Building Wealth Happens One Baby Step at a Time

Welcome to the Ramsey Show, where we help you win in your life. We're going to help you win in your money, win in your profession, and win in your relationships.
The phone number to jump in today so we can coach you up is 888-825-5225. Alongside the incomparable, the doctor is in sign is hanging above my head.
Dr. John Deloney.
What's up? My pal and seatmate, if you will. And I'm Ken Coleman.
And so we are here for you today. So no money personalities, but we know the basics and we're going to help you out.
We're going to get behind some of this stuff. So excited to have you with us.
Corey's going to start us off, John, in Detroit, Michigan. Corey, how can we help today? Thank you for taking my call.
You bet. What's going on? My wife and I are kind of trying to think in the future, and we know that our wealth is going to be significant,

and we're just trying to figure out when do we start to give.

Yes.

Tell us about this wealth.

We know we're going to be wealthy.

Give us a picture of what's going on and when it happens.

We're currently at around $900,000,

and my wife and I are teachers, so we have a pension as well. We have about $320,000 in Roths.
We have $210,000 in our $457,000. We currently max out our Roths, our $457,000 every year.
And then we have two additional properties besides our single residence. And those are paid for? Yes.
So what's your net worth? 900? Around 900. Okay.
So what is the question? I love how John answered. He's absolutely right.
So what is the specific giving strategy or question marks you have around this? What are you pondering? So we live comfortably as we are and as we're saving, and our kids' colleges are taken care of, and our goals are set. And we know we'll achieve our goals.
The question is, when do we stop building our wealth, and when do we start giving it away? What if it's both and? Exploring that part. It's both and.
Do you all not give at all right now? At this moment, no. Okay.
What has inspired the question about giving? We sat down and we've paid off our properties. We are, I mean, we're saving 35% of our income and we still are comfortable.
So we're realizing that we have an excess. Yeah, but back to John's question.
Is there a specific cause, something that has spurred this on where you want to give, you're about it uh well we're maxed out we have a child that's going to be leaving daycare going into kindergarten that's when we kind of really sat down what do we do with this additional money so we're trying just to figure out do we continue investing do we keep building wealth or at what point do we start to share you do both i my my honest answer would be you start to share years ago. Because I think generosity is a position.
It's a stance you take on the world. When you look at giving as a number, we'll start doing X when we get there.
What most people find is their life continues to grow. Their needs and their expenses grow with them.
And that number just, that finish line keeps moving and moving and moving. So giving is a way of being.
It's a way of going through the world saying, I got struck by lightning in that I married well. My jobs have been stable.
I've worked out. I was left in inheritance.
I worked really hard. I owned a small port-a-potty company, and then all of a sudden some guy bought 40,000 acres next to us, and now I'm a million.
Whatever the posture is, or I'm a person of faith, and every single breath that takes a blessing, and so I'm a pass-through. I'm going to let so much of this go back to those who need.
Whatever your position is, every single psychological study, every single faith community throughout all of human history has wired into it generosity, giving, being a pass through. And so for the sake of your soul, not like in a go to church or you go to hell, that's what I'm talking about, but for the sake of your spirit, of your soul, your marriage, your kids, yeah, start giving today.
Find causes that matter to you. Find moments that matter to you.
Find people that you see that we can be a blessing towards and begin to practice it. And Ken, I tell people, practice this in little ways, meaning wait until you see at a restaurant when you see a waitress who's working five different sections because people didn't show up on their shift and she's exhausted and your food's a little bit late and tip her 100% of the tab and write her a note that says, we saw how hard you're working, we're grateful for you.
Do that and then just watch her when she opens it up. Do small things like that.
And then find somebody at your kid's kindergarten who can't afford the tuition and tell the headmaster, hey, we'd like to pick up somebody's tuition. Just let us know.
Or be more strategic about it once you think about it. But it's just a posture.
Yeah. Corey, did I hear you say you guys are investing 35%? Yeah.
Yeah. You know, look, here's what Dave has taught for years, and of course we sing that chorus as well.
What we teach is in the baby steps. Are you familiar with the baby steps? I'm assuming you are.
Yes, we went through them and paid everything off. Exactly.
So you get to do whatever you want, but we've prescribed for 15%, and you guys are in great shape. So you could say, we're going to go back to that and we're going to invest 15% and we're not going to stop.
Okay. That's the, when John and I said, yes, and that's that.
Now, if you want to do more than that, you can, but that's the rule of thumb and you're in great shape. So at which point you now go, okay, if I'm going to invest 15% or 35%, then whatever's left over, how much of my income am I going to set aside for continuous giving?

So John's right.

You can give where you are.

However you're moving throughout the day, you find opportunities to give.

But for strategic giving, then I would put a budget number on it.

And so let's say you said we're going to do, for sake of discussion, let's say you're going to go back to investing 15%.

