Delayed Gratification Is a Key Ingredient to Building Wealth

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Leon is with us in San Francisco.

Hi, Leon. How are you? Hi, Dave.
How's it going? Better than I deserve. What's up? So I've been fortunate enough to amass some money over the years through just working and some very nicely timed company acquisitions.
And now I would like to make one of my childhood dreams come true.

I like to buy a supercar that's worth about $250,000.

Cool.

Which car?

Specifically the Lamborghini Huracan, a used one.

That's a beast.

Yeah, a used one would be $250,000.

You're right.

Used, what, $450,000?

I think so, yeah. Yeah, okay.
Cool. News, what, $450? I think so, yeah.

Yeah, okay.

Cool.

So what year model would that be?

Well, looking on some of these websites, anywhere from a 2015 to a 2017, 2018.

Okay, so a 10-year-old has lost $200,000 in value.

Yeah.

Yes.

That's about right.

Okay.

Yeah. And what's your about right.
Okay. Yeah.

And what's your net worth? You sound like you're a bazillionaire or something. My net worth, so I can break this down.
I have a net worth, if you include a mortgage, about $3.66 million. Okay.
And what do you make in a year? I make about $300,000 a year, which doesn't include a 30% bonus. It's a single income.
I am married with a one-year-old child, but my wife is a stay-at-home mom. And how old are you? I'm 39 and she is 41.
Okay. All right.
You can afford the car if you want it. The thing is, here's how I look at these.
Here's how I decide this, and I answer questions on this show like, what would I do if I woke up in your shoes? That's how I answer questions, okay? You said you're how old? 39. Okay, good.
Well, you've done really well. Congratulations.
Thank you. There's a couple of rules of thumb.
Generally speaking, you do not want to own all the things you have with motors or wheels to be more than about half your annual income. Now, your income is a little wacky because you've made big chunks of money doing a few deals here or there that don't really include your $300.
So this violates that. You know what I'm saying? It's more than half your annual income.
So that's one rule I look at. It's not a hard and fast rule.
The second thing is the main thing I do today, if and I are doing something that feels kind of like a weird large purchase that strangely or even a large amount of money we're giving away in generosity the same thing. We just use the burn the money in the middle of the floor thing.
If I took this much money and set fire to it does my life change change? If the answer is yes, then it's too expensive. I see.
I think you could lose 8% of your net worth, 250 as a percentage of 3.8 million, and probably not miss it. Okay.
Because the 250 is going to be worth 150 in 20 minutes. You know that.
I mean, we already established 450 turned into 250, right? Right. It's going to go down in value, and the bigger it is, the faster it's going to go.
I mean, the good news is most of the loss is gone. The first 10 years, you're going to lose the most of it.
And don't get caught up in the illusion it's going to go up in value they're not they're going to go down in value and and let me just tell you the new ones are better they don't make them like they used to thank god i got a 1960 corvette frame up restoration compared to the new corvette it's a piece of crap i mean compared it's a beautiful little antique car but thank god they don't make them like that anymore. We have, like, brakes that work and power steering and all kinds of modern conveniences now, you know? And so, you know, it's – so, number one, if I burn the money in the middle of the floor, does it affect my children, my grandchildren, my wife? No, it doesn't.
You can afford the car.

I think you can afford the car.

Then the last thing I do, Leon, is I ask myself some contentment questions,

particularly about cars because I'm a car nut.

If no one ever sees this car and only I see it and enjoy it, do I still want it?

For me, if I'm driving that car, the answer is yes,

because I don't give a crap what you think.

I'm going to enjoy that freaking fine piece of machinery, right?

But if you're buying it to impress other people,

that's a danger sign spiritually. Agreed? Agreed.
Leon, I have two quick questions. Is there anything you haven't told us that we should know? I mean, I do have the mortgage, which is, you know, it's in California, and it is a sizable mortgage of about $739,000 at 6.74%.

But... and it is a sizable mortgage of about $739,000 at 6.74%.
But the house itself is worth about $1.9 million. All right.
And then my second question is how much cash do you have total? So out of what I say on the net worth, about $2.1 million is in brokerage and index fund that follows large mid-cap U.S. market.
And then about $150,000 is liquid, mixed between check and savings. About $510,000 in my 401k, about $500,000 in my wife's 401k.
And so that's liquid. and then about 500k in company RSUs, which are investing in approximately one-third every year.
Before we buy toys, we grow up and pay off the mortgage. So you need to pay off the mortgage too.
You've got the money in brokerage to pay it off. You've got the money in brokerage to buy this car, and you're still fine.
And you've still got the exact same net worth when we're done with this discussion. So until the car goes down in value.
That's what I was wondering. In this current situation, I would say no.
I just wouldn't do it personally. I'd want to have the house cleared.
Pay off the house. I know, I know, but I don't know.
I can't believe I'm actually saying you're a little bit more conservative than you

because I love cars.

But when you walk through that, I personally put myself in the

what would I do if I were him,

and I don't think I'd spring for that car at that price right now.

That's fair.

But you laid it out.

He can do it.

He can afford it, and it's not going to ruin him.

I mean, if you call me up and you tell me you make $300,000 a year and i dreamed about it since i was a child i'll kiss my butt you know um i'm gonna and you know i got no money and i'm gonna go get a car loan to buy that no i'm gonna rip you to shreds no that'd be dumb okay for your own sake because i love you but yeah yeah but i mean yeah really that's so i honestly it doesn't make the sale to me because I've had to quit doing that myself. I always wanted that since I was a child.
That's not justification for spending money you don't have. Wah.
So go make some money. But if you have the money and it's just something you want, then go for it.
Yeah. I mean, it's not the end of the world.
But that's the trick. Well done.
Well done. Well done.
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Thank you for joining us. Merry Christmas, America.
We're glad you're with us. Robert is in New Jersey.
Hey, Robert, welcome to the Ramsey Show. Hey, Dave.
Thanks for taking my call. Sure.
What's up? So I'm calling to talk about your favorite financial instrument, the whole life insurance policies. I have a question about policies that my parents bought years and years ago, and hopefully you can help me figure out what to do with these things.
So long story short, me and my family, me and my parents and my brother opened a small business about five or six years ago. When we did, we borrowed money against my parents' whole life insurance policies to help fund the real estate purchase and construction.
It's a dog daycare boarding and grooming facility. Been open five years, doing well, profitable, growing, it's in good shape.
The first two years, we didn't make any payments on those loans. So the unit grew as it capitalized the interest.
Then I started making monthly payments on those loans for money that we were making in the business once we became, you know, fairly profitable. So here's my question.
These loans, they, there's six total loans excuse me, six total ins policies and my parents took out about $1.4 million in, in face value insurance plus the additional insurance they purchased over the years, as they were, I think they made some overpayments in the past, things like that. I have borrowed about $600,000 against the policy.
So here's my question. What's the remaining cash value? The remaining, the net cash value of today is about $200,000, and the death benefit as of today and all of them combined is about 1.06 million.
Okay. My question is, do I bother paying these loans down? And if I do, do I use your snowball effect and go for the lowest balance loans first or do I pay them off all evenly? Because technically they all have the same interest rate.

