You Have To Fight For Peace And Quit Living In Chaos

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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.

Rachel Cruz, number one best-selling author, Ramsey Personality, co-host of the Smart Money Happy Hour.

My daughter is my co-host today.

The phone number is 888-825-5225.

Sarah is in Newark, New Jersey.

Hi, Sarah.

How are you?

Hi.

Well, my health is not great, and I have to

make some serious decisions about my estate, but I have several problems, and I don't know what to do, and I'm desperate for advice.

Okay.

Well, I'm an expert on my opinion, so I'll give it to you.

Okay.

In a few months, I'll be 82.

Now, I've always had some physical limitations, but I've been very independent and

have managed to have a fairly decent life and acquire a lot of stuff.

So,

but now my health is, I've had a lot of problems.

The doctors are still trying to figure out exactly what's wrong.

And so I need to, I did go to a lawyer for a preliminary will, but I didn't finalize it yet.

My problems are this.

I'm completely disorganized.

I don't know where anything is.

And my house, if you've ever watched the TV shows about hoarders,

My house looks like a hoarder's house.

The difference is I'm not hoarding trash, I'm hoarding collectibles and antiques.

So I have to deal with that as well.

But what I really don't know what to do about is the fact that I owe back taxes,

the state and federal taxes.

And I'm afraid because they haven't contacted me in years.

Maybe they think I'm dead.

I don't know.

I'm afraid if I start in,

that I'll stir up a hornet's nest.

So one of my questions is, if I do die,

are my heirs liable for

the back state and federal taxes?

No, but your estate is.

Okay.

So if, for instance, if you were leaving your home to one of your children,

in order to keep that home, they would have to file those taxes and pay them.

All right.

So should I go to a lawyer for more advice?

No, I would just go to ramseysolutions.com and click on ELP.

It stands for endorsed local provider for tax preparer.

Okay.

And go sit down with a professional tax person

that does tax preparing.

Typically what we see in your situation is unusual.

But typically what we see is they'll go back about three years

and file three years of tax returns and whatever those taxes are.

And then from this point forward, you continue to file taxes on my own.

Oh, so it's only three years.

Typically, that's what we call coming in out of the cold.

Okay, because I probably owe maybe as much as 10 years of back taxes.

Yeah,

you typically don't do that.

But again, I'll let you get professional tax advice, not some guy on a podcast.

But that's what I have run into.

And it is really important that you do that because

let me tell you what it it does.

When you get this put to bed and you have a system and a plan,

your anxiety level is going to go down.

Because this is riding right in your shoulder blades,

right along the top of your neck.

I'm so upset over this stuff.

Yeah, well, and you're scared.

You don't know whether they're going to come show up at your door and put some 82-year-old woman in jail or something.

You have these things pop in your mind in the morning when you're waking up or just before you go to sleep at night, and that's just stress.

And so, even in other words, once you know what the trouble looks like, it's still going to be stress-relieving because at least it's defined the size of the monster and the sharpness of his claws.

We know exactly what we're dealing with, and I think you're going to find it's a lot less than your imagination has led you to believe.

But the sooner you deal with it, the sooner you're going to get that sense of relief.

Yeah, Sarah, do you have family in the area?

No, no, they live states away.

They live states away.

away.

I do have a local guy I know.

I've been paying him a little bit to come and help me try and deal with a lot of this stuff.

Good.

That's what I was going to suggest, too.

Is you know, when you start getting organized in one area of your life, we see this a lot with money when people start actually taking control of their money and getting that.

And we've talked to people, and it's everything from like their marriages change, they lose weight.

I mean, like, it's just wild how other parts of your life start to come into light.

So the chaos that you're living in physically, too.

My hope for you, just for, yeah, I mean, you're 82.

Um, for the rest of the time you are alive, that there's a little bit more peace and sanity, and your physical space is creating as much chaos as this financial space, too.

I could only imagine.

And so, well, I love that you're even working on that.

You said you already had a guy that's helping you.

My guess is you probably got enough antiques you could sell and not miss them to pay off the taxes.

Well, that's the other thing.

I'm trying to,

you know, straighten up enough so that I could take photographs of what I own.

I've been doing this as a sideline for maybe 60 years, so I know what I've got.

But

just learning that I'm not liable for 10 years' worth, because I don't even know my income.

I don't think you are.

I don't think you are.

But I think you got to go back and you got to put together some kind of a tax return and file it.

And it's a lot less, they're a lot less aggressive if you go to them rather than them coming and finding you.

Have you been working, Sarah?

Or when did you stop working?

Well, I never officially retired.

I've always had my hand in something.

I'm like an entrepreneur.

So, you know, I still do stuff.

So, what is your net worth?

I have no idea.

Well, okay.

What's the house worth?

My house worth, the last time I looked, somebody looked for me on Zillow.

It was about,

but that does not include.

You said it was worth what you cut out it's worth what

two hundred and thirty thousand okay what do you think the antiques are worth um

at least twenty to thirty thousand i would think and how much money do you have in your nest egg um maybe around sixty saved up okay good okay well because i was gonna say the other thing is my my other income comes from gas fracking

But if you ask me how much I get every year, it's a different amount all the time.

Yeah, so you had some family land that's got some oil leases on it.

Yeah, well, it's where I live.

Oh, okay.

Okay.

All right, cool.

Yeah,

you do have to sit down with somebody, so jump on.

And

I'll tell you what, Christian will pick up.

I'm going to hook you up with one of our coaches in the area and see if they can hold your hand through this, because you really need to take action on these things

because

this

buildup of stuff of situations is starting to weigh on you and we've got to get that on assuming it's her property tax too that they could come and take that i mean

i don't i mean we're talking about filing taxes so that wouldn't be so not necessarily that yeah i'm just thinking about her home yeah i i don't think property taxes would have gone 10 years in new jersey that's well that's what i think are they gonna bad they would have already been there yeah

i'm guessing this is just income tax state and federal but um yeah we just got to get you some relief, kiddo.

You're going to have to address the situation, and we're going to put someone in your life that's going to lovingly make you do it because you got to do this.

This is the Ramsey Show.

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Sabah is with us in Delaware.

Hey, Sabah, what's up?

Hi, Mr.

Ramsey.

I am in desperate need of your guidance, and I appreciate that you're taking my call today.

Okay, how can we help?

So, to give your background, I am 50 years old, have two adult children that live with me, and

have no intention intention of moving on out on their own.

When

my kids were little, my daughter, the youngest, was four,

and I got divorced.

So I shifted the blame on myself that I was responsible for the divorce.

So I kind of, and I took responsibility for this,

enabled both of them to be totally dependent on me.

How old are they today?

27, 21.

When you were little,

I saved more than I am now.

When my son turned 18, I had some receiving in his name, took up credit cards, just a credit card for him.

And when he graduated high school, his credit score was 780.

I did the same for my daughter.

When she turned 18, built her credit to 780, gave each of them their credit cards, and told them just run with it.

Recently, I decided to purchase a home.

I've been waiting and waiting, and the market is not getting any better.

So I figured, well, I'll just go ahead and purchase anyway, whatever I have, whatever the market has right now.

So I phoned the lending officer and I asked to have my name and my two children's name on the loan.

And I got this.

Why would you put your two children on the loan?

I figure

if it's just me,

I wouldn't get the amount based on the market, the horsing market.

I'm a little bit confused because I thought you were calling me because you had enabled these children and you were wanting to stop doing it.

Pretty much, pretty much.

If you want to stop doing that, you don't put them on the loan.

Okay.

They need to be on their own

and you need to be on your own as standalone, sustainable adults.

Okay.

So how are we going to cut them loose?

What are we going to do?

I don't know.

I don't know.

Yeah, you do.

You say, I mean, you say in three months, in three months, you are moving out.

Okay.

In three months, you're going to have a job and you're going to be on your own.

You're 27 years old.

You're 21 years old.

You're leaving.

And it sounds like that move, Saba, is more scary for you than it's going to be for them.

You are so dependent upon them.

I mean, it sounds like

from an emotional standpoint and everything.

I mean, you've put so much relational stock

in them.

And you don't,

your loneliness is going to be knocking at the door

as they exit.

And so you're going to have to deal with you really for the first time, possibly.

Because it sounds like there's been some avoiding and

in a sense kind of medicating right with their relationship with you and you're detaching that so I think that this move is going to be harder for you than them

I

a little bit of both because I did give them kind of like an ultimatum for the end of the year because I wanted to

I put I could even put them on the loan because of how bad the credit has gotten so um I got approved and I'm looking like okay

I don't know why that would be a shock.

I mean, you taught these kids to borrow money and run their credit score up, and then you're shocked that they did that?

I wouldn't be shocked.

I think that's exactly what you taught them to do.

Okay.

There's no shock of your life.

I mean,

when you take a 17-year-old and you run up a FICO score by running up their credit card debt, and you teach them that that's how they're supposed to live, then they go live that way.

That's what they're going to do.

No, no, no, no, no.

I built the credit office

by borrowing money and using credit cards.

But I paid it off to built-in credit.

I know, but you taught them the best way to have a quality life is be throwing this plastic around, and then they threw the plastic around.