Thank you. then I would put a budget number on it.
And so let's say you said we're going to do, for sake of discussion, let's say you're going to go back to investing 15%, and that's the continuing build. But then you go, okay, we're going to take that 35% we've been investing, we're only going to invest 15%, and we're going to take 20% of our income.
And that is now our giving fund. And to John's point, if you feel generous and you want to leave a $500 tip that comes out of that number, if you want to invest in a nonprofit, a mission organization, your church, some type of charity, I would find a cause that's near and dear to both you and your wife and something that has a story attached to it that connects to you all's story.
I think that's a great way to do it, but you get to decide. But I would just start immediately doing it and you've got the margin.
And so now if you're investing 15% and you are giving 20% or whatever ratio you want to do there, I would start right away. Okay.
Well, just kind of tap onto that. Would you give smaller or you invest and then give later in larger amounts again we're not genie in a bottle so i'm not going to answer that i like john's answer you get to decide cory there's no i'm not turning to page five in the in the in the ramsey manual right now to answer that question because that is so individual to you we're not being being coy.
It's a posture. You do what you want to do.
But my only advice on that is, John, and you weigh in on this, if I was in your position, Corey, I would be giving a substantial chunk consistently to something that I deeply connected to. Absolutely.
I would leave it at that. You get to fill in what deeply connected to looks like.
Yes. And I think what you need to do, Corey, is get out of the spreadsheet and into life.
And so, yes, there's going to be a library someday that wants an extra gargoyle that your $9 million could pay for. You're right.
But you want something special? Go tip your waiter $100 at a Waffle House, and he'll chase you out into the parking lot and hug you because you just took care of his kid's light bill. You just put food on their table for a month.
I love that you're bringing into a special customized gargoyle. There's a lot to unpack there on the commercial break.
It tells me so much that I love about you. Hey, we have something special coming back.
Big news. King and Hellman.
We'll tell you. Can't wait.
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Make sure to check it out, you guys. Welcome back, America.
Thrilled to have you with us here on the Ramsey Show alongside Dr. John Deloney.
I'm Ken Coleman, and we're here for you. The phone number, by the way, to jump in is 888-825-5225.
That's 888-825-5225. All right, Ken, I got to jump in.
You're jumping in. I have been waiting for weeks and weeks and weeks for to be able to talk about this publicly, man.
This is amazing. This is a huge day for Ken Colemanman for your family for this company and this incredible new show called front row seat that you're premiering this week so thank you tell us the genesis of this thing tell us how it's been going yeah um and i'm so jealous of everything from the from the it does look cool the team's the talent the team the videos all of set design, everything's rad.
But tell us all about it. So if you're old enough to know the show Inside the Actor's Studio.
Legend. If you remember that, we're a famed movie television and producer, professor.
James Lipton would interview the best of the best of actors, directors, producers. and he would do it in front of a classroom in a theater, but a true classroom.
And then the students themselves would get a chance to jump in and ask questions. That's the concept of front row seats.
Why we call it front row seat, uh, because we will be doing this in front of a live audience, uh, surrounding a very small, intimate audience surrounding me and the guest. Uh, and then we'll do virtual audiences.
And so where you can sit in almost on a group Zoom with somebody that you would never get the opportunity to talk to, but you don't just listen and learn, you actually get to ask questions. That's why we call it front row seat.
And we're focused on three things. We want people to get better personally.
Think of all the areas of your personal life. You think about your relational life.
It's where you're focused on helping people. You think of your physical life, your mental and emotional life.
We bring whatever version we have to work. And so we want people to get better.
So bringing them people that are experts in all of those areas, deep dive, how can we get better so that we can go to work and we have the best opportunity to do our best work and move up, whatever move up looks like. And then ultimately, as you move up in America, you get thrown into leadership positions that largely you're not trained for.
So some leadership 101 stuff. So you're thinking about personal growth topics, growth development topics at work, and then leadership 101 stuff from some of the best voices in the world.
Our debut episode out today, former governor, first female governor of South Carolina, Nikki Haley. Now, if you're on the Trump side of things, you're going to have to get over it because it's not a political interview.
Well, it's a great interview. This is a leadership interview.
And I'm going to be sitting with people that are left, right, middle, don't even want to talk about it because this conversation is designed to make us think, to make us feel, and to make us do. And that's what we're doing with the show.
And I'm really excited about it. It's my roots, by the way.
Yeah. Yeah.
So I'm saying you've been interviewing people, athletes, presidents, You've been interviewing people who are extraordinary in what they do forever. Like for way before you were on the reinsert team.
Yeah, and I've had the opportunity to do a lot of coaching here on the Ken Coleman Show. But this is a natural evolution of what I've always wanted to do.
And I think that, you know, I always tell people, do what your heart tells you to do. Follow your heart, Dave, and the leadership.
This is a show that I've wanted to do for a very long time. And so we're doing it.
And it's designed to, again, bring in a large audience. If you listen to this show for money issues, you're going to love this show.
And so the audience themselves brings in a representation. That live audience represents the people listening and watching.
So I would say this, and we'll move on to the calls. You can get it on YouTube, podcast app, the Ramsey Network app.
All you got to search is Front Row Seat, Ken Coleman, and it'll come up, and it's live now. And I will say this, this interview with Nikki Haley, a deep dive on her past as a child, an immigrant who dealt with bullying because of her race, a woman who broke a barrier and then stood up for one of the biggest issues that divides us racially.
I mean, this is a woman of great substance. Whether you like her or not, I think you'll learn something from this interview.
That's all I'd say on that. Well, and my favorite, here's what I i think sets this whole show apart and i can't wait to see this thing just hit the ground running dude is i don't know how many times we listen to podcasts and someone's doing an interview and i think yeah but hold on but what about and i want to inject myself in that conversation or at least ask the next question or that felt like a softball and you have a live audience you have that get to do that.
That's right. And I don't know that that show exists anywhere, right? That's my favorite part is allowing people to get a chance to speak up and ask a question.
And ask their questions. So I love it.
I love it. I love it, man.
Front row seat now available from Ramsey Solutions. You can get it wherever you get your podcasts and on YouTube.
All right, to the phones we go. Sarah is joining us in Charlotte, North Carolina.
Sarah, how can we help today? Hi, thanks for taking my call. You bet.
What's going on? So my question is, how much should I be contributing to my kids by 29? I know there's no magic number of what you know what college is going to cost for them but is there a point of you know you get a hundred thousand dollars in there should you be putting it in a high yield savings account instead just in case sure how old are they and have you done any investing so far so there's six and three three. Okay.
And my six-year-old, we have $15,000 sitting in his account at this point. Good.
And my three-year-old, $6,700. Good.
So if you were just to look, if you get on RamseySolutions.com after this call and pull up our investment calculator, punch those numbers in. And it'd be a real fun exercise for you to see, okay, at 18, based on those two amounts and put in a modest return, nothing crazy, then you're going to see what that number is going to add up to.
But I think, John, I like her question. You know, there's no magic you get to about $100,000.
I'm curious, if I were you and I'm thinking what education may or may not look like 15 years from now. You can know this, Sarah, that with AI, college will look different for your kids than it did for us.
I think $100,000 is pretty good. Just know that.
Yeah. What are your thoughts on that number?

And I will also add our mortgage, I've calculated out that once our kids are out of daycare that we're going to increase our mortgage payments and I should have it paid off the year my oldest goes to college.

Sure. So there's an awesome and then a, let me just check you on it.
Okay. That will be the year also that one of your parents calls and says, we need to move in with you.
So I know in your head, probably I want to get to a place where I can just cashflow all of this. And I like that idea.
I like that sentiment and also just be prepared for life to happen along the way too.

Right.

Yeah. I would really do the investment calculator, Sarah.
I really would so that you can actually see how these numbers play out. Because again, if you could make the case to put 150 to 200 away per kid, that's real right now.
That won't cover a lot of schools for four years. We know that.
If you put 200 away, you'll be fine. 200, you're easy okay.
You're fine. But I just believe that it's a tough thing to discuss, John, because you and I both, we talk about this all the time, higher ed is going to look dramatically different.
Correct. Would you agree with that at least? About 1,000%.
Okay, let me ask you this. Actually, we've never talked about this.
If that's true, I don't see how it gets more expensive i see it getting less expensive the only way it gets if you see a and again this is what what higher ed people talk like me and my colleagues have talked about for years behind closed doors like just having those we call them sad lunches right um if you saw a a dramatic number of colleges close, which I don't think is wild speculation. Oh, no.
I think it's going to happen. Then it will make the remaining colleges very, very exclusive and thus very, very expensive.
Interesting. And I think the marquee will be on a shared experience.
it will be the cultural aspect as much if not more so than the information. If I've got a personal bot who can just coach me along the way.
And see, that's where I think, you know what? That's a fun discussion for another time. The human element will be, can I associate and talk to and hang out with other people my age and older? Can I have multiple leaders? Like you have multiple professors, etc.
I think there will be a premium level, just like there's really fancy restaurants now. That's exactly right.
But I do think we're seeing the cost of tuition, student loans. I think COVID started the tide.
I do think we're going to see decentralized higher ed. And thus, I think it's going to be a lot less expensive.
That would be my prediction. I could be wrong.
I agree with wrong. I still think there'll be your premium place.
There's always going to be a Ritz-Carlton. That's right.
That's right. But Airbnbs didn't exist.
That's exactly right. All right.
Quick break. He's Dr.
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Welcome back to The Ramsey Show. Thrilled to have you with us.
888-825-5225 is the number to jump in. I'm Ken Coleman.
Dr. John Deloney is joining me today.
Jack is with us now in Cleveland, Ohio. Jack, how can we help? Hey guys, how are you? We're having a blast.
What's going on with you? Okay, so I just need some advice. My my ex i have a kid with my ex and my kid is

getting older and big expenses are starting to come up and i don't know how to tell um my ex

can we we're pretty good co-parenting we just talk about things a lot um but i think there's

an expectation with money and i don't think i can meet their expectation with money. So I have, it's like a finance question and it's really morale.
You know, like my kid needs braces or wants braces. It's not medically necessary.
And that's $6,000. She wants to split it with three grand a piece.
I just don't have it. Is that something I am just obligated to pay anyway and just figure it out? No.
Or am I allowed to say no? And then there's a car that's being brought up right now and there's just some big expenses coming up and she wants to split everything. And I don't know how I can really do that.
Well, it's pretty common. Well, it's pretty common that people get sideways at this age and some parents like you um are just steeped in reality this is how much money I have like even if I wanted to buy you six thousand dollar braces which I I do I want you I want you to have the things that you think are going to make you feel beautiful I want you to have that and I don't have that those dollars right dollars.
Right. And then there's other parents who, as the kid gets older, they want to, they want to use money and stuff as a proxy for the world that they thought they would have been able to give them had there not been a divorce.
I want you to have this fancy car. I want you to have these fancy clothes and this fancy, whatever.
I want to say yes to everything that you want. What's your relationship with stepmom?