It's basically like one large basket, right? So am I even benefiting from the snowball considering there's no minimum payment on these things, right? I can pay them at any time, any way I want. I could make the payment.
I could not let the interest capitalize. You know, you can manage them any way you like.
So what do I do with them? Should I pay them? Should I not? So apparently your parents don't need the actual life insurance.

Well, I mean, look, they took these out thinking, hey, one day.

No, what I'm asking is that if your dad died today,

your mom's not going to get much money

because the loans are repaid from the death benefit. Yeah, correct.
So if you have a face value of 1.4 and you have loans of 600, they currently have $800,000 in actual proceeds would come to your mom if your dad died. there's also an extra $200,000.
They also, over the years, purchased an extra $200,000 of insurance by overpayments. So it's 1.6.
Paid up additions, yeah. Yeah, paid up additions, yeah.
So they actually have a million-dollar in debt benefit. But yet you are right, though, by the way.
My parents, though they have an interest in our small business, they have income through that. That's actually my second job.
I have another job where I'm a trader. I flip the syndicate market.
I trade IPOs. I borrowed money from my parents to feed that as well and gave them a percentage of what I make off of that.
So basically my parents have income through me. Do your parents have other wealth?

Yes.

How much?

How much?

So I'm going to be honest, and I don't have total transparency,

but I'm going to say all in they probably have assets that are a million and a half dollars.

In addition to all this, okay.

Yeah.

Yeah, and income.

Even though they are retired, they have income from two businesses that i run that they have interest in so they they uh you're right without their life insurance they would still be financially safe yeah okay um well i i don't think you guys are going to do what i would do because you're so far afield and your parents are so heavily emotionally invested in this process that I don't think there's a snowball's chance that you guys are actually going to do this.

But you asked, so I'll tell you.

I owe you that.

What would I do?

I would cancel the whole life policies completely, cash them out, and and end it i had a funny feeling you'd say that yeah i would just end it yeah because your mom is going to be fine and if they want to if they want you to execute a note for 600 000 back to them then you would owe them that money because they you've reduced the amount they're going to get from the cancellation of the policies by the loan you've taken out so um you know they either need to get equity in the business and or more equity in the business they do have equity they have i know but does that offset the loan no you're still paying on the loan gotcha right um no you're right you're right uh well let me ask you this this, just because you definitely understand these instruments better than I do, right?

So say I was to cancel these policies today.

They're not yours. You can't.
Your parents can cancel them today. Well, you're right.
We'll put it this way. They basically, I've been managing their finances for them

other than some just assets that they own

that somebody else helps them out with

because they're both kind of, frankly, you know, they're, they're a little older and both a little bit unwell say. Um, so they basically asked me what to do with these things and do, you know, they, they take my advice and trust me and I, I don't want to put them in the wrong direction here, you know? Um, but, but say, say that I advise them, say, you should close these things down today, right? Mm-hmm.
So they do that. They get out of it what? The net cash value that's left at $190,000.
Exactly. They get a check for that $190,000.
Exactly. And then they have the $600,000 that is owed to them from the start of our business.
Correct. And that's it.
That's it. Right? Right.
Okay. And they got rid of all the expenses and you're not paying interest on your own money.
Yeah, exactly. Yeah.
Uh, okay. That all makes sense.
The only, the only counter I'd have that if you, to help convince me here, Dave is, so there is say that they were to pass away soon, unfortunately, right? I mean,

my parents, to be frank, they're, you know, they're relatively, um, there's just over a

million dollars of death benefit, uh, left over after accounting for the loans, right? Um,

no, why, how come? Because you've got $1.4 million in death benefit minus $600. Well, don't forget, $1.4 million plus the other $200, and what do they call paid up additions? Okay.
So it's 1.6 minus $8 million. Yeah, all right.
Well, minus $6, yeah. So it's the statements and the death benefit amount for each one of these things added together is just over a million.
So why walk away from that payout for taking, say, 200? Well, I mean, if they're terminally ill and got a year to live, if you want to play that gamble on your parents' death game, you can. I'm personally not doing that.
And I don't think they are one year from grave. I may be one year from grave.
I don't know. But you guys are paying so much in such extreme costs and have for so long on these ridiculous things that the last thing I'm going to do is keep giving these people money.
Um, I just couldn't do it. And so, but again, if someone's terminally ill, that's on one of these policies and you think they're, you know, you think they got a one year, um, as my grandpa said, he said, I'm not buying green bananas.
You know, you know, you think we're running on the end of this thing. Then if you want to play that gamble game against their death, that's called an actuarial table.
It's the statistical probability of death versus the game you're playing. And I personally, unless someone is, you know, in hospice or something, I'm not going to fool with that.
The other question is, are they okay? Have you got their finances set up in such a way that their mom's going to be okay if dad dies financially without these policies i think she is and and then the same question the other way but i mean you do whatever you want to do that that's a different situation and then the loan you've got back to them for the doggy whatever it was hotel or whatever it was the. If you've got siblings and so forth,

you may have some issues of dividing that up.

You may end up owing them,

depending on how this will is set up.

I don't want to know how the will's done,

for your sake, but wow.

Zero chance he doesn't.

Agreed.

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better not wait you better not wait all right taylor is in fort worth hey taylor what's up hi thanks so much for taking my call sure how can i help um so my question is should i go back to school and pursue my nurse practitioner license and why would you want to do that So I'm currently working as a nurse. I'm newly married and I make about 75k before taxes.
My husband makes about 100k before taxes and it's something that I've always considered doing and I just we don't have any kids yet so I kind of feel like maybe it's now or never But my biggest concern is I've watched several of my friends go back to school, and then they have had babies or kids in life come up, and they have decided to be a stay-at-home mom. And so I'm a little bit nervous to make that decision, that financial decision to go back to school before having kids, and then I don't want to regret when I have kids

still having to work because of that degree. Yeah.
Well, the answer to that is not what

you're concerned about. The answer is pay cash.
If you don't go into debt, then there's no regret

because then you could, let's just fast forward. Let's say that you pay cash, you cash flow your

way through this. And on this income, you should be able to do that.
And then you get the nurse practitioner degree. You have kiddos, you want to come home for a season, then they get to school and you go, I want to go back.
That entire transition is very likely, but there's no regret attached to that. And that extra income is going to be worth the ROI, and it's going to be worth it.
So the answer is don't go into debt. Cash flow your way through it.
And with your income, you should be able to save up and do that. Right.
Yeah, that would be the plan. We actually already have the cash set aside.
Oh, well, then what's the regret? Let's say you spend that cash. I mean, is the regret that I spent the cash and now I'm never going back into it.
And so now I've just, oh, I burnt that money. Is that what you're saying? Yeah, I think it's just sacrifice over the next two years.

