Rock Bottom Can Be Solid Ground to Rebuild On

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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, co-host of Smart Money Happy Hour, two big hits on the Ramsey networks, and my daughter, she's my co-host today.

Open phones at 888-825-5225.

Tasha's with us in Louisville, Kentucky.

Hey, Tasha, how are you?

Hi, good afternoon.

Thank you for taking my call.

Sure, what's up?

I just had a question.

I do suffer from a little financial PTSD from the past, and my husband and I have both worked through that.

We do not have any credit card debt.

We own our own homes.

We both work.

We have no car payments.

However...

Sounds like a good disease to me.

It actually is.

And that's why this next part is the problem.

My husband finally has got his 25 years in.

He desires to work two more years before retirement,

but he has started a new side job, and it has done very well.

But with that, he has blown through a substantial amount of our savings, and now he wants to blow into our retirement.

And I don't know if I'm being selfish

because of the past traumatic of or trauma of the credit card debt, et cetera, that we had.

Okay, so I'm a little bit confused.

There's two competing sentences here.

He's doing extremely well,

but he's blown through a substantial part of our savings.

Those two things don't go together.

So is he doing well or is he blown through the savings?

Which is it?

He's doing both.

He currently works a full-time job.

I know, I heard that.

But the side gig, how much savings has he used up?

How much money?

Well, with the FEMA equipment, about $140,000.

The what equipment?

The FEMA equipment.

FEMA.

FEMA, yes.

What's he doing?

Like in North Carolina, like the cleanup for the flooding disaster areas.

So like North Carolina, Kentucky, those places.

Yeah, you can clean up flooding cheaper than $140,000 in equipment.

What did he buy?

He bought excavators, Beccos,

pressure washer equipment, that sort of thing

to kind of,

I guess, just to work with the damage to clear everything up.

And you're in Louis.

Yes.

And he's in North Carolina?

No, no, no.

He just goes to the places that are flooded with catastrophic events.

And he's done that for a couple of years.

So how much money has he made since he's done really well?

About $150, roughly.

About $150.

He's not doing really well.

He's broke even.

Well, with his regular job that he's doing.

No, honey, I don't care about his regular job.

When you open a business and you spend $140,000 to make $150,000, that's not doing well.

Right.

That's breaking even.

Well,

that's kind of the point that he and I have been going back and forth.

That's approaching a hobby.

Well,

that, to me, is kind of how I envision it.

But he's also now wanting to add to his collection of things to me me that he just admires.

Not when we're not making money.

Even if you've got $2 million in your retirement, I still would not do that.

As a business owner who coaches 10,000 business owners, I tell people to add to equipment only when you're getting an ROI.

He's not getting an ROI yet.

He's not getting a rate of return yet.

Right.

How old are you guys?

He is 48 and I'm 43.

And we both have federal jobs that are very good, but the side job is kind of where it's thrown everything off because we had like everything that we have paid for

the side job is what we want to call it, has came out of our savings.

So here's the way I would do it if I were him, not you.

Okay.

Okay.

If I were him,

if you used $140,000 of your savings to start a business, I would not buy more equipment equipment until I put that $140,000 back in savings.

Okay.

And then I would pay cash for, out of the business only,

any other equipment.

See, that right there is weird because we do have about $89,000 in savings, and then the two pieces of equipment that he's wanting would completely wipe that out.

No.

Absolutely not.

I am a saver.

I'm a taxi.

It's not getting to do with that.

It's got to to do with that's bad business practice.

It's a bad way to run a business.

How long has he had this open?

When you're losing a quarter of watermelon, you don't get a bigger truck.

He's had this open since last June.

Last June.

So it's been a year.

So I support you wanting to be in business, honey.

And I want you to be successful in business.

The definition of success in business is making money, profit.

And so far, you've made $10,000 profit.

When you put the $140,000 back in savings, whatever money you make on this side business, if you want to put it all back into equipment, that's fine, but we're not taking any more out of savings.

I'm not okay with that because it's bad business practice.

Okay.

He's falling into the shinier thing.

If I get more and more pieces of equipment, I'll be able to make a profit.

And no, you need to learn how to make a profit with $140,000 worth of equipment you got.

When you can start making money with that, then take that money and buy some more equipment.

And Tasha, I hope you're hearing this, that this is regardless, this is not you having a traumatic financial event and it's causing this angst amongst you.

Like, this is just kind of common sense, right?

So, separate the two.

Even if you never had any level of these like moments nightmarish stuff with money and you always were great, this would still be stupid, right?

It's not the difference in a spender and a saver.

Yes, yeah, yeah, yeah.

It's not a personality thing.

It's not a history thing.

It's a stupid thing.

It's just a stupid thing.

Just don't do it.

So,

how do I explain, apart from it being a stupid financial decision?

Well,

businesses are supposed to be profitable, honey.

And when the business is profitable, meaning you put the $140 back in our savings, then if that business continues to make money, we can buy equipment out of the money it makes.

It's called at the speed of cash.

Yeah, we grow this business, a side business, at the speed that it produces cash.

That you're dipping into retirement at your age.

Because what you're doing is you're masking over the fact that this so far is a failure.

Well,

the issue that I'm having with him as far as understanding that, because I do know that that is not a smart business decision

to be pretty much, like you said, just making $10,000 in a year from that, is that, you know, he has worked so long.

He's like, well, I have X amount in retirement.

Well, we still have to be able to live after that.

You want some wine with that cheese.

Exactly.

Seriously, call the Wambulance.

i work so hard

we all work hard

well we we we managed to pay in three years almost ninety one thousand dollars in credit card off that's right that's how you're supposed to do it and we i listen i think he has i think he probably has a business that will work but he needs to prove it needs to slow down he needs to prove it right you can't buy enough equipment to make something successful you have to make it successful and then buy the equipment that's just bull crap and people do this stuff all the time in business and they go broke.

And it's just, it's just not wise.

Please, you know, you guys got to keep having the fight.

And it's not, and it's not because you're damaged goods with PTSD or something.

That's not the Rachel's right about that.

Rachel's dead on.

This is bad business practice.

Simple.

Regardless of how we got to this point, it's a bad business practice.

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Mike's in Atlanta.

Hey, Mike, welcome to the Ramsey Show.

Hey, thank you guys for taking my call.

Sure.

So I'm going to be straightforward to my question.

Me and my wife, we have $70,000 in debt, and I'm not so sure if we should file bankruptcy.

How many thousand dollars in debt?

All right, $70,000.

Oh, $70,000.

Okay, on what?

$70.

Yes, so the the breakdown is $50K on a car repo,

$10K on credit card, $5,000 on medical, and $5,000 in another car loan.

Okay.

Are you

what do you guys make?

What's your household income?

All right, so my household income is $70K,

$72K yearly, and take home pay $6K a month.

Your wife work?

Yes, me and my wife work.

Okay, what do you do?

We both bankers.

You're You're bankers?

Yes.

Okay.

All right.

Because

you're not making much money.

No, we're not at all.

We're not making much money at all.

So we're looking in the next few months to get a promotion so we can bump it up for at least 80k each.

Yeah.

Okay.

Each, so 160?

Yes.

In a few months from now, but we're not so sure yet.

So it might take it right around like about a year.

Okay.

Well,

the good news is that I think on top of all that, we do have to replace a transmission on the car that we have right now, and it's worth $4,000 that they're charging us.

Okay.

Well, you're scared and you're overwhelmed and you're behind on bills, but you're not bankrupt mathematically.

Okay.

Mm-hmm.

Because you can settle.

Number one, you're not paying anything on the car repo today.

No, we're not.

So as a matter of fact, all these debts, it's because I recently got married with my wife and she carried all these debts into our marriage, but I knew from the beginning.

So I'm just trying to get a lot of money.

Oh, so these are all old debts?

Yes.

They're all behind.

Okay.

Yeah, they're all behind.

Well, old debts can be settled for pennies on the dollar.

That's what I heard from you.

Okay.

And so, and a car repo of $50,000 probably means that's not the actual deficit.

That probably means that was the total loan on the car.

Exactly.

Okay.

So then they sold the car for something,

and the difference is what you technically owe, not the total.

Okay.

And then you can settle that for somewhere around a quarter on the dollar.

Okay.

So let's pretend that they sold that car for

20,000 bucks

at the repo lot because it probably was a $30,000 or $35,000 car.

Does that sound right?

Yes.

I'm guessing, but I'm probably not that far off.

So they sold it for $20,000.

She owed $50,000, so now she owes $30,000.

You don't owe anything because you didn't sign for this car.

No, I did not.

Okay, so that's where the fun comes in.

This is where it gets cute.

So you're going to make the phone call

when you're ready, but not now, and say, what's the deficit?

And they're going to say $30,000.

And you're going to start laughing when they say that.

And say, well, you know, all you've got is my wife, and she makes $25,000 a year.

You're not going to get paid, dude.

I'm in the banking business, and you're not going to get your money.

So I tell you what we can do, though.

I will put some money towards this because I've married her.

And,

you know,

I'll give you guys $6,000.

So offer them $0.15 on the dollar and plan to settle around $0.25 on the dollar.

Okay.

But you've got got to have that money scraped together from living on nothing and piling up cash.

And that's your big one, by the way.

That's the big one.

So what we're going to do is do a debt snowball, but do a different kind.

Normally the debt snowball is you pay minimum payments on everything but the little one and attack the little one in that order, right?

Okay, yes.

But these are all bad debts.

So we're not paying on them now.

So we're not going to do that.

Instead, we're going to list them smallest to largest, and we're going to settle the smallest one first.

Or just pay it, one of the two.

If you've got a little $200 medical bill, don't screw around with it.

Just pay it.

That's five grand.

And the car is, are you guys current on the car, Mike?

The $5,000?

Yes, which is the best.

Oh, yeah, you need to get that paid off.

Yeah, get that paid off and then start clearing those medical bills, then clear the credit card, and then call the repo people.

Okay.

But the repo people aren't going to do anything.

They're the slowest on the planet, the dumbest on the planet.

So they're not even aggressive.

They're just, you know, the credit card people are aggressive.

They'll at least call you names and your mother names and other stuff.

But the repo people are, they're just like a slug.

So

unless it's one of those tote the note lots and then they're super aggressive.

But that's probably not what this is.

So anyway, yeah, you settle it for, so here's the thing.

So if we settle the car for seven or eight grand, we settle the credit cards for five grand, we pay the others, it's 20 grand and you're out of debt.

