If You Want To Be a Millionaire, Do What Millionaires Do

Live from the headquarters of Ramsey Solutions, this is the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. I'm Dave Ramsey, your host, number one best-selling author and Ramsey personality Ken Coleman is my co-host today.
As we answer your questions about your life and your money, the phone number is 888-825-5225. Merry Christmas, America.
We're so glad you're with us. Brittany is going to start this segment in Charlotte, North Carolina.
Hi, Brittany. How are you? Hi, I'm wonderful.
How are you today? Better than I deserve. What's up? I've got a question for you.
So my husband and I have started doing the baby steps. We have started our budget, and we are just trying to figure out where do we put this leftover money that we have at the end of the month.
I have quite a few student loans as well as our car payments. We have a credit card, and we have a $10,000 personal loan that my husband just had to take out because he had issues with his truck.
So I'm just trying to figure out what's the best bang for our buck as far as this leftover money that we have at the end of the month. $10,000 worth of issues on a truck? Yeah.
What in the world?

What?

So apparently the engine had some kind of issue, and it's a no manufacturer problem.

Recall hasn't happened yet, but yet it's going to be give or take about $7,000 to $10,000

to fix it.

Okay.

Yeah. And you already took out the loan? Yes, he did.
But the work hasn't been done? They are starting it and doing it now. Okay.
All right. All right.
Um, okay. So the first step to getting out of debt is quit borrowing more.
That's why I was asking.

So the baby steps are your order of attack.

That's what they're for.

So we start with number one.

Do you know what number one is?

I have to have a $1,000 emergency fund.

Starter, beginner emergency fund. Do you have $1,000? Yes, sir.
Do you have more than $1,000? We have about $1,600 in our savings account right now. Good.
Okay. So we're going to take $600 of that and any other money we can squeeze out of the budget, and we're going to apply it to Baby step two, which is the debt snowball.

Does that sound familiar? Yes, sir, it does. Okay, and the debt snowball is where you list all of your debts, smallest to largest, except your home, pay minimum payments on everything but the little one, and attack the little one with a vengeance.
Yes. What's your smallest debt? it's about, and that's, I guess that's my biggest question is within my student loan, it's a bunch of smaller little loans.
Okay. What is your smallest debt? They're little debts.
They're small student loans. It's not by category.
It's by debt. $10,000.
What? It's a $2,000 student loan. Okay, good.
So we're going to throw $600 out of savings at that and any other money we can throw at it and try to get that paid off in about a month here, right? Yes. What's your household income? We make about $215,000 a year.
Okay. Him and I both combined.
Excellent. And what's your next smallest debt? It's another $3,000 student loan.
Good. I want both of those gone by the end of January.
Okay. Including the $600 we're pulling out of savings.
You see how we're doing this? Boom, just like that. Yes.
And every dollar we can squeeze out of this wonderful income that you have we're going to attack attack attack attack attack now if you do not need but seven thousand dollars then take three of that borrowed money and put it back on that loan okay and you have a seven thousand dollar loan for your debt snowball instead of a 10 right okay and uh it sounds like everything the truck's already down there and this deal's already done i might have challenged even how to fix the truck but sounds like we're already um cows out of the barn on that one so yeah but um uh good news is you have a fabulous income what is the total of your debt? Well, not counting our home, it is $125,000.

Oh, excellent.

If you live on beans and rice, you'll be out of debt in a year.

That's the plan.

Okay.

I love it.

And no eating out and no vacations and no more borrowing money.

And we're going to attack this to the tune of about $10,000 a month. And we're going to be out of debt in one year.
And that still leaves you $100,000 to live on. Oh, darn.
Wow, that's a pretty cool plan. That's how you do it.
That's your order of attack. And then once that's gone, we go back to the $1,000 account.
Baby step three is we raise it up to three to six months of expenses, a fully funded proper emergency fund because $1,000 is not enough. We all know that.
And then once that's done, then you do baby steps four, five, and six simultaneously. Four is you start putting 15% of your income away in retirement.
Five is you start funding your kid's college. Six is we throw everything else we can get our hands on at the house and get the house paid off.
Usually takes about five or six years to knock it out. And then once you finish that up, you're at baby step seven, which there's nothing left to do then, but become very wealthy and outrageously generous.
And it just works, Ken. Yeah, because it's momentum.
And I think it's so great to hear new callers, new people coming in, listening to what Dave just laid out. The secret to the baby steps that Dave figured out a long time ago is the sheer momentum, the emotional momentum of knocking out those debts and seeing that there is a path out of this.
Because for a lot of people, $120,000 of debt, just the sound of that is bone crushing. And so to understand that we can do this one step at a time, it's really, really huge.
And I got to say back to that truck issue, something like that happens. I think people automatically, Dave, they default to, I've got to go into debt because this is my car.
And they don't sit there and go, what are all of my options right now that don't require taking out debt? They just immediately default to, well, it's my car, and that's a bit of a trap. It is.
And well, here's the thing. Most Americans, that's a good point, solve their problems with a debt payment.
They get a new debt to solve a problem. I want to go to college.
I don't have any money, so now I'm a student loan. I don't have a car.
I like that car. Now I have a car payment.
And I want to go on vacation, and I don't have any money. So now I have a vacation loan.
Oh, wait a minute. Christmas this year is in December.
It caught me off guard. Oh, that's going to be some credit card debt.
Anything that's a surprise, and everything seems to be a surprise, we solve our problems with a new debt payment. And you're going to be in debt the rest of your life.
And that's what the banks have taught you to do. And that's, it's a mindset that Ken, you're exactly right.
It has to be broken where you say, I don't borrow money anymore. So now what am I going to do? Yeah.
Yeah. You just take it off the table.
It's not, it's not even on the table. Grandma used to say, where there's a will, there's a way.
And I believe if you will yourself to not use debt as an option, you can get pretty innovative. In fact, that's where innovation comes from, a lack of resources.
That's the very nature of innovation. They figure out a way to solve a problem.
People that have a lack of resources get more creative, always. Always.
I have gotten very creative many times over the years once I drew a line in the sand that said, I don't borrow money. So that's part of her story going forward now.
That's the plan. This is the Ramsey Show.
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That's chministries.org slash budget. Ken Coleman, Ramsey, personality number one bestselling author of the book Paycheck to Purpose.
He's my co-host today. The phone number here is 888-825-5225.
Ray in Houston, Texas. What's up, Ray? Hey, Dave.
How are you? Better than I deserve. How can I help? Okay.
So I am 27 years old, and I just finished filing, well, I mean, just completed Chapter 7 bankruptcy. And I have no idea what to do next financially at all.
I'm sorry. Wow.
Are you working? Are you working? Yeah. So right now I'm just bartending.
I'm still trying to find a job in my career field in the meantime. Which is what? What field is that? I have a degree in chemistry, so I was working as a lab assistant, but it was a contract base, and my contract wasn't renewed.
What's the path, though? What's the ideal path that led you to a chemistry degree? Where do you want to be? I thought I just wanted to be a chemist. I'm not sure if that's still what I want to do at the moment.
Well, I'm not worried about the moment, but I am trying to think about this long-term play, because now you're rebuilding your life. So is chemistry off the table, a career in chemistry off the table, or is it still on the table? It's still on the table.
I'm still on the table. What's that income look like? What would be a top income in your field?

