Building Wealth Is About More Than Just Math

Speaker 1 Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual, amazing relationships.

Speaker 1 Jade Washall Ramsey personality, number one best-selling author, is my co-host today. Open phones at triple eight eight two five five two two five.
Marta is with us to start this hour.

Speaker 1 Marta's in Portland, Oregon. Hi, Marta.
How are you?

Speaker 2 Hi, Dave. I'm doing okay.
Good. Thanks for taking my call.
Sure. What's up?

Speaker 2 So I

Speaker 2 am 57 years old. I've been married for 33 years, and I've never managed our joint

Speaker 2 financials.

Speaker 2 But I find myself that that was a big mistake on my part, and I need help with trying to figure out how to sort out my finances. I have a house that's in my name, and

Speaker 2 my husband has gambling

Speaker 2 problems that I just discovered, and has been snowballing since I started discovering the problems. I signed a HELOG not knowing what I actually was signing.

Speaker 2 So I owe $90,000

Speaker 2 of that and haven't done taxes for four years.

Speaker 2 So I know that at least I owe $10,000 out of to the IRS on top of everything else I probably owe because he was taking money of my retirement without my knowledge.

Speaker 2 And so that's gonna come down the pike for me. And

Speaker 2 I'm just overwhelmed about how to get things.

Speaker 3 How'd you find out?

Speaker 2 I found out a letter, because you know, he handles the mail, he handle everything.

Speaker 2 I opened a letter and it's on Fidelity and found out that he had borrowed money from there and I confronted them about it. And that was last year and he said he was paying it and he did pay it.

Speaker 2 And I told him not to take any more money.

Speaker 2 But he continued to do that. Not only that, but he had taken money prior years, and he never

Speaker 2 told me that. He's got 10

Speaker 2 counts because he also stole money from a nonprofit that he was the treasurer of.

Speaker 3 Are you still together?

Speaker 2 Unfortunately, yes, because

Speaker 2 people say I'm too nice.

Speaker 1 Well,

Speaker 2 getting a divorce is going to be very expensive, and so I'm trying to get my finances in order. He's just delusional.
He's an awful lot of people.

Speaker 1 So,

Speaker 3 are you just biding your time? Is that what that amounts to?

Speaker 3 You're trying to get your finances together so that you can get out of this marriage, or are you guys going to counseling to see if you can solve it?

Speaker 2 Oh, no, we did counsel, and he was not there.

Speaker 2 I mean, I've been begging him to do things, and he's not.

Speaker 1 Let me make sure I understand where you are then, hon. I'm sorry.
What a heartbreak.

Speaker 1 Yeah,

Speaker 1 you don't know what's going on, and that's terrifying. And

Speaker 1 you got 33-year marriage that's ending, and that's terrifying. Am I understanding you correctly to say you are saying you're going to end this?

Speaker 2 I am, yes. I'm done with it.

Speaker 2 He's not. He thinks

Speaker 1 he lives in.

Speaker 1 In Oregon, you can file for divorce. You're allowed to do that.

Speaker 2 Right, yeah. I just can't.

Speaker 1 Do you work outside the home?

Speaker 2 Oh, yeah.

Speaker 2 I'm a nurse.

Speaker 1 So where is the money go that you make?

Speaker 2 Well, it was going to a joint account. I finally

Speaker 1 changed it. It's going into your name now.

Speaker 2 Yes.

Speaker 1 Good. How much is in that account?

Speaker 2 Right now, there's about $11,000.

Speaker 1 Okay. When you hang up the phone, I want you to call a divorce attorney.
and schedule an appointment for tomorrow.

Speaker 1 Please.

Speaker 1 You keep thinking you're going to wake up and this is all a bad dream.

Speaker 1 And I'm your old ugly brother that's telling you it's not. It's your reality and it's unbelievably sad.
It's unbelievably scary. But it's going to get worse every moment that you don't deal with this.

Speaker 1 You do not have to do anything except pay a retainer, get a lawyer, and file for divorce right now.

Speaker 2 Okay, I did see one, and

Speaker 2 at the time I didn't even have the money for the retainer.

Speaker 1 Now you do.

Speaker 1 Yeah. Okay.

Speaker 1 Is that the one you're going to use?

Speaker 2 I don't know yet.

Speaker 2 I only saw one and he's telling me he's going to fight it and you want.

Speaker 1 I don't care what he thinks. Half.

Speaker 1 He no longer has a vote.

Speaker 2 Yeah.

Speaker 1 He gave that up when he stole money from a nonprofit, when he stole money from his wife, when he had her sign documents that she didn't know what she was signing. This is a full raging lunatic addict

Speaker 1 who has no boundaries.

Speaker 1 And

Speaker 1 he's going to burn the house down around you if you stand there and watch it and ignore the smoke. Please, darling, for your sake, while there's still something left,

Speaker 1 get an attorney and get him around the throat and shut down all of the financials. Shut down everything.
So he has has no concept of anything. Move it all out from under his care

Speaker 1 until his attorney and the court makes you put it back. It's time for you to get very aggressive, to try to salvage what you can for the next chapter of your life, hon.

Speaker 3 Marta, who knows about this? Are you going through this alone or do you have some folks around you?

Speaker 2 Oh, no. I mean,

Speaker 2 I have friends. I'm going to counseling.

Speaker 2 My kids know, but I mean, he took, what, $60,000 from my son, who's married, has two babies, saying he was going to pay it back. He had a business that went bankrupt, and I'm just kind of...

Speaker 1 Yeah, you got to separate yourself. This has been done a long time, and you've ignored it, thinking it was going to get better, hon.
Because you're a sweet person.

Speaker 1 But listen, you're killing yourself here, okay? Please,

Speaker 1 please deal with this. Okay.
Now.

Speaker 1 This is your big brother that loves you talking, okay?

Speaker 1 Do it now.

Speaker 2 Okay.

Speaker 1 Quit screwing around with this. It's not going to.

Speaker 1 If he suddenly gets healed, gets lightning bolts struck from heaven and changes. We can always come back and talk about that later.

Speaker 1 But right now, everything you have told me in the last few minutes screams emergency.