I mean, if I didn't go back to school, we would start our family a little bit sooner.

I think probably within the year.

And going back to school means pushing that off for two years.

And so I think just kind of struggling with that and if that's right.

No, I'd have babies.

I would too.

I was getting ready to say, I think that's the priority.

Babies are better than school.

And the school will always be there like right you see and you already got the cash set aside i i'm going to say the same thing because i'm thinking if stacy and i are having that conversation i i would ask you if i was sitting with you and your husband i'd go both of you vote write it down secret ballot or tell me straightforward which is the higher priority and if you both say kids then I think it's a no-brainer right and I mean I know kids are I mean we're only 28 and so starting a family at 30 isn't crazy um so it's just kind of trying to decide if you know it makes more sense to go and increase my income before we have kids rather than having them and then trying to you know suffer through school and they care and everything else school will always be there yep and and and i'm not trying to but i'm just going to speak some truth over you you have no idea when these babies are coming so you don't have any control over that now i certainly hope it happens in a in a time frame that you'd love but we don't know spoken like a guy who adopted two and then had one. Right.
And our journey was a long time. And I don't wish that on anybody as far as a long period of trying to have babies.
But I am saying you don't have any idea what that's going to look like. So you can't hedge your bets on, well, if I go to school, then we have the baby.
You just don't know. So I would move forward with the bigger life decision,

the bigger desire, the bigger priority.

That's what we do.

Then we manage the rest of the decisions against that. Another way that I've learned on big stuff,

whatever the big stuff is that helps me,

and it helped me to make, that's why I spoke so quickly,

is if I pan back and I say, all right,

I'm now talking to 58-year-old Taylor,

which one would she have wished she had done? Ding, ding, ding, ding. It's real easy.
Yeah. I heard it in your voice.
Okay. And it's not your friends.
It's not what your friends are doing. I don't give a crap what your friends are doing.
I'm talking, I was just listening to you, and you're trying to say, okay, should I go make more money and expand my career and therefore have children later? But I kind of, you know, I heard it. I want to have them now.
That's what you said. No question.
And hear from us. You've got plenty money yeah you're fine you'll be okay you'll be okay just keep keep working your baby steps and um and then at the appropriate time you can work on uh nurse practitioner which by the way is an incredible wonderful control that's a beautiful career field you're going to make so much money and you're going to have so much access to you'll have all the work you'll ever want you'll always have work so really good devon is in raleigh north carolina hi devon how are you hi i'm good thank you so much for taking my call how are y'all doing better than we deserve how can we help um i just had a quick question obviously that's what i called So, my husband and I actually just finished paying off our debt.

Good. Congratulations.
Thank you so much. Like, you have been a game changer for us.
We are currently saving for our, like, three to six months and then going to be saving for a down payment. and I needed to know, should this just be going into just like a savings account

or like a high yield savings or should we putting the money somewhere else? Oh, high yield savings is fine. Okay.
Okay. You're going to make a little bit of interest, but the money you're going to have for your down payment is going to be from the sweat of your brow, not from the interest rate.
Okay. Because you're not going to have it in there long enough to make any interest to amount to anything.
No, and I didn't think that, and that's why I didn't know if it really mattered, but okay, okay, awesome. Yeah, you're the secret sauce to having a down payment, not the investment.
I mean, just go ahead and get what you can get, a high-yield savings, what, four or five right now, that kind of thing. There's nothing wrong with that.
But, I mean, 5% of $100,000 is $5,000. And that means if you had $100,000 in there, you'd have $105,000.
$100,000 versus $105,000 does not change the house you buy. The $100,000 is what changes the house you buy.
So you're the secret sauce to put the $100,000 in there. Because, again, interest rates matter a lot more when you're thinking in a long-term time horizon.
Mathematically, they matter a lot more. And so, yeah, I would just park it in a high-yield savings.
You don't have to think about it. Yeah, I love it.
And I love hearing the excitement. I love hearing.
She's winning. Knock it out, baby.
They just paid off their debt. Now you've got a young couple.
The American dream is alive and well is what I take from that call.

Absolutely.

Despite what you may be reading or hearing somewhere else, that's fun.

Absolutely.

Mary is on Facebook and says,

At age 56, how much should I have saved for retirement by now?

Oh, no, you're not going to make it.

You're going to be fine. I don't even know how much you have, but you're going to be fine.
There's not a set number. Okay.
The goal is by the time you quit working, whenever that is, and the government made up the number 65. No one else did.
It just made up. Okay.
So you can work till 85.

You can work till 105. I don't care.
You just work until you don't want to work or till you

hate that job and you go do something different. Right.
So, but if you can live off of 8%

of your nest egg and it's invested at 12, you'll be fine. So if you have $500,000, 8% of that,

Thank you. 8% of your nest egg, and it's invested at 12, you'll be fine.
So if you have $500,000, 8% of that would be $40,000 a year.

And it'll be growing at a little more than that.

It'll be growing at about $60,000 a year.

So if you grow 60 and you pull off 40, you'll be fine.

And that program right there will run in perpetuation.

It doesn't have an end.

You're not going to be a good one. 60 and you pull off 40, you'll be fine.
And that, that, that program right there will run in perpetuation. It doesn't have an, it doesn't have an, you never run out of money with that

program. So if you build an estate that you can live off of 8%, then boom, you're going to be

there just fine. So just start targeting that and be serious about it, be intentional about it,

but don't be anxiety ridden about it. This intentional about it.
But don't be anxiety-ridden about it.

This is The Ramsey Show.

For free tools and resources to help you reach your home goals, go to ramseysolutions.com slash real estate or click the link in the show notes.