So absolutely.

So, yeah, I think, you know, end of the year is fine.

Three months is fine, whatever you want to do.

But you need to put a set date on it, and then you need to start asking yourself what must be true in my life for me to be okay emotionally when they leave.

And what must be true in their life for them to actually be able to eat and not be in the homeless shelter.

So we got to help them, you know, between now and Christmas, we got to have a plan.

And the great news is, is that everyone in this story gets to grow up.

Everyone here gets to have dignity, standalone adult dignity, for the first time

ever.

And

first time since you had a four-year-old for you, and it's first time for them,

because they don't have the dignity of being a standalone adult.

They're, you know, stuck in their mother's mess.

Yeah.

And weirdly, you guys are kind of the same age financially as you continue to learn how to handle money because it sounds like, say, but, you know, getting even just the basics

principles, the common sense principles that we talk about on this show implemented in your life is one of the first steps.

So if you hold on the line, Christian's going to pick up.

And we'll just give you guys like three copies of Total Money Makeover.

I think just starting from the basic

and learning the baby steps.

And all three of you guys will be learning this at the same time.

But that's a, I mean, that's a beautiful gift of, you know, the humility to say, kids, I did this really wrong.

And the way I taught you and showed you how money works.

Yeah, I got bad news.

We're going to do the opposite.

The good news is you're getting ready to be a grown-up on your own.

The bad news is you're getting ready to be a grown-up on your own.

And so, yeah, that's.

And that's not a bad mom move.

No, that's a good mom move.

Yes, exactly.

So don't have the shame and the guilt around.

A good mom's going to say, I made a mistake and I'm gonna fix this.

The bad news is I made a mistake.

The good news is I'm gonna not make a mistake anymore.

Amy's in New York City.

Hey, Amy, what's up?

Hi, Dave.

How are you, Rachel?

Thank you so much for taking my call.

Sure.

How can we help?

So

my husband is being relocated from New York City to Tennessee, and we're preparing for this big move in our life.

We've got quite a bit of equity in our home now,

and we're looking at neighborhoods.

And I'm trying to figure out, would it be best for us to try to find a home where we could pay for it with little to no mortgage, but we would probably have to do some work and fix things?

Or is it better to take out a smaller mortgage,

move our family very far?

How much equity are you coming out of New York City with?

About $600,000.

And where in Tennessee are you moving?

We're We're going to be looking outside of Memphis.

Okay.

Well, suburbs of Memphis, you can buy a $600,000 home

that doesn't require repairs.

Yeah, so we're looking at school districts.

So we have three littles.

So based upon kind of school districts.

Yeah, Collierville, you can do $600,000 house.

Can you now?

Germantown and all that area?

I don't know.

I mean, that does.

That is actually where we're going to go.

Those are very nice suburbs.

And

I know you want to get your kids.

Yeah.

The median house price in America is $441,000.

That's the middle in America.

Memphis would be sitting right in the middle.

And so that's the median house price.

Have you looked, Amy, at those houses?

I mean, have you guys?

I've just been looking online.

So we've been looking online and we've been working with an agent because we have a trip booked out there in three weeks.

That'll tell you a lot.

That's going to get you there.

I think you can make this work.

You may be a little bit further out.

It may be a different school district maybe than the one you thought, but you haven't even been there yet.

So go there, drive around, figure out what's going on.

The beautiful thing about Memphis is as you come east,

you know, it really, you know, out into the more rural areas at just, you know, an hour or 45 minutes outside Memphis, you get into some really cool areas.

And I think the school districts are going to be very solid.

I don't think there are going to be any issues.

You're far from an an inner city experience there.

And so, but you go look at it and figure it out.

Yeah, and for you guys long term, just to know.

But I'm going to have the goal of paying cash.

But I mean, if you end up with an $800,000 and a $200,000 mortgage and you're paid off in two years, it's not the end of the world.

But don't start with the assumption that I have to buy a fixer-upper.

That's not a fair assumption when you ain't even been there yet.

So let's go and gather actual data and look at actual properties and look at actual neighborhoods and you know work the process.

You've got to get some market knowledge,

drive times, school districts, those kinds of things.

And when you get that, it's going to start to the answers are going to start to come to the top.

And you're going to be fine.

It's going to end up being a great move for y'all.

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

Hey guys, how are you?

Great.

Great.

Honored to be here.

Honored to have you.

Where do you all live?

Fort Wayne, Indiana.

Oh, fun.

Well, welcome to Nashville.

And how much debt have you two paid off?

$600,000.

Oh, my gosh.

How long did this take?

About seven years.

Good for you.

And your range of income during that time?

Started around $130,000 and up to $270,000.

Cool.

What do you all do for a living?

I'm a registered nurse.

And I'm a CPA in corporate finance.

Awesome.

Very cool.

So I'm going to guess seven years and $600K, you might have paid off your house.

That's correct.

Wow!

Look at that weird people.

You got it.

No mortgage.

Oh, look how pretty.

How old are you guys?

I'm 33.

Wow, it's a nice house.

Thank you.

And it's a paid-for house at 33 years old.

What's this house worth?

About $800 to $900.

Cool.

Oh, my God.

Cool.

And I'm guessing that you also have investments.

We do.

About what?

So, retirement, we're around $700,000 currently and have a couple hundred thousand in liquid brokerage.

Yeah, so you're approaching $2 million net worth.

All right.

And you're 33 years old.

That's pretty stinking incredible.

That's amazing, y'all.

Way to go.

I love weird people.

Normal's broke.

You guys are like millennials that are millionaires.

This is so fun.

I'm so proud of you.

Way to go, baby steps millionaires.

Excellent job.

All right, so 600,000.

How much of that was the house?

It was, that was the house entirely.

That was it?

Okay, just straight up.

Let's kill it.

Let's kill it.

Let's kill it.

Seven years.

So almost $100,000 a year.

Boom, boom, boom.

While you live life.

Yep.

I mean, and sometimes live it on not much.

I mean, if you started at 130, I mean, you guys were yeah, we picked up some steam as we progressed through our careers as well and started to add a bit more as we went.

But we've, we're pretty intense.

So when we've, when we have a goal,

we tend to go after it pretty hard.

I can tell.

Yeah.

So six years ago, what started all of this then when you guys were like, we want to pay off our house, which sounds insane to most people.

Right.

So in your mid-20s, you know?

Correct.

Wow.

So I mentioned we're fairly intense, but we had a starter home very early in our marriage.

So we really started our debt-free journey a couple of years into our marriage.

And we had a dream.

We call it our five-year dream.

And our dream was to not only pay off our starter home, but to build towards

a strong down payment towards a larger home that we could

have our growing family

grow and just love a new home where we can spread out.

So we have three little girls, and they've really been our inspiration for so much of what we've done.

So sweet.

Oh, my gosh.

So they were born through this process, but I don't think they're seven yet, right?

That's right.

So they were all through the paying off the house journey.

They've been part of the journey all along.

So how did you get tied into the Ramsey stuff?

So initially, one of our employers early out of college offered your Smart Dollar program as part of the benefits package.

And so that got us really very early in our marriage engaged in terms of how do we combine our finances?

How do we get on the correct track?

So much of what has been part of our journey is, again, making a goal and

going after it, but also having that disciplined approach.

We were both athletes in college and goal-oriented people.

She was the better athlete, I do have to add.

So I've been chasing her all along.

But when we have a goal, we just go for it.

And we tried to make as much of our investing journey and debt payoff journey as automatic as we can.

And that's something that we started very early in our marriage.

So

we've really been all in on debt payoff and then investing into our retirement plan just from the beginning and having that part of our natural rhythm of

following the baby steps from back in the smart dollar days when you were with the other employer.

Exactly right.

And then plug into the podcast, I assume, and other stuff.

Correct.

That's right.

So there's a lot of people on that four, five, and six journey where they're throwing extra at the house because baby step two, right?

We talk about scorched earth.

You do nothing, you live nothing.

And then once you hit baby steps four, five, and six, you know, you can kind of ease off.

So I know you guys are intense people, you said, but was there any, like, what was the balance?

We people ask us this a lot of like, okay, so how do we know?

Like, is it okay to go on vacation?

Sometimes we're like, yes, enjoy your life while you're throwing extra at the house.

How did you guys manage and balance that?

Right.

We made sure to make sure our girls had what they needed first.

And

we just, we followed the every dollar budget plan and we saw where our money was going.

And if we had extra,

we just kind of weighed, should we go on vacation?

Should we put it at the mortgage?

We kind of just, you know, made a plan that way and took it month by month.

And we're here now.

It's amazing.

So what was the sport, Lindsay, that you were so good at?

I was a softball player.

Oh, okay.

All right.

He was baseball, so kind of.

Oh, there you go.

It just matched.

In the same family, this.

Fun, fun stuff.

Well, congratulations.

Thank you.

Okay, so goal-oriented, intense.

You follow the Every Dollar Plan.

You work together, obviously.

A A lot of communication, I can tell.

Yep.

Because you really are in sync on this.

And

you can even see it for those of you that are listening rather than watching, after doing debt-free screams for all these years, we can sometimes see the body language, you know, how much you're in sync.