Y'all communicate well?

Y'all co-parent well? It was really, really rocky in the early years. And we've worked on it really well.
And I think that we're, I mean, at one point we've even had a couple of beers together. So I think we've gotten pretty okay.
but I just

you know my kid is

15 going on at 16 and she's so

excited together. So I think we've gotten pretty okay.
Um, but I just, you know, I just, you know, my kid is, you know, 15 going on 16 and she's so getting so expensive now with bigger ticket items. It's not just clothes anymore.
So, well, I, so here's what you have to do. You have to sit down with your ex-wife and say, Hey, could we meet? And I'm glad that y'all are acting like adults.
It's awesome. I love it when adults act like adults.
It's so good. So rare.
So high five to you. Um, and just say, Hey, here's my financial situation.
Here's where we are. I, it would, it would be honoring to you that you're, she doesn't say, I want to buy this, but your dad's too cheap to, cause at the end of the day, that doesn't hurt you as much as it hurts that kid.
And so if y'all could come to some sort of agreement on those kind of things, and maybe you can't, and you'll remember, oh, this is why we got divorced in the first place. Hopefully she could say, well, in my new world, I've got 5,000 bucks.
If you could do 1,000, I'm going to tell the kid that we're splitting this together. And y'all work out the money behind closed doors, like adults, whatever you can put in there.
But you have a financial reality that you to stick to and um i hopefully y'all can sit down and have an adult conversation to come to some consensus here we're not getting her alexis that's never possible right um i can come up over the next year with 3500 that i could contribute to a camry right and if you wanted to have a new follow-up do have a follow-up question. Okay, go ahead.

So we're kind of going down that path right now, and I think you're going to say no. I'm assuming you're going to say no, but.
Don't take out any loans. Please don't.
Okay. Yes.
Well, that's exactly kind of where she wants to go. It's not necessarily a loan.
It's an IOU to her. She wants to.
God, no. So, don't borrow money, but if you have to choose between a bank and your ex-wife, good God, at least there's laws regulating a bank.
Yeah, I mean, Jack, I'm sitting there listening to you and John talk. You already knew the answer to the question that you asked.
I think you're, and again, no judgment here. I'm seriously putting myself in your shoes.
I would be a mess internally if I were in your shoes right now, because I would be afraid that my ex isn't going to like what is the reality and she's going to say something or do something. And then my kid is going to think that I don't love him as much.
I would be sick to my stomach. Just being honest, John.
Yeah, heck yeah. Jack, I think that's what you're dealing with.
That's how I feel. All right, so now that's what we need to address because when you started this call, you already knew what's reasonable and what's right.
And what is real. I can't afford it, right? You can't.
But what's also real, John, is that Jack can be manipulated

into, and I could too,

overloving our

16-year-old daughters, yes. Into credit

cards and all the other things to just get

through this. And you know what? I'd rather

deal with the financial pain

than the emotional pain of

disappointing my kid. I think that's where he sits.
Am I right,

Jack? Yeah, that's right. That's spot on.
Okay, have you taken her out, your 16-year-old out, and just said, I'm going to paint you a picture of how the world works. Here's how much money I got.
And your mom loves you, and she wants to buy you this, and I love you, and I want to buy you this, and here's what reality is. That's what I agree.
I that's the tack Jack you got to go directly to your daughter she's 16 I agree and I know leather seats feel like it's more love it's really not right like um what would happen if you had that conversation I don't know I've I I used to make a lot more money and i have spoiled you know my kid a lot and her family that just used to me just handed over money what did you do beyond the child support what did you now what did you do jack and how much did you make versus how much you make now um i was just a supervisor i just worked a lot of, and I didn't really have a good relationship with my kid.

And I made about $90,000.

And now I just work at the local lumber yard.

I just order lumber, and I make about $40,000.

I actually have a separate phone call.

I'm going to have to call you on, Ken, about a different job.

Well, that's why I bring that up. Just to be home more.
I think there's two things. I get that.
But I think there's two things. And, again, I'm – and, John, you weigh in on this.
But, Jack, I'm going to talk to you as if I was in your situation. And I think that, number one, I agree with Doc here that you're sitting down with your daughter and you're explaining reality.
And you give her a lot of why. Here's why I've cut back.
If you want to go to that, I got a different thought on that one. But you can explain all that.
Explain, I don't want to go into debt. Here's why.
Explain all of that. Be really honest, really humble, not defensive, but explain the situation.
Whether or not she gets it in the form of agrees with it or not. Doesn't matter.
Does not matter. But I think you've got to go one-to-one with the daughter and do your best to, and I don't want to say this the right, I don't want to mean controlling, but the narrative needs to be between you and your daughter.
That's the first thing I do. The second thing I do, interestingly enough that you said, I used to make 90, now I make 40.
I think for this season, you got three more years with this kiddo, right? Yep. I'd be working a little bit more and I would be doing what I could to cashflow.
And I'll come up with three grand for braces. I'll tell you what I'll commit to.
If she, whatever she earns towards her car, I'll match it. I'll match it.
Up to five grand or whatever number. And then now we got girls' skin in the game, moms' skin in the game, your skin in the game.
And I think for this season, I'd be pulling some more hours and leveraging my past experience to meet this situation in the middle. No debt, no manipulation and pressure from daughter or ex-wife.
However, I can bring more to the table, and out of a good gesture, I'm going to do that. I think I would try to do that.
John, is that unhealthy? 100%. Because here's what gift you're going to give her, a gift that's infinitely more valuable than braces, Jack.
If you sit down and have this conversation with her and say, I know you you really want braces i know right now you don't as much have to have them medically as um your teeth make you feel less than and you don't smile there's actually some research about smiling and teeth okay but i'm gonna go take a second job here and i'm gonna bust my butt and i'm gonna knock this out for you and here's my going to put some skin in the game, like Ken said, when it comes to grades or comes to working or whatever. But you showing her that extra hours and that extra work, and I took a second job driving for Amazon when she was at mom's house, and you're exhausted and you put that cash on the table, she will understand the value of a dollar infinitely more than you just throwing money at a problem or just saying no to a problem.
So I like that, Ken. But all of this starts with real, honest conversations.
Jack, you're a good man. And I'm going to tell you, I think you're a good dad.
So believe that. Act that way.
Hold the line. I'm not doing anything that hurts you financially.
This is The Ramsey Show. All right, Dave, you have some strong opinions.

Possibly, yeah.

Yeah, I think so.

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

So why is that?