Usually like around $70,000, $80,000.

Okay.

So, Ray, what happened?

Why did you file bankruptcy?

I was married, and we divorced, and I also lost my contract job. So I just had a lot of debt, and I just stopped paying for everything.
And I felt like there wasn't any other options to do except file Chapter 7. Okay.
What was the debt? I had a car loan for about $35,000. It was about $15,000 in credit card debt and my student loans, which is about 60.
They're not bankruptable. Well, I actually was able to get them discharged, actually.
Oh, they're private student loans. Okay.
Yes. Okay.
Yeah. All right.
Good. All right.
So when I was 28 many years ago, I filed bankruptcy, Chapter 7. I lost everything and I went through it.
It was very painful and a lot of shame that I had failed because I had. And it took some of my confidence away.
And so the way I chose to react to that was to do an autopsy on my stupidity and say, what put me here? What are the things I believed that were obvious lies that put me here? You follow me? In other words, if you're going to go through that kind of crap, at least learn the lessons, right? At least pass the test. If this is a test, at least pass the test.
So you never go back for those reasons. So you bought an education you couldn't afford.
You bought a car you couldn't afford. And you had no savings.
So when you went through a job loss and a divorce, everything came tumbling down because you had a lot of debt and no money. Does that sound right? That's correct.
Yeah, that's the CSI on your deal. So how do we recover from that? Well, we do the opposite of that.
We pile up cash and we have no debt and that's what i've been doing now for 35 years it worked too by the way good news um so next time you need a car uh you pay cash for it or you don't buy it uh the next time you need to uh take a class you pay cash for it or you don't buy it. The next time you need to dot, dot, dot, fill in the blank, stupid American thing we do, and don't do it unless you pay cash for it.
And part of my written monthly budget for the rest of my life from age 30 to age 64 today has been the first line in my budget is giving. I'm a Christian and I tithe to my local church.
That's the first thing that happens to money when it comes to us. The second thing that happens is savings.
And then we eat. We're always going to give and we're always going to save and we're always going to eat.

But we don't purchase crap while we've not been generous and while we've not saved money.

These are basic principles, and they're kind of common sense if you think about it.

But no one does them, Ray, and that's why most people are broke.

This is how you recover, kiddo.

And you do what Ken's talking about, and's get your let's get your career in business okay you're you're not um you're not tending bar because it's what what was your goal when you were 16 years old you're tending bar because that's where you're hiding while you're recovering from these wounds of a lost job, a bankruptcy, and a divorce. You've had three major blows emotionally.
So I want you to come out of the cave and go be who Ray's supposed to be, which is a chemist making $100,000 a year, or whatever it is you want to do. I don't care.
But God made you to go do something, So let's get that figured out because that's going to bring you in more money than you're making now, more satisfaction than you're making now. And then you can start saving and giving and avoiding debt going forward with a plan.
Is that all that makes sense? It makes sense. Yeah.
Ray, I just want to add that, Dave, I'm curious to know what you would say to this, having walked through this yourself. But Ray, I've got a friend of mine.
He's a big fitness expert, and he says, exhaust the body, tame the mind. And I think there's a bit of a truth there for you in this situation in the form of not necessarily working out, but I think you need to be working as much as you can.
I'd like to see you make the transition into your field because that's your greatest potential for income.

But whether you're working at a bar or you're working three or four jobs right now, I think you need a mental win. And I think you do it two ways.
You're working so hard that you have nothing else going on and you're piling up cash, as Dave says, because I think you need the emotional win and I think you need the mental win and not beat yourself up anymore. I think you need to see yourself establish that bank account and get it growing and watch yourself get some momentum of putting cash in the bank so that you convince yourself, I can actually do this.
I'm not a moron. I'm not the only person that's ever gone bankrupt.
Dave Ramsey has, and he's done well since. So I just think that would be my encouragement to you.
Stay busy right now. Be as busy as you can, not to detach, but to grow from this and to exhaust your work body and your work mind so that you can say, hey, I'm actually winning and I can build myself back up.
I can come out of these ashes. That would be my recommendation.
I think that's the best thing coming off of a big loss because I think it's traumatic. Well, and what happens is you start getting some wins and it rebuilds your confidence.
That's part of answering the question, how do I recover? That's it. Is you rebuild your confidence? I had to.
And it worked. Amy is in Dallas.
Hi, Amy. How are you? Good.
How are you guys doing? Better than we deserve. What's up? Hi, I'm just curious.
Is it up to the employer's discretion to allow or not allow a conversion from traditional 401k to Roth 401k? I've asked multiple times, and my answer has been, they don't do it. If the employer sets the rules of the 401k in place, some do not have a Roth option.
Mine does. Mine does have both.
So I've since done contributing to Roth, but I was hoping to... Your company offers a Roth 401k and a regular 401k.
Yes, sir. Then it is not up to the employer's discretion.
They're telling you they won't let you do it? Correct. I'm like, That's weird.
Okay. It's not their money, and they have the place to put the rules in place, but if if they chose not to have a Roth option they can do that for everyone but they can't select look at you and say no you can't do this this is a small employer no corporate america you need to get you need to get above this idiot's head somebody in HR is making mistake.
No, they do not have the right to deny

you. If they're offering the plan to everyone, they're offering the plan to everyone.
You can't say some employees can do this and some can't. That's not the way 401k rules work.
So I think you got to dig into this and learn a little bit more. There's something weird here.
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.
But 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.

Winston and I just signed up and we got an account.

And I'm not kidding.

It took less than five minutes.

It was so user-friendly.

The step-by-step approach was unbelievable. And then the next day, my phone rings and it says Fairwinds on my phone.
So I answered it and talked to someone there and they said, yeah, they give calls to every new customer. And so again, they just really care about your experience.
And I so, so appreciate that. So again, you guys, I know it can be a pain to switch banks or to open up new accounts, but Fairwinds, again, they make it so easy.
Plus anything that you can do at a traditional branch, you can do with them at fairwinds.org or on their app. And you'll have free access to over 33,000 ATMs.
Hey, you guys know how much I hate banks in general. And so for me to do this is a big deal.
Talk to our friends at Fairwinds and check out the combined checking and savings bundle

that they created just for the Ramsey tribe.

You guys, it's incredible.

Yeah, you guys, it's so easy to join Fairwinds no matter where you live.

So go to fairwinds.org slash Ramsey to learn more.