Speaker 2 Yeah, well, he thinks he's doing better, but he...

Speaker 1 Honey, I don't care what he thinks. He lost his vote.

Speaker 1 and there's no proof of that every time you tell me something about him it's where he stole something or took something that's your entire description of your husband he's a raging gambling addict

Speaker 1 and there's no fix for that we work with addicts all the time the only fix for that is to break the cycle and this guy is not interested in breaking the cycle Addicts can get better, but 100%

Speaker 1 of addicts are master master manipulators and they are master liars. He'll make you think this is your fault.

Speaker 2 Oh, yeah, he does make me think that.

Speaker 1 That's part of the addiction, okay?

Speaker 1 And there's only one thing you can do with this, and that's get distance.

Speaker 1 Financial distance, physical distance, housing distance. Call that attorney back or call an attorney today.
And please, darling, take action on this. It's not going to get better.

Speaker 1 This guy's an abuser.

Speaker 1 Wow, I'm so sorry. What a heartbreaking thing to deal with.

Speaker 3 Yeah.

Speaker 1 Fastest growing addiction in North America today.

Speaker 1 Online porn. Second fastest growing addiction.
Gambling. We're seeing in our financial counseling offices those two things destroying more families than anything else.
Thank you to the internet.

Speaker 1 This is the Ramsey Show.

Speaker 1 Black Friday week is in full swing at Ramsey Solutions. We've got life-changing gifts for the people you love all on sale.

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Paula's in Canada.

Speaker 1 Hi, Paula. Welcome to the Ramsey Show.

Speaker 2 Thank you very much.

Speaker 1 Sure. What's up?

Speaker 2 I have a question about adult children and financially helping them out, what my obligation is, because I hear lots of people

Speaker 2 trying to help out with weddings and education and that sort of thing. I'm at a point in my life now where financially I can do it.

Speaker 2 But am I obliged to do it when they've shown that they aren't financially responsible themselves? No. And how do I make it fair when there's five of them?

Speaker 1 Who would oblige? You mean morally or spiritually obliged or culturally obliged? I mean, who obliges you?

Speaker 2 Well, you know, when they're at a point where you're having babies and getting married, you don't need to spend all the time.

Speaker 1 Oh, I know what you're talking about. I'm asking, you said, Am I forced? Obliged is a sweet way.
Am I required

Speaker 1 is what you're saying. Who's

Speaker 1 who requires it?

Speaker 2 I guess I feel that they require it when it comes to fairness.

Speaker 1 Well, that would be called entitlement. That would not be called.

Speaker 1 Matter of fact, Paula, I have a new requirement. You need to send me some money.
Here's my address.

Speaker 1 Who gives a crap what someone else requires, right?

Speaker 3 Who is it that wants it and what do they want?

Speaker 2 Well, I don't know if they want it as far as trying to treat them fairly. You know, when there's five of them and one sees that I've spent money on one or the other,

Speaker 2 trying to help them out or spending money on weddings or having babies. And then the other ones think, well, why isn't she giving me money or why isn't she buying me gifts?

Speaker 2 You know, and I'm at a point in my life where I can do it, but I also want to be able to travel and enjoy my retirement and that kind of thing.

Speaker 2 And I don't know how to make it fair between the five of them.

Speaker 3 So I do think that that's an interesting question. I've got two kids, and it would be strange of me if both were good kids, if I paid for one wedding but didn't pay for the other.

Speaker 3 I could see why they would say, well, what's the difference? You've got five kids, that's a lot more.

Speaker 3 Is there something going on that's making you say, for child number one, I'll do this, but for child number two, I won't. And here's why.

Speaker 3 Is it a behavior thing? Is it a.

Speaker 2 I think so, because one of my children just had a baby, and another one is is in is having a baby again soon. And I've spent all sorts of money on one for a wedding, but not the other.

Speaker 1 Why? And we're saying, why not the other?

Speaker 2 Right. And one of my children is financially being irresponsible, and I do want to help them, but in the other sense, can I help them with stipulations?

Speaker 2 Like, I don't want to give you cash because you're going to waste it.

Speaker 1 Okay, back to Jade's question, because I'm not sure I heard the answer.

Speaker 1 If you paid for one wedding, but you didn't pay for the other, why?

Speaker 1 You decided that. Why did you was the one that you didn't pay for being irresponsible? And so you didn't want to fund it what was the reason for the differences

Speaker 2 um i i think it was more of some of them have had the big splashy weddings and then others of them haven't chosen to have the big splashy weddings so do i so they wanted the money instead

Speaker 2 yes exactly okay all right

Speaker 1 And you just, you felt like paying for the wedding was okay, but you didn't want to necessarily be

Speaker 1 to fund everybody the same amount.

Speaker 2 Or how do you make it equal? You know, if I'm spending $5,000 on one wedding,

Speaker 2 do I?

Speaker 3 Well, if it's your money, I think you get to set the premise if you say, okay, for each of you, this is the budget, and that's what it is, and you make it fair. I mean,

Speaker 3 my point is they don't get to decide what you give. You get to decide it.

Speaker 1 Okay. Yeah.

Speaker 1 But if you've already gone down the road.

Speaker 1 Yeah.

Speaker 1 I'm kind of stretched between two different things in this, and I don't know exactly where to land. I mean, we told our kids growing up, there is no fair.

Speaker 1 Fair is where the tilted whirl is and the cotton candy is. We're not socialists.
We're capitalists. There's not fair.
Okay?

Speaker 1 So that's how it works. Things don't work out.
That's just the way it is. And I don't get to decide all of the what life treats you fair or doesn't treat you fair, but fair is a joke.

Speaker 1 Fair is only by communist college professors. There's no fair.
Okay?

Speaker 1 Welcome to the real world. Now, that's what we talked.
That's on one sense. I don't have to do it equal because our family's not socialists.

Speaker 1 On the other sense, I don't want to scar one of them and make them think there is a

Speaker 1 unless I'm refusing to fund their misbehavior.

Speaker 1 I mean, if one of them has a splashy wedding and one of them doesn't, and the one that doesn't is doing heroin, well, I don't want to give them, I don't need to give them the same amount of money.