Well, credit unions, for one thing, are non-profit,

which means that the members, the customers, own the credit union. So any profits that the credit union makes goes back into customer pricing.
So you get better interest rate on savings, cheaper checking and so on, that kind of thing. And but that's what's more important than that, though, is the fact that the customer is the owner changes the spirit on the credit union.
So I find very few credit unions that aren't very customer centric. Yes.
Well, and I think we have found one that is incredible, and that's Fairwinds. They are an incredible credit union that is really out with the heart to help the customer.
You know, that's why we're partnering with them, because they've got a scope to be able to handle the Ramsey audience, and they're the right kind of people with the right kind of values. And they've done a really, really good job with customer service.
And the deals that they're offering, the Ramsey Tribe, is incredible. Yeah, absolutely.
And you're right. Their customer service is unbelievable.
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Welcome back to the Ramsey Show. Alongside Dr.
John Deloney, I'm Ken Coleman. So excited that you're with us, 888-825-5225.
Our Ramsey Network app question is from Darren. He writes in, my wife and I are 50, debt-free, and have a net worth of close to $5 million.
I retired last year and it's allowed me to lean into many fun hobbies. That said, I feel guilty that I'm not working, even though we don't need the money.
I'm embarrassed when people ask what I do for a living. Did I retire too early, or should I just ignore societal norms and enjoy the fruits of a lifetime of hard work? I'm going to go yes and yes, John.
Correct. A little bit controversial, maybe.
And what I mean by yes is, did he retire too early? Yes. Absolutely.
And should he ignore societal norms and enjoy the fruits?

Yes.

Yes.

Now, I'll explain the first part of that.

I'll get the second half because I like this question.

Yeah.

I don't think retirement is good for us.

No, I'm sorry.

Let me go back.

I know it's not good for us, and that's not my opinion.

That is based on-

All the data.

You know about all the data.

You and I are both data nerds, and the data says it's just not good for us physically mentally spiritually the whole nine yards uh but if retirement means going home and doing nothing which is what he's he's doing fun hobbies which is great i would say that um and this is my goal um and by the way this is a very unpopular opinion i was on graham stefan's uh show and asked me about retirement. And I said, it's overrated, and I'm not going to ever retire.
I have no interest personally either. I will slow down.
Yes. I will diversify.
But I will be doing something that looks, sounds, smells suspiciously like work until God takes me home. And that's because, A, I believe it's what's best for us.
Now, again, downshifting. So all I would say here is, Darren, hey, man, keep doing the hobbies, but find something.
Even if, by the way, here's what's interesting. I would say, John, that volunteerism is in the category of not retiring.
In other words, he may not have to collect a check, but let's say he's going in and he's, let's say he used to run a sawmill, random thing that came to my head. If he just goes in, he starts consulting with a couple of young guys that are in the wood business or whatever, and he tells them what he knows, and he does it one day a week.
It's about purpose and providing value. That's the idea's it so one can volunteer and by the way volunteers work exactly so that's my little spiel and i'll leave it at that let you jump in on the second part of that i just i a hundred percent agree i am also one i've got one of my closest friends in the world is counting down the minutes just counting down the minutes um and so i i'm with you when it comes to work i have a buddy who has a giant um ranch that he he messes with it you would say it was a hobby but he provides a great place when somebody needs wants to go for a hunt and bring their kid out for the first you know hunt he is he manages this thing so that people have a welcome place to come he's not retired he.
He is not retired. I agree.
He works really hard. Yeah, I love that.
He doesn't draw a paycheck, right? And so I think I also want to get down to this societal norm thing. If you at 50 years old are financially independent and you're still, quote-unquote, embarrassed when people ask you what you do, stop, stop.
The reason people work their lives to become financially independent so that they don't have to care what people think and so for some reason you are still attaching your self-worth and your quote unquote feelings to other people's perceptions and opinions of you stop yeah because you know the irony john i think most people would love to be where that dude is yes 50 yes i'm 50 that'd be amazing i think i'm young exactly i know i'm delusional but but but i still go i mean now again i wouldn't stop today right uh but you'd go to fewer meetings yo sure but i'd still come be on the on the show sure sure. Yeah.
That's a good point. Yeah.
Neither one of us like meetings.

No.

But I don't think there is, I think the societal norm is that everybody wants to be where he's at. Right.
He's in the one half of 1% of all people who do walk at 50. Right.
Or maybe smaller percentage than that. So what is, what do you think? And again, I'm putting you on the spot, but real quick, we'll get to a call call but i would love to know 30 seconds on what do you think is the source of that feeling he gives us in the last sentence that he thinks people are going dude you're 15 you're not working well i think it goes back to something i heard um an ai pontificator talking about more than a work crisis more than an economic crisis we are going to massive, especially in the United States, a massive social unrest when it comes to an identity shift.
Because in the West, our identities are based on what do you do and how hard do you work at it? If you don't answer those questions appropriately, you are seen as less than culturally. And so we don't have a psychology for what if a robot just does it right.
And what if the job that you had as an attorney making the $700 an hour goes away because a chat GBT will do it for 35 cents. Right.
And so we don't have a psychology for that. So I think it comes down to just breathing our, the cultural air, which is if you don't have an answer to the question, what do you do? My God, what if you could answer that? I love my life.
I hang out with my family. I am currently working on woodworking projects, but I'm also starting a radio building thing, and I play in a punk band on the weekends at 50.
That should be a great answer. I'm creative.
I solve problems for people, et cetera. But anyway, I think I want to be free from other people's, allowing other people to speak into my value or quote unquote embarrassment because of how I answer that kind of question.
Yes and amen. And by the way, last one, enjoying the fruits of a lifetime of hard work is not in opposition to doing hard things and showing up at a scheduled time.
So enjoying the fruits of a lifetime of hard work doesn't mean you stop doing hard work. I think hard work is good for you.
And every single nutritional, physical, psychological thing would say, keep doing hard things. So maybe you don't do it with a mean boss or something like that or shareholders, but keep doing hard things while you're enjoying the fruits of your labor.
Yeah, I love it. Let's see if we can get Will in here in Phoenix, Arizona.
Will, how can we help? Hi, guys. Thanks for taking my call.
You bet. We've got about two and a half minutes, and I'm sorry to do that to you, but see if you can get us your quick question and see if we can help.
All right. I hope you guys can hear me.
My wife and I are in baby step seven. Our home is worth 400,000.
Of course it's paid off. And my question is I'm 61 and potentially in four years like to possibly retire, not entirely like you guys were just talking about, but from corporate America anyway.
And the home that we sell for 400 now, which I'm assuming will go up, and the home we want to buy in the same area is possibly about 100,000 more. Currently have about 700,000 plus in retirement savings and liquid combined.
And I want to know if you guys think it's okay to spend $100,000 of the retirement to buy a $500,000 house instead of the $400,000 we're in now. I wouldn't take the money out of my retirement to do that.
I'd work a little bit longer and pay it off quick. And again, you could still retire from corporate world, and I think you could still accomplish what I'm suggesting.
Why would you move up in house? Most people retire and then they decide we're going to sell the big house that we raised the family in. I'll tell you why.
We're going to downshift. Tell him why.
I know. Well, believe it or not, I don't want to.
my wife doesn't want to go upstairs when she gets older she's like she's putting something on herself that hasn't happened yet she thinks she can't get up the stairs of the two-story wants to go to a one-story that's i knew it will i feel you dog i saw it coming like a freight train i knew it was the wife hey the house I just bought has one of those rad chair lifts in it. I'm coming over

tonight. I'm coming over tonight.
Well, fair enough. Fair enough.
So if that's going to be the case, John, I really don't want him pulling out of the retirement fund. I want that money staying, Will.
And again, you have the income and the experience to, if you've got to do do a mortgage on 100 grand at such a small amount and pay it off quick if you can't convince the one yeah well one thing i didn't throw in is that between now and those four or so years we will probably reinvest another hundred or so between now and then so oh i wouldn't do that $850. Oh, you're talking about investing in your retirement account.
Well, the whole question is about a house, but the retirement savings, which is $750, will probably be about $850 by that time. I know, but I still...
If you were at that million mark or more, I'd feel a little bit more comfortable about it. I wouldn't.

