hoa right

Speaker 1 i would say yeah that's pretty fair so two thousand dollars a month could go into a savings account if you you didn't have this payment, right?

Speaker 8 Yeah.

Speaker 8 Yeah. Yeah.
I was making a point.

Speaker 1 Now, plus your other savings that you're already doing.

Speaker 8 Yes.

Speaker 1 How long has it taken you to build this 185?

Speaker 8 So

Speaker 8 I did maybe not the smartest thing back in December.

Speaker 8 I did end up, two of my

Speaker 8 401ks, I did end up cashing those out because I had been thinking about doing this mortgage payoff.

Speaker 8 But it was only about 67 that was from there.

Speaker 1 And then the rest of the day. How old are you?

Speaker 8 I'm 30.

Speaker 3 So you took 67,000. You cashed out a $67,000 401k with the thought that you might pay off your mortgage with it?

Speaker 1 Yeah.

Speaker 1 You know, you're going to get it. Have you filed your taxes yet?

Speaker 8 I did. That's what I did.

Speaker 1 You got destroyed.

Speaker 8 So

Speaker 8 ironic, I put more. Okay, so that was what I netted from that 401k withdrawal.

Speaker 1 Yeah, but I mean, you got destroyed. They taxed you 10% plus your tax rate.
So you got hit with a $30,000 tax bail for doing that crap. Yeah.

Speaker 1 Oh, my God.

Speaker 3 Did you foresee that? Did you know that that was going to happen?

Speaker 8 I did.

Speaker 8 I kind of, in my head, I feel like I should have called you guys before I did that.

Speaker 1 Yeah, we would have yelled. Should have, could have, would have.

Speaker 3 I guess what I was trying to understand is you did that knowing the implications of it, but yet you're still like, wait, but now I'm unsure about paying off the mortgage.

Speaker 3 At this point, you better be sure and just go on and do it since you took the hint for it.

Speaker 1 You need to write a check tonight and pay off the mortgage.

Speaker 8 Okay.

Speaker 3 I mean, otherwise it was all for naught.

Speaker 8 Okay.

Speaker 1 If you paid the tax bill, no, you've already, your withholding is so stinking high. Have you adjusted your withholding back down now that the taxes are cleared?

Speaker 8 No, I haven't done that.

Speaker 1 You need to adjust that back down so you got more money coming home. You'll have a ton of money coming home from the adjusted W-4,

Speaker 1 and then you're going to, because you've been over-withholding to cover this ridiculous mistake,

Speaker 1 and you're not going to have a house payment anymore after tonight. And so you're going to be able to save $3,000 to $5,000 a month.
So you're going to put this money back in no time.

Speaker 1 So write a check tonight and pay off your mortgage, honey.

Speaker 3 And never borrow from your 401k again.

Speaker 1 Never, never cash out your 401k.

Speaker 1 Ever.

Speaker 1 Until you absolutely have to have it for food. But other than that, don't cash it out.
No, no, no, no, no, no, no, no, no, no. Now,

Speaker 1 and here's the thing. I've been doing this 35 years.

Speaker 1 I've told people for 35 years, pay off your mortgage. You know, the number of hate letters I've gotten or critical calls from people that said, I paid off my mortgage, Dave Ramsey.
I hate you.

Speaker 8 Zero. I feel like that's small.
Zero.

Speaker 1 We can bail our hate mail from ridiculous, trollish morons. We get stacks of stuff in here every day criticizing everything we do.

Speaker 1 But no one that has actually been the person who paid off their mortgage has ever complained about paying off their mortgage. I've never had one complaint on that.

Speaker 1 Now, I have a lot of complaints with a lot of people that have theories about a lot of things. And they're broke people with money theories, which is actually kind of cute.
But

Speaker 1 no one who's actually been the person that paid off the mortgage goes, oh, that was a huge mistake. I shouldn't have done that.
I'll never build wealth.

Speaker 1 Now, they all call me back and go, this is the smartest thing I've ever done in my life.

Speaker 1 Well, I mean, pay it off tonight.

Speaker 3 If you say you pay off your house and you hate it, you can always get another mortgage.

Speaker 1 Exactly. Just run and get you another one.
If you hate being out of debt, call the bank up. They'll help you.

Speaker 1 They love to help people like that. They definitely do.
And I've never had anybody take me up on that. No, I've never heard of it.

Speaker 1 I was laying awake at night because debt-free was keeping me up. And so I had to go get a mortgage.
I've never had that call.

Speaker 1 I've gotten some crazy butt calls on this show in 35 years but i've never gotten that no i've never heard it that's one we don't get so you're gonna my point is jasmine you're gonna feel so different as soon as you hit the submit button you're gonna go uh

Speaker 1 you're like you just were walking around 300 pound weight vest on and you took it off and set it in the floor you're gonna breathe deeper than you've ever breathed in your life what you think This the feeling of security you think you're getting from that savings account, I'm going to 10x it and say that's the feeling you're going to get from having a paid-for house.

Speaker 1 That's wonderful. People do not equate it the same that are savers.
That's wonderful. But savers even discover that debt freedom takes a weight off of you like nobody's business.

Speaker 1 Yeah, you can start saving $5,000 a month. In a year, you'll have another $60,000 in there.
In two years, you'll have another $120,000 in there, not counting the other stuff you do. Wow.

Speaker 1 Way to go, Jasmine. I'm proud of you.
Pay it off tonight.