And you guys are dialed in.

There's no question about that.

Like you said, laser-focused.

Is there anything else you would add to say, okay,

if I want to be out of debt, house and everything, in my 30s, and be approaching a $2 million net worth, What's the key?

What are the two things, five things, whatever that they ought to do?

I think just knowing that you're going to have to work hard, make compromises, sacrifices along the way, if you have that goal, if you have that dream,

make a plan to get there and just work hard.

And

it pays off.

If your goal is worth having, then it's worth the effort to put in.

I have a sense with y'all that

you have a system in place that

kind of the system, once you stuck it in there, was intense.

Yeah, because you you said automatic.

But you automatic and all that.

And then that also left you some room to have a good life.

Yes.

And I mean,

I don't have a sense you lived in a cave and collected limbs.

No, no, not at all.

We just made it a point to live below our means.

We just, you know, didn't,

we weren't really extravagant people.

We didn't go out all the time.

We were kind of boring in that sense, but we knew what we wanted and we thought that was more important.

Yeah.

We've been made fun of being a little tight, but

the beauty of it is for the next,

the rest of our lives together, we'll be able to grow and

live and give.

How did it feel when the first month you didn't have a mortgage payment?

And you were like, there's no money.

There's no money to throw at anything.

Like, we need to take some money here and there's no payment.

We were kind of confused.

We were like, what do we spend it on now?

It's an odd feeling, but it's a blessing, and we're excited about the future for sure.

What's the first big thing you're going to do?

Well, we've been here in Tennessee.

We were over in Pigeon Forge for a few days with the young ones, and the young ones don't know this yet, but mom and dad are going to take a little Caribbean trip here in the fall.

So

there we go.

Now we're talking.

I get to spend time with grandma, so that's fine.

That's good.

They'll love that.

They'll love that.

That's right.

And so, well, bring them up and let's introduce them.

What are their names and ages?

Rachel's right.

They're cute as bucks.

That is so sweet.

So we have Aubrey, who's six, and Hallie is three,

and then Natalie is 18 months.

Oh, my goodness.

And that's a really good why right there.

Why you would be intense, why you would be intentional, why you would make decisions to compromise on things.

And because those kids right there can do anything they want to do the rest of their lives because their mom and dads are champions.

Look at these, the two little ones.

They've had their arms around each other.

They're ready.

They're ready.

They've been working on this.

I love it.

Very good.

All right, Jamin and Lindsay, Aubrey, Hallie, and Natalie.

Girls, y'all ready to scream I'm dead free?

They've been practicing.

All right, here we go.

$600,000 paid off in seven years.

House and everything.

Babysteps millionaires in their early 30s.

Count it down.

Let's hear a debt-free scream.

Three, two, one.

We're debt-free.

Oh, my gosh.

Oh, guys, you have to understand

that that middle one right there, when she is

30 years old,

she's going to start to realize that the price her mom and dad paid has allowed them to become worth $30 million,

$40 million.

It's where they're headed.

Those of the mom and dad have completely changed their family tree.

They've completely

changed their family tree.

Peace, complete peace.

That money will never be a subject of stress and struggle.

There's such a way.

Never control.

And that's the example they've set.

It's perfect.

It's amazing.

It's just perfect.

If you were gone tomorrow, would your family know where your important stuff is?

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Buying or selling a home is a big deal.

And with all the clickbait headlines that are out there and the conflicting data and the drama, it's hard to know what's really happening.

Let me tell you, anytime you see much drama on something, you need to go to facts, hard data.

Facts are your friends.

And we're here to make the latest trends easy to understand.

Median home prices stayed steady last month at about $441,000.

That's a middle of house prices in America right now.

And it's been going up about $1,000 a month.

It's really not moving much,

but it's not going down.

The number of homes for sale hit over a million for the second month in a row, and this is the first time we've had that much inventory since 2019, but we still have more demand than inventory.

So again, prices are not going down.

Buyers have more options and they have negotiating power because sellers are facing more competition.

That's good.

The average 15-year fixed rate is still under 6%.

That's good.

To learn more about the housing market trends and get free tools to help you buy or sell with confidence, go to ramseysolutions.com slash market or click the show notes if you're on podcast or YouTube and we'll help you out.

Brendan is in Boston.

Hi, Brendan.

How are you?

Well, I'm good, Dave.

How are you?

Better than I deserve.

What's up?

So for the last 11, 12 years, I have been working two jobs.

One, like a,

let's call it my main job, 40 hours a week.

The other was like a real side gig that I ended up growing and

makes roughly the same amount as the main job.

So what do you make?

Right now, I make myself, not including my wife, I make around $215 a little.

There's a commission in there.

So this year it's looking like $215,000.

And that's the two jobs combined.

Correct.

Okay.

And your wife makes what?

She makes $60,000.

Okay.

She have a $265,000 household income in Boston, Massachusetts.

All right.

I'm with you.

Correct.

Yeah.

So

I'm really looking to slow down.

I've been waking up 4 a.m., 3, 4 a.m.

for

years, and it's getting to a point of like, all right, you know, I don't think I can do this for much longer.

So we ended up saving

about, we have in savings a little over a million dollars.

Good for you.

So

at this point,

the only debt we have, we never have credit card debt.

We haven't had that in like 10 years.

The only debt we have is two car leases, and they're relatively cheap for what what we could technically afford.

And then the house, which is around a little tiny bit under $400,000 left on the mortgage.

We bought the house at $650,000,

$645,000, actually.

And it's saying it's worth $9.20, but

let's call it E50.

Okay.

So I feel like we've been doing good.

And to be honest, like.

How long have you been making $265,000?

This year is probably my best year.

Last year was just under.

Last year was like $190,000.

I mean, you've been making roughly this kind of money for 10 years?

I would say, no, no, no, no, no.

Like

the last four years.

Well, you've done a great job of saving.

You've not done a great job of buying cars.

You bought

cars the most expensive possible way.

So, well, the million dollars is just in a savings account, like a high-yield savings account?

No, no, no, no, no, no.

No, no, no.

It's spread throughout index funds mutual funds um all sorts of things okay so what would happen if you paid off the cars and paid off your house

we would have 600k

yeah 600k

we thought about that and we talked ourselves out of it we have a 2.75 mortgage why so why do you want to stay in debt

well i

It is too, at least in our thought process.

If you could borrow another $200,000 and put it into mutual funds and be further in debt on your house, would you do that?

I wouldn't, no.

Okay, then why not pay it off?

It's the same thing.

I know, I know.

And it's like,

but to me, I'm like, okay, if I put it in an index fund,

let's say 80% of the time.

I've been doing this 30 years.

I've never talked someone into paying off their home that call me back hating me.

Ever.

Ever.

I mean, yeah.

All right.

and and we did we've done stuff and here's the second piece okay we've done the largest study of millionaires ever done and you're a millionaire you have a net worth of over a million dollars way to go but the number of people that are millionaires that told us the way i became a millionaire was i borrowed on my home or i didn't pay off my home so that i could do bigger investing is really close to zero The vast majority of the millionaires we interviewed said, I got my home paid off and I used the extra cash flow to increase my investments.

Right.

And that became, and I had the peace of mind, and I wasn't working like a stinking dog.

Man, you work like a dog.

You work like an animal.

And you have been for a long time.

Yeah, I mean, that's my second thing.

So now,

let's say, okay, I built this.

As I referred to it, my main job, I make about 115.

The other one, I make about 100.

So I built this other thing up from absolutely nothing to

what is it?

It's influencer marketing.

So

my friends own a company

years ago.

They asked for help.

They didn't know what to do.

People wanted to work with them.

They didn't know how.

I had no clue how to do it, but I've been in sales my whole life.

So I figured it out.

In six months, I turned it into like millions and millions in revenue.

Way to go.

I'm so proud of you.

All right.

Hey, listen, here's what I would do if I were you.

I'm going to solve for peace.

Before, for the last decade, you were solving for income and you did it very well and you saved it very well.

Congratulations.

I'm very proud of you.

But now I'm going to solve for peace.

You've lived like no one else.

Now let's live like no one else.

And here's how that sounds.

If I woke up in your shoes, knowing what I know today,

I would become very, very wealthy by using this formula.

First thing I would do is I'd pay off my house and my cars.

The second thing I would do is I'd hire someone and begin to train them in the influencer world so you don't have to work all the time

yeah i thought about that actually and that and that's your side gig right that's the hundred thousand so quit

and quit the day would you quit the day job not yet i'm gonna grow this business to be 300k i'm gonna grow this business to the top line of 300k and then i'm gonna quit the day job but i'm also gonna quit doing all the stinking work by myself

You have earned the margin to do that.

So train somebody.

This other one seems way more liquid.

But there's no sense in giving up $100,000 right now.

We don't want to do that in in this conversation.

You can do that later.

Right now, give up 40 grand or 50 grand by hiring a kid that knows more about this stuff than you anyway, and put them in there and start training them how you turn this into money and show them and let them carry some of the weight of this.

And you don't work like a dog, but you don't have to give up the businesses and you don't even have to give up the day job.