Yeah, I wouldn't pull $100,000 out when you only have $750,000.

I'd tell her she's got to work a little bit longer.

Yeah, I wouldn't have that conversation either.

I agree.

Just a joke, Will.

You're on your own, pal.

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Welcome to the Ramsey Show, where we help you win with your money,

win in your profession, and win in your relationships.

Alongside Dr. John Deloney, I'm Ken Coleman.

The phone number to jump in today is 888-825-5225.

888-825-5225.

Let's get it started with Zach in Lexington, Kentucky.

Zach, how can we help today?

I'm trying to figure out how to budget my money to get out of debt.

Okay.

Tell us a little bit more.

What's the debt?

Car payments, house, and a lot of small debts.

A couple credit cards and a student loan.

All right, let's list them out for us. So go smallest to largest, the biggest debt down to the smallest.
Start with the biggest debt. $150,000 for my house.
Okay, we'll leave the house out right now because we're going to work on that other debt. So keep going.
um twelve thousand000 for my truck, $3,000 for my wife's car, about $2,000 on a student loan, and then two different credit cards are $1,700 and $1,600. Okay.
And what is your combined income? Do you have two incomes or one? Two, me and my wife. So what's your combined

income? Roughly $60,000. Okay.
All right. What's the truck worth right now if you were to sell it,

private sale, not to a dealer? What's the truck worth? Roughly $25,000. Okay.
That's great news.

Okay. And how much is the $3,000 car? How much is that worth? About $6,000.
Okay, that's great news. Okay, and how much is the $3,000 car? How much is that worth? About six.
Okay. All right, so that's everything you got, correct? That's everything.
Do you have any cash outside of your checking account at all? What kind of cash do you have? None. I just sold a four-wheeler to a Ford Tire for both of our vehicles because we live paycheck to paycheck.
All right. So you guys are struggling just to make it to the end of the month? Yeah.
Okay. Majorly.
All right. So what is your question today? Are you struggling with budgeting or is it a bigger issue where you guys aren't on the same page about money? I'd like to see more income, but what do you think is the big cause of this? Is it a lack of budgeting, or is it you guys are on two different pages, one's trying, the other's spending like crazy? Give us a little bit more.
I think it's a lack of budgeting because, I mean, we buy our groceries, we eat most of our meals at home, we eat about one meal out a week. You know, it's kind of like a date.
It's just, we live, you know, our bills take most of our paychecks. We don't really have much income week by week.
And it's just, I feel suffocated. And I got a baby on the way.
Okay. That's due in about three weeks.
Okay. And I don't know how I'm going to afford child care.
All right. Let's figure this out.
So what is your income and what do you do? And then tell us your wife's income and what she does. My income is like, I want to say $32 to $35.
I don't know exactly. I make about $17 an hour.
What do you do? I am a water plant operator. Okay, great.
What does your wife do? She works for the courthouse, and she makes about $1,550.

Okay.

All right.

What is the mortgage?

You don't have a very big mortgage.

What's your mortgage payment?

It's almost $1,200.

Okay.

Well, that is a huge chunk of your take-home.

It's a massive, and we don't even owe that much.

I think it's because we're so young. Yeah.
No, that doesn't have anything interest rate on that do you know it's all interest rate uh i think it's almost eight percent good that that's the issue call my friends at churchill mortgage right when you get off this call and see about a like refinancing that house yeah i agree uh what's your truck payment um it's's $330. Okay, I'm going to start there.
And the reason I'm going to start there is because that's a $300 a month raise, which is a massive deal for you. And you've got equity in that.
And I would sell it. If you could sell that for $25,000, you owe $12,000.
That's going to leave you $13,000. I would go buy a $5,000 truck because I can find them all day long online and have done it before.
Then I'm going to take that $8,000 and I'm going to knock out your wife's car payment. I still got $5,000 left over.
I'm taking out the $2,000 student loan. loan what do i got left i'm trying to run

this in my head then i'm putting the rest of it in a in a savings account it's gonna be my emergency fund because i'm about to have a little baby in my house i agree but i mean you you also got the two credit cards which is 1300 for both no i got that those are gone then but i think he can get rid of it all if i if i did the math right i think you pay all of your you pay your entire debt off with the proceeds from the truck.

Brother.

You're free.

That's massive.

What is your car payment on the wife's car? $180. Okay.
So that's $480. All right.
And we should start going down the list. Yeah, you just got a $6,000 a year raise if you do this.
That's $500 a month. Now I'm going to say one other thing.
You, my friend, your wife's pregnant,

so I'll let her off the hook,

although I'd like to see her pick up some hours,

pick up 15 to 20 hours a week at Walmart working evenings

while the baby's in the oven.