Yes, and I do have to replace the transmission of the car now.

That's fine.

Go ahead and take care of it.

Go ahead and get the car fixed.

Yeah.

And And shop around.

That's not a dealer quote, is it?

No, no, it's not.

A good local mechanic, right?

Yes, I got like a quote from like two mechanics.

What kind of car is that?

It was a Ford Fusion.

It has a 200,000 miles on it.

I don't even know if it's worth it.

It might not be, but

don't put a new transmission in it.

Put a rebuilt in it.

They're half the price.

Okay.

Or have them buy one from the salvage yard out of an erect Ford fusion and put the used one in that's not even rebuilt.

And that's even cheaper.

You might get that for $500 to $1,000.

Mike, do y'all have any cash?

Yeah, we do like, I would say for like $3K, $4K.

Yeah, I think you can get this transmission fixed for less than that.

Yeah.

Yeah, get a used one from a salvage yard, get your local mechanic to put it in, because this car isn't worth spending much on.

Okay.

And let's get it up and running, and then you guys roll up your sleeves and take side gigs and push, push, push for for these uh these uh promotions

and then you just got to plow through about 20 grand of this and with a system and you take care of food shelter clothing transportation you get on a budget and the two of you are living on a budget you're not going out to eat you're not going on vacation you're broke and almost bankrupt we're not talking about those things so we're cleaning up this mess okay you can do this

I just want to be able to in the future be like you guys.

I've been watching Rachel and you, Dave, and everything.

It's just like down the road, like maybe 10 10 years from now, not living the sphere and,

you know, being scared all the time.

You'll get there faster than 10 years, Mike.

Yeah, it's 10 months.

We'll do that.

It's 10 months.

You guys, how long have you guys been married?

A few months?

Probably, no, like four months, 45.

Okay, yeah.

So you're newlyweds, you're figuring this out.

Money is a good thing.

So she comes in the house and opens up a suitcase full of bricks.

Right after the city.

She was carrying the bricks around.

They're dating.

It wasn't a surprise.

No, he knew they were there.

Yeah, he knew that they were there.

He wasn't surprised.

She told him they were were there.

But they're heavy.

They are heavy.

They're still heavy.

She's worth it.

She's worth it.

Help her clean it up.

That's fine.

She told the truth.

You knew what you were getting into.

You signed up.

This is your dowry.

Get after it.

Yeah.

And Mike, I think this is too, you know, we find with couples in general, but I think especially newlyweds, like this first season of marriage, this is a huge mountain for you guys to climb together.

And what this will do

from being unified going forward, like you guys are doing one of the scariest things.

I mean, you called and asked if you guys were going to file for bankruptcy.

Like that's how at the bottom you feel.

And you guys climbing out of this together is going to sustain something really beautiful.

I mean, seriously, there is, there is so much about

suffering.

And when you do that together and you kind of hit that bottom, what is planted out of that and the character qualities and what you guys will go through.

It's just, it is amazing.

So honestly, it's,

if there's a flip side of it, you can see this as a gift if you choose to look at it that way.

And you guys go on this journey together because I think it's going to be fantastic.

Yeah.

I mean, you knew all this was there.

You married her and you said,

this is what I want to do.

You're a stud, man.

You got a big backbone.

You can do this.

You signed up for it on purpose.

And that tells me you got the stuff right there.

That's not a guy.

A guy that's a wuss would have run.

Yeah, and your incomes.

I know you mentioned the raises, but you got to get them up.

I mean, both of you guys making 70 together.

I'm like, as bankers, you guys can do better.

You can do better.

So

push through.

And if not, then it's going to be side hustles at night, but that'll be worth it, you know, is to get out of this as quickly as possible.

Hey, hang on.

Christian's going to pick up.

We're going to get you signed up for every dollar premium and get you into Financial Peace University and make sure you get those budgets going and that you follow the exact steps on pushing through this that we just outlined.

And if you do that, you can get through this.

I know you can.

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Jan is in Portland, Oregon.

Hey, Jan, welcome to the Ramsey Show.

Well, hello there.

Shay, my question is whether or not it would be a wise move to get solar panels.

And the reason that we're considering it, we've been solicited heavily in the past and currently as well, but

our local utility company has recently had an 18% increase.

And then it's projected to be like a 4% increase each.

Can you do 100% replacement?

Of your power?

No.

No.

What percentage can you do?

do?

98%.

Oh, you can replace 98% of your power usage with solar.

Yes.

Okay, so what's the break-even period on it?

About seven years.

No, I wouldn't do it.

No, that's too long?

Yes.

It's too long.

So if we add more panels, it would be more expensive.

Would that change anything?

It would up the percentage of your panel.

If you can get it to where you, whatever you're buying, whatever percentage it is that you're buying, if you can get it to break even and you pay cash for them, and you can get it to break even in three to five years, I would consider it.

And the reason is solar panels are technology.

I endorse solar panel companies in several cities, okay?

I don't think Portland, Oregon is one of them that I remember.

So I'm not against solar.

Don't misunderstand.

But there's two things that the solar people do that are wrong that you should not do.

One is they want you to finance it, and

the savings is going to pay the payment for you.

Well, bullcrap.

Don't do that.

Okay.

That puts a lien on your house and now you've got this stuff attached to your house.

You can't sell your house.

You're screwed up.

No, pay cash for it or don't do it.

Number one.

Number two, solar panels have been...

How old are you?

70.

Yeah, yeah, I'm 64.

So this has been a subject that's been around for 40 years.

Agreed?

Yes.

Yeah.

And guess what?

During that 40 years, the efficiency and effectiveness of the technology on the solar panels has gone way up.

The solar panels of today versus the solar panels of even five years ago are like a five-year-old computer or a five-year-old cell phone.

Okay.

So seven years from now, your solar panels are going to be a flip phone.

Oh, okay.

The technology is going to be completely outdated.

and

performing at 10 or 20 percent of what the new ones are.

I'm making that number up.

But the technology is all technology and everything is advancing solar panels are technology they're advancing and they're an alternative energy source so everybody's trying to help them advance everybody's doing their r d because there's tax credits everywhere uh everybody the government will give you you know the state will give you money back the federal federal government gave you money back all this stuff everybody's trying to push this out there and so there's all kinds of money flying around this to make them better so they're going to get better than they are today And they are today better than they were yesterday.

So don't buy a computer that goes, I break even on the computer in seven years.

Buy a computer you break even on it in three years.

Don't buy a cell phone that you don't plan to throw away in about three years.

So in the meantime, at this age,

you know, we still have a pretty exorbitant utility bill.

Yeah, but this doesn't solve it.

Because

you're paying enough money to break even in seven years.

You're paying seven times as much as your utility bill today in order to install these stinking things.

Oh, okay.

I see.

Your money's already out of your pocket times, seven.

Do you guys have the money for it, Jan, if you wanted to?

Could you write a check for it?

Yes.

Okay.

Good.

Okay.

So, yeah, I would keep working with the different companies until they look at it.

And it may be your electricity has to go up even further before it makes sense or the solar panels got to increase in efficiency before it makes sense.

But there might be a 50% percent or a 68% percentage that breaks even in three to five years.

I would do that

in your case.

Okay, but in the meantime, just kind of put up and shut up with this

increases.

Well, there's nothing you can do about them.

I mean, and we're super frugal.

I mean, we're not wasteful with our

utility accounts.

No, which makes you super mad at these people for for doing this, yeah.

Kind of, yeah.

And it's kind of like one of those things, okay, well, I'll show them.

I'll just get solar panels, you know, but evidently maybe that well, you know, I don't want to show them by cutting off my finger, you know, no, that's no, no, no, that's not no, yeah, so maybe you price things around, Jan.

I mean, honestly, and if you can get the numbers to work with a company to that five-year break-even.

Or maybe they come down on their price because you're paying cash up front.

Yeah.

Oh, well, that's a good idea for because, yeah, we have, we've gotten lots of bids, and we did decide to go to a company that

most of them want you to finance because I think that's where they make the money, but we weren't interested in that.

But it still sounds like we either, if it did increase the

production, that still is not really a positive.

I don't care what the number is as long as you you get your money back in three to five years yeah okay and Jan with the with your utilities raising year after year it may fast forward that you know if you look up and you guys are paying a ton for utilities more and more that increase can show back into that three to five year timeline too

oh I see because if they go up 18% next year it's going to make it faster

okay faster and I'm sorry I'm not trying to be dense but

explain that

you're doing good you did great well in in order to get to the three to five-year break-even, making sure that you get your investments worth, that means if your utilities continue to raise year after year, they're more expensive, which means if the solar panels stay at the same price, then it's going to offset it sooner.

Exactly.

If I'm saying that.

The break-even analysis changes.

It's not a linear math problem.

It's a math problem on a curve.

So and it's just changes it.

Yeah.

Absolutely.

You're right.

It's a good question, though.

Yeah, that's a great question.

And I'm proud of you for doing cash because that is one thing.

We will get people that have solar panels to their homes, and it's a loan, and it's this whole thing, yes, when they're trying to sell, which is so frustrating.

Then they're stuck.

There we go.

All right.

Open phones at 888-825-5225.

Cameron is in Dallas.

Hey, Cameron, how are you?

Hey, I'm better than I deserve.

Dave, thank you, Dave and Rachel, for taking my call.

Sure.

My wife and I, we've been dreaming about upgrading our home for something a little bigger, maybe a little more functional.

And here's my question.

Would it be stupid for us to tap into the Roth principle that we've contributed over several years to buy a better house in cash without the burden of another mortgage so that we can keep enjoying that baby step seven freedom that you're always talking about?

No, well, the other way is not buy the house.

Yeah, that's true, too.

That's true.

So you've got options here.

No, I wouldn't cash out my Roth.

The Roth's growing tax-free.

You don't have anything else on the planet doing that.

No.

That's true.

No, I don't want to lose the power of that thing.

That's going to be so much stinking tax-free money in a few years.

And you're not 59 and a half, right?

No, no, no.

I'm 36.

I thought so.

Yeah, okay.

What's your household income?

$71,000.

Okay.

And what's the move-up going to cost?

I've got a paid-off house that's $250,000, and we've been looking to move into a $450,000.

Okay, so you need $200K.

How much do you have non-Roth to put towards that?

Well, I sell the house for $250.

No, I'm saying.

You need the other $200.

My mother was recently widowed, and she wants to move in with us.