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Might not be in all states. Today's question comes from Kate in Maryland.
My daughter is a junior in high school and has no idea what she wants to do when she graduates. My husband and I love the idea of her owning her own business, but neither my husband nor I have experience in this.
We both wish we had made different career decisions that would have given us more independence. Where can we research with her to get a better understanding and vision for this option? Or would you still recommend college versus real-world experience? Okay, I'm going to put myself into this particular situation and say, if this was my daughter, what would I do? And so because she's a junior, we would begin to identify areas of interest, not come up with a business idea.
I think this could be very paralyzing for a youngster. It's paralyzing for a lot of people in their 30s and 40s, because we know, Dave, from the data that 70% of Americans want to be self-employed, but only 6% are.
So I'm speaking from data here. So what I would do with my daughter is we would begin to identify areas of interest.
In other words, people that she wants to help, solutions she gets excited about, problems she wants to solve, and there's an industry. If there's a business, there's an industry.
And so we want to get broad so that she gets some real interest and begins to see some areas of interest. At that point, we're going to shadow.
I'm going to allow her to go have coffee, lunch with people that are in those industries or maybe run businesses in those industries, shadow at work if she can get shadow opportunities, all of this to begin to create a field of three or four of her most interesting options. At that point, then we start to have the discussion, is college, is a degree the best decision? Or is it getting right into the workforce and working in an industry? I'll give you an example to help clarify this some more.
If this were a young man, and by the way, it's not limited to young men, but let's say she decides she wants to own a business in the trades. At that point, then I want her shadowing folks that are working in those trades and getting a real-world experience, the good, the bad, the ugly, the smelly, everything.
And at that point, we determine whether or not she's really interested. And then the path is going to be to go to work and hustle and learn on the job, and eventually you work your way into spinning off on your own and starting your own business.
So that's a hard question to answer in such a short amount of time without back and forth, but that would be the advice that I would give because that's what I would do. These young people need to see it, touch it, experience it, smell it, and then they can decide completely agree because kate you did not say she has a this extreme passion and apparent natural talent and bent towards x because you did not say that that would have led her towards a business the people that we've talked to that are 18 or 19 or 21 years old that have had success and they call this show and they are really killing it and we're all kind of aghast at how yeah how far ahead of this curve they are running their own thing they almost always had a natural gift towards something uh technology is not unusual for a 19 year old today to be something that they would go you know they've been screwing around writing code messing around building apps and all of a sudden they built an app and took off and ran the business okay uh or you know whatever that's fine i mean that would be michael dell that would be bill gates both quit college college and Steve Jobs, all three.

All three companies were formed by college dropouts.

But they were super nerds with their eye exactly on what they wanted to do.

There was no question.

Instead, you're asking a very generic thing.

My husband and I always wish we were in business, so we wish our daughter would go into business, but none of us have a clue.

Yeah.

No, don't go in business.

Business is too hard.

That's correct.

Don't put an 18-year-old, 20-year-old out there with no education to go into business doing that.

No.

If she thinks that in talking with her that she has got some entrepreneurial flair

and wants to do a business someday, maybe in the future. A great, you know, just get a business degree.
Get a degree in finance, a degree in marketing. You'll learn accounting.
You'll learn statistics. You'll learn marketing.
You'll learn strategic thought. I mean, you'll get some of these basic things in a good four-year degree.
That's what I have. And I use a lot of those classes I took 40 years ago every day running Ramsey.
You know, it's a $300 million company. It's a dadgum good thing I had a couple of accounting classes.
Hello. You know, rather than just trying to figure that out with a high school accounting class.
And so it's a good thing that I understand marketing at an academic level before I actually get neck deep in it and then try to figure out how it works out here in the real world too. So I would do that if she thinks she's going to go that direction, combined with Ken's advice of really go in there and study, study, go visit these places.
Quit talking about this stuff in the abstract. Here's what we know about entrepreneurs.
Business is very hard. It is.
And people that have never started a small business and run one have this romantic view. Yeah.
But there's a lot of dirt under the fingernails, boys and girls. I mean, it's long hours.
It's the hardest boss you'll ever work for in your life. That guy's a dadgum slave driver.
Yeah. And to that point, the entrepreneurs that win are driven by deep, deep desire to solve a problem and they come up with a solution.
That's the business is a solution and they're deeply passionate about it. That's what keeps them going because it is, you almost need that magnetic pull or else you're gonna quit because in air quotes i always wanted to work for myself yeah you're not gonna make it no no chance it's too tough you're gonna get your butt run over in the middle of the street man i mean you're just gonna be roadkill and it's just too i mean because you put up with too much you shovel so much manure it's unbelievable to there's a pony in there somewhere, but you've got to shovel the manure.
I mean, it's real. And I'm not complaining and I'm not whining.
But I have a call for a certain thing. That's correct.
And I've had two in my life. I mean, one on real estate and went broke and then one doing this.
And I could do the real estate tomorrow and still be okay. But obviously, God us to this right here, and I'm happy with that.
But, yeah, I wouldn't put up with the BS that nobody will. That's why we see business people quit all the time.
It's why we see a chef who is good at cooking and nothing else has a failed restaurant. That's why restaurants have the highest failure rate of almost any stinking business category.
Because somebody thinks because they can cook or like cooking for their friends that that makes them a restaurant owner. No.
You've got to hire and fire people all day long. A restaurant has a 325% turnover ratio in a year.
It means you have to hire three people to fill that one position during that year that's so you're in the hiring business you're in the firing business you're in the food sourcing inventory there's all this stuff that goes with running a business it's not cooking that's right and and that's that it blows a chef's mind and they they go oh god i wish i'd never never. Yeah, we all wish you'd never.
But that is a great actual example of do I want to run a business that serves food or do I just want to cook food? Two very different paths. By the way, both honorable.
But there is a big distinction between the two, and that's the key. You know, it's even like when we're talking with entree leaders, these small businesses, and they're getting ready to promote their best salesperson to be sales manager.
It's two different skills. That's exactly right.
You're managing salespeople. It's different than making sales.
So sometimes one of the worst things you can do is take your best seller and turn them into a sales manager because they don't have that skill set. They're good at selling.
They're not good at managing salespeople. And don't forget, they may not enjoy it.
They may enjoy the service. They may hate it.
They enjoy the service of the customer. They don't enjoy the service of leading a team of people.
Again, you lead a bunch of salespeople. It's like running a beauty parlor.
It's drama. That's right.
Two very different job descriptions. So, you know, you need to get in there what it is.
So that's a great question, Kate. And we'll have the team send out.
I love the student assessment. It would be great

for them. Okay, perfect.
We've actually got that, and that's a young person can take that and get a pretty good idea of what a current snapshot of what a professional job description of purpose would look like for them. And that can be a business.
That's right. I'm not completely killing that, but make sure you understand that, you know, business is not romantic.
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Live from the headquarters of Ramsey Solutions, it's the Ramsey Show. We help people build wealth, do work that they love, and create actual amazing relationships.

Thank you for joining us, America.

We're so glad you're here.

Ken Coleman, Ramsey personality, number one best-selling author,

host of The Ken Coleman Show.

And, of course, the book is Paycheck to Purpose.

The other one's Proximity Principle.

He's my co-host today.

Open phones at 888-825-5225.