But you definitely need to be picking up

another 20 to 30 hours a week

to actually get this emergency fund built up

because you can be debt-free

and start stacking in the emergency fund really quickly. But this all effort i'm going to sell my truck pay off all the debt stick the rest in savings and my wife and i are going to work like we got no tomorrow in order to stack up five six seven grand all this is doable am i right john all this is doable listen, you're on it.
You said the baby comes in three weeks? Oh, three weeks. Yes.
Okay, and your wife works hourly, right? So if she is at home for two or three weeks on maternity leave or six weeks. We just took a huge hit.
You lose half your income, right? She has paid maternity leave for six weeks. Oh, outstanding.
Right. High five those people in Lexington.
Good for her. Listen, my man.
We live in a world, Adam, excuse me, Zach, that would tell you, well, you take off time. No, you're not.
You can't afford it, brother. You can't afford to take time off with your wife.
You got to be working. Yeah.
Crazy hours. Yeah.
And so you go get a second job, sell everything. If you sell this truck, you are debt free.
$500 a month raise right there. And let's also call Churchill, like you said.
Let's call Churchill and get this house, see if we can't get the house refinanced. That's number two.
And number three, brother, you're on the horn to get another job. I think with someone who works in a water treatment plan, who works as hard as you do on a day-in, day-in, you should expect to make $50,000 to $60,000.
Yeah. Okay.
Well, my biggest issue is I'm unlasting, but I'm supposed to be lasting in April, and that should be a little bit of a pay raise. And then I've been picking up odd jobs like crazy and working, you know, 16-hour shifts about four days away.
Good, man. But let's go get the best hourly rate we can right now.
I don't care what it is. Unless don't get a certification for a little bitty raise.
Yeah, I agree with that. Let's go get a certification or change fields so that in two years you're doubling your salary.
I'd like to see you be looking at the trades, Zach. I really would.
I want you to get through baby and get a nice emergency fund, but I'd like you to start thinking about the trades you know you're talking about a plumber electrician that down the road if that's something that you're interested i don't want to push you into that but the type of work you do i think it'd be a nice transition and we're talking about a much better situation when it relates to hourly rate plus benefits plus a nice ladder forward but listen zach we just gave you, I mean, this is easy compared to calls that we get. Selling that truck changes your life.
It also signals to your wife and that new baby, I'm the husband and I'll do anything for my family. By the way, honey, I sold the truck and I picked up a second job for the next six months so I can get us ahead financially.
You guys will be fine. You got a small mortgage.
Let's see if we can get you a better rate on that. But just doing what we said to sell on the truck is going to make the margin there.
Go get it, brother. Get after it, my man.
There's no sitting around waiting anymore. You got to move.
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Welcome back to the Ramsey Show. Alongside Dr.
John Deloney, I'm Ken Coleman.man glad you are with us today 888-825-5225 is the phone number we'd love to hear from you let's go to orlando florida where adam is joining us adam how can we help today uh hello and thank you for taking my call you bet what's going on um well i'm expecting to get married in the next year and a half and uh the person i'm expecting to get married to comes from a lot of money and uh yeah and um as someone that's in school and i'm expecting to have a stable career um i'm a little nervous because i don't think i can match that lifestyle that you can't you can't let it't. You can't.
Let it ride, dude. I mean, her father's an entrepreneur, and he makes a lot of money.
And I know that that type of wealth that she comes from is only available for an entrepreneur or businessman or has her own thing going on. And honestly, I'm not too confident that I could match that.
You can't. I thought we just covered this.
You can't. And John said let it go.
How do you think any of the men marrying Dave Ramsey's daughters felt? You don't. And you know what? Both of those men, I know them.
They're friends of mine. They're confident.
They're smart. And they do good work.
But they ain't ever going to have $750 million. That's right.
Yeah. So his daughters don't love them any less.
Is the issue you, which we would understand that. You've got to get over that.
But I understand you feeling that. Or is it her? Is she putting pressure on you? I mean, what's the reason for this call? What can we help you with? Well, I don't know her too well is the issue.
It's sort of an arranged marriage type of situation. Okay, hold up.
Now we're digging in. Hold on.
So are you actually engaged? Because you started off the call saying, I'm going to get married in about a year and a half. Is there a ring? Well, there's not a ring.
Are there animals going back and forth with the arrangements? Are you worth many goats? What are we doing? Well, she's from Morocco. As I mentioned, my cousin married her sister, actually.
And this is actually, we went to the wedding and things of that nature. And the way it works is she asked her dad, and her dad came to me, and her dad said, are you married? And I said, no, I'm not.
I'm actually 19 years old. I'm not married.
And we kind of hit it off from there. Whoa, whoa, whoa.
Who hit it off? You and the dad or you and this girl? Me and the dad. I've never really talked to her.
That's what I thought. I thought I heard you say, me and popsops hit it off, and I think I might marry his daughter.
I don't know if you know this, but she is a key component of this marriage that y'all are setting up. Not really.
Not with this deal. Is it really an arranged marriage? Yes, sir.
Not this. My mom and dad, or mainly my mom, I actually have seven siblings.
And my mom's trying to get each of us arranged. And I'm the last one.
And she always wanted, she always talked about it, all this. And when she came in contact with her parents, like, done deal.
They don't like the word arranged. We use the word insisted.
I don't know if that's more. I think that's probably the better word.
I think that's what it is. I think that's actually the right word.
Let me ask you this. Where are you at on this deal? Do you want to do this? I don't care how cool Pops is or not.
Well, I mean, she's pretty. She's really pretty.
No, no, bro, you're not answering my question. I think I know the answer.
Do you want to marry this girl or not? I think I do. No, don't no you don't even know her you want to please your mom is what you want to do you want to make your mom happy because she insists that you marry this wealthy moroccan girl well for me i honestly i understand that i've talked to her i forgot to mention i talked her here and there.
Like, nothing crazy, nothing like... Bro, I'm not marrying somebody that I talk to here and there.
That's an acquaintance. What are you doing? Why'd you call us? I believe I will marry this girl.
In all honesty, I saw that basically sandstone. Okay, in all honesty, why did you call us? It doesn't matter that you called us.
Because John and I want to help you, but we've already told you how we feel. Yes, sir.
How can we help you? Well, I don't know if I've mentioned that. Well, I'm set up for a stable career later on down the road.
And, again, I don't know how to – I can't match this lifestyle. I really don't know her I feel like we're on a hamster wheel none of the things you're saying matter it doesn't matter that you don't hold on, it doesn't matter that you don't talk to her regularly it doesn't matter that you haven't been on dates it doesn't matter that you haven't kissed her yet none of that matters because you said this thing's arranged so if it's arranged and you as a grown man in the united states of america are going to get in that boat and say all right mom you're going to direct the rest of my life then bro it doesn't matter what you make it doesn't matter any of that stuff because you got in the arranged boat and you took off down down the river what do you care let that be if you be a grown-up and decide, I love you, I want to create a life with you, us two, as two individual adults creating one, not letting my mom and your dad drive our future, if you want to do that, then yes, I get there being feelings like, man, I didn't make as much money as your dad.
You're going to have a different lifestyle. We may have a Honda lifestyle when you're used to a Lexus lifestyle.
That's all well and good, but that's not your situation right now, dude. So if that's the choice you're making, get in the boat, prop your feet up, put your hands behind your head, and then just ride on down the river out into the ocean, man.
Yeah. Yes, sir.
Does that make sense? It makes sense. It makes sense.

So you called us saying, guys, I don't know what to do.

I don't think I can provide for her.

It doesn't matter.

She chose you and Pops chose you, it sounds like,

or the two of them got together and said, this is my guy,

and you're just going to go along with it.

So, therefore, it doesn't matter if she's disappointed.

It's got to be the greatest get-out-of-jail-husband card of all time.

And, Adam, for what it's worth, it's absurd. if she's disappointed.
It's got to be the greatest get-out-of-jail-husband card of all time. And Adam, for what it's worth.

It's absurd.

How old are you, man?

19.

I tell 19-year-olds to get off their parents' cell phone plan,

much less their marriage arrangement plans.

So knock your lights out, man.

You're an uncharted water for me.

I would tell pops to get you a good job. That's what I would do.
What are you worried about? Why are we even going to school? I mean, this guy's wealthy and he selected you. The whole thing is foreign to me, Adam, and we're having a little bit of fun with it because, quite frankly, it's so absurd I can only laugh with it.
And what is absurd is I'm not insulting other, I probably already have, but we'll get over it. The absurdity is your attitude towards it.
I'm not going to judge another culture and arranged marriages. I don't get it, but I'm also...
This doesn't feel like a cultural practice. This feels like an overbearing mom.
Yeah, you can say that. What culture do you come from? are you an american family oh i was born in i'm born in america raised in america but my my um my father's from yemen yeah we're muslim they're they're brocan so there's obviously some differences this is a generational thing for your parents this is a very normal thing for them to arrange or insist my yeah my my parents weren't arranged my my dad's parents were arranged and their parents are arranged yeah it's what i'm getting at so i don't understand it but i'm not i'm not knocking the tradition because i don't understand it and i want to be very clear our large audience on that what i'm saying absurd is your response to this because i feel like you got an option to go deuces i'm out kind of think I'm going to do it.
And yet you called us to go, what do I do? And I just, I'm pleading with you and I mean this. I hope you remember my voice multiple times tonight before you go to bed.
Please don't do this. John, am I right? You can hear it all over him.
He feels like he has to do. That's the thing, Adam.
I've actually looked at the data on the traditional cultural arranged practices. It's remarkable.
It's robust. But there's entire family systems around these new married couples and families and all that.
So I'm with you, Ken. Not knocking it at all.
This doesn't sound like that. It sounds like a mom that wants to make sure her boys marry somebody who's going to have a lot of wealth.
And good on mom. She got you there.
She got you, yeah. You, though, Adam, aren't in.
And if you're not into the cultural practice, if you're not on board with the family practice, you're not on board with this woman that you are going to... At some point, they close the door and it's just y'all two.
This is awful, but I'm going to be real. If I was in Adam's situation and the father approached me and we're hanging out and we're bros and he goes, hey, by the way, my daughter over there, it's my fourth one, would you like to marry her? She thinks you're cute.
I'd go, let's talk terms. I would be like, hey.
Can I get an offer sheet? I need to run to the bathroom real quick and I would go to Washington, D.C. and I would never be seen again.
That's true.

But I mean, if we're going to do all this, let's go.

Alright, what's the job? Do we got a slush

fund? This is wackadoodle.