And two years from now, if you grow it enough, then you give up the day job.

Yeah, yeah.

But right now, you need to get off the treadmill.

You're tired.

Yes.

Solve for peace.

yes yeah and i would just be curious to keep kind of pushing on that brendan that run a budget if you guys had no payments house cars nothing and what she's bringing in and then just one of these jobs right that you're at about 175 then you probably and just and just do the budget and just see i mean it just like at least frees you up to gosh to not wake up at yeah 3 4 a.m every day definitely not going to keep doing what you're doing if you keep doing what you're doing you're going to keep getting what you've been getting which is tired.

So you have worked like your butt off and you've earned the right to bring someone in under your wing and start mentoring them.

You've earned the right to be debt-free because you worked your butt off.

That's right.

And it's always funny to me because it's the number one pushback we get when we tell people to take money out of your investments and pay off your outs.

So they start talking about the spread.

I can get 8% right.

And he started into all of it.

And it's always telling to me whenever we have our live events, whether we're with, you know, 1,500 to 3,000 to 4,000 people.

And we will ask the question somewhere in the content of, okay, how many of you all have paid off your home?

And you've been doing this for three decades.

So in the crowd, there's usually there's a good portion of people that are there.

30%.

And so people are raising their hand.

And then we always ask them, okay, leave your hand up if you regretted it.

And never once in a sea of people that have done it, never once has someone kept their hand up and said, I so regretted paying off my house.

Because the truth is.

Listen, if you're paying off and you hate it, you you can go get a mortgage.

As I said, you can go borrow back on your house if you absolutely hate it.

So

trust me, Brendan, they'll help you do that.

They'll help you do that by Friday.

It takes about 20 minutes to get you a new mortgage to me if you hate being debt-free.

I've just never, it's not, I've never experienced it in 30-some-odd years of doing this.

Yeah, hey, you're a good dude, man.

You deserve a little rest.

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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.

Rachel Cruz, number one best-selling author, host of the Rachel Cruz Show.

Ramsey personality, my daughter.

She's my co-host today.

Open phones at 888-825-5225.

Shonda is in Chicago.

Hey, Shonda, how are you?

I'm good.

How are you?

Better than I deserve.

What's up?

Yes, I called in to get some financial advice.

I'm a single parent.

I have about

$185,000 in credit card debt, but it's from personal and business business combined together

195,000 in credit card debt

what the crap did you buy Shonda

okay so I lost my brother in 2020 and so it was hard for me um to go back to work so I started I also started a business um

and starting up the business, it started kind of slow, and so I was using the money to basically pay for bills.

Did the business become successful?

It did, and I is still slow.

Okay.

So it failed?

Yes.

Are you still doing it?

Yes.

And what kind of money does it make?

What kind of money does it make?

Maybe

$600 a month.

$8,000 a month?

No, $600.

$600 a month.

Okay.

Yeah, that's different.

Okay.

What is the business?

It's credit repair.

And

how do you spend money on credit repair?

I'm spending money on it.

I mean, you said...

So, you mean you were borrowing money to eat because you weren't making a living?

Yes.

Yes.

And not only that, I was investing in different things with the money as well.

Like, basically, I try to do the flipping the homes, and I was pulling money off the cost to do that.

So it was like I was losing money trying to do different investments.

What are you doing now for work?

I was paying my business with you.

I worked in security.

And what do you make?

$40,000.

What's the most money you ever made in your life in a year?

$60,000.

Okay.

All right.

I have a degree in criminal justice.

Okay.

All right.

Is this all the debt you have, Shonda?

Are the credit cards?

Are there any student loans or car loans?

I have student loans and a car loan.

Yes.

And I have a home.

Okay.

What do you owe on the car?

The car owe about $25,000.

Okay.

And what do you owe on your student loans?

$36,000.

Okay.

And all this is on top of the $185,000, correct?

Yes.

So my thing was, I was thinking about bankruptcy, but I was like, let me get some up there, but I don't see no other way out and look for other jobs.

That's not,

I can't really do that because I have a younger daughter that's 10 and I have an older daughter that starts college in August.

So she wouldn't be able to help as much with my child if I did decide to go and get a second job.

So, yeah.

Okay.

Well, you have a car that you can't afford, and student loans are student loans are not bankruptable.

Oh, yeah, no, they.

Okay.

So they're going to stay there no matter what happens.

And I mean, you can you could turn the car in in the bankruptcy.

And if you're going to file bankruptcy, please, God, turn the car in.

Because it's, it's just, it's, you make $40,000, you don't need a $25,000 car, period.

There's no planet that that works on.

And

so I remember being scared to death 35 years ago when Sharon and I lost everything, Shonda.

And

I was overwhelmed with the debt and the collectors calling and everything else.

And

the only thing I did right in that period of time was I really wanted to dig in and figure out

what I had done that set me up for this,

what mistakes I made,

what

philosophies or things I believed that were lies.

Okay.

And you told me two or three different things that are internet,

TikTok,

get-rich quick schemes.

Even your credit repair thing was a get-rich-quick scheme.

It's not even a viable business.

We don't do it because it's not viable.

You can't make enough to pay somebody to do it here, or I'd be doing it.

And the irony is you're doing credit repair.

That's an irony.

That's ridiculous.

And so

the,

you know, so, so,

but you've fallen for these things trying to get

to get ahead rather than developing a steady career path with your criminal justice degree and background that moves you up, up, up, up, up to where you start making some really good money.

If during the time that you tried all these things that were get rich quick things, if instead you had taken that same amount of energy and poured it into your career, you'd probably be making 100K right now.

Correct.

And that's what I, that's, if you've got to go through this kind of hell, like, and I'm sorry you're there, for goodness sakes, learn the lessons from the hell.

Okay.

And that's what Sharon and I said.

If we're going to go through this, we're going to learn what, what was broken in Dave that set us up for this fall.

And we looked at that and said, okay, why did I fall for building a house of cards?

What was driving inside of me?

What was broken?

And it was a spiritual walk in my faith,

my God walk that

allowed me to repair the insides as we were.

restarting our lives after a bankruptcy.

So if I'm in your shoes, I'm going to talk about selling my car and getting out of that.

And I'm going to talk about what I can do in the criminal justice field to add to my income and move up in my career.

And just don't pay the credit cards and don't pay the student loans for a while.

And let's see if you could get your budget set up right, even if it doesn't look like you can pay it all today.

I don't see how you can pay it with where you are today.

But where you are today is not your destiny.

Your destiny is to make more.

And so

if you just don't pay them and they don't ever get around to suing you and the student loans just stack up and the credit cards just stack up and go bad, cut them all up, get rid of the stupid car payment, get you a hoopdy to get back and forth to work and get out of this dadgum $600 car payment because you got ripped off on that thing too.

I'm positive.

And then just let your stuff just go bad.

And then as you start making some money, you could start working, you know, pay off the student loan first.

And then start working.

Well, usually they'll settle, especially with the credit cards.

The credit cards will settle for pennies on the dollar.

I mean, you could go through and settle these credit cards over the next five years and, you know, end up getting completely out of debt for $25,000 or $30,000.

But you got to, you're, that's a long way from where you are right now.

So hang on, we're going to sign you up for Financial Peace University and for every dollar our budgeting, we're going to pay for it to help you get started because I remember being scared.

And but you got to start aiming at something steady, steady growth.

Be the tortoise, don't be the hare.

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Today's question comes from Betsy in Oklahoma.

A year ago, I met the man of my dreams and we've been discussing marriage.

This would have thrilled me earlier in our relationship, but it causes me anxiety now because of his out-of-control spending.

He filed bankruptcy and worked seven days a week at two different jobs to recover from it.

Despite the experience, he is still spending close to $1,000 a month on stuff that he does not need, like clothes, music equipment, and hobbies that he hasn't taken up yet.

He is also in therapy for this problem, but makes no behavior changes.

I am scared that all the work I've put in to my own life and career over the last two decades could be impacted if it ever becomes our money, like you recommend.

What is a girl to do?

What is a girl to do?

I mean, Betsy, I think you're looking right down the

scope of what your future could be.

And if it gives you an anxiety now, not married to him, that's probably going to magnify once you guys get married.

So,

I mean, it's one of those things that money fights and money problems are one of the leading causes of divorce in America.

And there's a reason why, because people get into a marriage and they cannot agree on their money.

And it causes so much conflict and strife that it's not even worth it anymore.

And so if you are not in alignment and feel comfortable with him on this subject, then moving forward into marriage, I don't see a way that that's possible.

So, I'm so sorry, Betsy.

But I believe that there are other great men out there that could be the man of your dreams.

I know it's kind of a buzzkill in the romance world, but I just don't know if there's like a soulmate kind of thing.

I think you can be attracted and be compatible with a lot of different people.

And so,

this would just probably not end well, Betsy, from what we've seen and what studies show.

So what you're saying is, is the man of your dreams, once you dug a little deeper, is the man of your nightmares.

And so, you know,

the first few weeks or months of the romance were fun until we got to understand that the guy has basically got issues and he's immature and he's got problems and

you're going to marry a little boy.

who just buys whatever he wants to buy, whenever he wants to buy it.

