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

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

Ken Coleman, Ramsey personality, number one best-selling author and host of the brand new hit on the Ramsey Networks called Front Row Seat.

He's my co-host today.

Open phones at 888-825-5225.

Jack's in St.

Louis.

Hey, Jack, how are you?

I'm great.

How are you guys doing?

Better than we deserve.

What's up in your world?

Dave, I'm broke.

I'm borrowing money from family to live.

My wife and I both work for a school district.

We work all the hours they'll work us.

Every chance they get to do some extra jobs, we do it.

I'm qualifying for welfare now.

I've got two adopted sons at home.

We've adopted a lot of children through the years.

Never made much money.

And I've got a house that I owe about $189.

You're working on $120.

I'm sorry, I won't interrupt you.

$120.

I'm sorry.

What's it worth?

What's it worth?

It's worth about $189.

Okay.

Here's the problem.

Every house that's for sale in our area is cost more than what I owe on the house I've got now.

So I could sell the house and break out with my equity and start over, but then I'm going to be right back in the position I'm in again.

So I feel like I'm in a corner I can't get out of.

Okay.

One thing I drove by there that I wanted to ask about, and I almost interrupted you, I apologize, was the

problem.

You're both working full-time jobs, and somehow you still qualify for welfare?

For the food program, yes.

What's your combined income?

It's

a little less than $35.

And you work for the school system?

Yeah.

Wait a minute.

Wait a minute.

That's not even $7 an hour.

You're not working 40 hours, not two people.

Well,

here's the catcher.

She is a substitute teacher, but she works every time they call her.

Yeah, but that's not full-time.

We don't know what else to do.

Well, that's not a full-time job.

That's sporadic at best.

well my my contract is for a little bit less than 20 and then she makes the rest what do you do to make twenty thousand dollars for the school system i'm in transportation and i drive five routes a day okay

and uh how long have you been doing that hon this will be my sixth year okay all right what did you do before that

i pastored churches And ran a bank.

I actually ran a bank for eight years.

This is a world I'm I'm not used to.

I don't know what to do.

I don't know what to do.

Okay, well, I do.

Your job sucks.

You need a different job.

You make no money, sir.

That's the problem.

You are living at the poverty level.

I mean, with two kids and $35,000 because she's not working full-time.

And when you work, you're not getting paid anything.

And so, dude, you can make more than you make working at Target 40 hours a week, putting boxes on shelves.

Way more than you make.

Yeah.

And so your job just sucks.

We've got to reset your career sites.

You do, and we'll be happy to help you with that.

But you have an income problem, not an outgo problem.

And your house, and you're correct.

I agree with your assessment.

Your house sale will not fix this situation because you're going to cost me $17,000 to sell it.

Don't pay commission.

It doesn't matter.

It doesn't matter.

It doesn't fix the problem because you have an income that is not sustainable.

You cannot live on it.

Yeah.

And so you have to reset your career.

Yeah,

I don't want to put you on the spot, but I feel like I need to ask you this.

If you were sitting across from somebody who used to go to the church you pastored, and they told you what you just told us, what would your advice to that person be?

Well, that's a good question.

Listen.

You've already answered.

Insanity is the, you know, as they say, insanity is doing the same thing over and over again, expecting different results.

Correct.

So my advice would probably be what you just told me.

Yeah.

So you are,

I think that there's been a series of things that have happened that have led you to this.

We don't need to break all those things down.

But if I could just encourage you to do what you believe, to do what you would tell someone else.

And your wife needs to go get a real job today.

I don't care if she's being a cashier at the local supermarket, but we're going to literally go, where are the open jobs that no teenager, most people don't want to go, but they're already going to make more money than what you guys are making.

And you're going to have to get to the point where you say, I can do more things.

If I can turn a wrench, if I'm handy, I'm going to start working on some construction crews.

Because at this point, you guys have been making so little money, you have gotten to the point where you believe that's all you're worth.

Yeah, and you're not.

That's right.

It's just garbage.

So, pastor, I would say, I'm going to use the word pastor on you.

Get after it, man.

Let's change our day.

Let's change our week.

Let's change our month by going and getting to work.

If you're working 40 hours, you're making $9.

Grace.

And Target's paying $20.

Grace.

I do have a separate issue here.

I've got the two boys that adopted are autistic,

and my wife has to stay with them some, at least some.

Yeah, yeah.

So

what she's doing as a substitute has allowed us to be able to take care of them.

What happens when she's substituting and you're driving?

Well,

I get a few breaks during the day, but that's about it.

We tag team.

How old are the boys?

15 and 11.

Are they going to require care their whole life?

Yes, sir.

Okay.

So you don't have a choice.

You have to find a workaround.

Yeah, yeah.

I'm telling you, I'm in a predicament.

I don't know what to do.

No, you do know what to do.

You've got to get a different job, dude.

It's very simple.

It's a math problem.

You are not making any money.

And you have decided that this is the only possible thing for you.

And that's so fatalistic and incorrect.

So I don't care what you do.

I don't care if you start a business.

I don't care if you cut grass.

Dude, if she starts cleaning toilets, she can make four times what she's making now, being somebody's maid.

People are paying $25 to $50 an hour to be for maids right now.

And take the boys with her, you know, or she gets a customer service job where she's on the phone just doing a basic script.

She could be making $12, $15 an hour easy from home.

But we have to get in the generating income mode rather than we are trapped mode.

You are not trapped.

You have the worst possible jobs, both of you, for this situation.

And so you've got to start going, what can I do to make some money?

And that's not greed, that's survival.

Because your house is not unreasonable.

Your life is not unreasonable.

You're not a bunch of overspenders.

You're not out of control.

You just are broke.

You just don't make any money, sir.

Yeah,

there's a spirit over him.

There's a spirit over you,

Jack, and you know it.

That's just the I'm stuck spirit.

I'm trapped.

There's nothing I can do.

There's nothing I can do.

You said it like four times, and it's just not true.

We are talking to a guy who's done things and can do things, and you've got to do something else in your situation.

You cannot survive.

And so, yeah, both of you are looking for jobs today, and you may be looking for jobs and upgrading jobs and jumping in and out of jobs for the next year to get your income up $20, $30, $40 an hour.

And let's get after it.

Go get you a lawnmower, man.

Get you a pressure washer.

Do something.

You can make a lot more money than you're making right now.

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Steve's in Lynchburg, Virginia.

Hi, Steve.

How are you?

Good, guys.

How are y'all doing today?

Better than we deserve, sir.

What's up?

Trying to help my parents that have gotten into a pretty bad position.

Their house was foreclosed on.

They did a loan modification to get it out of foreclosure, so the loan's current.

They currently have about $13,000 and judgments against the house based on two credit card debts and a medical debt and a HELOC and a HUD loan.

And I don't know

what advice to give them to help them out, but not enable them.

I don't know if bankruptcy would affect the HUD or HELOC.

So, just trying to look for different answers.

The foreclosure must not have occurred.

There's not a plan with a traditional HUD mortgage where you actually get foreclosed on and then they give you the house back on a modification.

They must have done the modification right before the actual foreclosure sale occurred while the house was in foreclosure.

Does that sound right?

Yes, sir.

Yes, sir.

The foreclosure was in process.

Yeah, in process.

But once they dropped the hammer at the actual auction at the courthouse steps, there's no going back.

That's my point.

Okay, so that's anyway.

So they've got a loan modification, a HELOC, and a bunch of debt.

Why are they not able to pay their bills?

They just haven't made smart decisions with their money.

And I think they were, you know,

depending on Social Security and other stuff and realize that

they were a lot quicker than what

they are both 65.

Okay.

Do they both work?

My mom has never worked due to,

we'll say, medical issues.

My dad has worked, and he still works some jobs.

He's a contractor, so he does like remodels and stuff, but he's not able to do as much as he used to from doing construction for 40 years.

He's not physically able?

He's not physically able to do a full-time position, and I've tried to talk with him into the middle of the moment.

What's wrong with him physically?

Because I'm 65 and I work work full-time, and I could work full-time swinging a hammer if I had to.

Yes, sir.

He's broken his ankle a couple times, and when he was in the military, he broke his back falling off a tank.

So it's just something that he can't carry lumber and stuff up in the middle.

Well, he never has been able to.

He didn't break his back six months ago.

He broke it 20 years ago.

Right.

So what did he do for the last 20 years for carrying lumber?

He's been able to to do it.

I guess just the age and arthritis is catching up to him.

Well, but here's the thing, though.

He's an actual contractor.

So if he were to go out and beat the bushes for some restoration projects, renovation projects, he can put a crew together of young guys.

He knows how to do it.

And a contractor doesn't have to be swinging the hammer if he goes

and gets good guys, young guys that want to learn the trade.

My point is, he could make really good money as a neutral TC.

The reason we bring this up is you can't live on Social Security with what what you're talking about.

Right.

You got mortgage, you got HOA, you got liens from credit cards, all because they were trying to live on money that's not enough to cover their bills.

Right.

It's an income problem.

Am I wrong?

You're absolutely correct.

I just didn't know if there's...

I've heard you say so many times, you know, if you talk to creditors, you know, they'll usually settle pennies on the dollar.

They will.

They will, but he's going to be right back there again.

Right.

If we clean them up, I don't want them coming back.

I don't want the same

mathematical problem in the household recurring.

And so we've got to fix.

Now, if we fix the overall situation to where it, in other words, the income is enough to cover the household expenses through whatever reason, we either reduce the expenses that far or we increase the income.

Either one of those,

if we do either one of those, then we've got a sustainable situation.

Then if you went in and used some of your money to settle some of the old debts and get them cleaned off to where they've got a clean slate to start going forward,

that would not be enabling, and that would be a good move on your part if you've got that extra money.

But where you just pay off that stuff and they keep doing the same thing that got them there in the first place, they're going to be right back again.

Follow me?

Right.

And that's kind of where I'm selfishly like, well, maybe if I get them to file bankruptcy, that'll clear this up and they won't be able to go into further debt because they're

anything.

Oh, you can definitely get into debt after bankruptcy.

Credit card company will send you a pre-approved credit card 20 minutes after you file.

Okay.

Well, will the HELOCs and HUD loans, are those negotiable down?

Do you not have you have?

No, they will not negotiate.

Because they have a house securing them.

Right.

So

how much do they owe on the first mortgage?

$121,000.

What about the HELOC?

HELOC and HUD are both $30,000.

Okay, and what's the house worth?

350s.

is.

Okay.

So here's an idea.

Get them on a budget they can live on with a paid-for house, sell the house,

and buy a $200,000 condo.

Paid for, no debt.

Now they've got no house payment.

And if you settle the credit cards and get rid of them, well, you could actually pay them off out of the sale proceeds.