She'd be bringing $100K,

and if I pulled out my principal from my Roth, that'd be another $100.

Ah.

Okay.

And I'm assuming she does not have $200.

No, no, no, no.

She was recently foreclosed on.

She won't be buying anything anytime soon.

Well, you could go to 350.

Yeah, yeah.

I can't tell you to do that.

I wouldn't do it.

And so I don't tell people to do stuff I wouldn't do.

I get the time-sensitive pressure now.

Mom's homeless and has 100K.

And that's different than I want to wait three years.

Waiting three years, she got a problem.

And if you really, if your wife wants her to move in and you want her to move in, it takes her 100K in rents for six months to a year, and you guys build up more savings, you know.

I mean, yeah,

I'm not going to tell you to cash out of Roth because I personally wouldn't do it.

I would either not move or I would find some other way to skin the cat.

Rachel, do you ever get these sketchy text messages that are like, hey, you need to update your address and verify so it can get you the package you didn't order?

Yes, I have George sketchy and never trust them.

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They help with that.

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Two weekends are on sale right now for the Money and Marriage Getaway.

Rachel Cruz right here and Dr.

John Deloney do this a couple times a year.

It is a full weekend event, and it is an amazing event.

Three incredible days here in Nashville on the Ramsey campus to strengthen your money and your wealth, building your connection, deepen your intimacy, and more.

Tickets start at $7.49.

A couple get tickets for the lowest price before they end at ramseysolutions.com slash getaway or click the link in your show notes if you're listening on YouTube or podcasts.

These things are selling out.

Though November's just about gone.

Yes.

Yeah.

These are great weekends.

We actually have a couple in the lobby.

They've been to three.

There are money and marriage alums.

It's an event that so many people repeat.

We end up selling like 60% of it at the event for the next event because people always want to come back.

So, Dr.

John Deloney and myself, and we have fun, y'all.

It's a fun weekend.

You guys are, you guys are, it's like stand-up comedy almost in there.

It's that, and we get real, we get, we cut down to it, like to the real stuff.

And so, it's uh, it's not your typical marriage conference.

I'll say that much.

It's good.

Not with you too.

Samantha's in Fort Worth.

Hey, Samantha.

Hi.

Hi, how can we help?

I was laid out for my job yesterday.

I'm sorry.

What were you making?

What were you making?

$70,000.

Man.

What happened?

You're so absurd.

I'm a massive land.

A massive land.

I was there 12 years.

A massive land.

Oh, my gosh.

No warning, huh?

No warning.

What severance did they offer you?

They want to hug you.

What severance did they offer you?

I'm getting about $40,000.

Awesome!

What were you doing?

I was a billing specialist.

Cool.

Dave's trying to cheer you up.

No, this is a true.

Listen.

Hey, listen, here's what happens, okay?

Once you get through crying, and crying's normal, I don't blame you for that.

It's scary, okay?

But once you get through crying, go get you a $70,000 job by Friday, and this nets you $40,000.

You get a signing bonus, kid.

Yes.

Yeah.

Yeah.

Hey, man, listen.

There are people all over Fort Worth, Texas looking for help right now.

What industry was it in, Samantha?

She was a billing specialist.

Well, billing, but like for

what?

Energy.

Okay.

You could do billing in anything, huh?

Once you know how to do it, you know how to do it, right?

Yes.

Samantha, I'm curious, is your

tears, is it from, are you scared?

Are you hurt?

Where is the main emotion coming from?

I'm really hurt.

I'm hurried, but then also, too, I was in school and I was due to graduate with my business administration degree in December of 2026.

So now they were paying for it.

So now I don't have the money to finish school.

They were paying.

We're not done.

Okay.

What happens when you get a a job making $90,000, you put $40,000 in your pocket, and the new job pays for your education?

Then I'd be very happy.

Yeah, me too.

And appreciative.

Me too.

See, this is what's going to happen.

All right.

So we don't have to assume that you're not going back to school.

Let's assume you are continuing school.

Let's assume the next place is paying for it and the next place is paying you more than you used to make.

And you're going to put this 40K severance in your pocket.

I think this is a net net positive.

You just hadn't found that place yet, but you hadn't started looking yet because you're still pissed off and hurting crying.

And I don't blame you.

It takes a minute to get over that.

That's okay.

But you get about 48 hours of that, and then let's go find a job.

Okay.

You can do this.

You can do this.

Listen, that company does not have a soul.

They're letting you go had nothing to do with you.

You're not worth less than you were six weeks ago.

You're worth more than you were six weeks ago.

$40,000 more.

You follow me?

Yes.

Hey, they were paying you $70,000, and they're a horrible company.

That tells me that someone else will probably pay you more.

Because good companies don't treat people like this and piss on them.

Yeah, and sometimes, Samantha, we do find that if you're in something for so long that you have no idea what else is out there.

And so you may, your new position, your new job, it may be, it's going to feel new, which change is always a little scary, right?

You're going to have to learn some new stuff here or there.

Like, I get that.

That can be uncomfortable, but it actually could be so much better.

Yeah.

So much of a better, even environment.

The people, all of it, like the whole thing could be an upgrade.

Why were you getting your business, your BA degree, your business administration degree?

What were you wanting to do?

So, my plan was just to use it to try to get into, honestly, I wanted to get into the like accounting department oh so you want to go into accounting

well this is a good time

you've almost completed your business administration degree that makes you qualified to move into the accounting department at the next place and make 80

and tell them you want to and part of the negotiation is they need to finish they need to pay for you to finish your degree most places have some kind of education supplement nowadays if they're of any size

we pay we pay for people to go to to class at Ramsey because it turns out we like smart people around here and the ones that go to class, you know, this makes them smarter.

So, hello.

Are you married, Samantha?

No, I'm single.

Okay.

Okay.

Do you have any money saved?

Well, I have a

just the $6,000.

Is that your fully funded emergency fund?

No, I was working on it.

That's the thing.

Okay, but

you're debt-free, and you got $6,000, and they're sending you 40 more.

Correct.

This is so awesome.

This is a lot of my mortgage.

This is so awesome.

You're going to look back a year from now and go, the best thing ever happened to me in my life is when those twerps fired me.

I'm dead serious, girl.

But you need to get your head around that idea instead of like the world's going to fall apart because these twerps fired me.

Because the world's not going to fall apart unless you deem it.

Because you have upside potential here.

This is God saying, I wanted you to move into accounting faster than you were going to anyway.

And now you got kicked out of the nest, so fly, little eagle.

That feel good?

You can do this.

It does.

I just needed to hear it.

If you weren't scared, you wouldn't be normal, but scared's not a bad thing.

And you're valuable out in the marketplace, Samantha, what you are making and 12 years somewhere.

Yeah.

So you have the experience, all of it.

You're going to be fine.

You're going to be fine.

If you were 22 and you worked somewhere for six months and you're like, all right, we got to start over, right?

That feels a little different.

This is, you might be established.

You might be a barista then, but not now.

Yeah, you're established.

You're good, Samantha.

And this gives you so much buffer.

And you've put yourself in a position where you have no payments but your mortgage.

So you're good.

It's not like you have a $700 car payment and credit cards and student loans and all of that that could eat into that $40.

You have buffer, you have time, you are good.

You are good.

The fear comes from a couple of things.

One is you have to reframe your mind and say,

I'm going, this is going to turn out good.

And the fear comes from the sudden surprise and the chance that it might not turn out good.

Feels like rejection, yeah.

Yeah.

The suddenness of this is what is part of what got you.

You know, you've had no time to process it.

So

not picking on you for being upset, but I am telling you, you got 48 hours of this crying stuff, and then it's time to get with it.

Suck it up, girl.

No, I'm serious.

You need to go beat me.

Listen, I'm telling you, fly, little eagle.

Fly.

Fly, girl.

Go get you 80,000 bucks, and you call me back laughing.

I want to hear from you, okay?

We're going to give you Ken Coleman's stuff.

Find the work you were wired to do.

Take that assessment and make sure you're on track with this thing.

And I'm going to send you his book, Paycheck to Purpose, and I'm going to send you his book, Proximity Principle.

And I want you to go to kencolem.com and download all of those job search ideas and how to put together a resume and how to work the proximity principle and go get you a job.

And I want you neck deep, eight hours a day, pounding the pavement, not just filling out applications, but running down leads and going and getting a job by Monday.

Monday.

Say Monday, Dave.

Monday, Dave.

You got this.

You got this.

I know you can do it.

I'm not blaming you for being scared and I'm not blaming you for being mad.

I would be both if I were you right now.

But the faster you get the other side of this, the more of this money you get to put in your pocket.

Yeah, that's true.

And the more this turns into a positive story rather than

a spiral.

There's no reason to spiral.

Spiral.

You're going to do great.

Spiral.

You're going to do great.

You can do this.

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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, and my daughter is my co-host today.

McKenzie is in Chicago.

Hi, McKenzie.

Welcome to the Ramsey Show.

Hi.

What's up?

Well, I'm calling because I'm kind of in a unique situation.

My husband and I have been married for two years.

We're both college graduates.

We are currently, I want to say, about $40,000 in debt.

I apologize.

I don't have exact numbers because of the situation we're in.

My...

Hey, Mackenzie, are you on speakerphone?

No, ma'am.

Okay.

There you go.

You can speak directly into your phone then because you're breaking up.

Okay.

I'm sorry.

yeah.

No, I'm speaking right into my phone.

Can you hear me?

Yes, okay.

Thank you.

Okay.

Well,

this chamorian is

I've been trying to broach the subject of our finances with my husband.

A little bit of background is my husband and I are both college graduates, but not long after I graduated college, I was run over by a car and left permanently disabled.

I am

yeah.

I am currently trying to find a job, but I suffer from those seizures.

I need a cane.

I'm 23 years old, but I need a cane to get around, and it's hard.

So my husband does work full-time, and I'm filing for disability to try and help offset the bills.

But since I do not work, my husband is kind of taken full control of our finances.

I'm unaware of where our money goes.

And the one thing I know

is we're working through baby step two we have our one thousand dollar emergency uh

McKenzie in the in the when the with the car accident was there a brain injury yes sir okay

so he's taking full control uh as a service to you because you're not as able to do this is that what you're saying

I

am

I have the mental capacity to understand our budget and finances.

What's the nature of the brain injury then?

It causes seizures.

Oh, that's it.

Yeah, it causes seizures.