And that's a problem.

It's a problem.

Yep.

I'm sorry.

Yeah.

And it's been a year.

What a girl to do.

What's a girl to do?

Don't be a girl.

Be a woman.

What's a woman to do?

She wouldn't put up with that crap.

There you go.

Dave's marriage advice 101.

I'm telling you.

It's true.

I mean,

you think about powerful, confident, strong women.

They don't put up with this kind of garbage.

And

that's what you want, by the way.

And

it is.

It's the immaturity to me.

Yeah.

That's what it screams, is that.

And the idea that there's not going to be stability.

Musical equipment and hobbies that he hasn't actually taken up yet.

Yeah.

This is that sounds like a 16-year-old.

Oh, I was going to say my eight-year-old.

Yeah.

No,

she's way sharper than that.

No, she's my spender, though.

That's my thing.

Is what I'm saying is I'm like, she, you know, it sounds like a child to the point.

I'm like, it's with no consequences, is what it sounds like.

Except he did.

He filed bankruptcy.

And then filed, and then is in therapy, but doesn't change behaviors.

So there we go.

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John is with us.

John is in Raleigh, North Carolina.

Hey, John, how are you?

Good.

How are you doing?

Better than I deserve.

What's up?

Great.

I'm a college football coach.

I've been coaching for about 16 years.

My wife and I have been on the plan since 2018.

Fast forward seven years and we're in Baby Step Seven, also Baby Step Millionaire.

So we are fully on board.

Congratulations.

Way to go.

Thank you.

Yep, we're fully on board.

My question today centers around whether we should buy a home.

I called you about three years ago, and we were renters at that point.

And really, my worry was, hey, we move a lot as coaches.

Should we buy a house or should we just stay renters?

You told us to buy.

You know, we're sitting here three and a half years later and we paid that starter home off.

But now

we've got two little girls.

Mama wants a new house and she wants a bigger house.

And really to keep it simple, my worry is that we are going into year four here at this current job.

If we do move, My worry is that we move and then we've got to move

again really quickly.

And her worry is that if we don't move we look up and we're here for 10 years and we're still in the same three-bedroom townhome yeah so that's kind of the the question is a philosophical one uh on what you think well you know the current house is worth what

uh 460 470 and the uh the upgrade house is worth what

we're looking at right around a million okay have you got the 600

no sir so you're gonna have to go into back into debt yes sir in that case.

Okay.

How much do you guys have in savings, John?

Nothing.

Everything we've got is, you know, other than our emergency fund, everything we've got is in the home equity and,

you know, IRAs and retirement.

Okay, okay.

How much do you make a year?

Together, right around 500.

Okay.

So really, in a short period of time, you've done this with this fabulous income?

Yes, sir.

Okay.

All right.

No, I would not move up in-house right now.

You don't have any money.

And when you can save up and put a bunch of

at least half of the move up in cash, I would do it.

And take a small mortgage, maybe.

That would fit.

But I do not want 100% of your net worth tied up in your house.

Gotcha.

And currently we're right around half and half, just like, you know, the studies always show.

I'm sorry.

Where's the other half?

We're 500 or 450, 460 in-house, and we're in 500 or so in retirement.

Oh, in retirement accounts.

Okay.

All right.

Okay.

Then it's not 100%.

Okay.

That's not as concerning then.

But, I mean, you have absolutely no cash to put towards this transaction, is what you're telling me.

No, and this question is assuming that we would have

our home equity plus cash to throw towards it.

Let's say you're going to move from 400 to 800 and you put 200 cash with it and took a 200 mortgage.

I'm probably up for that one.

Gotcha.

But right now, you're just financing 100%

of a want

upgrade.

And it's not getting to do with the stability.

It's just got to do with the situation, with the math ratios.

That makes sense.

But philosophically, you're saying the stability doesn't matter to you.

No, because you could sell it.

Because in Raleigh, North Carolina, you could sell an $800,000 house.

Okay.

If it's an $8 million house, we might be stuck in it.

Right.

Got it.

Might not be able to move an $8 million in Raleigh real quick.

But $800,000, that's prime market right there.

You can sell that thing in 30 seconds.

If you did change cities.

So you can turn this over.

But yeah, I think you just save for another year like maniacs with your great great income.

Yeah, and just know if you did take another job, like if you did worst case scenario and the fear happens, oh my gosh, we get, you know, we have to move.

You sell it.

Well, you sell it and, or if it doesn't sell right away, just go rent somewhere so you don't have two mortgages until it sells.

Right.

I mean, like, there's still, there's still ways to be able to do it and handle the situation,

especially with that, yeah, with Yell's income.

So you, you would land somewhere and an $800,000 house will sell until it does sell.

You're a renter in the new city

if that scenario goes down.

But I know I don't want to finance 100% of an upgrade that's a want.

Her desire with your household income is reasonable, but you guys just haven't executed on your plan long enough yet to be in a position to do that desire.

Yeah, but in the next year or two, you guys could be there.

I would save a couple hundred a year.

Yeah, for sure.

For sure.

You know, if you watch what you're doing, you ought to be able to if you're making 500.

And so, yeah.

And so let's talk about that.

Let's talk about not doing big,

crazy, wild, out-of-control vacations that do small, inexpensive ones.

Let's talk about other expenditures in the household that are,

you know,

some of them are reasonable and some of them are not.

And

let's talk about we want a house bad enough to not do some of those things and limit the household budget.

And

not on beans and rice, but just being very intentional and saying, got this great income.

We're going to focus it on.

I mean, God forbid you live like you're making 200.

You bank 300.

I think we're doing pretty good, right?

Yeah.

I think you can do that.

Pretty good place.

For a year.

Dale is in Memphis.

Hey, Dale, what's up?

This is great to talk to you.

I'm really excited.

I have an issue to decide whether to pull out of the market and put everything in annuities.

Oh, no.

Who would tell you to do that?

Well, I've got two brokers.

They're kind of dueling a little bit.

My IRA is with, I don't know if you want to give the name, one company, and I've got a money market account with the second company.

And I was commenting to my broker, Jared, at the second company, that I need to start taking some money out.

And so he got on the ball.

He wants my business, basically.

So he's come up with a plan to take everything out of company A and put it into annuities in a four-step plan.

Have one that matures in one year, some at two, and some at three, and some at four.

The second guy is not a financial advisor.

He works for an insurance company.

He's going to be making a lot of commissions off you, Dale.

That's what I

just, I don't like annuities.

No, I'm doing

it.

No, no.

Second guy's fired.

Well, that's easy.

Probably before he got hired.

No, I mean, he's an insurance guy.

He's not an investment broker.

Okay.

The reason he wants to put you in annuities is he can't sell mutual funds.

He's not licensed to.

I was not aware of that.

Yeah,

that's how I know why he's pushing annuities.

Very few people push annuities in the financial planning world unless they're insurance people.

Even variable annuities.

Variable annuities are not horrible, but that's not where you should be first and foremost.

There's very little flexibility there.

How old are you?

70.

And how much money is that?

Okay, in my IRA, I've got $630,000.

Money markets, $146,000.

I could give you a complete breakdown, but not a money.

No, you don't need to be in annuities unless you're just scared to death or something, and you don't strike me as that.

You're just trying to figure out how all this works is what strikes me.

So let's go back to your first guy and talk to them.

If you want another opinion, you could go to ramseysolutions.com and click on Smart Vestor.

Talk to one of our Smart Vestor pros in the area, and they will teach you why I'm yelling no annuities.

Annuities are not evil.

They're not bad.

The variable annuity is a mutual fund inside of an annuity.

It has some advantages, but it has a lot of flexibility issues.

You can't get to the money.

It's very difficult to get to it inside of seven years.

And you're 70 years old.

And so if you're wanting to access the money, you want to move some of it into a one-year, some of it, you don't need to do all that.

If you just put it in mutual funds, you can just get to it whenever you want to.

I'm 64.

I've got total access to everything.

And you're past 59 and a half.

That's what I'm saying.

Any of it I want.

Tap into that Roth.

Yep.

And I can do whatever I want to do.

I don't touch any of it.

I don't need any of it.

But I mean,

I've got complete flexibility.

If I want to cash a bunch of it out and go buy a big piece of real estate, which could happen, I might do that because I'm a real estate guy.

But anyway, but no, I don't have it tied up in annuities.

There's just very few times I'm going to put somebody into an annuity.

The variable annuities have some good elements to them.

We can talk about that later.

but you don't need them, Dale.

And I smell an insurance person's blood smell.

Yeah, have a certain tint to it.

You can smell it from here.

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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.

Rachel Cruz, number one best-selling author, host of the Rachel Cruz Show, Ramsey Personality.

My daughter is my co-host today.

Ashley is in Baltimore, Maryland.

Hi, Ashley.

How are you?

I'm great.

Thank you so much for taking my call.

Me and my husband are big fans.

Well, we're honored.

How can we help today?

So me and my husband have been married for about 12 years.

We have two beautiful children, and we are on our third.

Basically, we came to the terms that you're famous for saying is we're sick and tired of being being in this place.

We've really buckled down.