You don't even need to use your money.

And then buy a house with the money that's left over in cash, a condo with the house, money that's left over in cash.

And if that sets them up on on a budget that they can live on the amount that they've got coming in without either one of them working much, then fine.

But I still think your dad ought to go do something.

Right.

I agree.

What about the idea that I've been floating now is buying the house from them?

No, absolutely not.

No, because we're not addressing the core issue.

The core issue is they can't live on it.

I mean, if you just gave them a free house, yeah, I guess if you want to do that, I mean, do you have an extra $350,000 laying around?

I do.

You do.

What's your net worth?

I do.

Close to $2 million.

Okay.

All right.

You buried the lead on us.

Yeah.

That's information that would have changed the whole discussion from the start.

But if you want to do that, then you own the house.

But I still want them to create a sustainable life.

And so I want them to go through Financial Peace University.

i want them living on a budget and i don't want them to i want them to promise to never borrow another dime the rest of their entire lives

right and i i we've talked about it i think without the house payment you know their their social security income and the side jobs they could they could easily get by on uh they mathematically could but they've chosen not to do that in the past

they've chosen to let their house go all the way into foreclosure.

They've chosen to not pay credit cards to the point they now have a judgment lien on their house.

And so they'll choose that again unless we have a very clear understanding.

And I would write it down, not as a legal agreement, but as a clarity agreement.

And my concern is if you buy the house, and I'm wondering here, are you planning to let them live there rent-free?

I just wanted to clarify that.

Is that the plan?

That's the plan.

I just feel like if I try charging rent and they got behind it, it just means that they're not.

No, no, no.

I get that.

But here's the thing I'm going to say.

I don't even like this because let's say you do that and they live rent-free, but they don't stick to a budget.

Now the resentment is so high, and then you got this stupid house.

I'd make them sell the house.

I wouldn't buy this house if I were you, whether you have the money or not.

I might buy it.

I might disagree with Ken, but

under the conditions that address his concern, and that is me and mom and dad have a very clear understanding.

We're going to have zero debt when this transaction is complete.

And you are promising to, A, live on a written budget that the two of you run every month and I'll help you with it.

I'll coach you along and B,

you promise to never borrow money again under any circumstances, ever.

Right.

The rest of your breathing freaking life.

Okay.

And if you do those, if they stick to those two things, they can sustain on Social Security with no house payment and you're paying, you own the house.

House is going to go up in value.

You'll be all right over time.

You're going to have some repair costs and taxes and insurance you've got to come out of pocket with annually.

And you'd have to do those.

You have to plan on that.

But you've got the money to do this if they agree to make the changes in their behaviors, characters, habits, and they agree.

And I'm literally going to write this out as a one-page document that we agree to.

I'm afraid to sign it.

I don't know why.

There's no evidence that they will.

So you're right.

You're right.

That is a correct assumption, but that's the only way I would do the deal.

Yeah, otherwise, I'd simply make them sell it, and that's really hard to do.

You've got the money, and it's super hard to do since you got the money.

Yeah, it is.

But I'm a little heartless today.

You are.

Yeah, you're just kind of getting with it today.

Glad I got you on here because I might have wussed.

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John's in Texas.

Hey, John, how are you?

Hey, Dave, I'm doing good.

How are you doing?

Better than I deserve.

What's up?

So, I kind of got

an issue.

I need to know.

I just need someone with more insight than I do on this.

If I'm taking more of a risk than I should.

I'm looking at buying another car, a used car.

Since I've been 18, I've been driving $500 beaters and that's just the way I've lived.

I got married, got my wife pregnant, and I bought a new car and I kind of regret it because I have 13K and of that car.

I still need to pay off.

It's reliable, but I've always said, you know, I should have just stuck with a good used car.

So I'm looking at getting another one.

My usual budget of buying a car is around 5K,

but I've been, I live in an area where it's hard hard to find a reliable car for 5K.

You'll typically buy it for 5K, and then you'll have to sink another one, two, three grand and repairs into it.

And I've come across a car that's at $9,200.

It's about 43,000 miles on it.

It's a Lexus ES300.

Super reliable.

The dude said he has receipts from every time they got gas.

I mean, it's got every record that you need there.

It's in mint condition, garage kept.

John, do you have $9,200?

I do.

I do.

Yes, sir.

I have.

So

in cash-wise, I have about $30K disposable income and about $5K in crypto and silver that I don't consider spending money.

But I have, right now, I have $10,000 in cash on my desk, and I'm looking at it.

And you have a $13,000 car payment.

Yes, sir.

Okay.

All right.

I would sell the crypto today.

Okay.

For all the reasons.

And

I would pay off your car today, and I would buy this car.

Okay.

Okay.

You've got the cash to do all of that.

I do.

Yep.

I'd be debt-free by the end of this transaction and have two decent cars and then start saving with no car payment.

Is that your only debt other than your home?

It is.

Me and my wife got a

we got a lawsuit from a car wreck.

We finally settled a lawsuit and I paid off all my debt this past year.

Except that car she's driving.

Yeah.

okay and you got a baby on the way you said or brand new baby no he's one and a half oh good okay perfect and you're you're what 26 or 25 uh 27 27 pretty good guess okay

and so almost like i've done this yeah and so um

yeah that's exactly where you are and now here's the trick dude okay you you you have mastered the art of living frugally in order to save money

you have not mastered the art of managing money,

which will make the money that you have coming in now with no debt grow really, really fast.

And so I'm going to give you guys every dollar premium for that baby.

And I want you and your wife to sit down with zero car payments.

And

you have the new Lexus.

She has the paid for $13,000 of debt that's gone.

And you've got some money over here to work your baby steps.

And now we've got to build and make sure we have an emergency fund of three to six months of expenses.

And then once we have that, we're going to start investing in our 401ks, and you're going to be wealthy.

But you're going to systematize your frugality rather than just saying, frugality is going to save me.

Frugality won't make you wealthy.

It is one of the things that will cause you to build margin, and the margin will make you wealthy.

But you can't frugal yourself into rich.

You can only frugal yourself into survival.

And you live in a cave, collect Lent, and only come out on triple coupe on Thursday.

And so that's frugality, but there's no life in there.

And so

that's the $500 car thing.

And so you've been very wise in that sense, but I want you to just harness that energy and focus it now and systematize it.

And that's called managing money, not just cheaping.

Cheaping is good for a while to get you where you need to go.

You're going to be a great dad.

You're going to be a great husband.

You're a good man.

I'm glad you called.

We want to help you and your family.

You hang on.

We'll have them pick up and get you going on this.

Carson's in Provo, Utah.

Hi, Carson.

Speaking of frugal, what's up?

Hey, how's it going?

I'm doing great.

How are you?

Better than I deserve.

How can I help?

Yeah, no, I loved hearing what you were saying before.

I guess my question is,

how do I know if I'm being too frugal or too cheap?

I love kind of what you talk about giving, and I think that's something that I could be a little better at.

But I just feel like sometimes I'm a little too frugal or a little too cheap, or the people around me think I'm bad.

Well, you live in a cult, you live with people around you that overspend.

And so if a congressman says you're being too frugal, that's not an indication you're frugal.

It's just an indication you're on track.

So broke people make fun of your finances.

That's okay.

So that doesn't bother me.

What bothers me is you're wondering.

So are you married?

I'm not.

So I'm 24.

I just started my first full-time job, and I'm making pretty good money.

What's pretty good money?

I'm making $85,000 a year.

Good.

what are you doing um i'm a computer role of software developer good good for you give us some examples uh let's say dave and i go to lunch with you give us a couple of examples where we might think you're too frugal what is your best guess

um if i didn't offer to pay if i chose or like made some comments about if the most expensive thing on the menu is you know, ridiculously expensive, or if I chose maybe like the cheapest thing on the menu, and that was a little obvious.

I don't know.

That's not jumping out.

That's just somebody that's being aware.

Yeah, I think you may be beating yourself up.

Yeah, I think you're doing okay on that.

Here's the thing: there are three things you can do with money, and you should always do all three things to be psychologically and spiritually mature.

You should always be generous.

So when you're at lunch, regardless of what you order, I want you to leave a nice tip.

Those people work hard.

Okay?

The second thing is you can enjoy money, and I want you to get some joy from money.

I used to work for a guy that

was trying to help me build wealth.

And he said, Dave, I want you to build enough wealth that you read a menu from the left to the right.

Most people spend their whole lives looking down the price column to choose what they're going to order.

I want you to order what you want to order regardless of the price.

And that means you've built enough wealth that it doesn't matter what you have for freaking lunch.

Okay.

And so I want you to enjoy your life within reason.

And, you know, so generosity, enjoy, and then investing.

And I want you to be systematically investing.

So if you're giving money and you're enjoying money, you're doing no investing, you're out of balance.

If you're investing and you're enjoying money, but you're not doing any generosity, you're out of balance.

You follow me?

So any of that, it's a three-legged stool.

You got to get all three legs to sit down on that stool.

And I'd be working on that and practicing.

You're good at living on less than you make.

That's a natural gifting.

My wife is the same way.

My wife has leftovers in the refrigerator, and we're multi, multi, multi-millionaires.

It makes no sense at all.

Okay, but they're there.

And

then tells me how great they are over and over and over again, just to try to sell me on them.

After 43 years, she's still trying to make this sale.

Her natural gifting is frugality.

Some people's natural gifting is generosity.

Some people's natural gifting is they love saving.

They get a hive from investing and watching their mutual fund account grow.

So lean into that.

Enjoy the ride, but make sure you're doing some things that feel a little bit like you're spending too much.

That's you enjoying your money while you're being generous, while you're investing.

And if you're doing all three, you're going to be okay.

That's right.

Quick question.

Would you describe yourself as fearful or hopeful with money?

Will?

Oh, me.

I'm sorry.

Oh, my bad.

I pushed the wrong button.

Carson's already on hold.

I got him.

I'll put him on hold.

Yeah, I think, here's what I was going to get at.

I think people have to, it's a great point you made.

You got to ask yourself, is my natural default because of the environment I grew up in or the experience that I've lived to this moment?

Both your environment and experience is what shapes the way you see any issue and certainly money.

So ask yourself,

is my default my natural penitent towards fear or is it towards hope with money?

And there's no wrong answer here, but when you can see that, then you can go into the roots of this and go, why am I naturally fearful about money?

Or why am I tending to be a little bit more hopeful, a little bit more optimistic?

And that's really key to kind of know yourself.

When Rachel wrote her best-selling book, I'm looking at it, number one bestseller, Know Yourself, Know Your Money.

I thought it was very insightful.

Let's go to McCoffy.

Let's do that.

I think it'd be a great gift.