I do have some intellectual deficits, but I did graduate after I

was still able to hold a job and do

sorry.

I have some intellectual deficits, but it's not so bad that I don't know what's going on.

And I'm coherent.

Okay.

I didn't obviously we're having a conversation we knew you were coherent but I was trying to figure out the motivation of him taking full control of the finances

really it's because he's the only one making money I have a side business I

work at a farmer's market every weekend and that brings in some money but it's not a lot got you so what is the what is the way we can serve you today hon

well I'm trying to broach the subject my um from the correct event I was helped with a lot of medical bills.

Um I have paid off a lot of them, but um about six months ago, my husband stopped paying for any and all of my bets completely.

He is only paying off his debts.

And I'm trying to broach that conversation, but whenever I try to

it's a, well, we don't have enough money and

I don't know I just I'm concerned I want some advice of like I don't understand why he's not wanting yeah are you guys okay so you mentioned that you guys have a thousand dollars for baby step one right is he working the debt snowball and he's paying minimum payments on everything and then focusing a lot of money on the smallest debt yeah so actually the smallest debt would be my medical bills right now our debts are the medical bills student loans the car pay okay how much are the how much are the medical how much is your medical debt?

The last I checked was about $3,000.

That's broken up over a couple different medical bills.

I'm not wondering.

And are the student loans his?

They're both of ours.

I have $10,000.

He has $15,000.

And he's working on his $15,000 is what you're saying with money that he's making.

Yes, and the car payment that came, he got the car before we were married.

Okay.

So I'm confused.

So when you say, why are you paying yours instead of mine since we're both married?

what does he say?

Well, it's like we don't have enough money.

You don't have enough money.

It's just a matter of what the order is.

Yeah.

You don't have enough money to pay all of them.

You've only got enough money to pay a few, but instead of why is he paying his instead of yours?

That's what I'm trying to figure out.

No, he's not.

There's something else going on.

And

I mean, you're due an answer to that question.

There's nothing wrong with you asking that question.

I'm asking that question.

If I were in your shoes, I would want to know why is because it sounds like he's planning an exit to me.

That's what it sounds like to me, too.

And that's where I'm really, I'm scared.

Yeah.

Because I'll be truthful.

If

I...

I try to be as little of

an expense as possible due to the nature of no, that isn't how this marriage thing works.

It's for richer, for poorer, in sickness and in health, and that includes car accidents.

So

it's not my wife needs to be less of a burden to me to be worthy to be married to me.

That's bullcrap.

Thank you.

Okay.

But the reason I'm saying this is because the only,

besides the medical bills, the only expense I have is I'm currently going through service doctor school.

and I'm we're trying to pay that off and thankfully it's not that much we're subsidized with some grants and stuff but if I don't get

if we don't pay this off it's not like we're it's not exactly a debt it's more

like a payment plan you pay and then you get the dog when it's paid off if that makes sense yeah honey I think you have a marriage problem okay yeah and I think the two of you need to sit down with a marriage counselor okay Because I can't tell what's going on between the traumatic brain injury, the

other issues, the seizures, the other things issuing with the car wreck, and then his behavior is

in the context that the information that you've got that you brought to us, we can't understand why he's doing this.

I don't see a logical reason for it.

There may be an explanation, but I don't know what it is.

And

I think it's fair

with what all you've been through, and even if you hadn't been through that, it's fair for you to get an answer to the question.

Well, yeah, for sure, especially if you guys were dealing with money one way, sounds like this accident happened and stuff started shuffling, and then suddenly he's kind of turned course.

So that's, that's what I would want to get to the bottom of,

McKenzie.

I think I want to go see a marriage counselor.

Yeah.

And if he won't go, go without him.

And I think you need to get some advice that's more in-depth than a couple of goobs on the radio.

And so that's, you know, because I think I can't tell what's going on here, for sure.

I don't like the signals, I can tell you that.

And

I don't like the information I have, but I can't tell what's going on.

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Amanda is in Phoenix.

Hi, Amanda.

How are you?

Hi, I'm good.

Thanks.

My question today is: how should we, me and my husband, proceed with unknown medical expenses that are already racking up for our newborn daughter?

Wow, what happened?

What's she facing?

Yeah, well, we don't really know yet.

This is our second baby.

We had her in April, and she's just had a good number of health issues since birth.

So we're doing genetic testing, neurology, the whole nine-month yards, and we've been barely managing with our HSA, but that's depleted now.

And we were in the ER two times as last week, so that has wiped out our emergency funds.

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

If you have

an HSA, ER is 100% covered.

Oh, then maybe it's the FSA,

whatever money was.

So you have health insurance, right?

Yes.

Most health insurance 100% covers emergency rent.

Oh,

this was not covered.

Why?

I have no idea, but we paid $1,500

for the two visits, and we just put it on a credit card.

Why?

You submitted

your insurance at the front when you walked into ER and they didn't accept it?

Yes.

No, they accepted it.

We have a high deductible health care plan, so we haven't met our deductible for the years.

You haven't hit it yet.

Yeah, but ER is usually not involved in the deductible.

It's usually 100%.

Well,

we sold the pay.

The registration came around and they collected our money.

Okay.

You need to get on the insurance side of this, and that's because

it sounds like you've got an ongoing process here that this is going to be a

road to walk yeah you've got a journey ahead of you agreed agreed yeah and so you you're probably gonna burn through deductible and you're gonna you're gonna become an expert on what insurance covers

yeah and that's that that means you're not gonna be shelling out fifteen hundred bucks every 30 minutes here um so because insurance is gonna you once you burn through your deductible and you hit your stop loss a hundred percent of it's gonna be covered

okay that that sounds good uh our deductible is $14,000, and

so we have about $10,000 to hit that.

What's your stop-loss?

I'm not too sure what that means.

Okay, what that means is after you

and while you're hitting your deductible,

what is the copay, 80, 20?

Yeah, 80, 20.

Okay, the 20 come out of your pocket will only go so far, and after that,

they cover 100%.

That's what stop-loss is.

Maximum out-of-pocket is what stop loss is.

Okay.

And so you need to find out what your max out of pocket is.

So right now we know you got 10 grand more.

That's for sure.

And then you've got some more on copay beyond that.

That's for sure.

And I think you need to go back and revisit with your HR people and find out, or whoever's managing this health insurance,

why an ER stay.

was not covered 100% because they almost always are.

Okay.

And Amanda, this journey to, I mean, it takes so much work and it's going to be so many phone calls talking to so many people, but it's worth it because in the medical world and what we see so often is when insurance screws up, they usually just assume the person on the other end is going to just take the bill and they just do what they can and they're just going to live their life versus the people that actually fight it and stay on top of it because there usually is money laying there.

And again,

if they screw it up and bill you wrong, most people don't have the perseverance to stay with it, to be calling the insurance and bugging them.

So really press into that and really, really get an answer because it could save you guys a lot.

For sure.

What I'm trying to help with is this.

Here's the visual.

You've got this

health challenges with a tiny baby.

And so that just puts your heart in a blender every day.

Yes.

And

it feels like, number two,

that there's no end to the checks I'm going to write because of my love for this little baby, that these checks are going to be a million dollars before I'm through.

The first one is true.

The baby has health challenges, and that puts your heart in a blender.

Everybody who's got babies who's ever had one sick knows how you feel.

Not exactly how you feel, but we've all had our breath taken away, and you get your breath taken away about every 45 minutes right now.

Okay?

And so, but that one is true.

The second one that this is going to bankrupt you and you're going to be a million dollars in debt is not true.

And so what I want to do is get these, you have two burdens on you, both of which are overwhelming.

I want to take the second one and quantify it and get it off of you.

Here's what it's going to sound like.

You're going to call them and deal with the ER thing, like I've told you three times already, because I'm a little pissed right now about this.

Okay.

Number two, not at you but at them okay number two

you're going to quantify what your out-of-pocket is on the deductible number three you're going to learn your copay after the deductible is met probably is 80 20 most of the time it is

okay

because you're in you're in a high deductible hsa plan the other thing when you have a high deductible like this usually you have a low

stop-loss or maximum out-of-pocket number number.

I'm going to guess,

I'm guessing, based on my expertise and having seen a thousand of these things, that your maximum out-of-pocket is probably 20 grand, including the deductible.

Okay.

Okay.

It might be 30.

It's not 100.

Yeah.

Okay.

So you are not facing a million.

You're facing 20, maybe 30,000, and that's nothing compared to number one, which is dealing with the baby.

Yeah, yeah.

So I want to relieve you of the financial

stress that's added to this so you can focus your emotional energy in the right place and your prayers in the right place, which is on the baby.

But you've got to do business well, as Rachel said, with this insurance company and make sure they're paying every stinking dime.

Okay, definitely.

I haven't even, I mean, we just got back last night from the latest AR.

Well, it's easy to assume that this is, that, that, that the medical bills are going to be endless and there are going to be a million dollars in bankruptcy.

Yeah.

It's easy to assume, and they're simply not.

Okay.

There's simply not.

And are we, am I pausing baby steps now?

Yes, everything.

Okay.

You're in the middle of a storm.

Pause everything.

Pile up cash.

Okay.

Yeah.

Take care of baby.

Take care of you.

Okay.

I need $20,000 or $30,000.

And they're putting it it on a credit card right now would you just have a medical bill though versus have them bill you yeah i wouldn't do the credit card because i just think of the high interest rate and dealing with credit card companies i'd rather just have the yeah have them bail you anytime they anytime they anytime

they didn't give you that option how do you want to pay for this yeah we just said how i want to pay for it is you're going to bill me because i just gave you the insurance card yeah oh my goodness

okay wow but it's okay yeah and if you can't do that get your boss in here

and if he can't do it get his boss in here.

Tay's about to fly to Phoenix.

I'm serious, Mama Bear.

I'm serious, Mama Bear.

They're messing with your baby here.

Go for the throat.

Yeah.

This is bull crap.

These people start treating your baby like it's a dad gum widget on the end of a conveyor belt.

And this medical industry versus the medical arts is driving me nuts.

So how quick can we manage you and get you out of here?

Kiss my butt.

Take care of this kid and send me a bill.

This is crazy.

I'm serious.

This is the world you're getting ready to live in.

You're a patient advocate now.

Yeah.

And that means you are demanding service from a medical profession that's forgotten how to give it.

Yeah.

I'll find my voice.

I have yeah, there you go.

That's the one I'm looking for.

That's the one I'm looking for.