That's F-A-I-R-W-I-N-D-S dot org slash Ramsey. No one wins at anything big by accident.
Winning is not an accidental thing. You have a great marriage, it's not an accidental thing.
It's not a random lightning strike. If you have a fabulous career, you build wealth, it's not random.
You do a series of intentional acts. When you're handling money, the very basics of handling money is to handle it instead of wondering where it went.
And that's telling it what to do. That's why we developed the world's best budgeting app called EveryDollar.
EveryDollar will help you give every dollar a name and make every dollar behave and do what it's supposed to do. My friend John Maxwell says, a budget is people telling their money what to do instead of wondering where it went.
My friend Zig Ziglar used to say, if you aim at nothing, you'll hit it every time. Most mediocre people aim at nothing, and then they're shocked that their life is mediocre in a category or in general.
Winning is an intentional act.

Aim at something.

Do it on purpose.

You can download every dollar.

The budgeting app I'm talking about, 50 million people have.

That's a lot.

I wish all of them were using it.

But wow, pretty cool.

But download it for free in the App Store or at Google Play. Alex is in Atlanta.
Hi, Alex. Welcome to the Ramsey Show.
Hey, Dave. Thanks for having me.
Sure, man. What's up? So I had a quick question.
It might be a little complex, but my dad's been disabled my whole life, and he's had multiple heart attacks. My mom's been fighting with stage 3 cervical cancer.
You know, I want to know if it's honorable to go $1,000 into debt to be able to take my wife and kids down to go visit them and take them to Disneyland and what my parents used to do with us when we were kids so they can, you know, I don't know when the next time we're all going to. Take your kids to Disneyland? Your parents?

All of us.

Oh.

Your parents' health will allow a Disneyland trip?

In a wheelchair, yeah.

Disneyland or Disney World in Orlando?

Disney World in Orlando.

Where's mom and dad?

He just got cleared to fly from California to Florida to visit my grandmother and my sister she just had a baby too I'm just trying to yeah so what's your household income sir I bring in anywhere from 80 to 120 why can you not find a thousand dollars I dug myself a little hole before I had kids and bought more expensive cars than I should have.

And I'm paying the price now.

So you don't have $1,000.

You make $120,000 a year.

You don't have $1,000.

I have $2,000 in savings.

Then take $1,000 and go to Florida.

Okay. Why did you call me and ask me to borrow money when you have $2,000 in your savings account? Oh, I wasn't calling to borrow.
I was calling just for some insight. No, you were saying, is it honorable to borrow money because my parents are sick and dying so I can spend some time with them before they leave this earth, and I have to borrow money to do it, but you don't have to borrow money to do it.
Yeah. I was just trying to figure out if I should keep the $1,000 or $2,000 for...
Let me reframe this for you, okay? If you borrow $1,000, you're not borrowing it for your sick parents. You're borrowing it to put it in savings.
It's the same thing. If you take $1,000 out of savings and you borrow $1,000 for this trip and put it back in savings.
It's the same thing if you take a thousand dollars out of savings and you borrow a thousand dollars for this trip and put it back in savings it's the same thing so you're really not borrowing for the parents trip you've worked this whole drama thing up in your head you're really borrowing so you don't have to deplete your little savings account see the difference yeah what this is, if I'm you, is my wake-up call. It's time to do some different stuff, Alex.
Agreed? You make too much money to be this freaking broke. You work too hard to be this freaking broke, dude.
Yeah. What's the depression from? You sound like you're walking around a mud hole just trying to figure out the way i mean i've you know i've read the books i've read your books and you have the energy of a hound dog in the sun what's the deal man i mean I mean, are you depressed?

You know, I think it's just hard watching your family suffer your whole life,

and then you try, and you're trying to prevent that from happening in your house and with your kids and trying to make everybody happy

and trying to be happier yourself too

and make all the right choices.

Sounds like you're exhausted.

Yeah.

I think you're emotionally exhausted.

So here's the thing.

You make $120,000 a year.

The plan you've been working is not working.

Can we agree with that?

Oh, yeah.

You work too hard.

You make too much money to be as broke as you are.

So take $1,000 out of the account is the answer to your question

and go visit your mom and dad.

Thank you. at.
You work too hard. You make too much money to be as broke as you are.
So take a thousand dollars out of the account is the answer to your question and go visit your mom and dad and take them everybody to Disneyland. That's fine.
But when you get home, man, it's time to sell some cars. It's time to cut up the credit cards.
It's time to put everybody on a budget. And I don't care if the 14 year old is happy by definition, 14 year olds are not happy anyway.
and so I don't really care. That's true.
That's the deal. So I don't know if the 14 year old is happy by definition 14 year olds are not happy anyway and so i don't really care that's true that's the deal so i don't know if you got a 14 year old i just made that up but i would take you said you're taking kids to disney maybe it's eight year old that's not happy well the definition of eight happy when you're eight is you have shelter and food and dry clothing that fits that's After that, everything else is a spoiled freaking American.
So, you know, it's okay to have some nice things. It's not okay to have some nice things when you can't afford them and you can't afford them.
You guys have got to change your ways, man. This is your wake up call.
When you make $120,000 a year and you have to call some guy on the radio that you've never even met to ask permission in your mind or to ask insight in your mind to use $1,000 of your $2,000 savings account, that's signaling. That's flares going off.
Time for a change. Time to do something different, dude.
He's going to have to get comfortable disappointing some people or really to be honest with you he's got to be okay with what he perceives as disappointment when in all reality uh it's just not there that's what i hear i hear a guy that's just overextended and he's just lost all reason because he's trying to emotionally feel good about himself make sure everybody else feels feels good about him. And he gets to this point where he calls and says, is it okay to take a thousand dollars out on a credit card just to pay for this trip? Because I feel like I got to make my mom and dad happy because they made me happy.
I heard that throughout the entire description and I feel bad for him. I really do.
But it's not even an issue. It really isn't.
issue it really isn't so that's not all in his head so guys one of the things you have to do in this regard and is um all of us dave included me included rationalize our purchase