We got rid of everything we could possibly think of without it being the kids.

And I feel like I still don't know what I'm doing.

He's working as much as he can.

He has really changed his amount that he gets per month and per year, you know, over the past four years.

He's currently looking for a new job.

And basically, my question is, is what more can I do that's not all just going to bills bills and there's nothing left over.

So what is your household income?

Our household income gross is about $79,000 a year.

Our tax return last year was about 80.

My husband is a shop foreman, so as far as overtime, bonuses, things like that, it's no guarantee.

Was 80 with some extra bonuses and things included or was that pretty much just standard last year?

That was standard last year.

Right now, I have it at $79.8 per year.

That's that $56 gross with just regular 40 hours and 10.50 gross for 20 hours overtime.

That puts it at about $66.50 gross per month.

What's your house payment?

We rent.

We've always been renters.

We've never been homeowners, unfortunately.

Our rent is $2,250.

Okay.

And how much your car payment?

We had two cars.

We actually gave up one, and we're down to one car.

It's $5.76.

We owe a remaining balance of $11,520, and we will fully own it on February

27.

Okay.

And you're a full-time mom?

I'm full-time mom.

I was working.

I was an optician at a vision center, but my pregnancy for my first trimester was horrible.

I was literally puking on my brakes and in between patients, and I had to leave my job.

And our school, unfortunately, did not offer child care.

It would have been almost $6,000 for three months while the kids were for summer.

Yeah.

What other debt is there, Ashley, besides the car?

Just the car.

And obviously, the car we gave up.

We're waiting to hear back how much it will sell at auction for how much we will owe on it.

I believe the balance when we did give it up was about $12,000.

So you voluntarily repoed it?

Yes.

I know it was horrible, but it was I didn't know what else to do versus

Yeah, because you felt like you guys couldn't make the payment.

Was that the urgency of it?

Exactly.

We moved about two years ago into our house now

because the kids were getting older.

My son and daughter is eight and just my son just turned 11.

They needed their own separate rooms.

And where we lived to where my husband works, it was about an hour and a half commute there and back.

in addition to going to and from all of their schools with both cars and we said you know what let's get rid of the second car let's move closer.

Let's cut everything in half.

Mom won't need a car.

I'll just walk to the bus.

You know, I'll grocery shop when we get off of work, and we could just do this.

And

it was a decision that we felt like basically he was going to come home to go to work one day, and the car wasn't going to be there, anyways.

So let's voluntarily give it up.

Okay, and you guys bring home.

What do you bring home a month?

Not gross, like after tax.

Take home is $5,276 a month on average.

And that's with the 40 hours plus the five hours over time.

Sometimes it's more, sometimes it's less.

So what's hard is almost half of your income is going to this rent.

Yes.

That's why there's no room in your budget.

Yeah.

Exactly.

And basically, I've turned off everything that I can turn off.

You can't turn off enough stuff to have 50% of your income go into housing.

You cannot afford to live there.

I don't know what else to do.

You cannot afford to live there.

I don't know what else you do either, but you cannot afford to live there.

You cannot have a house payment or rent that is 50% of your take-home pay and be anything but where you are right now, which is stressed.

There's no amount of cutting that is going to make that work.

Even getting rid of that ridiculous car payment is not going to make that work.

And so if you had no debt at all, it still doesn't work.

There's no room in your budget.

Your house.

Yeah, you should be having an extra thousand dollars a month.

So I don't know what the answer to the equation is.

I don't know whether you're going to move from Baltimore to another city.

I don't know whether he's going to change jobs.

I don't know what the equation is.

But what you're doing is not sustainable.

Yeah, he's actually on his way to a job interview today because another kicker that's really stressing me out is he works for a small company and he has no benefits.

We are 32 years old and he has a no 401k.

I'm not worried about that.

You can't eat

right now.

You did a voluntary repo on a car.

That's a long way from worrying about a 401k.

And so right now, you've got to either

he's got to have his income go up dramatically and or you guys got to move.

Okay, last question.

How can I move with our credit being as low as it is?

You just did.

You moved into a house you couldn't afford with your credit being as low.

Well, we had somebody co-sign for us.

That was the only way that we can do that.

So is that something that we do again to be able?

No, I wouldn't do co-signing.

And see, you know, so what we're saying is you took a house you couldn't afford, and now we just proved it because they wanted a cosigner because the people that rented it to you knew you couldn't afford it.

So they're counting on the cosigner because they looked at your budget and they shouldn't have rented to you.

I wouldn't have rented to you because I don't want your problems if I'm the landlord.

And

that's what you guys are going to be.

You're going to be a problem before this is over.

So

I know you don't like this, and I know you wish I wouldn't tell you the truth, but I love you enough to tell you the truth.

You cannot afford to live in that house unless his income goes up substantially in the next three months, like a lot, almost double.

Okay.

Your house payment should be somewhere around a fourth of your take-home pay, and especially when it's rent.

And so

I don't know where you guys are going to live.

I don't know if it's Baltimore.

I don't know if you're leaving the city.

I don't know if he's coming to a completely different area of the country.

I don't know what you're doing.

But I do know that what you're doing will not work over the next 10 years.

You're going to crash and crash and crash and crash, and the stress that you feel right now is going to be a constant thing.

And it's because you took out too much house and stupid car payments.

Those two things have got to go.

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if you're tired of living paycheck to paycheck and feeling like you can't get ahead join one of our free every dollar trainings there are new trainings every week this month and they're all hosted by one of the ramsey personalities tomorrow's george campbell by the way and you get signed up for that i think there might be room on that one still uh we're going to show you how to stick to a budget and even find an average of about $9,000 of margin.

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Josephine's in Tallahassee.

Hi, Josephine.

How are you?

I'm doing well.

Thank you.

Thanks for taking my call.

Sure.

How can I help?

So,

my husband and I are in disagreement about whether or not to gift one of our kids money.

And one of us feels like

we have been generous to them financially, and it's time for them to stand on their own two feet.

And the other one of us says we have much to be grateful for and we have money and we should gift them the money if we can afford it.

So

neither one of you are right.

Yeah.

Both of you are wrong.

You know why?

Because neither one of you said, what's best for this kid over the next 20 years.

One of you said, I've got some money.

I'll just throw them lollipops.

And the other one said, I don't care.

They just stand on their own.

Neither one of you asked the question, what's best for the kid?

Okay, what's best for the kid in this situation?

Yeah, that's what I'm asking.

So, yeah.

So we're retired, quite comfortable financially.

We are on baby step seven.

So you've got the money in question.

How much money are they asking for?

Well, they're not asking.

Okay, how much money are we proposing?

I'm proposing $30,000.

Why?

What do they need $30,000 for that grown people can't go get on their own?

Okay.

So

my daughter married someone with considerable student loan debt.

And

they have

not been attacking it with gazelle intensity in part because they keep being hopeful like many young people are that their loans would be forgiven

and so they're kind of not paying on it aggressively and my son and they they live

frugally I would say they live in a modest house they don't have any car payments my son-in-law has been

driving a beater for the last couple years and my daughter's car is starting to have some significant issues so they they have to replace their cars and they don't have the money in the bank to

do they not make any money to different vehicles.

They do make money, where's their money going?

If it's not going to student loan, it's not going to cars.

Where's it going?

Well, they have two kids, so I don't

know if they're what their income is?

I think, yeah, I think their income is about $180 a year.

You've got to be kidding me.

They make $180,000 and they're driving a couple of beaters and mommy's going to bail them out.

Come on, Josephine, did you just hear that?

Well, he has significant student loans.

I don't care.

He's not paying on them.

He's waiting on Biden.

Oh, wait.

Biden's not president anymore.

Yeah.

He's not even paying down aggressively.

He makes $180,000 a year and they're pissing their money away.

Yeah, I'm sorry, you lose the darling.

You lose the money.

Where do they live, Josephine?

Where do they live?

They live in Michigan.

So they're not in a place where the cost of living is super high.

No,

they have significant discipline issues and spending issues.

And giving them $30,000 is definitely giving a drunk a drink.

Okay.

All right.

So

just mind my own business.

It's not mind your own business.

It's okay to be a mom that loves, but

you don't want to be an enabler because the math that you just gave me is crazy.

It's crazy.

A young couple making $180,000 called me up just on the air here and said, we're driving a couple of hoopties and

we're not going to pay off our student loan debt because we're waiting on the government to do it.

We would put them on a Ramsey program called Beans and Rice, Rice and Beans, get on a budget, quit going out to eat, quit going on vacations you can't afford, go buy yourself a decent $10,000 car and pay cash for it, and then roll up your sleeves and clean up your dad gum student loan mess, be a grown-up.

That's the speech they would get if they called here.

Yeah, yeah.

Okay.

And you know why I would give them that speech?

Because I love them.

Yeah.

And you love them too.

The only difference you and I have is in how we manifest that.

What I want to do is I want to create in them habits and

systems and processes and character traits that create a sustainable life for them where they become prosperous.

That's what I want to create in them.

Giving them money when they're misbehaving with money does not do that.

Okay.

All right.