Give me a coffee.

Carson, hang on.

We'll get you a copy of Rachel's book.

I think it'll help you with this whole discussion.

It'll be really good.

Yeah, very good.

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Jane is with us in Florida.

Hi, Jane.

How are you?

Hi, I'm good.

How are you?

Better than I deserve.

What's up?

I had a question about what you would think for our situation.

We just bought a small business using an SBA 7A loan.

I'm sorry.

Say that again.

I didn't hear the first part.

It garbled.

Oh, I'm sorry.

I was just asking what you think we should do in our situation.

We just bought a small business using an SBA 7A loan, and we live in a very high-cost of living area, my fiancé and I.

And we're considering buying a house versus renting, considering that we have this new debt with us.

So, what do you think we should do?

You both signed an SBA loan together, and you're not married?

We're about to be married, yes.

When?

This year.

Friday.

Got it.

This is very dangerous.

How much is the FBA SBA loan?

Around $700,000.

How old are you two?

I'm 28.

He's 29.

What is this business?

It is a blue-collar service business that does very well.

It's a specific area that it services, and it's a necessary service.

Have you opened?

Yeah,

we took over two weeks ago.

Oh, someone else had it, and you bought it?

Yeah, yeah, yes.

What's the annual profits on this business?

Gross last year was over a million.

The owner last year paid himself from $350,000.

Jeez.

And you paid $700,000 for it.

Okay.

Correct.

And are you both working it full-time?

I have a job.

Making what?

$100,000 around there.

Okay.

And so hypothetically your household income is 350.

Well, he's not going to pay himself as much.

You know, I mean, you have a profit in the business of $250,000.

Right.

Yes.

That's a profit.

Even if he doesn't pay himself, he paid himself.

It's profit.

It's taxable income.

It's got to come somewhere.

If it's not a salary or not, it comes to you at the end of the year.

You're going to pay taxes on it.

You might as well take it home.

Okay.

Right.

So you make $250,000 there, $150 with you.

That's $3.50,000.

You owe $700.

No, I would not buy a house.

I would rent a cheap one-bedroom apartment, and I would pay this crazy butt loan off that you got yourself into in two years or two and a half years.

Well, that's what we're doing now.

So

good.

I would just stay right where you are.

And I also think that you're extremely vulnerable when you did this without being married.

And so you're not going to do it, but you should get married immediately.

Yeah.

Yeah.

And by the way, we've taken this call many, many times where an unmarried couple gets into a business and the relationship goes kaput and then it's nasty.

I want to make sure that our audience understands why you're so certain about that.

We hear that over and over again.

We get it when everything doesn't work out exactly like you planned, which is every time.

It never works out exactly like you planned.

It might be better than you planned.

It might be worse than you planned, but it never works out exactly like you planned.

So, folks, here's what you got to think through.

Ken's right.

What we see is

what causes this, okay?

So here's an example of things that have come in over the years.

Now, this is pretty macabre, but it's actual phone calls, okay, over the 30 years of doing this.

They're in the situation that that young lady is in, and

he gets T-boned

and is in a wheelchair.

Can't speak, can't move.

Now what?

Oh,

or he gets killed.

Now she owns a business with her future mother-in-law because there's no will, of course.

And his half of stuff does not go to a fiancé under Florida law unless there's a will that states that it does.

So you need that done by the end of the day.

But yeah, you end up, and you didn't really like the mother-in-law.

You just loved the son-in-law.

Just love the son.

That's all you loved.

But now you're partners with her.

And she's not going to work there, by the way, but she wants her half.

And you've got to go down there and work full-time because you are about to get foreclosed on by the SBA if you don't.

All this stuff happens all the time.

And so the other thing that can happen is you go in there and you take it over, and it runs better than you thought it would, and you're able to pay the loan off in 18 months instead of two and a half years.

That would be an awesome thing.

I hope that for you.

I hope that's what occurs.

I hope it's better than you thought it was.

But,

yeah,

this thing of running a business, there's three rules of business.

It takes twice as long as you think it's going to.

It costs twice as much as you think it's going to.

And you're not the exception.

Those are the three rules of business.

And I've experienced them in depth over 35 years of running Ramsey.

So I'm not the exception either.

And so I have to plan everything out for worst case scenarios.

And

that's certainly A, not borrowing money, and B, certainly not borrowing money with someone I'm not married to.

The same thing applies to buying a house with your sweet little fiancé.

That's right.

Don't do it.

That's right.

Well, see, they're living together now.

A more common scenario, too, is that he gets under pressure.

He's never run his own business before.

And I got to tell you something, folks, that's a whole different enchilada.

And if he gets super stressed, the relationship starts.

He's called him an enchilada.

I said, no, not him.

I said, it.

Being a business.

He will change.

He will change form.

He will.

And you hope none of this happens.

But that's why we're not, you know, the sky is falling.

This isn't chicken a little advice.

This is

a lot of experience.

Don't ask Sharon Ramsey about Dave Ramsey going broke version versus Dave Ramsey today version.

You won't like the discussion.

Yeah.

Because she will tell you the truth.

It's not pretty.

I'm just saying.

I agree with you, Dave.

Get to the courthouse, get a will.

Let's get this stuff.

We jumped into this massive partnership, but we didn't really cover it all the way around.

That's what concerns us.

Doing things in the wrong order.

Get your head taken off.

It's pretty simple.

Right.

So, yeah.

the data's there, folks.

The data's there.

It's not simply a moralistic argument, although you could make the argument on that basis alone.

But it's not simply that.

There's legal implications, financial implications.

All of these things roll into these discussions and

running out your worst case scenarios.

So now, no, I would not buy a house and add to the problems that you have already.

I would run like my hair was on fire to get these problems cleaned up.

One thing I want to do, I I want to ask a question on behalf of our very large audience here we didn't discuss.

I'd love for you to give them a fundamental, if you're going to buy a business, how much you should spend based on revenues, because I think they overpaid

either.

If they got a good buy,

if the numbers are what they think they are, if their due diligence when they're signing up and going through the books,

they actually did that.

I mean, because here's the thing, you're buying a business,

the owner will tell you this is what our books say.

I don't care.

What do the tax returns say?

Yes.

What do they file taxes on?

Well, we didn't report everything.

Oh, so you tell me you don't have integrity.

Okay.

And now I'm supposed to believe your books.

No.

I think I'm going off the number on the tax return.

What you're willing to pay taxes on is your real profit.

What you actually have to pay taxes on, that's your real profit.

Well, I have depreciation schedule.

Yeah, you also had the expenses of the buy the item that you were depreciating.

So that's bull crap.

And so help you with the math on that.

There's no depreciation on anything that you didn't first pay for.

That's how that works.

So, anyway, I want to see what the real bottom line is, what the real taxable income is.

And based on that, I'm going to do a multiple of three, four, five, somewhere in there, is going to be the valuation of that small business.

And that's after a manager is paid to run the business if you're an absentee owner.

This is the Ramsey Show.

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

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

Ken Coleman, number one best-selling author, Ramsey personality, and host of the new hit on the Ramsey Network, Front Row Seat.

And you need to check that out if you haven't checked out that podcast.

It's a long-form interview with some of America's best and brightest, and some of the world's best and brightest, as a matter of fact.

And you had Gary Sinise on the other day.

Yeah, you know, what a great actor.

Probably one of the most respected men in in Hollywood, and really, probably the most respected servant of our men and women who have served in the military.

He's got a great heart for veterans, does incredible work, of course, on the backs of probably one of the most beloved characters in movie history as it relates to our military characters, and that's Lieutenant Dan and doing great work.

He's a good friend of yours, and came in and we had a great time.

Yeah, he's moved to this area a few years ago, and we've gotten to be friends.

And

genuinely the kindest,

gentle guy.

Very humble.

Yeah.

Yeah.

You guys will love watching that interview.

It's great.

So check it out.

And the Jimmy John interview has been going Zoom, Zoom.

Absolutely.

It's huge to feedback on that.

As we really had a hunch that it would, because A, the guy knows what he's talking about.

When you go from offering three sandwiches with used equipment to selling for $3.3 billion,

you should probably listen to this guy.

He's got the American dream figured out.

He did it and did it well.

And one of the kindest, talk about kindness.

And generous.

Yeah.

Yeah.

Unbelievably generous.

He shoots the whole theory that billionaires are evil people to pieces.

He really does.

He's pretty funny about that.

I thought he would be more bombastic to that answer.

It was a good answer, though.

Yeah, yeah.

He was starting to heat up.

Yeah, he was, but he caught himself.

He did, he did.

You know, I just feel sorry for him.

They're just not smart.

It's like,

yeah, it's good.

Oh, my gosh.

Check it all out.

It's called Front Row Seat with Ken Coleman.

It's on YouTube and on podcasts, anywhere great podcasts are sold.

You'll be able to follow it up, watch it, listen listen to it.

You will get great information and inspiration, and that's what we do here.

Alex is with us in Texas.

Hi, Alex.

How are you?

Good.

How are you?

Better than I deserve.

What's up?

So I'm a newlywed, just wanting to get your opinion on the best way to join financers.

Cool.

How long have you been married?

I got married in July, so just a couple weeks.

Oh, look at you.

Way to go.

How old are you guys?

27 and 28.

Okay.

That's a very important question.

And the reason it's very important is 30 years of doing what we're doing, we know that very few couples have a high-quality marriage and build wealth without combining their finances.

And as a matter of fact, one of the things we found in the millionaire study where we were studying millionaires, 83% of millionaires said they were working hand in hand as a team with their spouse.

Both had a vote, both were pulling the wagon together, and that's how they became millionaires.

So it's a great great question.

Now, the question is how to do it.

From a tactical standpoint, your monthly income, pretty simple, one checking account.

All the money goes into one checking account.

That number,

that monthly income number, goes at the top of the budget.

And the two of you sit down together and have a budget committee meeting.

And you say, okay, before the month begins, we're going to have $3,273 or $8,642 or whatever the number is

this coming month.

That's what we're going to have.

Now, let's spend all of those dollars.

Give every one of those dollars a name in the every dollar budget, and we both agree to it.

There cannot be any money left over.

It has to go into savings.

It has to go into generosity.

It has to go into a debt.

It has to go be spent on groceries.

It has to go to something.

Every dollar has to have an assignment exactly to the penny.

No leftover squash money.

No need.

If you want to put it in savings, put it in savings.

I don't care.

And then call it, you know, call it my emergency fund.

Whatever you're doing with it, do it on purpose and do it together.

Is that what you're asking?

Yes, but also, so we have some debt.

I just wasn't sure.

I've seen how some people say do like 95% all-in-one account.

You each get like 5% for unmoney, squash money, whatever you want.