Speaker 1 Well, that's not fair. I don't care.

Speaker 1 I'm not going to fund misbehavior.

Speaker 1 But on the other hand, if there's no differences in their behaviors, it feels a little weird weird that they're not getting the same amount of money.

Speaker 1 So, no, you're not obligated, but I'm just thinking through with you the emotional and the relational

Speaker 1 parts of the discussion. You are not obliged.
Period. It's your money.
You get to decide. I don't get to tell you what to do with it.
They don't get to tell you what to do with it.

Speaker 1 You can just look at someone and say no, and no is a complete sentence. But from a relational standpoint, if there's not a reason for differentiating,

Speaker 1 that would give me as a dad concern. I can see how that would cause you a problem.
If there's a reason, like a misbehavior for differentiating, I can lean into that real easily.

Speaker 3 And I do think it's fair to say, let's say you have $10,000 to put towards a wedding. I think it's fair to say, I have $10,000 for your wedding.

Speaker 3 But if one of them says, I don't want the wedding, I just want the $10,000. I think it's fair to say, no, the $10,000 is for the wedding.

Speaker 1 Right.

Speaker 2 And those stipulations are okay.

Speaker 3 Well, in this case, especially since you're saying some of them are misbehaving with money, you giving them $10,000 is them saying, well, I'm going to do whatever I want with this money.

Speaker 3 And to your point, if they're doing misbehavior things, then that's not the gift you wanted it to be.

Speaker 1 No, it magnifies their stupidity when you give them money. So

Speaker 1 it does for all of us. Anybody that gets money, it magnifies who you are, good and bad.
And so when you put some zeros on the end of that, you're doing that. So I don't know.

Speaker 1 I think one of the things we've learned to do in the Ramsey household, and it's helped, because I am convinced, my wife and I were talking about this the other day.

Speaker 1 And it's not because my kids are bad. They're excellent kids.
But I think adult children is a weird phrase to start with. That's like an oxymoronic phrase to start with.

Speaker 1 But raising adult children is the hardest phase of parenting. It was much easier.
when they were under my control and I could just tell them what to freaking do. It was a lot easier.

Speaker 1 Now they have these ideas of their own and stuff. I taught them to think and damned if they didn't.
You know, oh my God, it's so hard. So, you know, and so

Speaker 1 it's a difficult time and emotionally in that state for a lot of parents, Paula.

Speaker 1 But I think if you're going to differentiate for a reason, one of the things we've done a really good job about is we just communicate. We just say there's a difference here and here's why.

Speaker 1 And you know what? That lets all the air out of it. And you say it in front of the whole fam family, right? You can put everybody in the room and go, this is what we're doing.

Speaker 1 It's Thanksgiving, by the way. And here's what we're doing.
And it clears the air. You know, I remember Rachel had her first big book coming out.
And we know what personalities make on a big book.

Speaker 1 And so we were at Thanksgiving. And I said, hey, everybody, we're going to stop just a second here.
And y'all are all, they're all in their 20s. And I'm like,

Speaker 1 Rachel's getting ready to have a great year. from some hard work she's done.
And

Speaker 1 some of your years aren't aren't going to be as great because you haven't done that same exact work.

Speaker 1 And you get the decision right now to decide whether to be jealous and petty or whether to congratulate your sister and cheer her on. Yeah.

Speaker 1 To their credit, once you said it out loud, they immediately became cheerleaders. But it took the air out of the balloon of jealousy once you say it out loud.

Speaker 1 And so you don't, you know, it's harder to do it once somebody said it out loud. This is the Ramsey Show.

Speaker 1 Jade Washal, number one best-selling author and Ramsey personality, is my co-host. It's that time of year.

Speaker 1 In a few weeks, we're going to be doing a special giving generosity edition of The Ramsey Show.

Speaker 1 It's one of my favorite shows because we want to teach you to live like no one else so that later you can give like no one else. So here's the deal.

Speaker 1 Maybe you've been the person that was generous and you got to see someone's face and life changed.

Speaker 1 Maybe you were on the receiving end of the generosity and you want to tell that story, whether you know the person that gave or whether it was an anonymous gift, we don't care.

Speaker 1 We want to encourage generosity by telling great generosity stories.

Speaker 1 So jump on to ramseysolutions.com slash ask.

Speaker 1 Put giving in the subject line. That's how you get on the radio show if you want to leave a message there.
And you put giving on the subject line.

Speaker 1 We'll get you on the podcast, the YouTube show when we're doing the giving show. We do this every Christmastime.
It's one of our most popular shows.

Speaker 1 People love it because it reminds us how wonderful human beings can be out there and often are. It's coming up on December 18th, so send us your giving story starting today.

Speaker 1 So you can live like no one else. So later you can give like no one else.
Ramseysolutions.com slash ask put giving in the subject line hannah's in columbia south carolina hi hannah what's up

Speaker 2 hi dave hi jade i'm so excited to talk to you guys you too how can we help

Speaker 2 okay my question is

Speaker 2 i have been listening to you guys for about two or three months and i'm really gung-ko

Speaker 2 um

Speaker 2 My husband and I are almost to baby steps four, five, and six, and I know you guys say to be intentional in those and do them together. So, when you're in those steps, why

Speaker 2 should my husband and I not put extra money into

Speaker 2 an investment that has a 12% return instead of paying off our house that has an interest rate of 2.5?

Speaker 1 It's a great math question,

Speaker 1 and the reason is more than math.

Speaker 1 So, we studied 10,167 millionaires,

Speaker 1 okay,

Speaker 1 and asked them, how did you become a millionaire? Did you inherit the money? Did you win the lotto? Are you a country music star? Did you save and invest?

Speaker 1 How did you do it? What did you do? What's your age? What's your income? What's your career? So we could find...

Speaker 1 some correlations again and 10,000 people is enough to study to draw some real airtight research-based conclusions. And we got a lot of wonderful data from that.
In other words, facts.

Speaker 1 Here's what's interesting. The number of those millionaires that said, I became a millionaire because

Speaker 1 I borrowed on my home at a lesser interest rate so that I could invest

Speaker 1 more.