and one of the rationalization methodologies that we use is that we are doing this for someone else. And when you unpack it, most of the time that's just not true.
Example, okay? Little family has a brand new little baby. We spend $26,000 redoing the nursery.
Promise you, little baby has no freaking idea. You did not do this for the baby.
It does not change the baby's environment. It does not change their developmental skills.
It does not increase their intelligence. All absolute hogwash.
You did this for yourself. You did this so your friends could walk in and go, oh, it's and they're not talking about the baby they're talking about the nursery and so babies don't give a crap all they want is a dry diaper and some food that's all they and a good hug that's what a baby needs that's it man it's simple they don't need 26 000 worth of, if you have $26,000 extra laying around and you want to spruce up your home, do something nice, do it.
I can promise you Sharon Ramsey's doing that right now for Christmas for no apparent reason, but that she has the money. And that's okay.
But that's different than I'm broke and I did this for my child. No, you didn't.
Your child is three months old. They don't have a freaking clue.
Hello, Christmas present purchasers. Who are you really buying for? Think about it.
I don't mind you being, I'm not the Grinch, but quit using the little children as my rationalization. This is The Ramsey Show.
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Ken Coleman, Ramsey personality, is my co-host today. If you don't know, we have the Ramsey Network app that is free 100%.
There is no subscription anywhere around it. All you got to do is download it and start using it and it carries the third segment of the show every day on video and audio that is not available on podcast or youtube and you can search by call subject say i want to talk about high yield savings accounts and you pull up four or five times we've talked about on the air without having to listen to 26 hours of podcasting to get there.
So if you're looking for a specific thing, you can do that. And you can communicate with us by email, which is exactly what Adam did.
Today's Ramsey Network app question is, of course, from Adam. He says, could you please explain how to know if I can be self-insured? I'm 47, married with two daughters in their teens, and I have $250,000 in investments.
I believe my current life insurance policy, which I bought from a relative, is overpriced, but I'm afraid to change brokers. At what point can I pull the plug on having insurance? Okay.
Well, we're talking about life insurance, and so the way you answer the question back into it is, if you die, can your wife survive? If you die this year, can your wife survive on the investments in the situation that she's in? Generally speaking, we would tell folks to be self-insured. You would need to be 100% debt-free house and everything, and the kids are grown and gone, and there's a substantial investment, and she could live off of the income that the investments create.
So if she made 10% on $250,000, that'd be $25,000 a year, and she's got two teenage daughters. No, I don't think you're self-insured yeah i agree you got to replace your income now if you make sixty thousand dollars a year and you have a million dollars well the million will create you know 80 to 100 000 a year in income for your wife without touching the million and your kids are grown and gone and your house is paid for.
your wife actually gets a raise if you die then you're self-insured right and so if your investments will replace your income and or the fact that you're debt free and or the kids are grown and gone that puts you there but dude you're not uh i i would not tell you to do this now if you're getting ripped off on insurance it's time to have some courage and talk to zander insurance and get some the proper amount of term insurance in place um it's not that expensive even at 47 if you're if you're not overweight you don't smoke term life insurance is just cheap and zander insurance can shop among a bunch of different companies get you the right deal get that in place and uh i wouldn't even contact the relative i would just contact the insurance company and cancel it yeah your relative may not even be in the business anymore if they are they might not even notice the cancellation come through yeah and if they do, when they call up, just go, you know, I just want another different.

I want a different direction.

You're not required to get into a long explanation with someone that sold you something that you believe is overpriced, except goodbye.

I agree.

You know, this isn't scary.

I know it seems scary, but this is, again, kind of the law of the unknown, the thing we don't know anything about.

We want to leave it alone because it seems scary or time-consuming.

I mean, and Colin Zander, you're going to find out how seamless this process is to get properly insured. There's nothing to be scared about for switching.
Yeah. Well, he said, I'm afraid to change brokers.
He's afraid of the conflict with a relative. That's what amounts to.
Oh, okay. I didn't read that.
I'm reading that anyway. Yeah, yeah, I got you.
That's what I get. Well, you know what? Same deal there.
What are you afraid of? Yeah. I mean, if you want to pay extra money just because you don't want to deal with disappointing a family member, that's just not the way I want to live.
I'd rather save money. Yeah.
Well, and there's, you know, why would someone that loves me overcharge me? There's the other side of this. It's like, you know, who is it I'm disappointing here? The person who's supposed to be having my best interest at heart and yet overcharge me.
So, yeah, gosh, sorry, I'm disappointing you. Right.
Who cares? Right, yeah. Yeah.
So, yeah, get your term insurance in place, the proper amount. You're not self-insured yet, I don't think.
I don't think your wife wants to live on $25,000 a year. I could be wrong, but I don't think she does.
Derek is in St. Louis.
Hi, Derek. How are you? Hi, Dave.
Been a big fan for a long time. Thanks.
I'm great. Thank you.
The reason I'm calling today is my wife would like to quit her job and stay home with the kids.

About 10 years ago, we built a house on the family farm, which I now run.

We've got a little over $2,000 a month mortgage.

And I'm just afraid if she quits, we're barely going to be able to pay all the bills. We also have three children.
The two older ones are both in Catholic school because we didn't want them in the public schools here locally. Okay, so what is your income? What do you make a year on running the farm? Well, I also work full-time off the farm.
Oh, good.

What's your income if she quits? So my take-home pay from the job is a little north of $100,000. It's about $5,200 a month take-home.
That's her. Whoa, whoa, whoa.
$100,000 is $8,300. You don't have $3,000 in withholding.
Well, there's also 401K and health insurance. Okay.
How much is going into 401K? 15% right now. Are you in baby step four? You're out of debt except the house? All but my car, which is a $5,000 loan, I drive it for work.
That's the only thing. And how much, how much do you have in savings other than your 401k? I'd have to check.
I didn't look today. So we have three or $4,000 in savings.
The farm accounts, we make some money on it. If we have trouble, we have some money.
Pay your car off today, Derek. I could.
Yes. No, you need to now.
Okay. Now you're out of debt on the car, and the answer to your question is $2,000 a month on $8,300, and you've got farm income.
What is the net profit on the farm that you pay taxes on annually? Well, it varies year to year. I know.
It's a farm. Yeah.
Yeah. The commodity prices went to half price this year from last.
I haven't got everything back from the crops, but. Honey, how long you been doing this? Uh, all my life.
Okay. So what do you make a year on a stinking farm? It's not rocket science.
You're making 30,000, 300,000. This year, it's probably going to be closer to 10 to 15.
Okay. In some years you make 20.
So you're not making much money on the farm. Okay, I got it.
Well, 40 to 50. Well, except 20.

Okay, all right.

So somewhere in there.

At least by, okay.

Now, all right, so you got $150,000, $140,000 household income.

So the question is, run a budget in detail.

We have a budget.

We keep a spreadsheet.

Then run your budget as if she's not working and bank her check. Say that again? Run a budget for the next three months as if she's not working and put her entire check in savings.
Okay. If you can do that, she can come home.
If you can't do that, what have we got to change so that she can come home? Is it Catholic school? Is it we move? What have we got to change? What's less important than her coming home? Both of those other things, the farm and the Catholic school, sounds very important to you, but maybe, I mean, one of these things may need to give. I don't know for her to be able to come home.
But if you simply, the math is, if you'll just practice living on your income, then, gosh, it's a no-brainer. She can come home.
You don't have anything to be vaguely afraid about.

You actually have done an analysis and have proven what we call proof texting the concept.

But if you can't bank her check and make it,

then you start asking yourself, what have we got to change for us to be able to bank her check and make it?

And we've got to work that through.