Yeah, some people are broke.

So

don't listen to some people.

Some people got an opinion about everything,

and they're wrong.

So, no, I wouldn't do any of that.

The thing is, this, you're going to attack your debts together.

It's for better, for worse, for rich or for poorer.

And

the old marriage vows from the Book of Common Prayer say, unto thee all my worldly goods I pledge.

So we're truly joining everything.

He got you and your debt.

You got him and your debt.

You got him and his income.

He got you and your income.

And now we are we, not you and me.

Okay, perfect.

Then I have one other question, if that's okay.

Okay.

We do have a daughter.

She'll be two, and we're trying to find out the best saving option for her future.

Okay, that would be a 529 plan for her college, and you don't need to worry about that until you're out of debt, have your emergency fund in place, and that'll be called the baby steps.

I'm going to send you guys a wedding gift.

It's called the Total Money Makeover.

It's our best-selling book.

We've sold 14 million of them.

America's greatest coffee table coaster.

And so it's sat there on people's coffee tables for years and they don't read it.

But I'm going to send you one.

It's got the baby steps in it and people that follow those baby steps show you exactly how to do it.

They become wealthy and they get out of debt and they learn to work together.

I'm going to add a little wedding gift as well, Dave, since you've got me in the spirit of giving.

Rachel Cruz wrote a great book, number one bestsellers, called Know Yourself, Know Your Money.

And this is the advice I want to give you.

Dave gave you great tactical advice, but you two are learning how to truly live together.

And

one of the most important things you'll do in your marriage is learn how to manage money together.

And one of the reasons I want you two to read this book together is because you both need to know based on your experience in life with money and then your environment, the way your parents talked about money, that's all shaped you.

And then you guys are wired a certain way towards money and knowing

how you guys are wired for money, which this book will teach you, and you'll be able to really grasp it.

It's a great book for young couples that are getting started because if you two can understand each other as you go into the budgeting and into the baby steps, I think it'll make it so much more.

I think it's a great book for every young couple to read.

So we'll give you that book as well.

Yeah, I agree.

And Rachel wrote it actually out of the pain of her and Winston learning to work together.

Yeah.

And Because they're very different.

Rachel's got a little bit of her father in the sense that this abundance versus scarcity, I've always thought I could outearn my stupidity.

And Rachel definitely goes along with that.

And Winston, on the other hand, is very methodical, very careful, and is a saver

and is very wise.

And so the two of them working together have woven that together over a decade plus a marriage into a wonderful marriage.

Yeah, that's awesome.

And so that's good advice.

And you learn to work together.

Larry Burquette used to say, opposites attract.

If two people just alike get married, one of you is unnecessary.

Typically, a spender attracts a saver.

Typically, abundance attracts scarcity.

Typically,

you know, the nerd that likes details attracts the person who is not that concerned about details and would much rather have a party.

And so the free spirit.

So the nerd and the free spirit, the spender and the saver, the scarcity and the abundance, all these things are typically opposites, and you need each other.

You learn from each other.

You add spice to the gumbo from each other.

One's not right, one's not wrong, but learning to work together, as Ken's pointing out, is absolutely vital.

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Mel is in Nashville.

Hi, Mel.

How are you?

I'm good, Dave.

How are you?

Better than I deserve.

How can I help?

Well, hey.

So I am

set up with trying to figure out what I'm doing.

I have no clue what I'm doing, just to be honest.

I'm trying to get on a plan to get out of debt.

And I just, I don't really know where to start.

And the last year has been awful.

I have about

approximately probably $25,000 in credit card debt

and then also includes a personal loan.

But

about a year, well, a little over a year ago, I lost my husband.

He passed away.

And ever since then, I've like I was doing, actually trying to do a little bit better before that happened.

I was starting to get things paid off.

And then I went right back into the cycle of just using my credit card for everything and just trying to stay afloat and

I still have two kids at home so I'm trying to navigate all of that and I'm trying to get through this without crying so

so hunt how old are your babies how old are your babies they are 10 and 15.

okay and what do you what do you make what's your income uh before taxes it's um almost 60.

okay all right cool how old are you i'm 44.

what do you do for a living?

Um, I work in insurance.

Okay.

All right.

Um

well, there there's several touch points that help you get control.

Okay.

Um some of them are emotional, spiritual, psychological.

Some of them are mathematical.

Okay.

Math is math is we get our income up looking at some side hustles that you can do with babies at home and we get our out go down

and we make the money that we have behave and that's called a budget.

The money that you have is not behaving.

It's living from desperation to desperation because you are.

Right.

When you're scared and you're scared, I can hear it,

you get desperate and every time I get desperate right after that, I get stupid.

Yeah.

And that's what piles up.

And then you feel stuck, and then the shame comes, and all those other things.

So, all that's the emotional part and the psychological part and the spiritual part, okay?

But

the good news is you actually make enough money to live on.

You don't make a ton of money, but you can probably figure this out.

What do you owe on your car?

Actually, I don't.

Oh, good.

That's good news.

So, $25,000 in credit card and student and personal loan.

What other debt?

That's it.

What do you owe in your home?

Nothing.

It's paid off.

It's paid off.

Well, we live in a trailer, but it's paid off.

But it's paid off.

You don't have any house payment.

No, it's paid off.

Right.

No mortgage, yeah.

That's good.

That's good.

Okay.

So no mortgage is a good thing.

And $25K in credit card, and you make $60,000.

This is doable.

Okay?

Right.

I tell myself, I'm like, it's doable.

I don't know why I can't see my money.

Well,

because your heart was broken, you lost your husband, huh?

And you were struggling, okay?

And that's just normal human stuff.

So what we've got to do is help you put together a system to live on the money that you have.

And we're going to put you on the every dollar budget, and we're going to get you a Ramsey coach, and we'll pay for all of it, okay?

I'll take care of you.

Make sure you get up and get running here.

You can do this mathematically.

But the first thing is, is you've got to change the way you look at it and the way you think about it.

Of course, we're going to get the credit cards out and cut cut them up.

They've been such a blessing.

Not.

Not.

So we're going to stop using the stupid things.

We're going to have a plan to eat and pay the lights and

make sure the water is on.

And then we'll start talking about how we can pay off this debt after we've met our basic needs in the household.

But if you've eaten food, if your family has food and your family has lights and water, and you've got gas for your car to drive to work,

you make plenty of money to do all that.

Right.

And so we've just got to make the money behave.

And then we can start using some of it after we've taken care of Mel and her kids.

Then we'll use some of it to start taking care of the stupid banks and get them out of your life.

Forever and ever.

Amen.

Never go back.

Yes.

Okay.

So that's what we're going to do.

So

we can show you exactly how to do this, but you're just by yourself, and you're, um,

you're, it's what I would be doing if I lost Sharon.

I'd be just flailing around a little bit,

yeah, and you're just kind of flopping around, you know, and it's just going everywhere, and you're just running and going, and you're tired, and you're stressed.

Is that, am I, is this true?

Am I telling the truth?

Yes, yes, okay,

okay, all right.

Are you in a good church?

I am, yeah.

Good,

good.

Does your pastor know you're facing all this?

Yes.

You sure?

Yeah.

I mean, they know,

I don't know if they know

how bad I've been the last few months.

Probably not.

Yeah.

Yeah.

You need to tell your people that love you.

Yeah.

Because the book that I read and the book that you read says we take care of widows.

Okay?

So

give your congregation and your pastor the opportunity to do what they're called to do.

Okay.

And Ramsey's going to do that too.

Ramsey's going to set you up with a Ramsey coach free of charge, sit with you, help you put together your budget, and then coach you, and then also hold you accountable.

That means they're going to be mean to you and make you do it.

You're going to freaking do it.

Okay.

And Mel, listen, this is really doable.

And I want to just throw a number at you, not that you have to take on you, but I just want to show you something.

If you

were to make an additional $2,000 a month and you put every nickel on that towards this debt, you're talking about getting out of this in a year.

Now, I'm not saying you have to do that, but I want you to catch, because we're going to give you all the help, but I want you to be able to see that what seems insurmountable to you at the start of this call, you can actually knock this out.

And you've had horrible change thrust upon your life by losing your husband, but.

You're still here and your kiddos are still here.

And this is not going to be fun getting a budget and cutting out credit cards and not relying on it.

It's not going to be fun, but you've already had a horrible thing.

It's going to be more fun than the hell you're sitting in.

That's exactly right.

You can get through this.

I just want you to hear that.

You can actually get out of this.

Yeah, this is very, very doable.

And you hang on.

We're going to put our arms around you and help you make sure you do it.

You get on the phone with a Ramsey coach as soon as you get hooked up with one.

Sit down with them.

They're going to take, we're going to take care of you.

And we're going to make sure you get on that every dollar budget to stay on it.

And you let your pastor and your community know where you are.

And that you, they may not need to give you money.

They may just need to love you.

That's okay.

I'm not saying you're a charity case because I don't really think you are.

But if they want to give you some money and put towards this, it wouldn't make me mad.

But it depends on the congregation, how they work and all that.

But I mean, more than anything, they just need to love you.

That's right.

You don't need to do this by yourself.

Life, it's not good that man be alone.

You know, when you do these things together, you picked up on something and she broke when you said it, and you were right.

You mentioned the word shame.

You've coached so many people one-on-one on the air.

How does shame hurt us in times like this when we're trying to jump out of debt?

Because you've experienced it personally.

Just talk about shame.

It's the great lie from the pit of hell is what it is.

It makes you...

People, when they get in a situation like that when you're broke and you can't pay your bills, you think, and you screwed up, you think you're the only one.

Right.

And it turns out if you've got your act together, that's when you're the only one.

Right.

Most people are broke and out of control.

Most people don't have their crap together.

78% of Americans say they live paycheck to paycheck.

That's eight out of 10 houses on your street are broke and out of control.

So don't let anybody whisper in your ear, call the devil, and say, you're not worthy because you're broken out of control.

You're just a normal person.

Normal just sucks.

That's all.

You don't want to be normal.

Normal sucks bad.

So it's the great thing.

I used to think when I went broke, I was the only one on the planet Earth that was that stupid.

And when I started telling my story, it's like everybody's like, yeah, me too, me too, me too, me too, me too.

It's like everybody raised their hands and said, I've done stupid.

I was stupid.

I went broke too.

Dave, I went broke in real estate, just like you.

I kept hearing it over and over and over.

Now, for 30 years, I've heard it everywhere.

Normal is this.

You just don't want to be normal.

That's the trick.

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Today's question comes from Victoria in Texas.

My 14-year-old son wants to allocate some of his earned money to online gambling.

He says everyone, and this is in all caps, at school does it.

Please help me explain to him why it is 100%

wrong.