Speaker 1 Which is effectively what you're talking about doing. You're not borrowing on it, but you're not paying it off, which is the same thing.

Speaker 1 The number of them that said, I delayed paying off my home so that I could invest more, and that's how I became a millionaire. You know how many of them it was out of 10,000?

Speaker 1 Not very many. Zero.

Speaker 1 We never had one tell us that,

Speaker 1 that that's how they became a millionaire, was that they leveraged their home into investments.

Speaker 1 Isn't that interesting? And yet the math that you bring up is actually accurate. I mean,

Speaker 1 you can borrow money, or you might have a mortgage at 3%, and you can make make 10, 12, maybe 14%. In the last 12 months, you can make 30% on an S ⁇ P, okay, which is not normal,

Speaker 1 but you're 12%.

Speaker 1 I don't argue with it at all. The difference is, is that

Speaker 1 you're going to be paying taxes on the money unless you're investing it into a Roth.

Speaker 1 And,

Speaker 1 you know,

Speaker 1 you've also taken more risk because you're home. So something happens to people when they get their home paid off.

Speaker 1 The freedom that they sense in their relationships and their careers causes them to prosper more and faster

Speaker 1 than the difference in the interest rates.

Speaker 1 And so that's the only explanation I've got for it. And I will tell you this: here's an interesting thing you can do: go ahead and pay off your house.
And if you hate it, just go get another mortgage.

Speaker 2 That's where I am. I really want to do that, but I'm also married to an accountant who says,

Speaker 2 he knows the math.

Speaker 1 Well, here's the problem.

Speaker 1 I see it. Let me submit to him that he's doing a naive, primitive, incomplete math formula because his math formula does not include risk and his math formula does not include taxes.

Speaker 1 And if he can quantify the risk exactly and put it into a math formula, he's a better guy than I am, and I'm a math nerd from now on.

Speaker 1 But it is a real risk because we can all honestly say the more debt you have, the more risk you have, agreed?

Speaker 1 Yes. And to not mathematically factor that into his formula makes his formula naive and incomplete.
So I don't care if he's an accountant. He's wrong.

Speaker 1 Right.

Speaker 1 That's the thing. I mean, now, how do you convince him of that? I don't know.
That's a different story. You've been convincing him

Speaker 1 he's wrong since you got married, so maybe you can work on it.

Speaker 3 Yeah. My biggest question for him him would be what what is his ultimate goal and why are you guys doing that his ultimate goal is build wealth and he thinks he's leveraging the money right am i right

Speaker 3 yes yes you are right yeah but i guess my question is is it a let's say let's say he says my my goal is to have eight million dollars right is it a time frame is it a time frame he's so caught up on or is there a way that you can present that argument and say hey we can still get there we're just going there in this order and this is going to give me more peace do you see what i'm saying

Speaker 1 Yeah, Hannah,

Speaker 1 he was trained by the same people I was trained by. My finance professor was broke.

Speaker 1 What's wrong with that picture? A broke finance professor is like a shop teacher with missing fingers. My grandpa was not broke.

Speaker 1 And he was also an accountant. The reason he was not broke, though, is he avoided debt like the plague because he was a child of the Great Depression.

Speaker 1 And he had no debt, no debt, no debt, no debt, no way, no debt. And when I started going in debt like a crazy man to buy houses in my 20s, he said, I'm going to throw you out of the family.

Speaker 1 You couldn't be one of ours. You're too dumb.

Speaker 1 He didn't say that, but

Speaker 1 he

Speaker 1 made me feel that. So there you go.
But yeah, I mean, because it's so polar opposite of what that generation that had common sense lived.

Speaker 1 So the problem, Hannah, is your husband was trained by a broke finance professor to believe an incomplete, inaccurate math formula. And you can play this back for him.

Speaker 1 And Jane, you know, it's an interesting conversation because we get this question like all the time. Once a week, right?

Speaker 1 And

Speaker 1 when I first started this journey,

Speaker 1 this journey being common sense money, I've got a finance degree.

Speaker 1 I've got letters and licenses of all kinds after my name that says I'm supposed to know something about money, but I'm 28 years old and I'm bankrupt because I borrowed too dead gun much money and I'm an idiot.

Speaker 1 And I got the opportunity to start over. My wife would have left, but she didn't have a car.
I mean, it was awful.

Speaker 1 Horrible. And I was a brand new Christian.
And so I started learning from this guy named Larry Burquette that the Bible had financial principles.

Speaker 1 And I read in there, the borrower is slave to the lender. And then I read in there, he who is impulsive exalts folly.
And then I read in there,

Speaker 1 the blessings and cursings to the house of Israel as they cross the Jordan after Moses has led them in the wilderness. The blessings are you will be so wealthy, you will be a lender.

Speaker 1 The cursings are you will be a borrower. Every single thing in scripture that I was reading as a brand new believer was negative about debt.

Speaker 1 And yet my intellect and academics all told me that to borrow money, like her husband, the accountant. And I struggled with exactly the same thing.

Speaker 1 But I made the decision in those days on the basis of faith.

Speaker 1 I just said, okay.

Speaker 1 I tried it the

Speaker 1 academic way. I went broke.
And I'm going to try this Bible stuff.

Speaker 1 And it's common sense. Now, years later, I discover, oh,

Speaker 1 they left out risk. They left the math formulas incomplete.

Speaker 1 These academics aren't so dadgum smart after all. Who knew? This is the Ramsey Show.

Speaker 1 Jade Washaw Ramsey Personality is my co-host today. I'm Dave Ramsey, your host.
The Ramsey Show question of the day is brought to you by Y ReFi.

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Speaker 1 That's the letter Y, R-E-F-Y dot com slash Ramsey. Might not be in all states.

Speaker 3 All right. Today's question comes from Brody in Maryland.
He says, is it unfair for me to feel angry that my wife wants a bigger house? We bought a 1400 square foot house last April.

Speaker 3 I sold all four of my investment properties that I worked very hard for to completely pay off our debt, including the new house.

Speaker 3 Our house is a three-bedroom, two-bath ranch with a backyard on a quiet street, and it's in a good school district. So much sacrifice and saving went into making this happen.