It's just powerful, the deduction that you just gave folks. I mean, you've got to take the emotion out of this stuff.
I'm afraid. What are you afraid of? Is there something to be afraid of? Or is it just a fake monster under the bed? You've got to look under the bed.
And that's the idea here. And I think there's so much power in what you know and what you don't know.
And then you put the things on the scale and go, that's not as important as her being home, or that is more important than her being home, so she's not coming home, if that's how that works. I mean, it's just math.
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Ken Coleman, Ramsey personality, number one bestselling author of the book Paycheck to Purpose. He's my co-host today.
Open phones here at 888-825-5225. Tyler's in Charlotte, North Carolina.
Hi, Tyler. How are you? I'm good.
How are you? Better than I deserve. What's up? So I run a realtor business with five agents and property management as well.
And my attorney approached me about potentially partnering 50-50 on it. And I've been against that since I've got started for many reasons.
But I just kind of wanted to run it by y'all and switch out though. Give us your top couple of reasons why you didn't want to do it.
Just risky. You never truly know who you're working with.
They could change their mind, you know, down the road or get greedy, get sick. I mean, many different options that could cause hassles in the future.
Our rule is the only ship won't sail is a partnership. Yeah.
So I find with the exception of medical practices and law practices, we coach tens of thousands of small businesses through Entree Leadership, and we find almost no partnerships of this type survive 10 years. They don't make it 10 years.
And because of a lot of different things that you just described, sometimes it's not negative things even, sometimes it's a positive thing. But why would your attorney want to buy 50% of your business? Well, he's been doing law for 10 years now, and he's just kind of looking to grow another realm I guess kind of same way

I am just kind of wanting to pick things up and do something a little different than we've been doing I'm sorry same thing you're you're wanting to do something different well I've just yeah every every couple years I kind of get bored is the best way I can say it and I look to start something else and I've done that last couple years and has been a great

decision Every couple years I kind of get bored is the best way I can say it. I look to start something else, and I've done that the last couple years and it has been a great decision.
So I thought this time I'd just kind of try to grow my main business instead of trying to branch out into other things. Yeah, staying in your lane is a good thing.
Okay. How would it change? How would it change? Have you guys talked about the details of what it would look like if he came in?

Yeah, I've been working with him for about four years. He's got a lot of, you know, obviously contacts, other lawyers and stuff like that in the area that he's merged his business with.
And my main business is investors, and he knows a lot of them. He closes business bills and everything as well as regular real estate.
So we would be looking to separate ourselves from the overhead brokerage, kind of make the firm a standalone thing, get an office going, because I don't have a brick-and-mortar office yet, and he has one kind of available, and then just kind of merge into that. He would help with the law side.
You mean you don't have a brick-and-mortar for this other thing? You have one for your real estate office? No, I your real estate office no i don't have one because i'm but you said you had nine agents or five agents i have five yeah we i opened an office one time and it never really benefited us and because i kind of started during covid is when i got started um and we've just never ran out of a out of an office we've out of our own homes. The principal broker has to have a location.
Well, it's a brokered-by business. I have my firm.
I'm brokered by an overhead brokerage. Oh, you're not the principal broker.
I'm a broker in charge of this firm for property management purposes. Yeah.
Principal broker in most states has to have a physical location. Okay.
Hey, hey. Okay.
All that doesn't, to me, is simple. No, I would not go in partnership.
I don't do partnerships. I don't mind doing a deal with someone, a singular deal, a one-off that has a set end to it.
That's more of a joint venture. And I don't do hardly any of those, but I would do that.
But something that is an ongoing thing that does not have a set calendar to its expiration, a term to it, I would not do that. Now, if he's got some investors and you all want to work out some deals, you know, where, you know, he gets a certain amount of legal work if he keeps spoon-feeding you investors and that kind of thing.
A legal way to do the transfer on that, that's fine. But no, I don't, you don't need a wife.
I mean, that's an attorney. No, no, no.
I wouldn't, I wouldn't do it. No, I think you're, you guys are just bored.
You need to, you need to to back up and say gosh how what can I do to make this thing exciting and go push something out there that's different and that gives you some energy again but no I'm it's a compliment that he came to you and said it'd be fun to do business with you I think I like the you do stuff, but that compliment does not substitute for good sense. You just nailed it.
I cannot tell you how many times I've taken calls on the Ken Coleman show like this, where someone feels like they are less than if they don't take some opportunity that in their heart, they don't want to take. But because it's an opportunity, what happens is the brain feels great.
There's an endorphin release from being wanted, right? Or from being approached on this. And so you feel like, oh, common sense is I'd be an idiot to walk away from this.
And in all reality, you got to trust your gut. You got to trust your principles and your values.
And you led Tyler with principles and values. I think you got to listen to those things.
Those are bedrock things that keep us grounded and keep us from making big, big mistakes. And I think, Dave, you nailed it.
There's something weird, right, about the psyche when somebody wants you to be a part of them or they come to you with an attractive offer. I want you in this deal.
And one of the things that has happened to me over the years running ramsey is people come in with ideas sure hey i want to share this idea with you and see if you want to work on this idea and um you know i don't i just don't um you know one guy was you know he's like well this is the best idea since sliced bread you need to sign an nda so i can tell you about it you sign a non-disclosure agreement so i can expose this wonderful idea to you and i said please don't tell me anymore because dude i get ideas in here like shovelfuls every day ideas are a dime a dozen people who can actually get crap done those are hard to find ideas not hard to find they're everywhere people that execute and follow through with excellence and energy and enthusiasm and that those are those are a rare gem you bring me one of those i'll sign an nda but um but i don't need because please don't tell me your idea because we might have already had the idea and then you'll think i stole it from you because they're that easy ideas are just everywhere when you're entrepreneurial i mean i'm somewhat add i guess it's undiagnosed that when i was a child they called it hyperactive but um yeah dave talks too much on all my report cards now make a living doing it but there you go. So much to my grade school teacher's chagrin.
So ideas are everywhere. I mean, squirrel, there's another

idea. Boom, they're everywhere.
But people that can do them or not, and it's the same category

here of the affirmation of, oh, I brought you an idea. Oh, thank you.
I'm worthy of your idea.

Thank you. But then I quickly figured out, no, no, I don't need to.

No, no, no, that's a nightmare.

So true.

You know, it's because of the law.

Can I tell people to eat beans and rice, rice and beans?

Yeah.

Would you believe that to date we've had over 1,000,

over 1,000 people propose that I co-author a book with them?

Of course.

Of beans and rice, rice and beans recipes. Yeah, it's a great idea.
Because they didn't understand it was a metaphor. No.
It doesn't literally mean everyone should actually eat. I thought you were going to tell me people pitched you on having your own rice brand or beans.
Oh, that too. I'm sure that's happening.
That too, yeah. Uncle Ben's got the market.
He's got the market.