I, yi, yi.

How old is your son,

your youngest?

My youngest is 17.

I got a 17 and a 19.

So I will answer it as if they came to me and said, Dad, everyone is doing it.

First, I'd start with, I can't help but hear my nanny's voice right now.

He used to say to us,

if everyone's jumping off of a bridge, would you do it too?

You know, that's just old school, you know, and I'd start with that.

Then I would say, all right, let's look at gambling.

And I actually would come to it with numbers.

I'm a little bit of a data geek.

And so I would actually go pull real numbers.

on this particular type of online game.

Let's say it's sports, okay?

And I would show the rates of success on this and let the numbers talk for you to some degree.

Second,

I would explain gambling as a whole and how it does not pay off.

And

I would say, just because they live in your house, if they're going to do something that you are philosophically or spiritually or whatever you want to say opposed to,

what I would tell them, my son, is if you're going to do that and you're going to

go around me

and not honor the advice I'm giving you and do something so stupid, then you are not going to receive these blessings from me.

Now, that may be too harsh, Dave.

You may disagree with that, but I would take a pretty strong stance after I've made the numbers case

and make it very clear.

I don't believe in this.

I think this is foolish and this is against the values of my home.

And therefore, there are going to be consequences if you do this.

And then they got to learn the hard way.

Yeah.

Everyone

at school that is male and 14 is looking at pornography.

Not everyone is gambling.

That's a good point.

He's lying.

He's overstating.

He's being a 14-year-old using hyperbole.

Okay?

And 14 and 15-year-olds are interesting beasts.

They're very interesting.

I raised a few of them.

At our house with teenagers,

we went with the Andy Andrews approach that we are not trying to raise great kids.

We are trying to raise kids who become great adults.

And so at that stage of their development, the process that Sharon and I used was pretty simple.

Because inside of every 14-year-old, there are two people, a 34-year-old and a four-year-old.

And so I would ask them, which one am I speaking to, Sybil?

Y'all don't remember Sybil with multiple personalities.

It's an old show from the 70s, okay?

But yeah, which one am I speaking to, the four-year-old or the 14-year-old?

If I'm speaking to the four-year-old, I'm simply going to tell you what to do, and you're going to mind

because I'm older than you, and I can make another one that looks just like you.

You will behave.

Period.

You will do exactly what I say for your own good because I love you.

I don't care if you have a feeling.

It doesn't matter matter to me.

You're simply going to do what I say.

If you're four years old, that's how we deal with it.

Now, I'll be gentle and kind, but at the end of the day, I'm in freaking charge.

You're not.

The inmates don't run the asylum.

I'm bigger than you.

I have more power than you.

You're simply going to mind me for your own good.

You're not going to play in the street.

You're not going to touch hot stoves.

You're not jumping off of waterfalls.

You're four.

You're not driving cars.

You're four.

We're not having a negotiation with a four-year-old.

However, if you want to be an adult and sit here and talk about this, I will talk to you like an adult instead of a four-year-old.

If that's the case, then I would do exactly what Ken's saying.

Here's the data.

Since the internet opened,

when I started this show, people used to call me with addictions all the time.

When we started doing financial coaching in 1992, we've been dealing with addicts ever since.

100% of addicts have money problems.

There's no exceptions.

That's the nature of being an addict.

When I started, addiction was alcohol and drugs.

The number one addiction in America today being treated is pornography

online.

Has exploded it.

It's huge.

Porn online makes more money than all professional sports put together in America today.

It's vastly profitable and it's everywhere.

It's ubiquitous.

Keeping a 14-year-old away from porn, if they have a phone, is impossible

if they have connection to the internet.

And it is the fastest-growing addiction.

It's destroying the sexual function of young men for an entire generation.

The second, and we see them in our office every day here, where they've lost everything.

They've lost their families, they've lost their homes, they've lost their jobs, they've lost their careers because they're addicted, just like when they were doing cocaine.

Same thing.

And son, this is the truth.

And son, here's the other truth.

The second fastest growing addiction in America is online gambling.

Do you think draft kings can afford all of those ads because everyone that bets on draft kings won?

No, they can afford all those ads because everyone that bets on draft kings loses.

That's why the bookie always wins.

The house always wins.

Period.

It's a statistical fact.

It's how gambling works.

And if you're so stupid that you don't understand that, then you can understand this.

Gambling is a tax on people who can't do math.

Walk into the lobby of the Bellagio.

Walk into the lobby of the MGM Grand, and you will see some of the greatest architecture.

You'll see light fixtures that cost millions of dollars.

And it's all all built on house money.

You people gave them the money to build it.

That's how it works.

It's a mathematical fact.

So, son, if you're 14, I'm going to explain these facts to you.

And so, I don't want you to be involved in it.

By the way, honey, I'm not involved in online porn, and I'm not involved in online gambling.

I sadly spoke with a 32-year-old the other day that's run up $600,000 in sports betting.

He makes $180,000 a year.

He's going to to lose his marriage.

And his two little babies and his beautiful wife are going to leave.

And there's nothing he can do about it because he can't stop himself.

He's addicted.

So why would I let someone that I love be engaged in that?

Sweetheart, I love you.

There's no chance I'm going to let you be engaged in things that will destroy your life.

By the way, you're not doing cocaine either.

Even if everyone's doing it.

By the way, you're not doing crack either, even if everyone's doing it.

By the way, you're not going to drive 110 miles an hour and act like you're speed racer or something out here because everyone's doing it.

You're going to do things in this house because I love you that benefit you.

This does not benefit you.

And so you're not doing it.

Now, if I can convince you and persuade you as an adult, I will persuade you as an adult like I just did.

Yeah.

Here's some data.

Here we go.

UC San Diego news study: 96% of over 700,000 online gamblers.

That's a big sample size.

96% lost their money.

That's all of them.

I mean, nobody wins.

You want to play the 4% game?

It just doesn't add up.

It doesn't matter.

What makes you is an idiot?

And that's what I...

96%.

Yeah, if you want to be an idiot, if you want to join the 96% of losers, that's how I talk to a teenager.

I get entertainment from it.

That's the class.

Yeah, whatever.

Yeah, you're all trying to get it.

You work all week and

you get entertainment from losing the money that you worked all week for.

At those rates, you might as well buy a donkey and go stick

mine for gold.

Get yourself a pan.

So the deal is, I'm going to try to convince you you're not doing it, but I'm going to try to convince you and persuade you if you're willing to talk this through with an adult with me and you're going to understand why you're not doing it.

If you don't want to do that and you want to just throw a fit and be a four-year-old, I'll just simply tell you, you're not doing it.

We don't negotiate with idiots.

Not when they live in my house.

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We'll help you get going.

Will is with us in Ohio.

Hi, Will.

How are you?

Hey, Dave.

Thanks for taking my call.

Sure.

What's up?

So until about a year ago, we were living in a single-wide trailer to save money, pay off debt, and we paid off about $60,000 in debt.

We bought some land to hopefully build a house on in the future, but then we found black mold in our trailer and had to move out.

So now we're renting.

And between the rent and the land payment, that's destroying our savings, and we're kind of struggling here.

So I'm wondering, should we sell this land that we plan on for the future and want

and keep renting to pay other debts off?

Or, you know, we've got some family that's offered us land to build on for free, but houses are so daggone expensive now.

I'm not sure what to do.

Okay.

What's your household income, sir?

About $120,000.

How long have you been married?

Ten years.

Okay.

All right.

What's What's the land worth?

It's worth about double what we owe on it right now.

It's worth about $120,000.

And you owe $60,000?

Yes, sir.

Okay.

All right.

What would happen if you sold the land and took the $60,000 in cash that would be in your pocket and used that as a down payment on a house?

That'd be a heck of a down payment, yeah.

Just it's real good for commutes.

We like the land.

I think it's an emotional connection to it, you know.

But there are some other houses in the area we could look at.

Yeah.

I mean, you just buy a house and

then, you know, later on do a land deal, right?

After you get, after you get some things going, get the house going up in value, start getting it paid off.

You make good money, but you're kind of trapped right now.

You can't really afford to build on it.

Right.

And you say it's destroying your savings with the payment and the rent.

And so putting those two together and a down payment off the land, and that buys a house, that makes a lot more sense as a first step.

It's not necessarily a permanent decision.

You know, it's always funny when you're buying a house.

It feels more permanent than it is.

Yeah.

That's why people say stuff like, I bought my forever home.

Which is a load of crap because it's never your forever home.

There's only one forever home.

That's heaven.

And other than that, you're going to move.

So this idea, I'm never moving again, that's just not true.

Okay.

Unless you're 85, you're probably moving again.

So,

you know, and you may even be moving again there to the nursing home.

But anyway, so something's going on.

Anyway, you're moving again.

So

it's not a permanent deal.

Buy your house, sit there five, six years, save up some more money, take the equity you make on that property with the equity you put into it,

and start talking about building a house and buying you a piece of land at some point.

But,

you know, it's called a starter house, right?

Yeah.

What's your total debt?

We've got about $100K in debt, $20 on a student loan, $20,000 in a car, and $60,000 on the land.

Okay.

All right.

So you got that $40 in debt.

Good call, Ken.

I drove past that.

I went straight to the real estate deal.

Yeah, I need you to clear that stuff, too, and that makes this discussion harder.

What's the car situation?

$20,000 debt on the car.

Is it worth more than you owe?

No,

it's probably worth right about that.

It's fairly new.

What's the car payment on it?

$400 a month.

Okay.

Yeah.

Again, the way we answer questions here is what would I do if I woke up in your shoes?

I'd sell the car and the land.

And

I'd take five grand, go buy me a car to get back and forth to work.

And I'd start talking about buying a house and get these student loans paid off.

And,

you know, now we only got 40K to put down, not 60.

But anyway,

but we're still doing a starter house deal.

We're going to do a 15-year fix where the the payment's no more than a fourth-year take-home pay.

And you don't have a payment in the world then, dude.

And not a student loan payment, not a car payment, not a house payment, not anything.

And at this point, I mean, not land payment, not anything.

And you're going to put 40K down.

And,

yeah, I'm going to go buy a house.

That's what I'm doing

in that situation.

And then I'm going to, the emotional tide of the land I get.

I've got a piece of ground over here not far from where I'm sitting right now.

I go over there and shoot guns, ride four-wheelers and everything with the grandkids, all that stuff, and I love that piece of dirt.

I have an emotional connection to it.

I understand what you're talking about.

I don't want to sell it.

But, you know, what's the best thing for my family long term?

You know, that's a lot of money to shoot guns.

So

you got to think about what you're doing and what is more important than something else.

In my case, I'm not saying that's what you're doing with it, obviously.

But, okay, Chris is with us in Cincinnati.