Andrew is in Winston-Salem, North Carolina. Hi, Andrew.
Welcome to the Ramsey Show. Hey.
Hey. Hey, Dave.
Hope you guys are doing well today. Appreciate you taking my call.
Sure. So I'm 32 years old, and I've been following your baby steps and your content on YouTube and your website.
I've just reached baby step number four. Congratulations.
Well done. Thank you very much.
Yeah, it was a big achievement. So in regards to investing, I just took a look at kind of what my current situation is, and I'm enrolled in my employer's 401k and contributing 6%, which is what my company matches.
Now, I think your advice is to next open up a Roth IRA and max that out. And if there's any leftover, put that back into the 401k to hit my 15%.
Is that correct? Yeah, exactly. Unless your 401k offers a Roth and has good options, good mutual funds to pick up, in which case you could just put it all in there.
Doesn't matter. But does your company offer a Roth 401k? It's through Fidelity, so I'll have to go and check into that.
I was going to open up a Roth IRA through F um just to keep it under one one roof i wouldn't you would not no i would go go find it's not it's not whether it's with fidelity fidelity offers roth 401ks to the employers that use fidelity to manage their 401ks and the only question is whether your employer allows that or not if they do you need to switch your whole thing to Roth. Now, do you have good long-term options for mutual funds inside that 401K? I believe so, just based on the quick searching I've done.
Okay. You know, if you've got great options there, I would just put it all there, and I'd put it all in Roth.
Okay. That's what, you know, if that gets you to your 15%, if it doesn't, then you can open a Roth.
And I would go to a SmartVestorPro at RamseySolutions.com to get your investing started. But the mutual fund family, the brand is Fidelity.
There's Vanguard. There's Templeton.
There's American funds. Those are brands like Campbell's Soup.
But then the mutual funds inside is the vegetable soup or the chicken noodle soup or the chili or whatever analogy or metaphor we want to use here. So you don't have to have all of your soup from Campbell's.
You could get different brand of soup so it's not required that you go get a fidelity Roth with your 40 I mean just because your 401k is that not at all I'm not saying they're bad but most of these fun families these brands have good funds and bad funds track record wise so you just need to learn about their track records, and if you want some further help, do. Go to RamseySolutions.com and sit down and do that.
And, Ken, the big thing he's doing right is he's actually doing it. Yeah, and that he worked really hard to get there.
I loved how he kind of paused after you said, great job, and he went, it was a big accomplishment. And, and, you know, what's fun to hear about that is this is a guy who now understands the pain that they went through to get to baby step four.
And now you get

to the momentum stage where we're like, now we're getting wealthy and building wealth. And that's

fun to hear. Yep.
Yep. Absolutely.
And yeah, it's like, man, I got rid of all those payments and I

got some money to invest time to flip the switch from being a broke person to being a rich person. Right.
I'll ask a question because we've got a lot of new people all the time, and I know the answer, but I'd love you to address it. Because we tell people in Baby Step 4, 15%.
So the 15% explain that because he's got 6% he's putting in, his company's matching, because I think a lot of people have questions about that, so about what we teach on that number. Just take your household income.
If you're married, you and your spouse's income total times .15, and that dollar amount needs to be going into retirement somewhere, somehow. The best thing you can do is take a match,

regardless of if it's Roth or traditional.

If your company's matching, like he's got a 6% match,

the best thing you could do.

And the 6% match does not count towards the 15.

You are putting 15 in.

The fact that they give you 6%, that's irrelevant.

It's wonderful, but it's irrelevant to this discussion.

So you put in 15%.

That was your point.

That's right.

It's kind of a rock, paper, scissors, except it only goes one way. Match beats Roth beats traditional.
So you go down the order. You first get all the match you can get.
If they have a Roth, like I suggested to him, he may, then you get the match in a Roth. That's a double win.
Then you max out in Roth, and if you can't do anything except traditional beyond that, because, for instance, your company only has a traditional 401K, so you got the 6% match like he may have, he thinks he might have. Then you move on from that 6%.
We move on down. We do Roth at the SmartVestor Pro.
Well, that Roth amount plus the amount you put in the 401k at 6% match, still not up to 15%. Then the last stage is you go back and finish off with the traditional, which he had that exactly right.
That's right. He'd been listening and had that figured out exactly.
So match beats Roth beats traditional because a match is 100% rate of return.

You put in $1,000, they put in $1,000.

You made $1,000 on your money instantaneously.

And there are no mutual funds that have 100% rate of return.

None.

And there are no taxes that are 100% tax rate.

So you can always win with a match.

Always.

Match is a trump card.

It wins the whole thing.

Tara is in Salt Lake City. Hi, hi tara welcome to the ramsey show thank you dave i'm happy to be here good to have you what's up i um little background i have a degree in health care administration and since i had babies i found some jobs where i could do billing from home so i do insurance billing and i run co-pays and things like that.
My husband is a licensed therapist. And just this year, he became independently licensed.
So he started his own private practice where he sees patients on Saturdays. And so he works at his 40-hour-a-week job.
And then Saturdays, he sees his patients. And I want to be involved in his business's finances.
This is what I do from do from home for other offices like i understand insurance and co-pays and deductibles and he doesn't want me to touch his business at all and i why it's not so much that i don't trust him well no why why doesn't he want you touching it that's weird yeah he says he's worked for companies before where like the husband and wife have both been in charge and he like, I just see that their marriage isn't great and they're fighting over business things. And he's like, I'd rather not have business conflict in our marriage.
So he kind of wants to just have that. He's like, you can manage all the money I take home, but I want to run the business myself.
I mean, did Sharon help you when you were starting your business? No, but she also didn't want to and didn't have the skill set to. She does not have an accounting background like you do.
So this is not a... I'm like a certified QuickBooks.
This is like someone who says family should never work together. That's bull.
Family can work together just fine as long as they know how to do it, as long as they know have the relational skills. A therapist that does not have the relational skills to do this scares me yeah i mean he's not a marriage therapist but yeah well i mean he's a therapist in something you're doing some kind of teaches people to function with other human beings that's what therapy does yeah that's interesting david it's all it's like run the business is one thing she just wants to help with the finances no he he he doesn't want her involved at all.
Yeah, that's weird. It's weird.
No, I think you should be involved. But I think you also need to learn to work together sweetly.
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All that changes the algorithms on those things and pushes those formats right up into somebody's face and we're able to help more people because you guys followed shared subscribed and left nice reviews and so on jan is with us in tampa hi jan welcome to the ramsey show oh hi dave uh what an honor thank you so much sure how can we help well i've got a lot of things but this is a this is my main thing right now well i i am an accountant who's learning embarrassingly late in life how to start to manage my own finances um and i've been trying to i've been following your system um i'm working on trying to pay back my debt and i was before i heard what you had to say about working with places like americorps and stuff i was working with a debt settlement company and that was horrible i finally saw the fees and stuff that they were charging i can do better you know you know, just on my own. So I quit with them.
Okay. And then I negotiated, um, like synchrony, um, got that one paid off.
And the next one I was going to, I wanted to call you before I did this, but I called capital one. I hadn't talked to them in like a year and a half.
And I kicking myself cause I got set up on this 20 month debt repayment plan at like almost 300 a month. I mean, it's almost the full balance of the debt.
And I thought then I, after I did that, I thought I heard you say on another show that you, that you can, you know, settle it for, I mean, I understand paying back what I owe, believe me, that's weighing on my conscience a lot too. But I have heard you also speak to, you know, that you can settle these things for like quarters on the dollar yeah if it's a two-year-old or one-year-old debt yeah they're they're gonna and a lump sum they won't do that on payment plan how can we help you today jan well do you think if i offered them um 2500 no you have a payment plan now oh no they won't they have you i mean if you quit paying those payments and they don't have anything coming in, they might.
If you want to do that. But if you can pay this out now that you've done it, pay it out.
But if you're not able to do it, then you're not able to do it. You settle a debt when you're not able to pay it.
Well, I'm really not, but, I mean, it's a hardship, but I do understand about it. I mean, it's a balance in there.
It's not, it's are you able to, in the next 20 months, you know, pay your lights and water, food, work some extra jobs, and pay your bills. If you are, then pay them.
if you're not able to and water food work some extra jobs and pay your bills if you are then pay