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Hey, I love talking to you guys about money. I also love talking about business and small business as well.
Like we were just our last caller there. If you didn't know, I host a podcast called the Entree Leadership Podcast.
It's been on the air for many years since podcasts first started. I took it over.
We had other folks at Ramsey doing it, but I took it over about two years ago and started taking calls from small business people with questions about business and leadership and so on every day, or not every day, but one day a week. And if you have a small business or leadership question, reach out to us.
Leave us a voicemail at 844-944-1070. We'll set you up to be a caller, 844-944-1070, or you can go to entreleadership.com slash ask.
Sterling in Austin, Texas. How are you, Sterling? I'm doing good.
How about you? Better than I deserve. What's up? So we are on, my wife and I are on baby step two.
And I was wondering, according to the baby steps, when should we purchase a house? We call it three B. After baby step three is in place, you're debt free and you have an emergency fund of three to six months of expenses, then start saving for your down payment in 3B.
In other words, between 3 and 4, if you want to not start retirement savings for a short period of time and use that time to build up your down payment, that's when we would tell you to do it. Okay, that makes sense.
We are sadly about to have to go back into step one because of car repairs.

But then after that, we're going to be back to step two.

And so we're thinking about the future and trying to look at the market

and see when we can save up for a down payment.

Yeah, we want to get you in that. That's perfect.

So how much debt you got left, Sterling? It's still a lot. Right now, I want to say it totals to $109,000 with all the student loans, all my student loans, and then we both have two car loans, and then we have one personal loan.
Yeah. What's your household income? Uh, together we make about $120,000 a year after taxes.
Cool. What's the most expensive car loan? Uh, that would be my truck at $26,000.
Okay. All right.
Cool. It sounds like you got a good plan.
if you want to speed up the house, you jet the truck.

I've been considering it. I've really been considering it.
Right now it's been giving me a lot of problems. I have a friend who says the one thing that's worse than either parts or payments is having parts and payments when it comes to a vehicle.
That's a good saying. Yes, you can thank Robert Looney for that one.
He's told me parts and payments are, unfortunately, one of the worst things you can have, and right now my truck has been giving me both problems, and I've been really debating about getting rid of it. Yeah, if you could get 26, and you probably can.
You probably get close to that that for it depending on what it is um it gets you out of a fourth of your debt and speeds the purchase of the home which goes up in value and the truck goes down in value i'm not against having a nice truck i'm just always trying to figure out a way to get to my goal faster Yes, sir. I was doing some kind of estimation on every dollar, and it looks like after all the bills and other things that my wife and I are about to cut out, because we're deciding we really don't need, we have about $3,500 left over.
Yeah, it's about a about a three-year plan. So we're going to start really cutting things out and try to get that close to $5,000 left over every month or at least $4,000 and then really start paying things to make it a two and a half to three-year plan.
Yeah. And it'd be, and the truck payment is how much? The truck payment is $712.07.

It's like a 3.9% interest rate.

Put yourself in a hoopty and run the numbers with that extra $700 on there,

and you'll see what I'm talking about then.

That's cool.

Hey, man, you're doing great.

I'm proud of you.

Can't wait to hear you do your debt-free scream.

Good job.

Rick's in Columbia, South Carolina. Hi, Rick.
Welcome to the Ramsey Show. Thank you, Dave.
What's up? Well, I'm 47, and I'd like to retire at 55, and I'm not sure where to go yet. I thought I was pretty fiscally responsible, and then I started to listen to you in 2022 and realized I wasn't as smart as I thought I was.
So I'm going to ask for help. Oh my goodness.
Okay, cool. So, uh, how much debt have you got today? Uh, the only debt I have is I've got a company truck where I got a three-year loan and it's 1500 a1,500 a month, but I get reimbursed $1,100 to $1,700 depending on how many miles I drive from my company.

You get that whether you have a car payment or not.

Correct.

So, yeah, I need to get that truck paid off,

and then they still give me the same amount.

But the truck has to be – it can't be more than three years old.

So you have to systematically keep money moving that direction so you can upgrade the truck

periodically.

Yeah, correct.

But no more payments.

Yes.

The program is independent of debt.

It does not require debt.

Yeah.

You just used it to justify debt.

Correct.

Okay, so we're going to clear that.

Now, what's your nest egg looking like in your 401k?

Well, I've only I came out of a different

Thank you. So, um, okay.
So we're going to clear that now. What, how, what's your nest egg looking like in your 401k? Well, I've only, I came out of a different position where I was in a pension program.
And then April of 22, I started in with this 401k program and, uh, I've got, this is the big question is last year I started doing a Roth 401k. Good.
And my tax advisor said that I should be doing a traditional 401k. You should fire your tax advisor.
Because you said, yeah. I'm serious.
It was a heart attack. They're trading a tax deduction for tax-free growth.
This guy can't do math. That's what I thought too.
So I kept doing the Roth 401k this year. And changed tax advisors, because I don't know what else he's doing this dumb.
Yeah. Anyway, so you don't have a lot there.
So you're a long way from retiring in seven years. Yeah, so I got $19,000 in the Roth 401k, $67,000 in the traditional 401k, $18,000 in the HSA, and that's all since April 22.

Good.

Okay.

Well, you're tracking.

You're dumping a bunch of money in.

What do you make?

My base pays $111,000, and then my bonus was $56,000 this year.

Okay.

You married?