Hey, Chris, how are you?

I'm fine.

How are you?

Better than I deserve.

What's up?

I have a question.

I have got about $45,000 to $50,000 in various debts,

I think about $15,000 in credit card debts and about $22,000 or so in student loans and then a couple of other things.

And I have been

contacted by this debt consolidation or debt reduction company and run

away.

Run away

quickly.

What's your household income?

About $25,000 a year.

$25,000 a year.

Yeah.

How many hours a week are you?

Oh, you're on Social Security.

How old are you?

Yeah.

75.

How have you got a student loan debt?

Well, I was,

I went to this community

college about,

I started about 10 or 12 years ago.

And then

at one point, I just

was a little short of money, so I signed up for some student loans for a total of about $20,000.

And then what did you used to do for a living before you retired?

Computer programming.

I mean, I'm not, I actually, I'm looking for a job doing that.

Yeah.

Again, I think that would be helpful.

Yeah.

Yeah.

Because I enjoy doing it and it pays good.

Yeah.

No, and here's the thing.

The debt consolidation doesn't work because it doesn't change anything except the interest rates.

Your student loan interest rate is so small, it doesn't matter.

Your credit card debt's so small, you're going to pay it off fast anyway once you get this new job.

And so that's why I'm saying run away because they're making you a promise that if you just take this pill, everything will be okay.

No, you don't need to take the pill.

You need to just make everything okay.

So the way we work that is we list your debts, smallest to largest.

We pay minimum payments on everything but the little one.

And let's do something to get some income coming into this house and approaching it that way.

But credit cards and student loans as you approach your 70s are, yeah, those got to be cleared up because it's taking all the fun out of your life, I bet.

That's just no fun at all.

Yeah, Dave, you and I were talking about this during a commercial break several shows ago.

We were on together and we were seeing what the call was coming up next.

And I said to you, I said, I'll bet you this lady, because she was in her 70s, got a student loan when she was in her early 50s, and it came true.

Now, I've taken this call a lot and I've seen it a lot where people would call me on the old Ken Cole show and they'd say, hey, I tried to transition at 50 or whatever.

And I just want to say this, we're anti, you know, this this idea of just going for a student loan just to get a degree without any kind of focus as to why we're getting it.

But Dave, I want to say, if you're in your 50s, there is no scenario by which you should ever take a student loan.

I'm going to go that hardcore on that.

Let me go harder core.

If you're breathing,

there is no scenario by which you should take out a student loan.

Yeah, I agree.

Yeah, yeah, yeah.

But just what is happening, we're seeing this happen a lot, where people think they're going to change their life midstream with a student life.

Or downstream.

That's possible, too.

I like what you did there.

I see what you did there.

We've all done dumb things with money.

I've done them with zeros on the end.

One of the biggest mistakes I see people people make with money is not having a plan for it.

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You got to be intentional and you need to get a budget.

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

build wealth, do work that they love and create actual amazing relationships kid coleman ramsey personality number one best-selling author and host of the ramsey networks hit front row seat he's my co-host today be sure and check that show out the phone number here is triple eight eight two five two two five sarah's in san francisco hi sarah how are you Good, how are you?

Better than I deserve.

What's up?

So I have kind of a unique dual job situation.

I'm a property manager and a teacher.

So basically what that means is I live at a property and I get to live here for free in exchange for doing housework.

You name it.

I've probably done it.

Dog care, pet care, laundry.

I mean, I designed a golf cart one time.

It was really random.

So I don't have to pay rent, which is incredible.

I've been doing this for about four years for really, really affluent people.

But the household that I'm currently with, there's a lot of secrets that I unfortunately have to like carry with me of really terrible things that are happening.

And I just don't know how to weigh, like, should I leave and start paying rent somewhere?

Or should I stay and just kind of like push down the gross feelings and continue saving money?

Wow.

Life is too short to be feeling gross because of somebody else's behavior.

Yeah.

So, yeah.

You've got to leave.

Now the question is, how do we leave smart?

So what are you going to do with your life now?

Now that you don't work any there anymore, what are you going to do?

I mean, I just feel like I could save so much money for a down payment on a house if I if I stayed since I'm fully.

No, no, no.

We've already established you're leaving.

Okay.

Because they're, are they doing illegal stuff?

No, they're just like cheating on each other and like stealing alcohol from me.

It's just really like bad.

Stealing alcohol from you?

Yeah.

And then they blamed me for it about a year ago.

It's just blamed you for stealing your alcohol?

So they drink a lot.

They're trust fund kids.

All they do is just like drink and party all the time.

And about a year ago, they thought I was stealing alcohol until I found out one of them was an alcoholic.

Oh, okay.

Sarah, if you're representing your position in a court of law and Dave and I are judges, you're not doing a really good job.

You keep giving us multiple reasons as to why you should be running from these spoiled brats.

Listen, the amount of money you're saving is not worth the toll it's taking on your life.

True or false?

This is probably true.

Well, then there you go.

How old are you?

I'm 23.

Okay.

Now, what are you going to do with your life, 23-year-old?

I mean, I can move really anywhere I want.

Like, I'm a teacher, so I can move wherever.

Do you want to stay as a teacher?

That's what we're trying to figure out.

No, she's a caretaker.

No, she's a teacher and a property manager.

Oh, you teach out inside the home or outside the home?

Outside the home, just like a public school teacher.

So you have a teaching certificate.

Yeah.

A four-year degree.

Yes.

And you're still currently teaching, if I understood you correctly, right?

Yes.

Do you have any money at all?

The only debt I have is my car loan.

I said money.

$10,000.

You have money.

Yeah, like six grand of my savings.

Okay.

All right.

Leave.

Load up the car.

Load up the car and move.

What city do you want to be a teacher in?

Because you're leaving.

And it's not San Francisco, I'll help you.

It's not San Francisco.

What city do you want?

Where did you grow up?

I grew up in Oregon, which I'm sorry, I would never go back there.

Okay, that's fine.

We've established one state you're not going to.

Two states.

We got 48 states.

The state of San Francisco and the state of Oregon.

You are not going to those two states.

Okay.

Now, where else are we going?

Because

you're 23, have wheels, have $6,000.

We're going to move and get a one-bedroom apartment and be a teacher.

Ta-da.

Just like that?

Just like that.

You're like a free person and everything, and this is America, not Russia.

It's awesome.

Where do you want to live, kid?

Where's your next adventure?

Even though it saves me a bunch of money.

Where's your next adventure?

You're leaving.

Or go do this again somewhere else, but not for alcoholics.

Go to the state where you want to be.

You're going to end up getting sued or put in jail for something one of them do.

You know, evil is in the house.

You can smell it.

It's in the air.

Get out of there, girlfriend.

Now.

Now.

Where are you going?

What city?

I want to know.

What's your next adventure that makes you smile?

Where have you always wanted to live?

Gosh, Florida's pretty great.

Load up the truck and head to Beverly, kid.

Yeah, no per no income tax, state income tax there.

That's great.

Florida's good to their teachers, too.

Yeah.

And you can property manage for sane people in Florida if you want to save up money for a house.

You keep coming back to how much money you're saving as if you can't reproduce this somewhere else in a much better situation.

You've become a prisoner to this situation because you're only looking at how much money you're saving as if you can't do it anywhere else.

That's true.

I know.

That's why I said it.

Okay, so here's the deal okay

i want you out of there

before labor day

you have 27 days ready

set

go

this is your this is your old uncle dave old ugly uncle dave who loves you telling you ready set go set yourself free

you are free leave let these fine people know that by the end of the month we're gonna load up the stuff and go and if they want you to go sooner oh good

oh good

get in the car put your crap in the car you can put all your crap in one car can't you

yeah basically load up the car and drive to Florida what city in Florida do you want to live in

I like NASCAR.

Daytona's pretty cool.

All right.

Daytona is a neat little town and affordable, by the way.

It's a neat little town.

Head on over there, kiddo.

Not that far from Boca, and there's some rich crazies there, too.

That's a good point.

Who's your favorite NASCAR driver all time?

Oh,

I've been watching a lot of documentaries lately, but I just got to go with

probably Kyle Bush.

Okay, so I want you to channel your inner collaboration

and drive from San Francisco under the speed limit.

We're not trying to get you to break the speed limit.

He's aggressive.

I want you to go all the way to Daytona.

And when the sun's coming up, by the way, at Daytona, you can still drive on the beach.

I want you to drive out on the beach and sit there and smile and go, I am 23, I have money in my pocket.

I can be and do anything I want in the greatest land the world has ever known.

I don't have to put up with a couple of cheating, drunk, trust fund morons, and I'm gone.

How's that feel?

It feels good.

It's scary, but it's scary.

It's scary, but it's an awesome scary.

It's like bungee jumping.

Go!

We're pushing you off the bridge.

I don't know if you felt it or not.

Yeah.

This was our answer 20 seconds in.

We were into this answer 20 seconds into the call.

Now you're ready to do it.

Go do it.

We love you, and we want you to have a great life.

You're not going to have a great life staying where you are.

As a matter of fact, your life's going to go downhill pretty quick if you stay there.

You know, in your deepest inside, God's spirit inside of you is telling you to get away from the evil.

He's telling you, listen to him.

And then we told you, too, listen to us.

Then there's the fact that two trust fund babies are stealing your alcohol and blaming you for it.

What?

How bass acts is that?

It's way too easy to put off making a will.

And believe me, I've heard every excuse in the book.

But not having the time is one excuse we can kick to the curb right now.

Because these days, most folks can make a legally binding will on their laptop between loads of laundry.

If you're wondering if you can make your will online or if you need a lawyer, we have a quiz to help you figure that out in less than five minutes.

Just go to ramseysolutions.com slash wills quiz.

Ramseysolutions.com slash wills quiz.

Buying or selling a home is a big deal, and there's a lot of opinions out there about the real estate world.

If you don't believe me, just open up your social media.

There's a lot of opinions, and opinions are like armpits.

Everybody's got them, and most of them stink.

They really don't know what they're doing.

Everybody's got an idea.

Everybody's got a course on TikTok.

Everybody's got something you can get into.

Listen, when you got all this drama, one thing you know about drama, here's how you beat drama.

Facts.

Facts are your friends.

If you want to know the facts about real estate, you can simply go to our website.

We've got all the market trends on there.

You can tell exactly what's going on, and then you can make your decision.

Are house prices going up?

The answer is facts: yes.

Not quickly, not a lot, but they are going up.

They've gone up every single month this year.

That's a fact.

Interest rates are low.

The average 15-year fixed rate is

is 5.95 right now.

In any stretch of history, 6% or less has been considered a low interest rate.

It's just tough for it to be a low interest rate when you're coming off of 2% and 3.