them if you're not able to and you're behind and you call them up and you offer them pennies on the dollar as a lump sum which is what you're talking about i recommend but that's only for someone who can't pay it's not a get out of debt technique for someone who's able i have ten thousand dollars in the bank I owe ten thousand dollars write a check don't

settle a debt technique for someone who's able. I have $10,000 in the bank.
I owe $10,000. Write a check.
Don't settle a debt like that if you took out the money on the credit card, right? Yeah, it gets down to ethics and character. You took it out.
It doesn't sound like she's trying to violate that, but I'm just trying to distinguish for our— I think she tried to get a deal. For a listening audience.
And now she regrets that yeah that's that's exactly what it is yeah

but that does also sound like you can pay it yeah it's hard but you can pay it if you can pay it and

do your other stuff then do it uh finish it out you'll be done um and and you know maybe they

waive some interest or something like that that's fine austin is in spokane hi austin welcome to

the ramsey show hello sir thank you for having me i really appreciate it sure how can we help

Thank you for having me. I really appreciate it.
Sure. How can we help? Yeah, so I'm kind of in a little bit of a dilemma.
I've been with my current company. I've been with them for 10 years now.
I started with the company when I was in my mid-20s. Me and my wife were having a kid at the time.
We're like, okay, this seems like a good option for us. They have really good benefits.
I've had good medical care. I have a great time off, flexible schedule.
But the pay has been lacking. And 10 years down the line, I still have the same job I started with.
I was hoping with this particular company, there'd be growth opportunities, ways to move up, and it just hasn't happened. So I kind of feel like I worked myself or backed myself into a corner being with the company for so long.
So I want to know, like, what do you think the possible options are to possibly move away from this company? Or because the benefits are so good, do I stick it out for a little bit longer? Kind of my dilemma, do I move forward or do I just move on? You move forward mentally, move forward, you know, looking through everything financially involved with the move, and then you make the move. But your soul has kind of left your body already around this job.
You feel like you've hit a lid. And the answer to your first question is no, you didn't paint yourself in a corner unless you're not telling us something.
You know, painting yourself in a corner is you have no options. You can't get out.
That's the very idea there with that. So the question is, go back to 10 years ago.
Where did you see yourself going up the ladder? What did it look like? Was it in this particular field or is it a different field, different yeah so what is this particular field um so i currently work with i guess you call a customer service role i've been doing that for 10 years uh well i kind of thought like this company is so big it's got a good name for itself if anything it's going to look great on a resume but what did you think you wanted to be doing where would you like to be today let's answer that question if you could snap your fingers, no risk, what think you wanted to be doing? Where would you like to be today?

Let's answer that question.

If you could snap your fingers, no risk,

what would you like to be doing right now?

I was like, I would, I mean,

the dream scenario,

I would love to own my own business someday.

No, that's down the road.

You went a little too far. Give me the, you already answered the question

and then you edited it.

I heard it.

So what's the spot on the ladder you'd like today? Had the 10 years gone the way you wanted it to? What would you be doing? If I'm doing customer service now, if I were in a management position in that same particular field, I would have been happy with that. All right.
So you get to management by virtue. In other words, you do good work and you're in a company that has a growth environment, meaning they do this.
You've not grown for 10 years. One of the things I would challenge you as your coach, if we're sitting in a one-on-one session is, do you have good evidence as to why you haven't moved at all in 10 years? I'm not saying it's your fault, but I'm also not necessarily blaming the company.
I just don't know enough to just make them the bad guys. But you need to know, homework assignment number one is, do I have some real clarity from my current leaders and through my records over the 10 years as to why maybe I haven't moved up the ladder? Let's make sure we're not walking around with a blind spot.
Second thing is, okay, what positions are available to me in different companies, same industry, where I know for a fact I've done my homework,

and they have a culture of growth.

Like Ramsey Solutions moves people up.

You do a good job here, and you stay with it,

you're going to get an opportunity for growth here.

And so you need to be looking for that.

We announced 32 promotions and staff meetings this morning.

Exactly.

Very normal.

So you know the industry, Zach.

You know the industry and you know the position.

Go get it.

Don't overthink this.

But before you move, we're going to have something that we're going to move into.

We're not going to jump and start looking.

It's just never a good idea unless for some reason you've got all kinds of wealth.

Is it too late at that company to go in and sit down with a supervisor and say,

how can I add value? It might be. That's my next question.
Have you ever sat with a leader in your 10 years and said, hey, I want to grow. What are some opportunities for me? Yeah, yeah, I have.
I've had the same manager for quite a while, and we've had those conversations, and I have moved or done rotational roles that only last for like six to nine months. I've tried those opportunities and I've unfortunately

haven't really accumulated or turned

into anything beyond that.

Yeah, I think Dave's right.

I think one more time I'd sit with him and go, hey, I've

been here 10 years and this is the kind of gig

that I'd love to have. You've given me these opportunities.

Shoot me straight. Let me know

where I stand. I can handle it.