Speaker 3 Now she wants a bigger house, even though she said she wanted this particular house before we put the offer in. I don't see how I can make this happen without going into debt again.

Speaker 3 And I will not go back into debt. Oh, this is juicy.

Speaker 1 Listen,

Speaker 3 here's the thing.

Speaker 3 I do think that some people's personalities, because you don't talk about any type of pay raise or situation where you guys' lifestyle has changed drastically, but I do think there's some people that

Speaker 3 the goalpost is constantly moving, right? It's like, if I just get this, I'll be happy. And then they get that thing and they're not happy.
Or if I just get this, I'll be content.

Speaker 3 And then it happens and they're not content because things don't make you happy and things don't make you content you know I think that they're fun but they don't they don't fill that void and yeah you can buy fun but you can't buy happiness yeah and you can't buy contentment

Speaker 3 And if you're on social media, which she might be every single day scrolling through and looking at what the influencers are doing and looking at what their friends, you know, their friends' houses or if she's spending all night watching HGTV, it is very difficult

Speaker 3 for some people to kind of go, well, that's them and that's okay. My life is fine.
And truly, I think that that's what this is. I think she's got a contentment issue.

Speaker 1 Exactly. Sidebar, what you stated there, I just saw an article the other day that

Speaker 1 the more hours you spend on social media, the typical,

Speaker 1 there's a direct correlation to the more credit card debt you have. Oh, really?

Speaker 3 I'd love to see that.

Speaker 1 I know there is. And the more overspending you do because, you know,

Speaker 1 I do it. And I have the money, but I'm like looking at some gun thing and I'm like, oh, I need one of those.
Yeah. But if I had stayed off of that,

Speaker 1 I wouldn't even have known it was there. And, you know, but so I know other people do it and I teach this crap.
So, you know, I mean, it's like, golly, if I'm doing it, it's got to be. So, okay.
Yeah.

Speaker 1 Here's what happened, Brody.

Speaker 1 You guys need to reset your marriage relationship.

Speaker 1 This is not about a 1,400 square foot house, and it's not about you being angry.

Speaker 1 You

Speaker 1 are acting like the daddy and she's acting like daddy's little princess. Uh-oh.

Speaker 1 You know, I can't. Daddy sold everything and did everything and sacrificed and worked his fingers to the bone and what do you get?

Speaker 1 Bony fingers and he got a house and he's real proud of the house and now she walks in and goes, yeah, I bet there's the wallpaper. Yeah.

Speaker 1 And so we need to reset this and instead let's be two like grown-ups.

Speaker 1 So the conversation I'm going to have is, and actually we had it at our house, but in a little different way when we were about your all's age, probably.

Speaker 1 I'll tell you about ours in a second, but the conversation I'm going to have is, okay,

Speaker 1 we

Speaker 1 are going to get aligned on

Speaker 1 our

Speaker 1 goals.

Speaker 1 My goal is not to perpetually make an unhappy person happy. I am not going to get on that treadmill.

Speaker 1 We, you're a grown woman. I'm a grown man.
we're going to sit down together. And here's one of mine, okay? I don't borrow money.

Speaker 1 Period. Here's another one of mine.
I like to provide nice things for my wife. Here's another one of mine.
These are what you might say, Brody, okay?

Speaker 1 And she's saying, well, I want a house as nice as my friends. Okay.
What can we

Speaker 1 do to get that?

Speaker 1 You don't work. You could work.

Speaker 1 You don't work much. You could work more.

Speaker 1 You could quit coach bagging it.

Speaker 1 And we might save that money towards a house. I mean, what are we going to do as two grown-up people to responsibly?

Speaker 1 Because I'm all in. I put all my chips in the table.
I sold off everything I had to buy this house for us.

Speaker 1 And what you did, though, was you did that without her. She was not aligned to that decision.
She was giving you lip service, but this was not her idea. It was yours.
Yeah.

Speaker 1 And now you're surprised that she's unhappy of your plan that did not her include her.

Speaker 1 So this is like, I got to tell you, you know what?

Speaker 1 About 10 years, I've been married 43 years, about 10 years into marriage, I don't buy Sharon jewelry any more that she hasn't seen.

Speaker 3 Tell us why.

Speaker 1 Because I picked out ugly crap. I know.

Speaker 1 according to her but i spent a lot of my beautiful money on her ugly crap and then she didn't she's like oh well i wouldn't i wouldn't have that and i'm like oh geez well let's just not do that again so i don't mind if sharon has i mean she's got earrings the size of a headlight but she picked them out

Speaker 1 and then she says they're heavy they're that big Okay, and I'm like, that's ridiculous. It's a good problem to have you.
Okay, just get your little earlobes and do some earlobe lifts.

Speaker 1 Start doing some workouts there in the gym because you picked them out. So, see, that's the difference.
This girl's not involved in this.

Speaker 3 Well, yeah, you can tell by the language, I sold all of my investment.

Speaker 1 So much sacrifice. Yeah, he's the only one.

Speaker 3 He feels like he's the only one sacrificing. You can tell by the language, whether.

Speaker 1 But it's a paternal thing rather than an equal thing. Yeah.
Yeah. You can hear it.
I think we got to reset and go, we're not going anywhere from here.

Speaker 1 We're not making any major decisions without both of us involved.

Speaker 1 And I learned that after I went broke because I made a lot of decisions that were stupid without talking to my wife. Proverbs 31 says, who can find a virtuous wife? For her worth is far above rubies.

Speaker 1 The heart of her husband safely trusts her. And here's my favorite part.
He will have no lack of gain.

Speaker 1 And it's not in the Bible, but it might be in one version like Second Hesitations. Right after no lack of gain, she no longer says, I told you so.

Speaker 1 Oh, I kind of like being able to say that you can't say that anymore. I like being able to say that

Speaker 1 I know, but you can't say that when you're in on the decision. All you can say is, We together made a dumb butt decision.
That's all you can say from this point forward. And that's it.

Speaker 1 You can't say, you're an idiot. You can't do that anymore because now you have to use plural.
It's change your pronouns. We are idiots.
We did this, right?