And some of you still have a recent memory of that, so it makes it feel like it's high.

It ain't high.

High is 14%.

High is 10, 12.

This is not high.

So you can start to figure this out and look at actual trends.

Go to ramseysolutions.com ramseysolutions.com slash market or click the link in the show notes and we'll get you helped out.

Colin is with us in Missouri.

Hey, Colin, what's up?

Well,

so

my grandmother that I haven't really talked to in years that's been a strange from my father and I'm recently estranged from him and all that

just recently offered the other day to pay off my credit card debt.

Never told her how much.

Just told her I was going through your steps to get out of debt.

And she said, oh, well, I'll help you so you don't got to pay interest.

I'll pay off your credit cards for you.

You can pay me back.

And I'm over here.

Like,

I don't feel comfortable taking money from her.

I would take it if it was a gift, but it's not a gift.

It's a loan.

Yeah, it's a loan.

It's a loan.

No, no.

No, thank you.

I'll pass.

Yeah.

So estranged and estranged and estranged.

There's a lot of estranged going on in your family.

The last thing you need to be doing is owing one of them money.

Yeah, and that's kind of how I felt.

Not only just for the fact that I'm not sure how tough she's going to be on

making me pay back this debt to her, but just I don't personally feel comfortable taking money for family.

Well, I mean, if she has $2 million and wants to give you $25,000 to pay off your credit card debt as a gift, we'll talk about it.

That's fine.

That's one thing.

No strings attached.

But this is not that.

This is you loaning money.

No, we do not loan money to family.

We do not borrow money from family.

You will change the quality of the relationship, and you guys have trouble with the quality of relationship in your family anyway.

Yeah.

Don't add to the character.

I mean, you've actually re-established a relationship with this lady that you have hardly ever known, and don't ruin that.

Yeah.

Do you still have doubts about this?

I mean, I never

really considered for more than like three seconds for

your voice sounds like you're like, yeah, well, maybe.

That's what I'm picking up on.

Are you afraid to tell her no thanks?

Kind of.

I knew it.

I knew it.

Yeah, but here's the deal.

Let me help you.

I'm sorry to cut you off.

Let me help you with this, okay?

You just need to say, grandmother, or whatever you call her, I really appreciate that, but

I need to take care of this myself.

I got into this mess.

I need to get myself out of this mess.

Dave and his team are going to help me get out of this mess, and I'm re-establishing this relationship with you, and I just don't think it's a good idea for me to be in debt to you when I'm already in debt over here.

So I appreciate the offer, but I just want to build my relationship with you and just move on.

I think it's going to be okay.

All right.

And by the way, let me say this, and I want Dave to weigh in here.

She may not like that, but I doubt it.

I think she's making this gesture because I think she wants some reparation.

She wants to repair.

And I think she's trying to make a good gesture here, and I think she'll be okay with that.

Dave, do you see a problem with that approach?

No, it's the only way I would do it.

I think you just go in kindness and say, it's me, it's not you, it's me.

Yeah,

I could tell

I need to pay off my debt because of the way I feel and the guy I look at in the mirror, Granny.

But thank you, Granny.

You're very sweet.

I appreciate the offer.

It's very kind of you.

It's kind of hard to pass up, but I'm going to.

Because I need to do this for me.

What Ken said.

And just blame it on you.

And that's the truth, by the way, too.

But the last thing you need is weirdness between family that already has its old boatloads of weirdness.

Estranged and estranged and estranged and then not estranged and then estranged.

There's a lot of strange.

And so, yeah, just stay away from it.

And that's a, you know, don't muddle this up.

So,

yeah.

And

I think she'll receive that well.

Maybe, and if she doesn't, then that's another signal.

That's right.

That's another signal that you shouldn't have done it.

The last thing you want to do is be, you know, owing money to people that get weird when you start telling about money.

So it's a bad idea.

Megan's in Vermont.

Hey, Megan, what's up?

Hi, thank you so much.

So my husband and I are on babysitter two.

We started off at $200,000 in debt.

We're at $172,000 in debt as of now.

I need some help with my car situation.

So I'm a road warrior.

I do 60,000 miles a year.

And my car is unfortunately out of service.

It's not fixable at this point.

So I'm borrowing my mother-in-law's extra car for the time being.

But I'm wondering, with the amount of mileage that I do and how much I'm on the road, what is the best way for me to go about purchasing a new vehicle that's going to be reliable?

You guys don't have any money?

No, we're throwing everything in our debt.

And you're down to $1,000.

You're doing it the way we teach.

Yes.

What's your household income?

It's $250,000.

Excellent.

Okay.

All right.

That's good news.

What do you do?

I am a home repair salesman.

Okay.

Excellent.

Okay.

Cool.

All right.

How long can you use this borrowed car?

A month, two months?

Probably six weeks.

I'm on week two right now.

Okay.

Another month then.

Okay.

Yes.

All right.

Well, I'm going to tell you what to do,

and then I'm going to tell you what to do long term, okay, and how to think about this.

Here's the thing.

Okay.

So, first thing I would do is answer your question.

Let's let the pressure off.

I would stop your debt snowball

and save up $10,000 in one month and pay cash for a $10,000 car.

Okay.

All right.

And what you're looking for is a car that is ugly and low miles and has a lot of life left in it.

An old Camry, an old Honda, a cord,

maybe an old Chevy of some kind.

But that's what you're looking for.

Something that's got a lot of life left in it, but it's not pretty because no one buys home repairs from you based on your car.

That's true.

Okay.

Now, then let's talk about a principle for Road Warriors for everyone listening, including you.

Whatever you, let's pretend you've got unlimited money and you're out of debt.

We're a couple of months or years down the road from this discussion.

I think it's fair to say that when you put

60,000 miles a year on a car, whatever you are driving, you are destroying its value.

Agreed?

Absolutely.

Miles destroys a car's value.

That's a fact.

That's a statistical fact, okay?

So a two-year-old car with 120,000 miles on it, piece of crap.

A four-year-old car with 240,000 miles on it, it's got no value.

You've wrung all the value out of it.

So the question is,

and when you destroy the value of a car, you're destroying the value of what you paid for.

And so from a business perspective, what you want to drive is the least expensive car that will get get the job done.

Now let's define get the job done.

It's got to get there, number one.

Number two, it's got to get there with reliability.

And number three, it's got to get there with a reasonable level of comfort.

So you're not driving a freaking Dodge neon.

You'll be in the chiropractor's office.

Okay?

So what is the cheapest car that's reliable and reasonably comfortable because I'm in it all the time.

And that's a $12,000 to a $15,000 car.

And I don't care what you're making or how rich you are.

That's all you ought to be driving.

Because if you buy a $50,000 car, a $100,000 escalade, you're going to destroy $100,000 in three years.

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In the lobby of Ramsey Solutions on the debt-free stage, Lee and Liz are with us.

Hey guys, how are you?

Doing great, Dave.

How are you?

Better than I deserve.

Where do you live?

Tampa, Florida.

Oh, fun.

Welcome to Nashville.

And how much debt have you two paid off?

$260,781.51.

Love it.

How long did that take?

Just about six years to the day.

Cool.

And your range of income during that time?

We started at $181,000.

Our best year was $215,000.

And then I became a stay-at-home mom when our son was born, and we ended up at about $133,000.

Cool.

Very cool.

Good for y'all.

What do y'all do for a living?

Lee is a police officer, and I was a certified nurse midwife, and now I'm a...

Stay-at-home mom.

I love it.

Very cool.

Good, good, good.

So six years, 261.

Did you pay off your house?

We did.

We did.

I love it.

Look at it, weird people.

Very cool, y'all.

So what's the house worth?

The house is worth $512,000.

Very cool.

And how much is in your nest egg, your 401ks and stuff?

About 570.

Ha, millionaires.

Woohoo!

Baby steps millionaires.

I'm proud of you.

How old are you two?

36.

36-year-old millionaires in Tampa, Florida with a paid-for house, ladies and gentlemen.

Let me introduce you to Lee and Liz.

Way to go, man.

Thank you.

That's so fun.

So fun.

Excellent.

So did somebody give you like $300,000?

No.

No, no, you just went and got money and lived on less than you make and all that.

So six years ago, tell me the story.

How did you get introduced to this Ramsey stuff?

Well, we had been married and in our house for about a year and a half and

we were making a lot of money.

We were making extra mortgage payments.

We were investing, doing a lot of different things all at once, but didn't have any shared goal or vision.

And then Lee found the podcast and listened to the audiobook of the total money makeover one night during one of his night shifts and came home and shared it with me.

And I was really concerned that I wanted to be a stay-at-home mom, but I wasn't sure if we would be able to do it with the mortgage payment.

So we got on board.

We were doing some dumb stuff like chasing credit card points and paying it off every payday.

So we quit doing that,

got on a written budget, and started attacking the mortgage.

And the bulk of it was paid off in the first three years.

And then when I stayed home and left my my you know six-figure job it slowed down but even still we we surpassed our goal by about 13 months.

Wow good for you well done so your

big motivator your why was for you to be home that was our plan all along

that's why we scratch clawed and did all the things we did right yes sir overnights night shifts overtime extra duty whatever we could pick up at the time we just did it there were some days where somebody was always asleep, and we would cook.

Or we were both at work.

Or we were both at work.

We would high-five, and then, you know, one of us would leave, and the other one would leave shortly thereafter.

So we just worked.

Also, we'd be home.

That's a good, that's a good why.

Yes, sir.

It's a good reason.

You got to have something that is bigger than the pain to make you go do it because you sacrificed deep.

It's hard to believe that as a police officer for 13 years, 10 of that was on night shift or swing shift.

So

here we are.

And now you don't have to do that.

No, sir.

You're a millionaire.

Yes.

So you get to work the shift you want to work.

Yes, sir.

And you've been there long enough, you probably do get to choose now.

That's correct.

Yeah, I love it.

Very good.

Very good.

And you got the shift you want, which is mommy shift.

24-7.

There you go, babe.

I love it.

That's good.

Very good.

So

I think a lot of people listening and watching going, how in the world did you walk away from a six-figure job and still finish?

I want you two to answer this.

I think some people are going, how'd you do it?

So how'd you still finish ahead of schedule when you lost that big income?

The grace of God, I think.

Anytime we were worried, it was like the budget just made sense by the end of the month.

I had paid off some of my nursing school loans before we got married and then went to grad school debt-free.

So if you're a nurse out there thinking you want to become a nurse practitioner, you can absolutely do it without going into debt.

and that helped a lot knowing that anything that I earned was going towards the mortgage

yeah there will be some months where we would we have a goal the to pay to pay down the mortgage and then we would surpass that we would say okay let's do X and we would do double that because of just

Either the paychecks would come in or just all the work, like I forgot how much we worked, and then the paycheck would show up two weeks later on a Friday and you would go, well, I guess we're doing more.