I don't know how else to process

that. Oh, Adam.

He needs to fall in love with somebody quick.

Send us a wedding invite. Me and Ken may show up.

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Welcome back to the Ramsey Show. Thrilled to have you with us.
I'm Ken Coleman. Dr.
John Deloney joins me. And the phone number for you to jump in is 888-825-5225.
That's 888-825-5225. Okay, folks, a little bit of a mild roller coaster going on in real estate right now.
That's just the reality. You know, a lot of experts are saying we're going to stay in this interest rate range for most of this year.
Who knows? They don't know. We don't know.
But the reality is, is for years we've said marry the home, date the rate. And so whether you're buying a home or selling a home, this is a massive, massive decision and transaction.
And it's why you need the tools and resources to get you prepared. And so that's why we have the Ramsey Real Estate Home Base.
Fabulous location for you. You're going to see calculators, start to finish-finish guides, how-tos, a podcast, books, and even a video course, all giving you actionable steps so that you can navigate the buying and selling process without any massive errors, and it's painless.
RamseySolutions.com slash real estate. RamseySolutions.com slash real estate.
Or you can click the link in the show notes if you're listening on YouTube and podcasts.

And I want to point out, when we tell you about all these things,

and if you miss it because we know you're listening to us and watching us

while you've got other things going on, the show notes, the show notes, the show notes,

all of the links, things we talk about are in the show notes of the podcast app

that you're listening to and on YouTube.

All right? And RamseySolutions.com, you can usually find it. All right.
Let's go back to the phones. Vanessa is joining us now in Phoenix, Arizona.
Vanessa, how can we help? Hi, thanks for taking my call. You bet.
So I just had a quick question. Me and my husband and my brother-in-law and sister-in-law, when we first got married and started having kids, we bought a piece of land and built two houses on it in the city, which is kind of a unique property.
Then we refinanced. We bought a house separately.
They bought their house separately. We long-term rentaled those two homes, and then we turned them into Airbnbs about five years ago.
My question is this. I'm wanting to sell my Airbnbs and to pay off my house I live in now and then build an Airbnb on the back of my property.
The problem is, is everybody tells me this is going to be the biggest mistake of our life because I can't buy into real estate like I did 20 years ago. I am going to have to pay capital gains because I already own the land that I'm going to build an Airbnb off of.
And obviously you have to pay capital gains if I pay my house off. So I'm just wondering, is selling my rentals to pay off my house and build another residual income a bad idea or not? No, of course not.
You know that, don't you? I do, but something about, because people are saying the interest rate that I own, I owe 238 on my home, and I'm at an interest rate of 2.99. I owe 166 on my rentals at an interest rate of about 4.25.
So they're saying, you know, lumber's going to go up. How do you know you can build an Airbnb on the back? God bless them.
They don't know as much about real estate as you do. True or false? Well, I don't feel like I know a lot.
All right, never mind. Okay, bad tack.
Let's go this. Okay, let's go by the numbers.
Can we do the numbers? Okay. All right.
Yeah. Let's say I want you to Give me these numbers super simple you sell both rentals okay how much money do you walk with cash well so that's another problem because we to find a comp in our area with two houses on one piece of land is very difficult so when we do the numbers in our head like, you know, the mortgage off to pay capital gains, like I think I need at least minimum, I need to walk away, me and my husband personally with $500,000.
Okay. I didn't ask that.
And I want you to keep this simple because I'm trying to help you, but you're confusing me in your answer. You sounded like a congressman on a Sunday morning show there.
So direct question. Stay with me.
I'm trying to help you. Okay.
Okay. First of all, you need to get a great real estate pro.
Okay. It's somebody who can give you real comps, real numbers, real comps, but I want you to be modest.
Okay. You own two homes.
What do you think you walk away with on a modest sale price of both rentals? Give me a modest ballpark figure. You've

thought through this, haven't you? Yes. Okay, then give me the number.
I would pay $500. All right, you're going to walk away with $500, and your current home that you live in that you want to pay off is how much? How much do you owe on it? $238.
Okay, so you're going to have $500 minus 238 is what?

272 left?

Yes.

Am I doing my math right i'm doing it quick i was a history guy polysor so 272 that's after we paid our house off now what is it going to cost you to build this property this next airbnb property on your actual house now that you have a paid for home

as your main living? What's it going to cost to do that? My husband believes being very generous about $200. So if I'm hearing you right, and I'm going to round down, we got $30,000 cash left over.
we have no debt at all on any properties. My home that I'm living in is paid off.
And I've got an actual rental property that is going to spit off cash in perpetuity that it's paid for. Yes.
Versus being $238,000 in debt on your main home and how much in debt on each of the rental homes? Together, they're $166,000. Okay.
So what do you like better? When I just ask you those numbers, what future do you like better? I want my home paid off and to have residual incoming money with that paid off as well. Great.
So I'm going to hand you over to my friend who's really smart with emotions and mental stuff. And John, now that I've just pulled out what she would prefer to do, which interestingly enough lines up with what we would tell her to do, what about these people in her life that know so much about lumber? I guess...

I'm trying to think of the right way to ask this question.

He's stumped.

No, there he goes.

It's this, Vanessa.

What do you do for a living?

So I clean our Airbnbs and manage them.

Okay.

My husband works for UPS.

What is your take-home salary every year?

A combined? This last year, it was about $115,000. $115,000.
Yes, sir. How somewhere along the way did you get the understanding that you're dumb? Who told you that? Well, not that I'm dumb, but accountants, like you have such a great interest rate on your home.
Why would you pay that off? And I'm like, well, because then my husband can work, but he can be basically retired. You have no car payments.
You have no credit card. That's a really smart answer.
Okay. So somebody is trying to tell you that you're able to see into a future that most people who are obsessed with their stupid spreadsheets and Instagram can't.
And that is this. What is life on the other side of not owing anybody anything? Or did I say it another way? What is life on the other side of freedom? And our culture is so stupid and obsessed with short inch by inch gains that they don't look at the long picture the long game it's so true you already have right it's the same reason companies hire a bunch of people to goose the q1 numbers and then fire them all q4 not for like realizing that at some point people just quit working for you because you're terrible people but they're so obsessed with the little notch here and the little notch there, the little notch here.

So in the same way, you've already projected a future where your husband laughs every morning.