Speaker 1 And so that's what's going on here, dude. You've got to reset

Speaker 1 this idea you have, put your little Superman cape up of you're the papa and you're the provider and all this stuff. And she's just a little woman and you're never going to make Scarlett O'Hara happy.

Speaker 1 It's not going to happen. So she's going to get on the same page and be like a grown woman and stuff, and then she'll become happy.

Speaker 3 Yeah. It's a weird balance of power.

Speaker 1 It's a big deal, man. It's a big deal.
This alignment in marriage is one of the things we find all the time in people's ability to get out of debt.

Speaker 1 They succeed in their careers at a greater rate

Speaker 1 and their ability to build wealth because they're aligned on sacrificing

Speaker 1 and they make decisions together. The first time we did that after going broke was we finally saved up a little bit of money and I had $10,000.
Sharon was driving a blue three-tone astro van.

Speaker 1 You remember those?

Speaker 3 Oh, 100%.

Speaker 1 Completely ugly. The carpet was covered in toddler goldfish

Speaker 1 from the third kid,

Speaker 1 and uh, it was nasty. This was a bad car, it was an embarrassing vehicle.
When they first came out, they were all right.

Speaker 1 Well, this was not first come out, and she's like, I need an I need a better car, we need to move up to a suburban.

Speaker 1 And I was gonna, I had ten thousand or fifteen thousand dollars saved at the company. I was getting ready to do this investment.

Speaker 1 We were gonna buy this thing, and I was gonna make a hundred thousand with this fifteen thousand down here. And she's like, uh, we need to do a car.

Speaker 1 And you know what? We did both, but we did the car first.

Speaker 1 And then we did the company. And it turns out now, all these years later, it was okay.
But in the moment, aligning on that with two grown-ups was a big deal. It's a big deal.
This is the Ramsey Show.

Speaker 1 Live from the headquarters of Ramsey Solutions, it's the Ramsey Show. where we help people

Speaker 1 build wealth, do work that they love, and create actual, amazing relationships. Jade Washall, Ramsey Personality, number one best-selling author of the book Money's Not a Math Problem.

Speaker 1 She's my co-host today. Open phones here at 888-825-5225.
Scott's in Las Vegas. Hey, Scott, what's up?

Speaker 2 Hi, how are you, Dave? Longtime listener. I really appreciate you guys taking my call.
Sure. I came across a question today for investing purposes on my Roth 401k.

Speaker 2 My coworkers and I were looking for next year and looking at setting things up.

Speaker 2 And a question came up about if I were to put, let's say, 15% of my income and I hit the IRS cap, let's say October or November, will that

Speaker 2 negatively affect how my company match? for the remainder of the year where I'm not actually giving any money. I don't know if it's a number that's going to be a fixed number regardless.

Speaker 2 Will the company 6% match be the same if I hit it in October or if I were to spread it out over smaller increments throughout the 26 paychecks?

Speaker 1 That's a question for your company, your HR team. That's not a regular

Speaker 2 way to be able to calculate that, to be able to look at even previous, because a couple of years I had made, I'd hit that number in October, and then the last two years, let me have a little bit more money in my pocket throughout the course, and I spread it out with a little bit lower number and let it hit the last paycheck in December.

Speaker 2 And I didn't know if that was going to be from the negative impact if I were to just.

Speaker 1 I think you could look at the total for that year,

Speaker 1 total invested by you, and then the total match and divide it and tell what the percentage was, right?

Speaker 2 Right, sure, exactly.

Speaker 1 And see what would tell you what would tell you what your company does. Yeah, I mean, some companies match up to a certain amount, some companies match all the way through.

Speaker 1 We match a percentage regardless of what you put in,

Speaker 1 regardless of when you put it in. And so, I mean, I've got some high-income earners that fully fund theirs in the first quarter.

Speaker 2 Right.

Speaker 1 And then they just don't, they don't have that because they can't, they max it out completely. They're not allowed to put any more than that in.

Speaker 1 And so, not by us, but by regulation. And then we match that as they do it, whenever they do it, whatever they do.
Same. But that's a company decision as to how the match is done.

Speaker 1 And if you have to drag it out to get the full match, I would drag it out.

Speaker 1 Makes sense.

Speaker 2 I'll reach out to them and find out how they distribute that money.

Speaker 1 Yeah, if you need to do 12-even months to get the full match, then do the 12-even months because the match is more valuable than the early portion of the investing. But

Speaker 1 that brings up another interesting thing, Jade, that sometimes people ask is, should I... you know, should I spread my personal Roth over 12 months or just do it in January?

Speaker 1 You know, you should do it in January is the answer mathematically, because the entire amount is earning throughout the entire year rather than a portion of it earning each month more. That's right.

Speaker 1 And so,

Speaker 1 well, what if the market went down? Well, if the market goes down, none of this works. So it only works when it's going up.

Speaker 1 And overall, we know it's going to go up. It could go up or down in the short term.
But yeah, so Scott, that's an HR and payroll. And whoever's managing your 401k at your company, question.

Speaker 1 And you could get a hint before you even call them by looking at the percentage they gave or the dollars they gave last year as a percentage of what you put in last year and see if that matches their standard match rate.

Speaker 1 And that would tell you, you know, if you're looking like 6%,

Speaker 1 then you go, okay, you know,

Speaker 1 I put in $10,000 irregularly, but they still put in, you know, 6% of that 600 bucks.

Speaker 1 And so, you know, or whatever the number is. But that's, you can still look at that and figure that out.
So, very cool. Very cool.
Good stuff, man. That's a great question, by the way.

Speaker 1 And here's the neat thing about all this.

Speaker 1 People like him,

Speaker 1 it's not the answer to this technical question that matters. What matters is he's actually thinking about it.

Speaker 1 I was going to say that, you know, most people don't think about it. They're not.

Speaker 3 Yeah, they don't think about it. So the fact that he's maxing it out, the fact that he's thinking through that is really, really great.

Speaker 1 Yeah. Really? And the intentionality.

Speaker 1 You know, one of the things I've got a friend that his dad was the governor of Tennessee in the 1950s. Okay.
And so he's in his 70s now.