By the way, signs you know you're working really hard is you forgot how much you made.

That's a great sign.

You're like, wow, I actually worked a lot last month.

And when we first got started, we were like, man, every dollar's not for us.

We have an irregular income.

We get paid every two weeks.

It's not lining up on the monthly budget.

So if you're out there and struggling with the same thing, just

stick with it, give it a couple months, keep practicing, keep plugging away, and chunk up those big balances.

Because when you're doing a big mortgage or a consolidated loan or something like that, every year we would look at our plan and say by the end of the year we want X number

on that balance sheet on New Year's Eve.

Some years we made it.

One year I totaled our car so we had to cash flow it and we didn't make it that month.

One year we made it by July.

Yeah.

That's fun.

So

how does it feel?

Paid-for-house or millionaires?

You're 36 years old.

It's pretty cool.

It's surreal still.

Was it worth it?

Absolutely.

Absolutely.

Because you guys went crazy for a while.

It's awesome.

Yeah.

Because people always ask us, you know, I don't know, man.

I think I want to live my life.

Well, you can do anything you want for the rest of your life now.

And we also did live life, too.

I mean, being on baby steps four, five, and six and doing those simultaneously and following the program, we were still able to cash flow home repairs, go on vacation, and do the things we talk about when you're on those baby steps.

And so we did it and just stuck to the plan.

Pretty cool.

Was that the breakers in the picture?

The dunces are.

Oh, okay.

Okay.

I thought I couldn't tell.

I just got a quick look on it when it flashed in front of my peripheral vision there.

But yeah, wow, good for y'all.

Nice vacation.

Good, good, good for you.

Wow.

What do you tell people the key to being a millionaire by the time you're 36 is?

Being consistent, being content, and working hard together, even if you're not seeing a lot of each other.

Also,

tracking your net worth was big for us because, yes, you can see some of the debt going away on the house, but then

we would also see our net worth rise.

And so, and having a goal, we would like to have X buy the end of the year.

And once again, something.

Because you're simultaneously paying off the house and putting money into your 401k.

Yes, sir.

Yeah.

Because you're doing baby step 456,

which is what you're supposed to do.

And so tracking the net worth is a it doubles the equation

and it and it helps me because I'm the natural spender, so it helps me to kind of see the end.

It was hard in the beginning for me to see $260,000.

I was like, Well, I'll just work hard at the end.

And she told me, No, you should work hard now because it will, in the end, it will literally fall off a cliff.

Yeah, and that's what it did.

Yeah, wow, I love it.

You just learned to say yes, dear.

That's such a great example there.

What did you guys learn about each other and your marriage as a result of this serious commitment?

I think how much we are willing to sacrifice for each other and how much humility we can have

and just choosing that over and over again.

Yeah.

I'm proud of y'all.

Thank you.

And I know your parents are here bragging on you and cheering you on.

I got to meet them earlier.

And you brought the kiddos with you.

Bring them up.

Let's introduce them with their ages and names.

The reason for doing this, they need the t-shirts to say, I'm the why.

I'm why they did this.

Oh my goodness.

So, names and ages?

We have John Edwin, who's two and a half, mm-hmm.

And Maggie, who's 11 months.

Ah, so they're too young to even know how big a hero their parents are.

Your old man and old lady Vanderbilt.

You got the whole thing started right here.

That's awesome, man.

I'm proud of y'all.

Well done.

Very well done.

You changed everything.

Very cool.

Very cool.

Very cool.

All right.

Lee and Liz, $261,000 paid off in six years, including putting money in their 401k.

They are now baby steps millionaires at 36.

Counted down.

Let's hear a debt-free scream.

Three, two, one.

We're debt-free.

Woo-hoo!

Love it.

Aren't they fun?

What rock stars, man!

Absolutely amazing.

Our scripture of the day, Isaiah 30, 21, whether you turn to the right or to the left, your ears will hear a voice behind you saying, this is the way.

Walk in it.

J.P.

Morgan said, the first step towards getting somewhere is to decide you're not going to stay where you are.

Well, that would be true.

There we go.

Tyler is in Reno, Nevada.

Hey, Tyler, what's up?

Hi, Dave.

So I'm just going to just kind of jump right into it.

Recently, I lost my job back in the middle of July.

We used

our emergency safety fund that we had to make sure bills are covered and such.

My question is:

You used your emergency fund for what?

For

like our other utility bills and such to catch up on.

You were a little bit behind.

And so my question is

my 401k from my previous job now since I got fired, do I withdraw my 401k to cover the other debt that we have?

No.

Or should I not?

No.

If you withdraw money from a 401k 401k before 59.5, you're going to be charged a 10% penalty plus your tax rate.

And so you're going to be charged the equivalent of about 40%

interest.

So Dave, would I borrow money at 40% interest to pay off my debt?

Of course, the answer would be no.

So mathematically, that is suicide.

So how's the new job hunt going?

It's going good.

Right now, I currently serve for the Army National Guard, so my leadership leadership was able to put me on orders to keep income coming for my family and I, which thanks to them that it is helping a little bit.

Other than that,

the biggest thing that is

wanting to want was wanting to do the withdraw is our car loan,

which we still have a pretty good amount of balance, and I just wasn't sure whether

about $7,000 left.

That's not bad.

Okay.

So So what does the ⁇ they put you on orders.

How much money does that amount to?

Every two weeks, it's roughly $2,200.

Okay.

Does that preclude you from doing anything else?

No, I mean, typically it's like a full-time job with the Army National Guard, which the orders is only like three months for three months only.

So at the end of September, it's my last month that they will help me.

And then from there, I like to get away from that.

What Ken and I are trying to understand is they put you on $4,400 a month, which is very nice.

That's awesome.

But you're going in and working every day at the guard.

Yes.

Okay.

So you have a full-time job until the orders run out in three months.

Okay.

Correct.

So you're going to go get a job, right?

For the end of September?

Yeah.

Yes, I've actually applied for a few jobs.

I'm just waiting to hear it back.

There is one in particular that I am hoping to get more than anything because it's right around the corner from where we live, and

the pay rate is actually pretty decent.

It would help us keep afloat.

I just wasn't sure to make a drastic move now or kind of hold off.

What would be the drastic move?

EE 401k.

No,

we've already established.

No, we're not doing that.

That's not a drastic move.

That's a dumb move.

Okay.

What were you doing that got

where you were fired?

What work?

What happened?

I was in a manufacturer warehouse and had a forklift incident, which meant a pull.

And

from there on, I got suspended from the job, waited, because they do like a...

the

urination test and breathalyzer, just like the normal policy job normally does

and uh from there i was suspended waited for about a week and a half and then when the time came they called me say i was terminated from the incident and never really gave me a more depth so there were drugs there were drugs in your system

no not at all

okay so you're just ran a forklift into a pole and they don't do that from a safety perspective they fired you

correct okay cool what were you making?

I was making, I mean, total, because I worked a lot overtime over there.

So I was at around $77,000 a year.

Okay.

And how long have you been driving a forklift?

Five and a half years.

Okay.

And one incident.

Yes.

What happened?

Give us a short version.

That's a little weird.

Yeah, just one mistake.

You weren't paying attention.

What happened?

It simply was just a yeah, it was simply just a mistake.

I was just exiting out the roll-up door that they have at the warehouse and checking my left and right as I normally do.

And as soon as I started to accelerate, I just turned a little bit while looking at the same time and ran into a pole.

From there on, suspended me and then ended up firing me.

Well, the reason I'm digging into this is because, you know, you can get paid really nicely, and you were getting made, you were making good money.

I would get back into that field if I could.

I don't know what this thing is around the corner.

That would be ideal, but I would be looking at multiple options in that space where you had experience before.

If you have the ability to operate heavy equipment, there is a tremendous shortage of heavy equipment operators.

And so, you know, I'd be looking in the bulldozer backhoe world as well as the Fort Cliff world.

There's a tremendous shortage.

Mike Rowe, our friend from Dirty Jobs, and I were talking about the other day, he said he's got one guy in Phoenix that would hire 22 people right now, today,

but he can't find them

that that

have experience and can

run a piece of equipment, in other words.

That's the thing.

So, that's what I'm looking for there.

And so, yeah, you just need to get the next thing lined up.

As far as the 401k goes, Tyler, what you're going to do is get with a Smart Vestor Pro, go to ramseysolutions.com, click Smart Vestor, and sit down with the one there in Reno, or one of the ones there in Reno.

And they'll have the heart of a teacher, and they'll show you how to roll it over from your old job into an IRA.

There will be zero taxes.

You pick a couple of three mutual funds, like we teach, four types of mutual funds, growth, growth, and income, aggressive growth, and international, and you roll it into that.

You only have a $7,000 debt.

Don't borrow money at 40% interest, which is the effect of taking money out of your 401k and getting a 10% penalty plus tax rate.

So don't do it.

Roll it over.

It's called a direct transfer rollover.

Do not have the old company send you the check.

Have it go straight to the investment.

They do not withhold.

If they send it to you, they're required to withhold 20%.

Now you don't have 100% to roll over.

It creates a problem.

So get with your Smart Vestor Pro today.

Jump on that website today, ramseysolutions.com.

Get your Smart Investor.

They'll help you do a direct transfer.

Write that down.

Direct transfer rollover.

But do it before HR sends you a check from that other place because you don't want them sending you a check.

You want the check sent by direction of the new IRA directly into the IRA.

That's the direct part of this transfer.

The other thing I would challenge you with, Tyler, is you mentioned you were working some overtime, a lot of hours at this previous job.

So let's go.

You've got the National Guard paying you every hour you can work.

I would set a goal to try to pay this $7,000 off before you're done with your guard duty, this next mission.

I think that's doable.

And it's certainly, even if it's not, you're going to get a long way there.

But you can do this with extra work, selling stuff.

No reason why you shouldn't be able to knock that seven grand out.

Yeah, and we, you said, so I would assume your wife is working.

If not, she could be as well.

So there's no reason for us to have a shortage of money in this house.

You make enough with your guard duty and with whatever else you can do, and then leaning into the next job and moving right ahead.

There's no reason for you to be behind on utilities again.

So it changes your life when you stay in control of these things.

Very, very good question, sir.

Sorry you've been through that.

Sounds like you're going to be okay.

It might end up being a blessing.

You might end up making more at the next gig.

You may look back and give those people a great thank you for the bent pole in their warehouse.

They could put a little sticker on it.

It says Tyler was here.

That puts this hour of the Ramsey Show in the books.

We'll be back with you before you know it.

In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.