Yes. Three kids, but my wife stays home with the kids, so it's just my income.
Okay. Well, I mean, the beautiful thing about what you're doing is you're making all the right moves.
I think the thing that will help you is to, you know, just do some calculations. You can use some of the calculators on our website.
They'll help you or in the EveryDollar app, either one, and start saying, okay, what will I have when I'm 55? What will I have when I'm 60 based on my current trend line with the lump sum I have now plus the payments I'm putting in now? And that will start to tell you, you know, give you some comfort level as to where you're going to be. I don't think you're going to be mathematically able to live like anywhere near like you're living now at 55 years old with no work.
So I think you're working a while. That's not a bad thing, though.
You need to be doing something. I'm 64.
I work. So it's not the end of the world.
Yeah, I would agree with that. I think the 55 is a little too aggressive.
So now, you know, double down, do your numbers crunch and go, okay, what is it really going to look like? And again, I, the data, Dave, just to back up what you said, the data is overwhelming for people who want to research it on what happens when you truly stop working. Now, financial retirement in my mind is different than just straight professional.
I'm not doing anything any longer. I think that it's not good for the body and it's definitely not good for the soul.
Not good for the mind. It's a terrible thing to waste.
Yeah, doing something. Having enough money to not have to work is different than just not working.
That's what you're saying. 100%, yeah.
Either way, you can start to run your numbers out and it'll give you some insights onto where you are. So that you're doing, you're doing pretty good, Rick.
Sounds like it. I'm going to get out of the truck debt and I'm going to jack up on some of these other things on the investment side and get this thing moving.
This is the Ramsey show. You know, one of the first things I discovered working in the financial world is how absolutely devastating it is when the breadwinner of a family dies and there's too little life insurance or none at all.
Grieving families are suddenly left behind scrambling to pay bills and trying to make ends meet. I also discovered that there are a lot of ripoffs in the life insurance world, like that whole life crap posing as an investment opportunity.
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Today's question comes from Nikki in Kansas. My husband has been at his current job for over five years.
He has received yearly inflationary raises. A new manager position was recently created and my husband considered applying for it, but before he could, it was given to another employee that has no previous experience in the role.
This new manager now repeatedly asked my husband for advice and wants him to work extra hours and to cover his lack of competence. I think it's time for him to find a new job, but he wants to make it work here.
His annual review is coming up should he mention the situation and bring up needing increased compensation or a path to growth. Well, Nikki, you know, when somebody has done me wrong, I found, Dave, that my wife Stacy has always taken it worse.
I don't know if Sharon's that way or not, but it feels like this situation where your husband's griped a little bit about this, Nikki, and you've gotten really upset about it. And I would listen to your husband here.
He wants to make it work. And based on the facts you've given us, he never raised his hand for the job.
And because he didn't raise his hand, whoever hired this other employee is not on the line for that because they can't read mine. So in this situation, I always tell people to never ask directly for a raise.
I teach to talk about a growth plan. After you talk about a desire to grow, in other words, I think in his interview, he needs to sit down and say, hey, listen, you know, I was thinking about raising my hand for this other position.
I didn't, and that's on me. But what it did show me is that I want more.
I want to lead. I want to step up.
I want to climb here at Company XYZ. So to that end, in my review, whether you got it for me today, but in the future, in the near future, I'd like to meet with you and discuss a growth plan.
What tools can I add to my tool belt? In other words, skills and experience. And then what are some shortcomings? What are some areas that may be blind spots for me that I need to be aware of so that I do better and make myself a better employee? And then can we lay that plan out and how do we measure it so that you and I are operating off the same sheet of paper, same sheet of music? And if we measure that, will that lead to opportunity for more responsibility, which should come with more compensation? That's the spirit, the posture that you should have so that you do not put your leader on the defensive, because many times they are not the sole decision maker in you getting a promotion and a raise.
And so the reason I prescribe it that way, Dave, is it allows them to have some ownership in it.

They don't feel put on the spot.

They don't feel backed into a corner.

And then we have an adult, mature, professional conversation about a path forward.

The other thing I want you to ask yourself is who is ambitious here, you or your husband? Because A, he didn't raise his hand for this position. B, his wife wrote us an email, not him.
Two indicators he ain't real fired up and so are not as fired up as you are that's correct that's very obvious so um i don't want you to want something for him more than he wants it for himself because that's going to come through when he sits down in his review he needs to be confident competent how can i add value to organization? What do I need to do to make myself more valuable so that I can grow here? Grow, meaning grow in responsibility and in value that I'm adding and hopefully in compensation someday. And that requires a body language, a little swagger.
Yeah, you got to show some hunger. I think what they want to see here is, I want to get better, I want to do more, be more, and that's attractive.
And, you know, I think that's a discussion. Maybe your husband doesn't want any of that.
Maybe you want it. I think it's very possible.
So you need to talk that through before you send him into the lion's cage. Open phones at 888-825-5225.
Matthew is in Houston, Texas. Hi, Matthew.
How are you? Hey, guys. Thanks for taking my call.
Sure. What's up? Hey, so I have a budgeting question.
I'm trying to figure out what I should do for an extra $20,000 in income I'm going to receive three to four times this year from overtime work.

Send it to Dave's Bahama Fund.

P.O. Box.

No, I'm kidding.

Okay.

All right.

So you're going to make an extra $80,000?

Yeah.

Sweet!

Very nice.