That makes total sense.

that's where we are i'm sorry i laughed so loud at you scared me

i thought you were going to tell me they made thirty thousand dollars a year or something and it caught me off guard i know i was yeah

wow wow so yeah let me tell you the nicest people on the planet are enablers they want to help and the way they want to help is they just give somebody money in a situation that they don't need to.

So it's the old, the old adage of you teach a man to fish and he has fish for the rest of his life.

If you give him a fish, he has a fish for a day.

And that's what we're talking about.

That's the difference in what we're talking about here.

Yeah, and different

scenario would be

let me tell you what I would do, Josephine.

You'd put them in Financial Peace University.

I would.

And I would match them.

And I would match them.

Oh, that's good.

Yeah.

You know, if you will, if you will go buy, if you will save up

$5,000 for a car, I'll put $5,000 with it so you can get a $10,000 car.

If you will pay down $10,000 on your student loan, I'll put $10,000 towards your student loan.

Yeah.

Up to 30.

I'm not going to do the whole stinking substantial.

We didn't ever get the number of what substantial is.

But I would do some matching to encourage the proper habits.

That's right.

Not to prop up and

encourage the improper habits.

That's right.

Yes.

But yeah, a matching plan might be.

And I'll tell you what, I'll give you, since I was so tough on you, I'm sorry.

I'll give you Financial Peace University to give to them

if you could talk them into doing it.

If you could talk them into doing it.

But if you guys will get in Financial Peace University and you'll start on a budget and you'll start limiting your spending and get control and get rid of the chaos and build a sustainable future for yourselves and for my grandbabies, I'll put up money and help by matching your positive moves

230K.

Yeah, because if the call wasn't...

Well, that's assuming your husband goes along with that, Josephine, because

you got to have peace in your house because y'all are still arguing about that too.

Totally, totally.

But if you and your husband, I would, Sharon and I would do that.

Because if she had called and said they make 50, they have been paying off debt like crazy, they're making progress, and one of their cars just died, and we want to come, we want to help them.

Yeah, you know what I mean?

That's helping them on a path that's positive.

That's right, exactly, exactly.

That's not

writing checks for misbehavior.

Yeah, which is a drunk or drink.

You don't want to do that.

So, yeah,

I want them fishing for life, not fish for a day.

Yes.

You buy the good.

Yeah, yeah, yeah, yeah.

That is hard, Josephine, though, as a mom, if you do see,

you know, your daughter, they're struggling.

And I could see if they have a lot of money, if Josephine and her husband have, I can see it is hard.

It's the nature of reaction.

But the hardest, you also know in your heart that they're misbehaving.

And that's hard, too.

Yes.

That they're not paying on the debt.

They're not doing what they need to do.

Yeah.

And they make $180,000.

Yeah.

You?

That one caught me off guard.

I didn't see that one coming.

I got hit in the back of the head like a boomer.

Hang on that one.

Oh, wow.

You can't make this day up.

I get it, Josephine.

You can't make this day up.

Wow.

Yeah, that's what I would do.

I would do matching and hang on, Christian will pick up, and we'll set you up with Financial Peace University if the kids want to do it.

I got a feeling they don't want to do it, but

maybe they will.

Maybe they'll like

the 30,000 in match.

Maybe they will.

That's assuming Josephine and her husband both agree on that.

That's fair.

Yeah.

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On the debt-free stage, right here in the lobby of Ramsey Solutions, Darren and Stephanie are with us.

Hey, guys, how are you?

Good, Dave.

How are you?

Better than I deserve.

Where do y'all live?

Odinson, Maryland.

Oh, fun.

Halfway between Baltimore and D.C.

Gotcha.

Welcome to Nashville.

Thank you.

All the way here to do a debt-free scream.

How much debt have you paid off?

$208,000 in the last four years.

Good.

Way to go.

And your range of income during that time?

$145,000 to $185,000.

all right there's that 180 thing again

so the the 200 paid off debt look at yeah i know 200 000 in debt in four years what kind of debt was this that was our house you paid off your house yes sir wow in maryland what's that house worth uh right now anywhere from 370 to 380.

wow good for you man

Rowdy.

I love it.

Congratulations.

What do y'all do for a living?

I'm in public safety.

And I'm a social worker.

Awesomeness.

Very cool.

So great, you guys.

So what made you four years ago decide to pay off your house?

How'd you get in touch with this Ramsey stuff?

So I guess the story started a little earlier than that.

Back in my early 20s, a friend of mine, during our small group meetings at the church, actually put together a financial seminar for our young adults.

At the end of that,

he gave some notes and those notes were, hey, if you need some more biblical principles, please see DaveRamsey.com.

Never went on DaveRamsey.com at the time.

However, back in 2020, something was going on in our country.

And I was doing some cleaning around the house and I actually found those notes from that conference that was put together.

Oh my gosh.

I did go on that time.

I started with the book and never turned back from there.

Unbelievable.

So Stephanie, he has a COVID obsession

with this Ramsey stuff.

He does.

You come home and go, what well i was actually home too because i was teleworking for

course yeah so um so he brings it up and i said what are you talking about we're doing what like a budget and this and that and he was like yeah we're just gonna go for it i i'm tired of paying bills and i'm tired of paying this home and we're just gonna do it and I said, okay, I looked at him and I was like, I trust you.

Go for it.

Let's go.

Wow.

Yes.

That's amazing.

Did y'all have other consumer debt during that time?

Or was it mostly just the house?

So we got married in 2017, and in those first four years, we paid off about $107,000 of other consumer debt.

Oh, my God.

That was before knowing the Ramsey plan.

So you already just didn't like debt.

Right.

So

it wasn't hard to convince you.

Right.

No, it was not.

No, it wasn't.

That is so crazy.

Okay.

And so then you guys had this lofty goal to pay off your house.

Yeah.

So it started with reading the book.

Then I then we went through FPU.

I also ran some FPU courses as a coordinator.

Oh, wow.

My wife pushed me to also do financial coach master training.

Wow.

I wasn't going to do it because of the cost.

And my wife told me I needed to do it.

So since reading Total Money Makeover, it's just been...

all gas, no breaks, and trying to tell everybody that I can about it.

Thank you.

Literally anyone and everyone.

Thank you.

We appreciate it.

I know he's bothersome, but we like him.

This is great.

Anyone and everyone he sees, he's like, come on,

we started this and you can do it too.

We're young.

We're 39 and 40 years old.

So it's, come on, our family, our siblings, our friends, you guys can do it too.

Have you convinced people or are most people like, okay, Darren?

I don't know.

We've convinced some and others have just continued to watch on the sidelines.

Yeah, that's fair.

Some of them are on the journey as well and they doing their first three or four steps.

Yeah.

That's amazing, you guys.

That's good.

Incredible.

And a a paid-off house at 40.

Yes, at 40.

How does that feel?

Amazing.

I asked the next month, I said, so can we get more fun money now that we don't have a mortgage?

I need to go shopping, obviously.

Here, here.

So what's the first, seriously, what's the first big thing you're going to do to enjoy the money now that you've gotten out?

So we have been traveling a lot.

So I think that's instead of thinking about paying the mortgage every month, it's kind of where are we going next?

And that's kind of what it's been.

What's the coolest thing you've done travel lately?

Well, we just went to the Final Four in April.

That's pretty cool.

Yeah, that's our tradition

yearly vacation.

Okay.

I still owe her a Europe trip.

Yes.

Okay.

Got canceled twice from COVID.

Oh, man.

So that will be up next, then, as well as a new car.

Yeah, good.

Good for y'all.

Well done.

I'm so proud of you.

And had two little ones.

Yes.

During the time, or were they

during the time?

Okay.

So part of it.

Oh, yeah, there they are.

sweet.

Our babies.

So kind of in 2020, when that happened, we had actually just made a big dumb mistake, Dave.

And we bought a new car, a brand new car.

So three months later was after I got into the journey.

And then I kind of just kicked myself in the butt because I knew I shouldn't have done it at the time.

But the 0% kind of, you know, entices you and you kind of talk each other into it.

So then after getting out of that car, then it was, we're getting done with the house.

And during that time, right after we got the car, that was when we found out that Stephanie was pregnant.

I love it.

I love it.

And it all happened all in what, four years?

So great.

And we did pay off that car pretty quickly.

It took us maybe five to six months to pay it off.

Good.

Yeah.

We were like, we're not doing this.

Come on now.

Yeah.

Get rid of it.

Yeah.

So we got rid of it pretty quickly.

Yeah.

Well, congratulations, you guys.

Okay, you're a master coach now, and your life reflects that you've been successful, both of you.

What do you tell people the key to getting out of debt is?

Really,

it's cliche, of course, around here, but the budget, the budget, the budget.

Budget is definitely not a four-letter word, despite what people acting like it is.

But I think really I was one of those doing the budget in my head.

And, you know, just we made enough.

We always paid the bills every single month.

But there wasn't that guide to really direct what we're doing before the month begins and then have a plan throughout the month every single day.

Yeah.

So good.

Stephanie?

Yeah, never give up and listen to your partner.

If you do have a partner,

keep the budget, stay consistent,

and just keep going.

And if you have a support system that's there to push you and cheerleaders, lean on to them.