We've been together a long time. Tell me,

what are my options here to grow? And be okay with whatever the answer is. And that'll give you some clarity moving forward.
But you're probably looking somewhere else is my guess. This is The Ramsey Show.
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you ever stood in the grocery store line nervous that when you spent that money it was going to cause check to bounce? I have. That's scary.
Life's too short to live scary like that. You want to stop it? You have to tell your money what to do instead of wondering where it went.
That happened to me when we were going broke. I got a brand new baby, a toddler, and a marriage hanging on by a thread.
Sharon would have left, but she didn't have a car. I mean, we were not, it was not good at our house.
And I remember, I can show you the Kroger. I was standing in line.
I'm writing a check, and I can't figure out in my head if when I buy these groceries, if there's going to be enough money to pay the electric bill, if the electricity is going to get cut off because I bought groceries. See, when you have a written, detailed plan, you'll never have that feeling again.
You'll know. This is how much I have for groceries, and that means I have enough for lights and enough for water and enough for the rent and enough for the kids' school activity and enough for whatever because you've got it written down.
And you know, if I stay stay in this side, this number that's written down for this category, that means the other categories get to exist without any trouble. The stress goes way down.
The anxiety evaporates. The old word we used to use is you are empowered.
Remember being empowered for things, Ken? That was a long time ago. Yes.
Scary word to a lot of people now. Yeah.
It's okay. You're empowered.
You're in control of your money instead of it. Money is a great slave.
It's a horrible master. You need a written, detailed game plan for your money.
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Kathy is with us in Indianapolis. Hi, Kathy.
Welcome to the Ramsey Show. Hi, Dave.
Thank you. Thanks so much for taking my call.
I feel like I could use a group call with all of you all, Rachel, Jade, John, Ken, and Dave. But Dave, you're like my financial father.
I think we're the same age, but I've been listening to you for a long time. So I've waited till a day that you were here.
So I think I have two main questions. Can we afford to own two homes? And the second was, if we divorce, what considerations are there for our investment account? So just a tiny bit of background.
We're living separately at home. I'm 65.
My husband's 67. I travel two to three weeks out of every month to go and help our daughter who lives in a different state with her tiny little ones with another one on the way.
I've gotten involved in a church up there and starting to develop some friendships up there.

My daughter and son-in-law, they want me to come as much as I want and to be there with them, but they don't really want to spend time with my husband. Why? behavioral and emotional immaturity, I think I would say.
Is that her dad? It doesn't seem to. No, I said, is that her father? Oh, is that her father? I'm sorry, yes.
Okay, so she doesn't want a relationship with her father. She wants it no more than a couple days at a time.
She's concerned about him being around the young kids. What's wrong with him? Well, I have involved our church, and they're tempted to talk to him, but I'd say it's, um, um, emotional immaturity, spiritual immaturity, relational immaturity, um, focus on politics and things that just don't matter.
Um, and he has asked for forgiveness every time these things happened. are the what are these things i mean he yells at people or what um i'm trying to think of a real quick example um he doesn't know when to quit when people say i don't want to talk about that he he won't quit and've talked to my pastor about it, and he's tried to set up times to talk with him.
But he just says that he will go to counseling, but then it never happens. So we've been living separately in our own home here for about six months.
Okay. Yeah.
I do not like that your daughter and your grandkids are driving this. You owe your marriage more than that.
How long have you been married? We've been married for 41 years. And maybe I'm not explaining it correctly.
You need to go, you without your daughter's input, I'm tired of her input already, you need to go sit down with a counselor and start talking to the counselor about how to talk to your husband of 40 years that you're going to require him to sit down in counseling with you and you need to be able to give some words to that for him for you to stay in the marriage okay well then I put boundaries around things, and I may have, I think maybe I jumped ahead. This has just been getting progressively worse.
Yeah, because you ran off to another city for three weeks at a time and griped with your daughter about how bad a man this is that you've been married to for 40 years. Of course, it's not getting better.
Well, and I hate to correct you there, I really do, that that is not how it's panned out and what you told me well yeah i'm trying to be careful here um because this has been ongoing for years and years and my going there so much has just recently started to pick up because of the need there i am not running away from my home here and my responsibilities here and i'm confident of that and my pastor's confident of that all right then you guys have to decide if you're going to be married and then you need to decide that and then you'll decide whether you're going to do stuff no i would not try to live in two different cities and act like we're not married when we're still married. That would be suicidal, relationally, emotionally, financially.
Yes. So I'm deciding our home here is paid off.
When you divorce, you turn your balance sheet into a business. And you're just going to look at what we own and what we owe, and that's going to be split.
And so you guys start thinking about that. Yes, and I have, and I contacted, I have my investment account, the $1.3 million with one of the brands, and I went to another one of the brands to have, because I'm right now 90-10 in stocks and then bonds and you don't need to move anything until you decide if it's what's going to be split exactly exactly so right now you need to decide first thing we got to just add it all up and start talking to a diverse attorney and how much of that's going to be yours how much of it's going to be his because in most states it's down to be his? Because in most states, it's down the middle.
Right.

It's 50-50 here.

And he says, my husband says he understands that, I mean, I've managed all that. I've built it.
We've done it together. But he said, you know, you deserve more than that.
But I said, well, beyond that, we just need to figure out what we're going to do. And they worked out this plan for me with a 50-50 split, but with it changing from 90-10 stocks and bonds to 70-30 stocks and bonds.
So I had a question for you about that. I was thinking about going with a second company, but they do individual stocks.
And I know that that is generally, you just, you do not do that. No, I wouldn't do do any of that i think you've got a whole lot bigger plant problem than whether you're in stocks or bonds honey in a marriage of 41 years you need to think about you all need to concentrate on that and you need to put a bow on that one way or another either we're in a healing mode or we're in an ending mode when it ends you take your poker chips off the table then you sit down and you know you can go to ramsey solutions and click on smart investor pro they'll sit down and put you in some mutual funds is what i would do it's pretty simple i wouldn't be in stocks i wouldn't be in bonds i wouldn't be in 70 30 i wouldn't be in 90 10 be 100 of mutual funds that's what i'm in and you've been You already knew that.
So, wow, that's a sad place you're in, honey. Real sad.
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Nicholas is in Washington,

DC.

Hi,

Nicholas.

How are you?

I'm good. How are you? I'm good.

How are you, Dave?

Better than I deserve.

What's up?

So I just graduated college, took my last final today, and I have a job offer that I've actually taken already for $130,000 a year.

You graduated from college and took $130,000.

What's your degree in?

Computer science.

Way to go, dude.

Man, look at you.

Thank you so much. Look at you.
Wow, okay. And on that note, I have absolutely no idea how to structure this income and how I can save it the best.
I have the blessing that I can live with my parents for a while after starting this job. So I think for the first six months i'll probably be living with them and just saving up as much as i possibly can uh but i'd love your insight on what actually maxed out my 401k uh any other you have any debt tools i do have debt i have roughly thirty thousand dollars of debt okay all right here's what i would do in your situation um you need to do a detailed written plan, and you're good at detailed written plans with computer science degree, of what you're going to do with every dollar before the month begins.
Now, you do not know exactly what your take-home pay is yet, but you can probably get pretty close. Okay? And I would not stay with your parents six months and save money.
i would stay there three months until you found a nice place and get out so i know that roughly my take home after taxes will be uh around seven and a half thousand a month okay perfect then budget that out stay there three months and find you an apartment and get the heck out man man. Start your life.
I'm ready to start my life.

Good. But on that note, what should I be aiming to pay for rent?

Because this is a very expensive area, kind of hence the large salary.

And one bedroom apartment in the area of where I work go for around $2,500.

Is that something you think I can afford?

Nope.

You need to bid a fourth of your income, a fourth of your take-home pay. Fourth of the take $2,500.
Is that something you think I can afford? Nope. You need a bit a fourth of your income.