Pretty nice. Where are you on the baby steps, bro? I'm not sure what baby step exactly.
Okay. So this whole thing is new to you.
Okay. That's cool.
That's fine. Okay.
We teach a process to use all extra money to achieve wealth as fast as possible, and we apply it in an order, a forced ranking of importance, okay? And that system is called the baby steps, one baby step at a time, and you'll become wealthy. So I'll walk you through them right quick.
You ready? Okay. First thing you need to do is save $1,000.
I bet you've already done that. Yes.
How much money do you have in savings? Just savings. I have about 50K.
Okay, good for you. And how much debt do you have not counting your home? None.
Good. Okay, baby step one is save $1,000.
Baby step two is to become debt-free everything but the house. Ding, ding, check those two boxes.
Three is to have an emergency fund of three to six months of expenses. If we call that $50,000, that emergency fund, you're there.
Three. Baby step four is start putting 15% of your income towards retirement, not more, not less, in 401ks and Roth IRAs.
Are you doing that? Yeah, I'm maxing them out. It's more like 25% at the moment.
Okay. Baby step five is kids college.
Do you have kids? No, I'm single. Well, that's easy.
We skipped that one. Baby step six is pay off your house early.
How much do you owe on your home? Yeah, I owe $200 on my home, and right now I'm putting an extra $400 a month towards the principal. Okay, and what do you make? What's your total income, sir? Well, depending with this OT, it should be close to about $200 this year.
Okay, and you're single and you have no debt payments. If I woke up in your shoes, what would I do following those steps I just gave you that I've taught 10 million people? I would tell you to reduce your 401k to 15%, not maxed out.
And I want you to take everything you can squeeze out of your monthly budget, including this bonuses that are coming in, and throw it at the mortgage. Let's pay this house off in two years.
Okay. Yeah, that's kind of what I've been leaning towards, too.
I don't like having it hang over my head, but I was also wondering if I should consider a side brokerage account. After the house is paid off.
Okay, so after yeah here's here's why here's why okay this is i did not i don't want it hanging over my head there's actual data okay we did the largest study of millionaires in north america ever done 10 167 of them two primary things caused them to have the first one to 10 million10 million of net worth. Investing steadily into their 401k and paying their home off.
And paying the home off is a big part of it, by the way. So a paid-for house.
How old are you? I'm 26. And the house is worth what? Probably about $260.
Okay. So when the house gets paid off, by the time it's paid off, somewhere around 34 years old, 33 years old, you're going to have a net worth of over a million dollars at the track you're on right now.
So way to go, dude. You're killing it.
Proud of you. Hang on.
I'm going to send you a copy of the book, Baby Steps Millionaires. It's my latest number one bestseller, and it'll show you exactly the stuff I'm talking about, why, when, and where, and it'll help you dial this in.
You are a stud. Keep it up, man.
This is the Ramsey Show. Listen, guys, I've heard just about every excuse for why folks think they can't get ahead with money.
So let's go ahead and settle this right now. You get the final say on what happens with your money.
That's why you have to start telling your money where to go so you can stop wondering where it went. So if you're going to start winning with money, you have to get on a budget.
The easiest way to get started and stick to it is with the every dollar budget app it'll help you make a plan for every single dollar coming in and every single dollar going out every single month and guess what it's free so no excuses download every dollar in the app store or Google Play today. Thanks for joining us, America.
We're glad you're here. Open phones at 888-825-5225.
Well, it snuck up on you again. Christmas is here.
Are you ready? Hey, whether you're shopping for yourself or you're looking for the perfect gift to help someone get their money in order, now is the time to shop and get up to 30% off our best-selling products, including Ken's book, Paycheck to Purpose, my book, the one I just mentioned, Baby Step Millionaires, or Total Money Makeover, Non-Anxious Life by our own Dr. John Deloney, Breaking Free from Broke, On Sale by George Camel, Questions for Humans decks of cards, $12, RamseySolutions.com.
By the way, the reminder, this is the last segment of the show on podcast and YouTube. You can pick up the final segment of the show, the final episode, or the final portion of the episode, rather, at the Ramsey Network app.
It's completely free. You can download it right now at Apple or at Google Play.
And you can always hear everything we're doing at Ramsey Network on their video and audio. So be sure and jump over to the Ramsey Network app and pick up everything you need to know.
Tammy is in Nashville. Hi, Tammy.
Welcome to the Ramsey Show. What's up? Hey, thank you so much.
Thanks for accepting my call and sharing your knowledge. I just have a quick question.
My husband and I are actually wanting to buy a home and he wants to do the shared mortgage and he's trying to convince me that it's a great thing and that it's so wonderful, and it sounds very stupid to me. And so I would just like to know what you...
Don't hold back, Tammy. Tell us how you really feel.
Well, I wanted to know what is this and the negatives and the positives, if there is any positives. That's my question.
Shared mortgage, negatives and positives, and is it a good thing? It is not a good thing. Your instinct is correct.
You win the argument. Now, let's talk about why.
Praise the Lord. Let's talk about why.
You have a good nose for stupid and so um you're like my wife in that regard but uh so a shared appreciation mortgage is what we're talking about and what this is is the mortgage company in return for a lower interest rate and in return usually for lesser down payment, you give up a portion of the increase in value. And so you buy a $300,000 house and it goes up to $500,000.
The sum of that $200,000 increase goes back to the mortgage company when you refinance or when you sell. So you do not get all of the growth in value.
The downside is two things. One is it can trap you and make it very difficult to refinance if you were able to and get rid of them, okay, get rid of that loss of growth.
And it can also make it difficult to sell. And of course, the third thing is, is you gave up some of your growth.
And it's not the trade off is not worth it, is what it amounts to. I don't know why he's being pulled into that.
That's very strange. Because the thing is, Very, very few mortggages very very very few people do this i thought the program was actually dead until a few months ago i heard somebody bring it up i think somebody's out there promoting it or something because i hadn't even heard of it in a long time first time i heard of it was back in the 90s and um but uh and in high interest rate environment you know and so you know interest rates were high, and people were trying to get the rate down by giving up some of their future appreciation.
So Tammy, kind of think of it this way. Have you heard these things with some of the student loan things where you can go to a certain college and you don't pay as much to go to the college, but you give up some of your income to that college no i've never heard of that same deal same kind of a thing here you're you're selling off your future for a little bit better deal in the present and that's never a good trade i'm sorry so you're saying that once uh if you ever decide to sell or if you ever decide to whatever, you have to give them a portion of the value? Yeah, of the increase in value, yes.
So if you bought a $300,000 house and it went up in value to $500,000 and you had a 20% shared appreciation, as an example,

then you would give up 20% of that $200,000 growth

or about $40,000 when you refinance to get rid of that mortgage.

By the way, if you wanted to just pay it off,

if you started making a lot of money and you were working the Ramsey plan

and you wanted to pay it off,

you've got to pay off that appreciation that you owe them to, not just the loan balance. So here's the, here's the idiotic thing to me is we have $400,000 or whatever in cash liquid.
We could just buy the home, but he doesn't want to do that. He wants to go through the bank because in his mind, he's keeping his money and making some money from the bank and i'm like this is why would the bank do that that makes no sense to me well the bank did it because it's good for the bank but it's not your husband's wrong you're right pay cash for your house you have the money you are exactly right i told him he needs to listen to his wife he might in his mind he's amen in his mind he's thinking he's keeping this money for somehow in his possession or something.
And I'm like, but I don't understand why we need to go through the bank and loan the bank our money to get a mortgage through the bank. Let's try a couple things, okay? Number one, you could say this.
Let's pay cash for the house. If two years from now, after we pay cash for it, you want to talk about getting a mortgage, we'll talk about it.
You know how hard it is for somebody emotionally to put a mortgage on a paid-for house? He'll never do it. Okay.
So try it, honey. Try it my way.
Pay cash for it for two years, and then we'll talk about it.

So that's thing number one.

Okay.

Thing number two, all right?

We did the largest study of millionaires ever done in North America. I say this all the time because we did.
We studied 10,000-plus millionaires. The number of millionaires that's out of 10,000 of them that said we became a millionaire by borrowing money on our home so that we could invest what your husband's talking about.
The number of millionaires that said they did that out of 10,000 was zero. Okay.
So the data says, the facts are that your husband's theory is wrong okay okay one last thing and i'm gonna keep i'm gonna keep throwing stuff at him and at you too but here's the thing so when i went when i went broke i did whatever i wanted to do because i'm really smart with, and I did some stupid butt stuff like he's trying to do. And I found in the Bible, Proverbs 31 says, Who can find a virtuous wife? For her worth is far above rubies.
The heart of her husband safely trusts her, and he will have no lack of gain. Now, that doesn't mean he can't argue with you about this.
He should and challenge your theory. He should.
I do with Sharon, with my wife, but I trust my wife to have common sense and input. Ken trusts Stacey to have common sense and input.
Hang on. I'm going to give you a copy of the book, Baby Steps Millionaires, for you and your husband to look at.
I think it'll help your husband with this. He's trying to do a good thing a bad way.
It's a bad move. You smelled it out.
Congratulations. I'm going to say what I think a lot of Americans are thinking right now, that Tammy would be a great co-host one time with you.
Were you not thinking that, James? I mean, was she let off with stupid with the same passion that Dave says? And I thought, I thought Tammy, America would love Tammy. I love Tammy.
She's, she's a treasure. I just wanted to say that.
I think that was one of my favorite calls that I've ever heard because she's on it. She makes no, no mistakes about what thinks, and I love her.
I think she's great. I don't think communication is a problem in their home.
No. You and Tammy co-coaching someone would melt the internet.
It would melt YouTube. Picture Dave fired up and Tammy a little fired up.
It would be great radio.

You're awesome, Tammy.

Very fun.

You're amazing, lady.

Well done.

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 docuseries 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.

Okay, now here's a sneak peek of what the new episode is all about, And don't forget to click the link in the show notes to download the app. 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.