And what I'm trying to do is get the burden off of you of the worry of a million dollars to along with the worry of we may have five years of surgeries.

Yeah.

Yeah.

Okay.

So here's the thing.

We've had at Ramsey on our plan, we've had kids that spent a million dollars worth of stay in NICU.

And the plan paid it.

And it's a standard insurance plan.

It's not because Ramsey's some kind of angel or something.

It's just a dad gum insurance policy.

And the insurance policy wrote the check.

And it's happened more than once.

I got a young crew around here.

We have a lot of babies.

67 born in one year.

Oh, man, I'm so sorry, though.

That's just, oh, from mom to mom, that just is so scary.

So scary.

But you guys have this.

You really do.

You're

going to be okay.

You call us back.

We'll fight with you.

We love you.

We'll help you any way we can.

Switching banks can be a hassle, and I totally get that.

But when Wince and I opened up our Fairwinds account, we were shocked by how quick and easy it was.

It just took a few minutes online.

We didn't have to block off an entire afternoon or track down paperwork.

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I couldn't believe it when I answered my phone and I was talking to them.

I was like, y'all are the nicest people.

Now, if if you're working hard to save money, get out of debt and build a future, you should have a bank that supports that, not fights it.

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All right, today's question comes from Alice in Montana.

My husband and I have been married for 21 years, and we had weathered financial struggles, including a past bankruptcy.

I had a solid nursing career that allowed him to pursue real estate full-time.

And in 2021, we had a strong year.

We owed $82,000 in taxes for the year, and the money was available in his business account.

I trusted him to handle everything, but I recently discovered he never paid the IRS.

Instead, he he used the money on business expenses in a failed side venture without telling me.

Our CPA tried contacting him for months and eventually filed our taxes without signatures in early 2023 to avoid penalties.

My husband also hid IRS notices from me.

I found out recently when I signed up for a certificate letter stating that the IRS intends to levy our home for $150,000.

I feel blindsided and betrayed.

My question is: should I buy him out using a second mortgage to cover the IRS or sell the home and walk away?

Whew.

Gosh, Alice.

Buy him.

Oh, she's divorcing him.

I don't know why you would buy him out.

Buy him out?

Buy him out means you're divorcing, I guess.

I don't know what that means.

You don't buy out somebody you're married to.

Bail him out?

Do I bail him out and maybe just pay for it?

I don't know.

You can bail out your husband.

Do you use a second mortgage or do you sell the house?

and it is is that all the penalties but eighty two thousand dollars and I'm confused but they filed

the CPA filed their taxes without signatures yeah that's weird

that's illegal um okay um

it's a good way for the CPA to end up in jail um

let's see

I mean most almost all filings are done electronically but the CPA that went ours does it requires us to sign a document allowing him to file it electronically.

Even though I'm not technically filing the tax return.

Hmm.

Okay, I can't tell what's going on.

This is a bunch of gobbledygook.

What I can tell is that if you have an $82,000 tax bill for one year, that means you made $400,000 or $300,000.

So if you're staying together

and you're going to marriage counseling to try to regain trust

and stop this ridiculous behavior of

deception,

if you're going to do that, then you've got this household income, you're nursing plus his $300K that he didn't pay taxes on, if he makes $300K next year and doesn't blow it all in a side venture and we have a game plan.

We could clean this up real quick.

That's, I guess, one direction.

The other direction is you're getting a divorce and you're selling the house.

Yeah.

No, I would not bail him out.

I would bail us out if we are staying together.

If we choose to get out of the way,

you know, no, I'm not going to leave you with

an unreliable, unresponsive ex-husband to pay off his

taxes

as a hmm.

She said we owed.

So I'm wondering if it's part of hers.

She's nursing.

They're withholding on her.

We don't know what's going on here.

I'm going to guess and say this is all the whole tax bill is regarding him.

And so the lien on your house is regarding him.

So you need to do two things.

Number one, if you're seeking a divorce, you're probably going to be selling the house.

Number two, you're not responsible for the taxes in the event you get a divorce.

You would file under what's called the innocent spouse provision, which is you didn't you are not aware of these taxes.

You are not aware of the business activities that created these taxes.

and so the IRS does not hold you liable, even if it was married filing jointly.

And so it's called the innocent spouse provision, and you would need a tax attorney or a great CPA that knows how to work that.

And that removes

the IRS from you.

Now, if it is a lien on a house that has both of your names on it and the house is sold, they can only take the $150 out of his portion then, if they have approved you for innocent spouse provision, and they should.

It sounds like you qualify for that.

But all of this only works, only happens if you're divorcing.

If you're staying together, you can file innocent spouse provision to keep them from coming after your income, which would probably be a good idea.

But then the two of you have got to reestablish some footing on trust and betrayal and lies and deception and then put all of our income in one pile to clean up the mess that he made.

And that would include the $150,000 lien being removed from the house.

Very few times does the IRS get around, it takes them about five years to actually sell a house, to force the sale of the house.

Very unusual for them to do that quickly.

They'll pop a lien on there in a heartbeat.

But to actually force the sale of the house to satisfy the tax lien, it takes them forever.

And they're just not very competent at that part, that level of collections.

They'll get there eventually if you do nothing.

And by the way, they'll turn the $150,000 into $400,000 before they get there in penalties and interest.

So if you stay together, get it cleaned up as quickly as possible.

If you're not staying together, see a CPA about innocent spouse provision.

Talk to your divorce attorney about that.

And then we're selling the house.

And you're going to get your portion of the house clear.

His portion has $150,000 lien on it.

I don't know how much value there is in this house we don't have enough information what a mess

sorry Alice

so it pops into my head that

Tom Stanley who wrote the book Millionaire Next Door in 1992 he's passed away in a car wreck

but he was an inspiration to a lot of us in this space showing that people become millionaires starting from nothing.

We followed up with that 40 years later with a

or 30 years later with the Ramsey study of millionaires, the largest study.

We studied 10 times more people than he did,

mainly not because we didn't like his study, but just because we wanted it was a PR stunt, because people criticized the size of his study.

So we ended up studying 10,167 millionaires and where money comes from.

He wrote another book later

called The Millionaire Mind, where he studied

billionaires

and he found 39 correlating statistics or correlating life demographics and character qualities and so forth among these billionaires that he studied.

And then he ranked them in order of most occurring among the study group to least occurring among the study group.

The number one

occurring thing among the billionaires that he studied, they were all self-made, meaning they started with nothing and became billionaires, thousand million.

This is way more than a million.

Thousand million is a billion.

Number one correlating, the most occurring item,

value, whatever, inside of this study was they had fanatical levels of integrity.

There is a high correlation between fanatical levels of integrity and the ability to build wealth.

That's the point of that story.

That would be the other end of the spectrum from the man in this email.

Lying to his wife,

trying to get out of taxes.

Yeah.

And, you know, not returning the CPA's call, all these kinds of things, whatever.

And so duck and hide, lay in the ditch, duck into the shadows.

Try to move the shell.

Hope the P won't be there next time.

Running a scheme, running a scam, trying to find a shortcut, trying to find a get-rich quick thing.

I'm making good money in real estate, but I still got a side hustle that's screwing up.

I find some way to burn money.

That's the opposite end of the number one

most occurring thing called integrity.

So until he fits, the good news is integrity is a decision.

He can just decide to be a man of integrity starting today.

But if he doesn't, you got issues, sister.

You got issues.

Yeah, you're trying to drag a tired donkey across the finish line.

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Joseph is with us in Fort Worth, Texas.

Hi, Joseph.

How are you?

Hey, Dave.

Hey, Rachel.

How are y'all doing today?

I'm doing pretty well.

Can't complain.

Cool.

How can we help?

So, I wanted to get your guys' opinion on bonds.

I'm just starting to, I feel like I've just dipped my toe into stocks and things like that.

But I looked into oil and gas bonds, and I don't know if that's a good route.

I have about

$500 in my HSA that I want to use to invest in that.

I have more money to invest, but I'm just asking specifically, I guess, about that.

And then any other advice you have on just stocks and trading in general.

Okay.

I don't buy bonds.

The bond market in general is almost as volatile as the stock market and doesn't return as well.

So it's pitched in the financial world as being safer than the stock market, but the actual data says it's not much safer.

The volatility in the bond market comes from shifting interest rates.

So I have avoided bonds.

I don't own a single bond.

And I've got millions of dollars in the market.

I don't own any single stocks because I don't like risk.

I own mutual funds.

A mutual fund is 90 to 200 different stocks.

My HSA is in mutual funds because I've never actually used it.

I bought the HSA the very first year that George W.

Bush put that program out, and I've filled it completely full every year ever since, and I've never touched it.

Whatever Whatever medical we've had has been very minor, and I've just paid it out of my pocket, and that basically has become a yet another retirement account that is growing tax-free

for medical use.

And above 65, which will happen in September, I can pull it out

with only paying taxes on it, no penalties, as if it were a retirement account.

So I'm going to continue to fund that, and I'm not even going to pull it out at 65.

But anyway, so all of that to say, I invest in mutual funds.

So if I put, I don't know, $100,000 into the market, 0% in single stocks, 0% in bonds, 100%

in a type of growth stock mutual fund of some kind or another, and

that's going to be 90 to 200 stocks in there.

And so I've not bet, the volatility from single stocks comes from the lack of diversification,

meaning that if you put $100,000 in one company, whatever that company does causes you to take your breath away, positively or negatively.

And so it's a lot more risk.

But if you're instead of being in one company, you're in two, then if one company goes crazy, the other one's sitting there, you got less risk.

If you're in 200,

you've way limited the risk, and the only risk you're riding is just the risk of the general stock market as a whole, then, and not simply betting the farm on one particular company based on your golfing buddy's hunch, which is how most people play single stocks.

And so I don't trade stocks on a daily basis.

I don't trade mutual funds on a daily basis.

I have the buy and hold tortoise in the tortoise and the hare.

The slow and ugly guy wins the race every time.

I'm perfectly content being the slow and ugly guy because I win the race every time.

Yeah, and I think that's the hard message for,

I want to say maybe the younger you are, the harder it is to be like, okay, this isn't exciting.

You know what I mean?

Like there's crypto, there's all these things happening, and it's like, ooh, I could make a return there, do this thing.

There's like this like game to it.

And when there's not a temptation to be a player.

Yeah, when there's not a game to it and you just kind of just keep investing, it's just boring as well.

That's it.