Speaker 1 But he was a little kid in short pants in the governor's mansion in the 1950s. And,

Speaker 1 you know, I had a great discussion with him one night. He said the discussion in our family table growing up was politics.

Speaker 1 And he said, you know what rich people talk about at the family table?

Speaker 1 Generosity

Speaker 1 and investing

Speaker 1 and value purchases,

Speaker 1 not cheapo purchases. All the important things you can do with money.
Long-term decision.

Speaker 1 And so a rich kid grows up with a silver spoon because their parents got rich because they were concentrating on money, not obsessed by it, not worshiping it.

Speaker 1 Like my friend's family didn't worship politics. They weren't obsessed by it, but they were in that world.
It's what they did.

Speaker 1 And it made me realize that's how, you know, if you grow up, I've got a cousin that's a car dealer. And guess what? He owns a bunch of cars.
I wonder why.

Speaker 3 Yeah, I think you end up talking about the things that are of value to you in your life, whether it's your religious beliefs, moral beliefs, hobbies, whatever that is. That's what you talk about.

Speaker 3 That's what you pass down.

Speaker 1 And so

Speaker 1 you need to be thoughtful about that. But that's the same thing of Scott being intentional.
What's him and his friends sitting around the lunch table talking about?

Speaker 1 Not other people's careers carrying a football.

Speaker 3 Well, let me tell you.

Speaker 1 Talking about their careers and how they're going to build wealth.

Speaker 3 I think that's one of the, I mean, we kind of talked about this early, but if you're on social media and you know more about P.

Speaker 3 Diddy and you know more about other celebrities' finances and you know more about what, you know, so-and-so is driving and you don't even know about your own stuff,

Speaker 3 you don't know the state of your own affairs, you don't care that much about your own financial situation, about your own relationships, that's a yeah it's a red flag it's backwards it really is more into pop culture than your own culture

Speaker 1 i was at a titans football game one time a long long time ago and um the seats were not great and the guy in front of us

Speaker 1 um

Speaker 1 was a large man

Speaker 1 spacious without a shirt oh and had painted his his big self blue with a big titan thing on his chest

Speaker 1 And he yelled and screamed like the world was coming to an end on every play. He cussed the coach.
You didn't like that? And on every play, he cussed the players.

Speaker 1 And I told my wife, I said, if he was as enthusiastic about his career or his marriage as he is about watching these young kids down here playing football,

Speaker 1 he would probably have a good life.

Speaker 1 Wrong dose.

Speaker 1 You know? Yeah.

Speaker 3 You got to channel it to the right cause.

Speaker 1 I mean, I'm sorry. I get it if you're in college and you and your buddies all have too many beers and paint letters on your chest and take your clothes off or whatever.
I get that.

Speaker 1 Take your shirts off anyway. I get that.
I don't get 56 years old.

Speaker 1 Yeah, and obese. I don't get that one.
Okay. It's just gross.
All right. I'm just saying it.
Just saying it for all the rest of us out there.

Speaker 1 This is the Ramsey Show.

Speaker 1 Jade Washaw Ramsey personality is my co-host today. Sidney is in Cincinnati, Ohio.
Hi, Sydney. Welcome to the Ramsey Show.

Speaker 1 Hi.

Speaker 2 Thanks for taking my call.

Speaker 1 Sure. What's up?

Speaker 2 So I'm kind of new to the Dave Ramsey universe,

Speaker 2 but I

Speaker 2 am currently like working through the steps, currently on step three.

Speaker 4 Cool.

Speaker 2 And earlier this year, I got President Biden's student loan forgiveness

Speaker 2 and a refund check with that. So I am completely consumer debt-free outside of my mortgage.

Speaker 1 Okay, stop just a second. Stop just a second because President Biden has issued several press releases, but all of the debt forgiveness was all programs that were already in existence.

Speaker 1 He took credit for them, but they were already there. Aside from that,

Speaker 1 what was the forgiveness that you got?

Speaker 1 What type? What was the situation?

Speaker 2 Just my student loans. My school was deemed predatory or whatever.

Speaker 1 Okay, okay. That's been in place for 20 years.

Speaker 1 Schools that are predatory and go broke, the student loans are forgiven for the last 20 years. And you should, by the way,

Speaker 1 and that is a standard forgiveness. So the student loan that you took out with this predatory trade school is what they typically are, or some kind of online school or something like that,

Speaker 1 they took out, they gave you student loans. They were federally insured student loans, and the federal government forgave those because they deemed the school to be predatory, right?

Speaker 2 Yep.

Speaker 1 How much did

Speaker 1 you, had you paid into it and they gave you that back? That's what the refund check was?

Speaker 2 Yes. And so I use that to pay off

Speaker 2 my car, my 401k loan that I used to do my mortgage. I know that's like against the rules.
I learned that now. You know, I didn't do that then.

Speaker 1 That's okay.

Speaker 1 That's okay.

Speaker 2 And paid off by credit card. So I've been consumer debt-free all year since then.

Speaker 1 Except the 401k.

Speaker 1 No, I paid that off as well. Oh, good.
What else did you get back? Way to go. How much was it?

Speaker 2 I got like $16,000, $17,000 back. Okay.

Speaker 1 Okay, and that cleared up some of the remainder mess. All right, so let me think here.

Speaker 1 You paid.

Speaker 1 All right, so the student loan was taken out. The money was given to the predatory school.
The predatory school goes broke.

Speaker 1 You are forgiven the student loan, and they refunded you what you had paid on the student loan. I don't think that type of loan forgiveness is taxable.

Speaker 1 Most loan forgiveness is taxable, but this is a different program because you did not actually receive the money here.

Speaker 1 The money you received back was your money you paid against the loan.

Speaker 2 Yeah.

Speaker 1 That was already your money.

Speaker 1 Yeah. So if you take out a credit card loan

Speaker 1 and you go buy something for yourself or you put the money in your pocket, right, and then they forgive that, that's taxable, but you got the benefit of that. You did not get any benefit here.

Speaker 1 I don't think this is taxable, but you're going to have to check with a tax professional to be sure.