So true. Where you have a cup of coffee on those rare, cold Phoenix mornings in your paid off house that nobody can ever take away from you and y'all just can go for a walk together hey vanessa and john do you both remember the classic miller light ads where it was like when we grew up it was like uh great taste and then the other half of the bar would yell it's less filling and it was a debate here's what's going on but, Vanessa.
Here's what I'm hearing. You're saying, my life is better! And they're going, better interest rate! And it's this goofy, weird, what? You're going, my life is better, and they're yelling, but you got a better interest rate! It's the goofiest thing I've ever heard.
Capital gains doesn't, it's the cap, people are like, well, you're just giving capital gains away, but then when I do the math, I'm like, but I'm going to pay more in interest over the next 25 years. Thank you.
Vanessa, you're not dumb. Good answer, Vanessa.
Ken and I in your seat would both do the exact same thing that you're talking about. And I'll pay the 3% difference on my APR that I'm losing for my new property.
I'll pay that difference in a peace tax every day. You got it right, Vanessa.
Do your plan, not theirs. This is the Ramsey Show.
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Welcome back to The Ramsey Show. I'm Ken Coleman.
Dr. John Deloney joins me this hour.
We are thrilled to have you with us, 888-825-5225. That's the number to jump in.
Today's question of the day is brought to you by Why Refi. Now, we don't recommend refinancing on everything, but for distressed private student loans, there is Y-Refi.
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Oh, I started pre-reading this question, Ken, and it's already giving me gas. All right.
Today's question comes from Allison in Georgia. Yeah, you're going to want to scoot over a few feet here.
My husband and I started building our dream home last year. We took out a HELOC to fund the down payment and start the building process.
We struggled financially for the last few months due to low profits at my husband's business. No way.
Things weren't going to always just continue to go up and up and up and up forever. So he took out several more loans to help with the cash flow.
These ended up strangling us, so we used most of the HELOC to keep the business afloat, along with using personal credit cards to make business purchases. The business now owes us over $300,000.
And y'all owe the banks and the credit card companies, I'm assuming. Our house is almost complete, but closing on it is in jeopardy due to all of this debt.
How do I come to terms with the fact that my dream house is probably gone? How do I deal with the embarrassment and the shame? And how do I feel safe in my home when everything is falling apart? A lot of questions for you there, Doc. A lot of emotional questions.
I mean, I would just say on the dream home is I would would if you can get out of it get out of it yeah and then start to to dig out of the situation from the business because this is there's a lot of stress right now there's a marriage issues there's the by the way she's putting all this on her husband she doesn't say here that either she was complicit in this like she participated and well i guess i'll just put this on or she needs to deal with some serious financial infidelity issues in her home where her husband came and said by the way i just lost the house and there are times when that happens he basically gambled it away yeah um i think when it comes to dealing with when dreams are gone or as as when you have to grieve what you wanted to be um man it just takes time you got to write some things down i recommend people go through some sort of lack of better words, a funeral, some sort of ceremony that says this was and it's not going to be anymore. Embarrassment and shame.
It's just kind of part of it. If you participated in trying to rob Peter to pay Paul and you ended up gambling away all of your losses, gambling away your home, then, yeah, there's some embarrassment.
There's some shame. I recommend dealing with those head on, walk straight into them.
When somebody asks, you say, me and my husband made some dumb business decisions. We ended up having to pick between the business and the home and we chose the business.
And you run straight through it and you'll find that the embarrassment and the shame lose their power over you when you say them out loud and you head directly into them. And then how do I feel safe in my home when everything's falling apart? That sounds like a marriage question, Ken.
And that's when you and your husband get away for half of a morning and go to breakfast at a cheap diner and say, we got to rebuild our ability to trust one another. Forget the business, forget the house, forget all this crap.
I agree. And to your point, the only thing I'd say on that is if she doesn't feel safe financially, which this circumstance would absolutely do that to anybody, then what you've got to do is I'm going to take shame, whatever shame there is, and it shouldn't be, but I understand that's a natural emotion.
Of course there is. But I'm going to go ahead and take shame over feeling unsafe, meaning I'm going to get out of these problems, go back away slowly.
I'm going to go get myself a job and get myself a checking account. I'm going to do what we need to do so that I feel like that my financial world isn't crumbling.
And then once I get there, that's going to do wonders for dealing with the shame. That's right.
That's right. But it's really hard to deal with all that at the same time.
That's exactly right. And it's easy for me to say on this side, but it's just a house.
So if their marriage is intact and they made some strategic gambles by taking out a HELOC to fund down payments and putting everything on credit cards and we triple stamp a double stamp and it all came down, everything's not falling apart. Yeah.
Right? But if your husband's lying to you and now you've lost your house and you may have lost your marriage, it can feel like everything's falling apart. You need to get somebody to and say these things out loud and you know what just i want to throw this out there john i know you're gonna agree with it but i it just popped in my head we need to say that if we are very wise and intentional in who we choose to be our friends those are the people you need to go talk to about.
Not need. You have to.
Instead of shame, you can enter with shame, but real friends will go, hey, don't worry about it. I'll bring the nachos.
You bring the beers. We're going to sit and talk about it.
They're not going to leave you. No.
They're going to actually make you feel good and dare I say safe. Yeah.
And they'll weep with you. They'll laugh laugh with you a good friend will poke at you and gotta

have those how can we uh i'm gonna tell you i and i and i mean that with everything in my being

stacy and i have always been intentional uh but i'm telling you we've got friends like that around

us right now that i'm just telling you it's everything you just have to have the people

that no matter what's going on you can snot in front of them and cry and ugly cry or be weak or doubtful or insecure or whatever. And they just come around you and they lift you.
And it is so important. So I just saw I heard that.
I was like, you know what? I get the shame feeling, but take that shame, take it to real friends and watch shame disappear. That's exactly right.
It's really good. All right, let's go to Valerie in San Antonio, Texas.
Valerie, how can we help? Hello. I was just wondering when I'm looking at baby steps four, five, and six, are you supposed to, you know, max out number four first before you move to five, before you pay more towards the house, or I know you're supposed to do them all together, but I just don't know how much of each.
Yeah, it's a good question. I love a good Ramsey rule follower, Valerie.
Yeah, so basically what that means is, is like once you get out of baby step three, okay, and you've got that three to six emergency fund, three to six months. Then you begin to take the budget.
We reorder the budget, right? And so we take 15% of take home and we invest that. And that is for retirement.
And so you begin to make that happen. Now, now you start working the rest of the budget, right? And so now we go, okay, we're going to put some, we're going to put what we can away for Baby Step 5.
And so you may have enough income where you can do all at the same time, but you may not have enough income to be able to do that. And so you may be in 4 and 5 for a while.
Does that make sense? Yes. So you suggest putting all 15% before you do 5 and 6, right? Yeah, because it's not about before.
It just becomes the thing. It's now, this is the next thing we do.
It's like budgeting, right? So once we get through baby step three, the automatic is every time we get a paycheck, we're putting our money away for retirement. So it's just in perpetuity.
Does that make sense? Yes, it does. Thank you so much.
Yeah, that's a really good call, actually. You know, because we have a lot of people that join us all the time, John.
And so do you want to talk about the momentum behind that and why Dave over the years developed that so it feels, and there are times where you can do four, five, and six all at the same time. Sure.
But that's a function of margin. Right.
It's exactly. Or sometimes like I was really close to paying off a house.
So I paused in, I guess, technically four or five, I paused putting money in retirement because it was like six months away and I could escalate. I'm just going to hammer it.
But so there is some four, five, and six flexibility. But the cornerstone principle is, if you got kids, there's going to be some educational expense at some point that you don't want them to have to choose between no education or debt, right? There is, you are going to have life after work at some point or life after an ability to go in and be given a paycheck and you have to prepare for that.
So you start saving for retirement. Dave's found 15% over the long haul is a good amount of money that's going to give you a good lifestyle on the end of it.
And then, yeah, dude, try to work towards a world where you don't owe anybody anything, including your mortgage, man. But yeah, I think that the hard part for me, the hard part for most people, is toggling out of the, ah, which is baby step one, two, and three, getting out of debt and getting an emergency fund, and then settling into living a, right? Like what do you want life to look like for you? And I think that's a hard part for everybody.
It really is. And we say, we use this phrase a lot and it can sound cliche and I don't want it to be cliche today, but we talk about we're moving now out of baby step three and we've been super, super intense.
And now we want to downshift, if you will, to intentionality.

And it's easier.

So from intensity to intentionality.

It's always easier to blame Dave for all your decisions.

Four, five, and six is where you guys sit down and say,

what kind of life do we want to build for ourselves

and what's that going to look like?

And you've got to own some of the consequences there.

That's right.

Good stuff.

Good hour, Dr. John Deloney.

I want to thank James Childs and our amazing crew behind the glass to keep us on the air

and you, America, for listening.

This is The Ramsey Show. We'll see you next time.