Like there's just not that much excitement around it.

Usually you're going to end up if you're investing.

You're doing it wrong.

Yeah.

And it's kind of depressing.

I mean, seriously, it is a little bit like.

Yeah,

if your broke friends are impressed with your investing, you're probably doing it wrong.

You know?

Because it's always some broke guy that runs up to me and goes, I know this guy that put $10 million in Bitcoin.

And I'm like, yeah, yeah, I bet you do.

I bet you don't, too.

I bet you're full of crap.

And seriously, people just come up with this stuff.

They pull it out of their ear, people that aren't really doing it.

And, you know, there are so many trends and so many things that kind of come and go.

And so it is the longevity of what you're putting your money into as well, which means it's been around for so long that no one really talks about it because it's that boring.

It's not new and exciting.

And so.

Don't you wish you bought a single-family house on East Ridge Drive in Antioch, Tennessee, a suburb of Nashville in 1978?

That I sold a guy when I was 18 years old,

got my real estate license.

I saw one of my high school buddies a house for $42,250.

This is why

you know what that house is worth right now?

We're so mad at y'all.

You know what that house is worth right now?

Yeah.

Don't you wish.

But see, that's what you want to.

That's who you want to be.

No one ever told you that this was going to be, you know, that you were going to make a million dollars in 20 minutes.

But in 40 years, you did make a million dollars because that's what that house is worth now.

Yeah.

Yep.

You know?

And by the way, it's an old house now.

So it's a really old house.

Still worth a lot, though.

It's antique.

But yeah.

But I mean, that's just a cute little brick house, nothing fancy to me.

Okay, so for Joseph, so you're saying mutual funds.

But something else that I feel like people are talking more and more about is like Vanguard index funds, like more of the SP

and all of that, too.

That's been talked about for a while.

Vanguard was started by John Bogle because he discovered that some 60% of the mutual funds do not outperform the standard and poor index.

And he said, if I just put it in the index, I beat six out of ten times, I beat the average mutual fund out there.

And people that follow that, that is literally passive investing.

People that follow that, we call them Bogleheads.

They call themselves Bogleheads.

And he started Vanguard, the whole Vanguard company on that basis.

And it's very successful.

And I invest in the SP sum.

I park money there like when I'm piling up cash to get ready to buy and do the next real estate deal, when I make some money at Ramsey and I'm just putting it somewhere for a year or whatever until I get enough to do the next deal.

And I'll park it over there.

But in my retirement accounts, I can find mutual funds that outperform the SP.

And I have consistently for 30 years outperformed the SP.

And it's really not rocket science.

But it's only 40% of them.

So you just got to look and go, does this thing outperform the SP?

It's right there in the dead gum prospectus.

It shows up on the website.

It shows up when you're sitting with your business.

And that's within your HSA, 401k, Roth, like all the

just standard retirement investing.

So Joseph, 15% of your income, be putting in all of that.

And then if you max all that out one day because you have a high income, then there's other things.

It's the shortest distance to a million dollars.

It's the shortest distance to wealthy.

It's not bonds.

It's not single stocks.

It's not day trading.

It's not crypto.

There's no data that says it is.

The only data says 401k, Roth IRA, loaded with good gross stock mutual funds and get your house paid off.

That's what all the wealth building data says for the first $1 to $5 million worth of net worth.

And the people that have $1 to $10 million net worth that we studied in this millionaire study, that's what we found over and over and over again.

We did not find them playing trends.

We did not find them playing fads.

They were not gold bugs.

They were not Bitcoin boys, Bitcoin

bros.

They were not any of that.

They were just like, they're the tortoise, the boring,

steady,

Every month the money comes out of my check into the 401k and I got a match.

And then they call us at

58, and they're like, well, we're looking to retire.

How much is in the 401k?

And they're like, 800,492.

You know what I mean?

And then our Roth has this, and you're like, holy crap.

There you go.

Well done.

And they call this show every day and every weekend they have for 30 years.

So that's the end of that speech, Joseph.

But thanks for letting me step up

uh, up onto the old Apple box and just give it a yell.

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Donovan is with us in West Palm Beach, Florida.

Hi, Donovan.

How are you?

I'm Joe Neal.

How are you?

Better than I deserve.

What's up?

Hey, so I really appreciate you guys taking my call.

And I am calling because I am currently 22.

I just turned 22, and I have a real estate business that

from the time I started about three and a half years ago was doing really well.

We were bringing in lots of money and everything was going great up until about this year where our revenue dropped off significantly.

What kind of real estate business?

You're a real estate broker?

No, residential investment, like fix and flip.

You fix and flip, and you're 22 years old.

And

your

revenues have been going up consistently for three and a a half years

Well, until this year

Okay, why did they slow down this year?

So where I am the market really slowed down a lot and um we were you know going from bringing in about a million to a million three every month from all the uh deals to now bringing in like you know three to four hundred thousand per month

and I'm struggling to keep up with um

you know paying all the expenses like uh you servicing the loans, paying the team, paying the subcontractors that are doing work on the house.

Thankfully, I've never missed payroll or anything like that, and I've never been late on my loans.

However, I definitely feel the struggle.

And in a few more months of this, the reserves are going to be completely wiped out.

This is like Dave 30 years ago.

I thought you just described it a little bit, which you know that's why I actually called you guys because I heard Dave.

You own how much much real estate?

So right now I did the math yesterday, just over 15 million.

And it's all for sale?

It's not all for sale.

Some properties are still under renovations, but

some are for sale already.

Okay, 15 million in property doesn't generate 100 million or doesn't generate a million dollars profit a month.

Yes, but we you know, we did about 80 houses last year, and that's not in like, you know, just straight revenue from selling the houses.

That's just, you know, gross what we brought in, what comes into the bench.

So that's not profit, that's gross.

Correct.

So you're just churning money.

Okay.

So

$12 million

in total churn was what you were doing, and now you're not, now the rate of churn has slowed down.

Is that what we're saying?

Yes, The houses are taking much longer to sell.

The budgets are, you know, getting overspent.

And what's your baseline overhead running a month?

So as far as overhead, like paying my office staff and marketing and everything, we're about 50 to 60 grand a month, depending on the month.

However, with paying all the subcontractors and

servicing the loans I have on the property, we're about $650,000.

Okay.

Yeah, you've discovered the downside of debt

in doing this.

And so what you've, yeah, get your butt in a crack.

Hmm.

Well, you're going to do

two things to survive because you're also not as profitable as you thought you were uh once you started actually

net net net actual taxable income for all these dollars that you're spending is not it's not been worth it because you're leveraged to your freaking eyeballs so um yeah

hmm are you married

uh no good

okay

um

well i mean the there's three levers to pull to survive.

One is you get your volume moving again, and no kidding, you already knew that.

And

two is you start dropping some prices on these properties to move them quickly to increase the velocity of the turn, because

your turn velocity is what's killing you.

And that's a function of price right now.

And so you're going to start having some, you're going to put some stuff on sale, and you're going to pick which ones I'm, you know, which ones I've got the most margin in that I can take them or which ones I can move that are price-sensitive neighborhoods that I can move quickly and get out of and start turning these out.

And as your subcontractors are finishing, you're going to start trimming that by 30 or 40%

until you're going to build your volume up more carefully next time.

But you're going to get this thing down to half a volume of what it was and make it profitable and then move towards a debt-free process and start doing these flips with debt-free.

Do a fourth as many and do them debt-free, and you've got a sustainable business.

The business you have is not sustainable.

It's going to come down around your ears before it's over.

And you're just starting to see the cracks in the armor right now in the theories that you're running off of.

You're doing tremendous volume.

The volume you're doing is very impressive for a 22-year-old.

I mean, if you're telling me the truth on these numbers

and your story is the truth, and I don't have any reason to believe it's not,

it's very impressive what you've done,

but you did ignore the risk that you were taking with the leverage.

But the amount of work you've been doing and generating is very impressive.

You're turning 80 freaking houses a year.

I mean, that's...

Yeah, thank you.

I appreciate that.

And if you can do that, instead do 30 with zero debt, you've got a sustainable business move a little slower, and you've got something that no matter what the economy does, it doesn't take you out.

One little bump.

I mean, the Fed does an interest rate adjustment half a point up, and they did not do that today, or an eighth of a point up today.

And you'd be in a, if that had happened today, instead of them keeping it even today, you'd be in an even bigger mess than you are.

You understand, right?

Yes, yeah, definitely.

Thank God it's continuing to trend at least a little bit down.

And as long as those rates trend down a little bit, you're going to be there.

I'm surprised West Palm Beach has dropped 70% in your volume.

I'm really shocked that the market slowed down that far there.

It's not slowed down that much many places.

Not year over year.

And where we are, we are a bit north.

Yeah, but not year over year.

I mean, year over year, that volume drop is 70% drop year over year because 24 was not that much different than 25.

Now, if you said over 20.

24.

Sorry?

Yeah, if you said it was a 70% drop over the year 2020, yeah, or 21, you know, where people were coming out and the volume was huge and the prices increases.

So anyway, get your volume up, lower your prices, start shedding subs as you finish these jobs and quit carrying the burden of all of them.

You may have to shed some office staff.

I've got to say the office.

Office staff.

You may have to get that down.

But you've got to get this nut where you can keep it cracked every month, whether it's overhead nut or variable expenses associated with the deals.

And then that'll get you out.

But everything's on sale starting today.

You've got to have a sale.

And you got to get, because that's going to get your velocity back up.

And maybe you can turn the corner before it crashes down around your head.

I hope you can.

Because what you've done is impressive.

It's just sad you did it the way you did it.

So it's going to come hit you in the face.

But the work you're doing is amazing.

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Mary's in Tallahassee, Florida.

Hi, Mary.

How are you?

I'm well, Dave.

How are you?

Better than I deserve.

What's up?

So my ex-husband and I accumulated a significant amount of tax debt.

We are divorced.

A couple years ago, a federal tax lien was placed on the home.

The home has now been sold.

I do not live in that home, but I was under the impression upon research on the IRS website that a federal tax lien, if it's placed on a home at the closing, the amount that is owed should be taken out that is owed to the IRS at the closing.

Yeah, otherwise, the title is not clear.

That did not happen.

My ex-husband was aware of the lien.

The closing attorney was aware of the lien, and they both walked away and it did not get settled.

And so I don't know if I have a leg to stand on.

I don't know what to do here.

The funds were dispersed to who?