Yeah.

Amen.

Good job, you guys.

Very proud of you.

Very proud of you.

Good work.

Good work.

Yeah.

Get this lady a trip to Europe, dude.

Yes.

Yes, sir.

She's ready.

And you guys have earned it.

You've lived like no one else.

And you're 40 years old and you got a paid-for house in freaking Maryland.

That's a big deal.

It's a big deal.

Way to go.

All right, bring the kiddos up here.

Let's introduce them.

I want to know their names and ages.

And have they been practicing any debt-free screams?

Oh, yes.

My son actually wrote his own song.

Oh, wow.

I like it.

This is Lucia.

What do her shirts say?

It says,

I'm also their why, and his says, I'm their why.

I'm their why, and I'm also their why.

Y'all are adorable.

Oh, my gosh.

Yesterday was DJ's fourth birthday, and today is Lucia's first birthday.

Oh, there you go.

There you go.

So, we're close together.

Yes.

Three years.

That's crazy.

Oh, my gosh.

That's wonderful.

Oh, happy birthday, kids.

Yeah, for her birthday, we let you do this.

Yay.

Well, these kids have had their whole family tree changed because mom and dad decided to work together towards a goal that was bigger than themselves.

Way to go.

All right, Darren and Stephanie, DJ and Lucia from Baltimore, Maryland area.

208,000 paid off in four years, making 145 to 185,000.

Count it down.

Let's hear a debt-free scream.

Three, two,

one.

We are debt-free.

DJ smiling.

Look at him.

He's ready, man.

I love it.

Congratulations, you guys.

We're proud of you.

Our scripture of the day is Ecclesiastes 10:10.

If the axe is dull and its edge unsharpened, more strength is needed, but skill will bring success.

Claude McDonald said, if hard work is the key to success, most people would rather pick the lock.

Michael is in Detroit.

Hey, Michael, welcome to the Ramsey Show.

Good afternoon, Dave.

Thanks for taking my call.

Sure.

What's up?

Well, my financial advisors come to me recommending structured notes for the portion of my savings that I won't be touching for five to ten years.

I'm retired, 55, no debt, about $2 million

in savings.

I've been told they have a downside protection up to 30%, and upside greater than the SP.

They can be laddered for liquidity and possibly sold through exchanges.

So I get that they're complicated, but if I do my due diligence, where's the downside?

It just seems too good to be true.

Well, let me put it to you this way: okay, I'm 64.

My net worth is

hundreds of millions of dollars.

Okay.

The amount of money I have in structured notes is zero.

Okay.

And when I meet with people that have net worths in excess of $10 million,

$20 million, which I often do,

the number of them that play with structured notes is really, really close to zero.

This is an ultra-high-risk derivative product.

It's set up to, you can ladder them, but the laddering only lowers some of the risk because that just means if two rungs break off the ladder, that's all you lose.

That's all that means.

And so you can outperform the SP simply by buying mutual funds that outperform the SP.

I do it all the time.

It's not really rocket science.

And so

this is,

I don't, I'm really confused why someone with a $2 million net worth, why a competent advisor would actually recommend something that has this much risk.

I'm appalled, actually.

Can you explain what the risk is?

So people,

I've gotten both sides of the bookheads, right?

It's mainly volatility.

It's mainly volatility because it depends on what it is.

I mean, there's all kinds of structured notes, but they're derivatives, which means they lay in the background and copy something else.

And so you can buy a structured note that copies the SP.

You can buy a structured note that's mirrored after bonds.

And, you know, but there's no point in doing all of that when you could just simply buy the SP,

you know, or just buy a mutual fund that has a 20-year track record of outperforming the S ⁇ P.

There's no reason to be in the direct background running a derivative product.

And,

you know, the risk is just volatility.

And, I mean, I don't think you're going to lose 100% of your money.

It's just the,

it's not worth it.

The juice isn't worth the squeeze as far as I'm concerned.

And I think it's highly inappropriate for an investment advisor with someone with only a $2 million net worth to be suggesting that someone play with this.

So

I think he's questionable on his fiduciary responsibility personally.

But

I would get a different investment advisor is what I'm saying.

I wouldn't stick with somebody that did that.

This guy's a player.

And are they pretty common?

No.

I feel like, yeah, I was going to say, I feel like it's not like a.

I mean, how many times on this show have you had somebody ask you that question?

Almost never.

And so,

but the reason is it's a, it's, there was a thing, what was it, what was the year?

I guess it was when the mortgage-backed securities in 2008, when we had all that crash, derivatives.

Everybody was talking about derivatives then.

Everybody was derivatives, derivatives, derivatives, which is just simply a product that lays in the background and mirrors something else.

It's a,

it comes out of, derives from derivative.

That's how the language works, in other words.

And so, but

it's not an actual product.

It's something that's trying to act like it's a product.

And the volatility is what?

When the market goes down, you lose more of it because

it doesn't mirror it exactly.

It's mirrored on a leverage plane.

And so you're going to, it's just the volatility is going to be, no, there's no sense.

We don't need to do a master class on something you shouldn't do.

So just, I wouldn't do it, Michael.

You do what you want to do.

but the, uh, uh, I don't find it to be normative to be used by wealthy people.

And so, what I, one of my things I learned a long time ago, when I went broke, I started interviewing millionaires.

And then, when I became a millionaire, I started interviewing billionaires.

And I said, How did you do that?

And, and so, and then we did the largest study on millionaires that's ever been done in North America, and we got good data there on where wealth really comes from.

And it doesn't come from playing with crap like this.

You just don't see it.

And so, um,

it's not Bitcoin.

It's not that bad, but it's just not that good.

It's not worth the trouble for the juice and worth the squeeze.

It's, you know, there's too much risk for the and volatility for the supposed questionable returns.

And so I'm no,

all of that babbling to say I wouldn't do it.

Yep, yep, yep.

Kayla's with us in Minneapolis.

Hi, Kayla.

Welcome to the Ramsey Show.

Hi, Dave.

Hi, Rachel.

Thank you for taking my call.

Sure.

What's up?

All right.

My question is, should I sacrifice time with my kids to get a second job to pay off my debt?

The backstory to that is I was once debt-free except for my home thanks to your plan.

And I went through a few traumatic things in my life.

One of them being domestic assault.

The second one was my older child attempting suicide.

So through

all of this, I

plummeted and got back into debt.

I currently owe $22,675.08 on my car, and I have a credit card for $15,440.18.

What's your income, Kiddo?

My employment income as well as child support, I gross $78,000.

And when was the last traumatic episode?

A little over a year ago.

Okay.

Because it's still catching in your throat.

I can hear it.

Oh, yeah.

Yeah.

Okay.

I'm sorry.

And you're a single mom and the kids are how old?

15 and 8.

Okay.

And the 15 year old is the one that had some mental health struggles, right?

Yep.

Yeah.

No, I'd sell my car.

But I'm going to be home for that 15-year-old.

So that is one of the biggest conflicts I'm having with this other than the other job is I drive for my job about 50 to 60,000 miles a year

and having that reliability of the vehicle is extremely important.

I know that you can find reliable vehicles elsewhere too, but with knowing that this is a good, constant, steady job, I'm really having a hard time

doing that.

Yeah.

Well, I'm going to find a good, reliable vehicle where I can get out of debt without having to work an extra job so I can be there for a 15-year-old that attempted suicide 18 months ago.

Okay.

I'm not willing to trade a car for that.

Okay.

There's not a there's not a circumstance you can make me believe the car is worth that.

Okay.

Because I think I think you want to be there with her, don't you?

Absolutely.

But I the way I'm I've been listening to you guys, maybe too much, and I'm like, I got to be so curious about this.

I need to get it it all paid off.

I need to.

Yeah, I want you to be furious, but I also want you to have proper priorities.

And right now, you've got some very fresh, open wounds in your life.

If this was four years ago and the kid was stable, I'd put you to work.

I'm game on that.

Okay.

But, but, I mean, you were talking last 12, 14 months.

You've had hell in your life.

And I want you to get, I don't want that further in the rearview mirror for you for you're not home at all.

Yeah.

And you've got latchkey kids.

Okay.

Do you?

I mean, I don't care if you want to go to work.

You can choose that.

I'm not going to be mad at you, but I'm trying to put myself in your shoes.

What would I do?

Yeah.

I definitely want to be there for them.

I'm just trying to think.

Yeah.

Yeah.

And just know that the budget.

And you're going to have to just cut everything out of the budget in order for this to happen.

I mean, in order for you to spend time with her, the trade-off is we don't go out to eat.

The trade-off is we're not going on vacation.

The trade-off is I'm whittling.

Are you able to stay current with everything, Kayla?

What do you yeah, I've never fallen

any payments?

I was afraid you were going to ask this.

I'm a dealer services accountant rep, so I go from car dealership to car dealership.

I'm not going to be mad at you for that.

Just trying to figure out what you could do from home as your side gig.

Side hustle.

Side hustle from home, yeah, while you're there and be present with the kiddos right now.

Yeah, let the family heal.

Get some stability there before you go

full-on sacrifice mode with this money.

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.