Fourth of your take-home pay.

Fourth of the take-home, okay.

So you may want to get a two-bedroom, get a

roommate, or you may want to live a little bit further

out with a bit more of a commute than

you were looking at. You're not going to

be able to afford to live in the cool area of

D.C. Not on

$130,000. It's not $130,000 budget.

Yeah. But you can live in the area.
You just can't live in the cool kids area and that's where the apartment was yeah yeah it sure was uh do you think i should be maxing out my 401k no i think you need to dump everything you got on the 30k until you get rid of it and then after that then after that i would start i'd make sure you had an emergency fund of three to six months of expenses after that i'd start putting 15 of my income away towards retirement in my 401k and um really you should be there within a year but um let's take this year and get the 30k and build an emergency fund of 20 000 cash start talking about maybe buying a house someday and let's start putting money in our 401 at that point. I'm going to send you a copy of the book, The Total Money Makeover, which outlines what we call the baby steps, Nicholas, and it'll walk you through every little bit of that, and jump online and get every dollar of the budgeting app for free, and get started on laying out your budget, and give every dollar a game plan before the begins, but completely concentrate on the debt until it's gone.
And, you know, two to three months at your parents' house is plenty in this situation. Yeah, I was going to say, Nicholas, the one thing you're going to need to fight is that you've been in college, presumably for four years, and you got a dorm room or an apartment in the cool part of town, and life's been a big, big blast.
And you've done well, and you got a good job. Now it's the time to start being patient, and I think the roommate living further out, learning how to manage your money, you're going to be so far ahead if you just can be patient and not try to keep a portion of that college lifestyle going.
This is the real world now, and that means not getting an apartment in an expensive place, getting one, two, maybe three roommates for a year, whatever that is. So that's my encouragement to you is now things are changing, and the mindset has to change with it, or else you're going to feel like, oh, I should have this, and I've been doing this.
Well, you can't afford to do that. It's a very different world now.
We have this sense when we take a step up, when we level up, and you're leveling up by graduating and getting a great job. It's human nature to have a sense of going, I deserve.
That's right. And let me help you with what you deserve.
You don't deserve anything unless you can pay for it. That's your measure whether you deserve it or not i no i don't know i don't i don't care if you have the money you deserve it if you don't have the money you don't deserve it you haven't made enough yet and that that slows your butt down and pushes you into a contentment zone which goes okay uh and then i'm gonna live like no one else so that later I can live and give like no one else.
Nick's in West Palm Beach. Hi Nick how are you? Hey Dave I'm doing good.
How are you guys doing? Better than I deserve. What's up? So I'm in a little predicament here.
I've been running my business. I started about eight years ago.
It's a party and event rental company. We're located in South Florida.
And I have just recently, probably within the last six months, kind of been listening to a lot of your videos and watching you guys consistently starting the baby steps. I've had about a little over $70,000 in debt between a vehicle, uh, or two, as well as just mainly credit card debt.
Um, within the last six months, I've paid off over half of that. I have about $30,000 in debt remaining with 22,000 of that being, uh, one of my vehicles and then about $8,000 left in credit cards.
Um, and now with it being December, um, I've got Christmas bonuses that need to be going out, you know, that I'm normally paying every year and that, you know, I've got about 10 employees total and, uh, I'd say four or five of them have been with me for a few years now and are used to, you know, that Christmas bonus. Um, this year I've just been, you know, I've been tightening everything up and I'm just in a predicament right now and wondering, you know, if I should pay those Christmas bonuses or if I should have a, you know, conversation with my employees about, you know.
Do you have the money? I've got the money, yeah. You know, I definitely have the money to pay them for sure right now.
How big a bonus are we talking about? Not a lot. I would say, you know, over the 10 employees, they're all going to be small bonuses, maybe totaling up to $3,000.
Okay. How much money do you have? I mean, right now, just liquid in the bank between, you know, my personal accounts and my business accounts, I'd say approximately maybe $35,000.
So you're just wanting to save the three this year to keep going towards all this debt elimination? That's your why? Right. That's my why.
How do you think they're going to react to that? What do you think their real reaction is going to be if you told them today? Definitely some disappointment for sure. I'm sure they're kind of counting on it.
It's later in the month than I would have normally paid it to. Yeah.
Because I'm just, you know what I mean? Have you ever seen Christmas Vacation with Chevy Chase? I haven't, unfortunately, no. Wow.
You know, watch that tonight. That didn't go well when he didn't pay the bonuses.
he gave him the jelly of the month club. These people are counting on it.
Listen, it's a comedy, but people are counting on this and you waited way too late to change this on them. It's my opinion.
I wouldn't do that for what money you think you're going to save. And you have the money.
You'll lose them. That's right.
You have the money. Right.
It's not like you have $30000 in bonuses and $30,000. Sure.
That's not, you have the money. It's not going to kill you.
It's really not even going to change your get out of debt plan. You're just more cognizant now where money's going, and that's a good thing.
But in terms of communicating with the team on something like that, you should have communicated before Thanksgiving. Yes.

And if the truth is we're not profitable enough to pay out bonuses this year, but that's not

even the truth here.

Truth is you have the money.

You just want to put it on debt instead.

And so in that case, no, I think part of running your business is a small, and these are small

Christmas bonus.

And yeah, just be, I definitely would give that out.

I'd give it out today, by the way, in cash, as soon as you get off the phone.

This is The Ramsey Show. What up, what up? It's Dr.
John Deloney from the Dr. John Deloney Show with some amazing news.
The latest episode of United States of Anxiety is available right now exclusively on the Ramsey Network app. This docu-series follows real people from my show as they embark on a 90-day journey to transform their lives, and I personally walk alongside them every step of the way.
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What's up, Kelsey?

So I've lived with crippling anxiety for as long as I can remember.

How do I stop it from constantly coming up in different areas of my life?

What does crippling anxiety mean? Paint me a picture of that. All right, so you ready to jump in? I'm ready to jump in.
We're going to check in with Kelsey. 30 days, 60 days, 90 days.
I cannot even function because I'm just crying. My mom left us when I was four.
I truly felt like for a while I had no family. She's experiencing things that really hurt a long time ago.
Tell me about this boy. He triggers me a lot.
Scared of losing Paul, scared of doing the wrong thing, scared of not being enough. It just feels like it would be exhausting to be Kelsey.
It is. Whenever somebody's playing whack-a-mole with their anxiety, when it just keeps moving, that tells me the underlying system's not okay.
How do I get my inner child out of this relationship? Because I feel like she's running the show. One of two people that's supposed to never leave took off.
I was this burden. You're burdened, that's right.
To the one person who should carry it.

All of it.

Did you ever tell that little girl that it wasn't her fault?

I don't know what to do.

You either have to choose to let this guy love you,

or you got to choose to let this guy go.