To my ex-husband.

It's because he then owned the house out of the divorce.

Because he got that house out of the divorce, yes.

The lien is on both of you?

Apparently, right now, I've had many, many, many conversations with the IRS.

And

I can't, the lien is on him,

I think, but

the notice of federal tax lien that we got in the mail, I have a copy of it.

You know, it has both of our names.

What was the lien from?

Who didn't pay taxes?

Well,

it's both of us combined.

I know.

Both of you didn't pay taxes?

Correct.

I mean, because

it was a large amount owed, and

we just couldn't do it.

Were you self-employed, both of you, or what?

How did you not pay your taxes?

Well,

at one point through these many years, he was self-employed, and he failed to

do the obligatory quarterly taxes, and so that did not help matters.

But I mean, so how much is the tax lien?

We owe about $65,000.

Okay, and how much of that was on his income that he produced?

That I am unsure of,

you know, that I do not know.

Why?

I mean, you should have a theory.

Were you working a salaried job?

Yes.

Were you not having taxes withheld on your salaried job?

Of course.

I was, and I even had additional taxes taken out.

Okay, so

he was working a business and was not filing his quarterlies and not filing taxes or not paying his taxes on his business.

That's where this came from, right?

Well, some of the years, not all of them.

Some of the years, I'm not sure why we owed so much, to be honest with you, Dave.

But we were on a payment plan for a while.

Then, you know, we got divorced.

The payment plan, we stopped paying on, financial stress.

Now, I've looked into getting on another payment plan, and that payment plan is going to be way too much a month to afford.

But the IRS is not trying to collect from you.

The IRS is not trying to collect from me.

I mean,

I do have my own personal debt from last year.

It's a more difficult time.

No, I'm talking about on this particular lien amount.

No,

they don't even act like you're you're there.

I'm assuming no.

But then when I go onto the IRS website, it does talk about a lien.

But then when I call them,

a lien is not

if your husband, if they're chasing your husband, they would have put a lien against anything that had his name on it.

This house used to also have your name on it, but that doesn't mean you're liable for the taxes necessarily.

Were you all doing married filing jointly?

Yes.

Okay.

Well, that's the only reason it would have your name on on it.

You probably could escape using innocent spouse provision.

You need some tax advice from a pro

that can get into this instead of you talking to the IRS because, I mean, you're talking to a kid in a cubicle at the IRS.

Exactly.

Exactly.

And a different one every time you call.

Oh, yeah.

And it takes hours each time.

Yeah.

No, I'm not doing that anymore.

You need to hire somebody.

What do you make now?

Money-wise?

Yeah.

Oh, I make a very decent living.

What do you make now?

I make $105,000.

Okay, good.

So you make enough to call, jump online at ramseysolutions.com and click on ELP for taxes, endorse local provider for taxes, find the person we endorse for taxes in Tallahassee, Florida.

Go sit down with them and tell them the story and tell them to get to the bottom of it and give them 500 bucks and they'll do it.

Okay.

That's what you've got to do.

I don't know.

I can't tell what happened with this house.

I've done a bazillion real estate transactions that had IRS liens on them and 100% of them got paid because the title is simply not clear.

Well, that's what I was wondering.

I'm like, who I don't know how

this happened.

If it was purposeful, accidental, sloppy, was it like, how did that not happen?

A buyer would have needed a title insurance policy.

Right, if they went, yeah, yeah.

Especially if they got a mortgage.

They would have been required to get a title insurance policy.

You can't get title insurance on something with an IRS lien on it.

And so that's what's weird here.

So something,

I think your husband's feeding, your ex-husband's feeding you a line of bullcrap is what I think.

What do you think?

You think he paid it and he's lying?

I don't know what happened, but I don't, what she described would be

so hard to pull off.

It would be just ludicrous for the closing attorney to

allow a seller to sign a warranty deed or a special warranty deed knowing there's an IRS lien against this house, knowing the title is not clear.

That would just be so messed up.

I just can't believe it happens.

I mean,

there's no way to get around this, and it turned out good for everybody.

And title insurance company is going to come to, you know, they're not going to allow it.

So I just, something different is happening than what she thinks is happening.

That's what I can't tell.

So, anyway,

get somebody to help you get to the bottom of it, Mary.

It's possible that they simply are not after you, and it's not your problem.

And that's my hope.

That's what I hope you find when you get to the bottom of it.

Roy is in Iowa.

Hi, Roy.

Welcome to the Ramsey Show.

Hi, Roy.

Mr.

Ramsey, thank you so much for yeah, can you hear me?

Sure, what's up?

Pretty good, Corrie.

Thank you for answering my phone call, Mr.

Ramsey.

I have a question.

I have a trucking company I've been running for the past

one year.

So I started with one heavy-duty truck and then added a couple of more trucks as well.

So, you know, everything was good, but there were a lot of hiccups and all that good stuff.

So, you know, just a couple of months ago, one of my trucks burned down.

You know, the driver just sent me a video, the truck was set on fire and all that good stuff.

You know, it was very horrible.

But, you know, the reason I'm calling is because I'm most of the time stressed out about this business.

Not because a lot of people complain about the market.

I'm not complaining about the market.

You know, I'm very satisfied with whatever the rates are being provided.

I mean, they're enough to feed the stomachs, pay the bills, and

keep the show running.

But what I'm concerned about is the breakdowns of the trucks in this industry.

I mean, they can cost you a lot of money sometimes.

20 grand, 30 grand.

It can even go worse.

So what you need to do when you close the books each month and you determine what your profits are, you need to start having a line item in your monthly budget that sets aside money for future repairs.

So a percentage of your profits, a large percentage of your profits at your stage of business, 20, 30% of of your profits before you take it home to eat.

Quit acting like you made that much money because you haven't yet until you paid for the repairs.

So if you make $10,000 a month, I want you to set $3,000 aside or $4,000 aside or whatever 30 or 40% is for repairs.

And I want you to build a repair war chest.

And it's called retained earnings in business.

And so build up your emergency fund inside your business.

But you do that by setting a set percentage of your profits each month as if it was an expense because it is a future expense and you're just setting the money back for it.

Hey guys, I love summer.

But do you ever notice how fast money can get out of hand this time of year?

You know how it is.

You want to make all these great memories.

It's so easy to just put your brain in beach mode and swipe that credit card.

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Haley's in New York City.

Hi, Haley.

How are you?

Hi, how are you?

Better than I deserve.

What's up?

So, to get to the point, I'm kind of calling in just to see if it's possible for me to become a stay-at-home mom.

There are some other factors outside of that that will affect it.

And I'm pretty ignorant when it comes to a lot of this stuff, just because all I've ever known is to work.

But it's seeming to cost me more going into work than it is to not.

One of my children is going to be potentially going in for brain surgery within the next month, and she's going to have to need one of her parents home, obviously, after for the care.

And I'm really stressing out about it because I get paid bi-weekly, and I just brought home a $500 paycheck,

a bi-weekly paycheck, and it went to pretty much nothing because everything is so expensive nowadays.

And my fiancé is switching jobs at the end of the month to make us more money.

And I'm just wondering if it would at all be possible because we do have two vehicle loans.

That's about the only debt that we have together.

We are not married.

Other than he does owe some,

I think, $3,000 to the government.

But

that's been on my mind lately, just more because of the surgery that is upcoming.

And I just need to know where to go at this point with the plan of everything and the plan of action.

Okay.

What does he make, hon?

He makes $25 an hour where he is currently.

That will be increasing.

You're in New York City?

Well, we are actually quite a bit upstate from New York City.

Okay.

I didn't think you're in Manhattan on $25 an hour.

Oh, no.

Okay.

No.

I currently make $20.50 an hour, but I work for the younger people.

What does he do?

He's a welder.

And how old is he?

He's 24 as well as.

Why is he only making $25 as a welder?

It should be $50.

Yeah, I'm not sure about that either.

I had questioned that, but I guess it's something to do with a union.

Well, leave the union and go be a freelance welder and make $50.

Right.

I'm dead serious.

Okay.

That's what I had said, too.

So you guys are 24.

You have a brand new baby.

How old is your baby?

This haven's searched?

She just turned one.

I have two older kids as well.

Okay.

All with him?

No.

Okay.

Is she his?

Yes.

Okay.

All right.

Well, I'm going to help you with the money question, and then I'm going to give you some advice that you didn't ask for from just an old guy that loves you, okay?

Okay.

It's irresponsible

for him and you to not be married when you have a child facing a brain surgery.

I understand.

Get married this weekend.

You, my darling, are extremely vulnerable right now.

Right.

And Rachel and I have taken calls from people over and over where something like this happens and the guy jets.

Okay.

And I'm not accusing your guy of that.

Okay.

Right.

I want to protect you and this child because, and I want him to prove he's going to be there and I want him to put a ring on it this weekend.

Right.

Okay.

That's going to help you.

That's the old guy advice.

Okay.

Okay.

And then I want him to get a better job.

Okay.

The answer to the question is, can you stay at home?

Well, for the short term, you don't have a choice.

You're going to be at home.

Right.

And y'all are going to have to figure it out.

He may have to work three jobs.

You may have to work some side gigs for them.

Sell these cars so you don't have payments every month.

Yeah.

You may have to sell some cars and get rid of these car payments.

Okay.

But you're going to have to do some stuff because this child's care, the care of this child is number one.

Agreed?

Correct.

Yes.

So the answer to your question overall, mathematically, can I stay at home with the kids,

like a permanent permanent decision is yes, as soon as you can live on his income.

Right.

That's the math, isn't it?

So we've got to do a budget based on his income, meaning that we can pay our rent, we can eat, we can do lights, pay car payments, or get rid of the car payments.

We have to create a life that is within his income, and then you can stay at home mathematically without creating a mess.

Okay.

As a permanent decision.

As a short-term decision, you're going to be at home.

Right.

Because you've got to take care of a brain surgery situation.

Wow.

I just took two weeks off of work because the other issue that we had been dealing with was

about two months ago, my daughter was also assaulted at daycare.

So we had to find a different daycare provider and then we lost the second one.

So I do have, as of right now, two weeks off of work until somebody else can start.

And that's mainly what's been freaking me out a little bit is

trying to make the decision of whether or not just to stay home because I drive a Tahoe and I work 45 minutes away from my house so between dad and child care what do you owe on the two cars

well we have a van and we have a Tahoe the Tahoe is about 25,000 because I rolled over from a vehicle that I had to trade in

and he owes about 13,000 on the van yeah the Tahoe's killing y'all yeah

so we got to get it sold and we got to get that debt paid off, and that's going to involve income coming from one or both of you, and then that's going to enable you to

fit your life within his income, and his income has to come up for that to happen.

That's what I think the math is going to tell you.

What do you do for a living?

I work in a medical laboratory at a hospital, but I only work three days a week as of right now.

Okay.

I was wondering if there's a way that you guys tag team this, where he works all day, comes home, tags you in, possibly, and you go do a shift or two, right?

Right.

Maybe twice a week or something.

Like, if you guys can tag team each other just to bring in some income for this time to get this stuff paid off.

Because if you don't have any car payments, you can fit your life within his income a lot quicker.

And the way you get there is create extra income on the short term.

Right.

And that's what I'm saying.

Is the surgery date?

Has it been set, Haley?

It has not yet.

She has an MRI this Friday morning.

I'll know more information probably after that.

Yes.

Okay.

Yep.

Well, the primary thing I want out of the whole discussion is for the baby to be taken care of.

And the secondary thing is to take care of the short-term time that you're off work.

And then the third thing is to answer the question of what must be true that's not true today

for us to be able to live on his income.

And that would probably be getting rid of the Tahoe debt, getting rid of his car debt,

getting his income up.

That's probably when you sit down to do your budget, what you're going to figure out.

Because I don't know that you're going to do this on $25 an hour from one person.

Yeah, I don't.

I don't know that,

and have three kids.

I just, I don't know that you're going to be able to do it.

You're probably not breaking even on daycare and Tahoe payments, so I agree with you on that.

You working three days a week.

So you're probably not losing much by losing that job if you lose the Tahoe payment

by getting it sold and or you know even if you have to finance the difference as a standalone personal loan yeah and that to cover the upside-down amount yeah but I would really talk to him Haley and look at some options because this is a I mean it's a pretty

vital situation you guys are in I mean like we were saying you don't have a choice after after she comes home from surgery someone yeah you have to be there to take care of her so there's there's choices that we all have to make in a situation like this that that we don't want.

So even if he wants to stay where he is, workwise, he may not have a choice.

He may have to leave the union and go figure out something else, you know, make more money as a welder.

He can make more in 25

for sure.

I'm so sorry, though.

It's a lot.

Wow.

There you go.

You got a lot on you, kiddo.

You work your butt off for your money, but your money's never going to return the favor if all you do is hope for the best.

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Our scripture of the day, Proverbs 10, for lazy hands make for poverty, but diligent hands bring wealth.

Andrew Tobias said, you want 21% interest risk-free?

Pay off your credit card.

Work.

Danielle is in Salt Lake City.

Hey, Danielle, what's up?

Hey, good.

How are you?

Better than I deserve.

How can we help?

Hey, so my husband and I, to keep it short and sweet, we applied for this program.

It's basically a rent-to-own program sponsored by

the state.

It is a 15-year term, and we cannot buy the home until the end of that term, but essentially all of our rent payments would go towards equity on that home.

My holdup is that we'll be basically renting for 15 years,

and we are only in baby step two right now, so we don't have an emergency fund, but our debt is only like $6,000, so not a ton.

Okay.

I think your holdup was

a good analysis.

I would not do this.

No?

No, not under any circumstances would I do this.

No.

I would get out of debt.

I'd build an emergency fund.

I'd start saving for a down payment on a house.

No, I would not rent for 15 years on purpose.

Yeah, so much changes, Danielle, in 15 years, if you think about it.

Life, I mean, it's just crazy.

think about 15 years ago for you right I mean just it is

and to be locked into something if you never close on it 100% of the money went to rent for 15 I mean well this

I mean our rent payment right now would be the exact same thing if you never close on it a hundred percent of it went to rent I'll give you a hundred percent chance you never close on it

you're not going to stay there 15 years.

Too much happens in life.

Crap, the roof on the thing will be 15 years old the dishwasher will be 15 years old stuff's gonna start breaking left and right

that's if it's brand new when you move in it uh danielle why did you

why did y'all why did y'all decide this and not just have a mortgage and build equity on your own and why why are you guys using this program

um well we were building a savings account and uh trying to save up money but we had a baby uh So all of our emergency funds went to paying that down, and we're still kind of working on that.

Good.

I love it.

So you get that last $6,000 clear, you build the emergency fund, and then you go buy and you start saving for a house.

How old are you?

23, and my husband's 24.

Yeah.

Please don't do this.

Well, the thing is we can get out of the rent program.

We're not signing for 15 years.

Don't sign up.

Don't sign anything else.

Just don't do it at all.

Please don't do it.

It's not good.

It's not good for you.

You called NAS.

I'm going to tell you the truth.

How do I visualize 33-year-old Danielle in her best life?

It's not 10 years into a 15-year rent program.

I can tell you that.

You're going to be so much better off, Danielle.

Yeah, you'll be so much better off at 33.

Yes.

I mean, seriously, think about it.

It's going to take you guys a couple of years.

Don't rush into a house.

You guys are fine.

You got time.

Rent, get yourself in a position and then actually start building money for you.

Like, as you guys start, when you finally buy a house for you guys, if you buy a house in four years, that's 11 years sooner than the planning.

And people are paying off their homes in seven to nine years using this program.

So you could have a paid-off house completely yours.

Before you would even be buying this other one.

Yes, yes.

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

There's a reason these programs exist, Danielle.

It's because people are not in good financial situations to buy houses.

So don't buy a house.

You guys don't.

You're not ready yet.

You're not ready.

I think all the lights are flashing.

There's plenty of time to do this.

Please, please don't do it.

Please, don't do it.

Your instinct when you said the wisest thing you said is the thing that's bothering me is I'm going to be renting the whole time.

And that really, really, really means a lot.

It should be bothering you.

And this may not be the case, but I'm going to just say it out loud because I see it.

Salt Lake City, it's kind of become like a small little LA.

The amount of lifestyle and

wealth and keeping up out of that city is pretty unbelievable.

So like, I don't know if there's any level of comparison, Danielle, of what you're living in, is everyone's like just doing really well around you.

I don't know, but I see more and more of that.

Really?

Coming out of Salt Lake.

Yes.

I have no idea.

Yes.

I should get out more.

Joseph is in Columbia, South Carolina.

Hey, Joseph, what's up?

Hey, how's it going?

Better than I deserve.

How can I help?

Yeah, I'm calling to I'm trying to decide if it would be a good idea to sell my paid-off truck to help pay off some debts and start a good savings.

How much is the truck worth?

I've gotten one estimate, and it was for $21,000.

And what do you make a year?

I'm making $4,700 a year.

You broke up.

I'm sorry.

You make what a year?

$47,000.

$47,000.

Okay.

Yeah, your phone's messing up.

$47,000, and you have a $20,000 truck.

Okay.

Are you single?

I have a girlfriend.

Okay.

You're single.

How old are you?

$22.

Okay.

Single or married are the two options.

Okay.

So you're in a relationship.

You're 22.

Yeah, you're dating someone.

That's cool.

And you have a $20,000 truck as paid for.

How much debt have you got?

I have $4,200 to the IRS and $2,000 on a credit card before I heard about you.

Okay.

How did you get behind the IRS at 22 years old?

So last year I took a job as a contractor, so I was basically self-employed and

just taxes is how I have that debt.

Yeah.

Are you now?

No, no, I changed jobs, so now I'm on a W-2.

So if you ever were a contractor again, you know how to handle it so that doesn't happen again, right?

Yes.

Lesson learned.

Good, okay, good.

So both of these are lessons learned.

Okay, so $6,200,

$47,000.

You like the truck?

I do.

I really like it, but I'm just trying to think long-term what would be better for me.

I appreciate the maturity of that statement, but for $6,000, I would not sell a $20,000 truck that I like

when I am making $47,000.

I would rather work three or four weekends and some overtime and live on beans and rice and not see the inside of a restaurant and my date be throwing frisbee for a while.

And let's get these 6,000 knocked out real, real fast.

I'd rather do that than sell my truck.

Okay.

Because I like my truck too, by the way.

I'm not selling it.

So I drove it today.

Yeah, yeah.

Definitely something I wasn't really ecstatic to do, but I was just thinking, you know, maybe.

Yeah, things to sell.

I would rather you get control of your budget and tighten it up.

And that's a lesson that'll help you anyway in case this uh dating relationship gets more serious and that's a lesson that'll help you become a millionaire by the time you're 30 and all those kinds of things yeah versus like a sweeping just i'll sell one thing and just fix everything fix the issue yeah where there's something about i do think you've learned both your lessons on these two things i'm not worried about that part of it um but i i love the idea of you gutting this out by getting by pinching your dollars and making them scream yeah And then that gets you, that also has the benefit of letting you keep a really nice truck.

And I'm pretty cool with all that.

But she's going to have to put up with you being a cheapskate for a month or two while you knock this out.

And that's probably a pretty good relationship test anyway.

To see if she sticks around.

Yeah.

Jason calls back and says he's single, then we know we

may have messed that one up for you, Joseph.

Well, I'm sure she's not going to be able to do it.

It wouldn't be the first time I messed it up for somebody.

I'm pretty good at that.

Yeah, but no, it's a, but it's a good thought, though, because, you know, and people sometimes ask on a larger scale, should I sell my house to get out of $40,000 of debt and all of that?

Not usually.

Yep, not usually.

Usually, you're better off to work your way out of it unless there's some other reason to sell the house.

Other reason to sell the truck.

I hate the truck.

Well, it'll sell a stupid thing anyway, but no.

He likes his truck.

And so I'm pretty good with that.

Pretty good with that.

Good show, Rachel.

That puts this hour of the Ramsey Show in the books.

We'll be back with 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.

Hey, you guys, I was shocked to learn that 88% of you out there are sharing the Ramsey show.

I mean, that is so incredible.

Thank you so much.

And I want to tell you that we're making it even easier to share.

So this June, we have pulled together the brand new Ramsey 101 YouTube playlist, a quick start collection of how to get started walking the Ramsey Plan.

Now, this playlist is perfect for that one person in your life who needs help winning with money and just doesn't know where to start.

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So, here's what you need to do: click the link at the top of the show notes, it'll take you straight to the YouTube playlist, copy it, text it, send it in a group chat, just say, hey, I thought this might help.

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One share, one playlist, one step could change everything for that one person in your life.

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