Speaker 2 Yeah, that's what I wanted to see if you guys had any insight on because I'm currently getting laid off and my plan is to file my taxes like first thing next year to help bridge any potential unemployment I'm expecting to run into but now I'm like if I'm gonna get taxed on that do I wait

Speaker 1 I don't think you're gonna get taxed on that not before then I don't think you're going to here's the way let's get you a pure answer here's the way to do it go to ramseysolutions.com and we have endor we call endorsed local providers they're people that we have vetted and we are comfortable with their professionalism and the quality of care that they give one of them is in the area of tax.

Speaker 1 So you're looking for a tax ELP, endorsed local provider, at ramseysolutions.com in your area of Cincinnati. There will be one or two or three of them.
Okay.

Speaker 1 Holler at one of them and talk to them about preparing your taxes and ask them on the phone if this type of loan forgiveness is taxable.

Speaker 1 Tell them Dave said he doesn't think it is, but for them to double check it.

Speaker 3 Yeah. And I see something on here that says, and I don't know if this was a part of American Rescue because this was kind of in place before that.

Speaker 1 No, this is not American Rescue. Yeah.

Speaker 3 But it says that if they're discharged between January 1st and December 31st of 2025, they are not taxable. So

Speaker 3 you shall see.

Speaker 1 Okay. I don't think you're going to get taxed on this one, okay?

Speaker 2 Okay.

Speaker 1 Good question. Good question.

Speaker 1 And lesson learned, politics aside, politicians tend to take credit for things they didn't do.

Speaker 1 It's part of being a politician. And like like when I was interviewing President Trump before the election,

Speaker 1 one of the things I told him was, people like me that own small businesses and actually do create jobs, it kind of pisses us off when you politicians say you create jobs because you politicians don't create nothing.

Speaker 1 All you can do is create an environment for those of us that actually create jobs to function. And he kind of laughed and goes, well, that's right.

Speaker 1 But then, you know, the next week he comes out and talks about all the jobs he created. But that's politicians.
And Biden didn't forgive these loans either.

Speaker 1 This program has been in place, God, since the student loans have been there. Predatory lending.
It's like a truck driving school that goes broke or a tech school.

Speaker 1 You go get a computer certification, but

Speaker 1 sometimes they're like hair care or...

Speaker 1 a massage therapist or something like that.

Speaker 1 And they'll get student loans going in these things and they can gin them up and they make a ton of money and then they turn the key and walk away with all the money in their pocket. They're scams.

Speaker 1 They're fronts is what they are. And they pop up and then they die.
They pop up and then they die.

Speaker 3 Daytime television. If you're watching

Speaker 3 Judge Mathis or all the I feel like that's all that's on T V are these

Speaker 3 I don't want to call them education institutes, but you know.

Speaker 1 Well, that's what they call themselves. Yeah.
Yeah, that and so we would be doing it as a Saturday Night Live skit. But yeah.

Speaker 1 But th but the the federal student loan forgiveness has been there for those types of situations for at least twenty years.

Speaker 3 At least. Well, listen, if you really want to get technical, it's it's never an administration forgiving debt.

Speaker 1 It's taxpayers forgiving your debt. We don't get the choice.
We just get the bill. That's what I'm saying.
Like,

Speaker 3 let's put the check on who is really

Speaker 1 paying your bills.

Speaker 1 That's it. That's for sure.
Yeah. Anytime the government, what was it, Reagan said? If the government says, if somebody says I'm from the government and I'm here to help,

Speaker 1 run.

Speaker 1 Yeah.

Speaker 1 That's the bottom line there. And that's either party, I'll just tell you.
Sure, yeah.

Speaker 1 But that's the thing to remember. And just

Speaker 1 either way, the good news is, by the way, if you pass, if someone passed away in your family, the student loans are forgiven. It's been that way 30 years.

Speaker 1 If someone is permanently disabled, their student loans are forgiven. It's been that way for 30 years.
Okay?

Speaker 1 That's not a new program. It's been since I've been on the air.
you know, that we've been talking about this. So

Speaker 1 that's the stuff. But either way, you do have to deal with the tax question.
So Sydney's smart to ask that question about the taxes.

Speaker 1 I think, I'm pretty sure you're not going to get taxed, but don't take Dave Ramsey's tax advice. I suck at that.

Speaker 3 Here it is. I found it.
Borrower Defense.

Speaker 3 So this is a program that eliminates federal student loan belonging to borrowers who their college misled them or if their school engaged in misconduct, if they violated any state laws, the IRS has issued notices for these and they are not taxable as income.

Speaker 1 Okay. There you go.
That's according to Google. So

Speaker 1 also check that out because it's on the internet. And Abraham Lincoln said everything on the internet is true.
So

Speaker 1 it's a good place to start. Yeah, that's the thing you got to remember.
But that's probably at.

Speaker 1 You found that on the IRS site or whatever?

Speaker 3 No, this is an article from Yahoo Finance.

Speaker 1 Yahoo Finance, yeah. So once again, please don't take their advice or mine.
Please get a professional to be sure. But it sounds like that we're onto something there.

Speaker 1 Sounds like we're on the right track.

Speaker 1 So good stuff. Very, very cool.

Speaker 1 All right, ladies and gentlemen, that's how we do it. Listen, the way the student loans go away,

Speaker 1 Jade, how'd your student loans go away? Work. Oh, there's that.

Speaker 1 It's

Speaker 1 a new program. It's a brand new program.
It's out. It's called WORK.

Speaker 3 Yeah, it's called You Wake Up in the Morning, you go to Work, and you stay at work all day, and then you take the money and you pay off your loans

Speaker 1 for a long time. You ought to get a radio show.

Speaker 3 don't have a, you don't do a whole lot other in between.

Speaker 1 You just work and pay off the loans and work and pay off the loans. My grandmother used to say there's a great place to go when you're broke.
To work.

Speaker 1 I love it. This is the Ramsey Show.

Speaker 1 Jade Washall, Ramsey Personality, number one best-selling author, is my co-host today in the lobby of Ramsey Solutions on the debt-free stage. Alex and Brenda are with us.
Hey guys, how are you?

Speaker 1 Good. How are yourself? Welcome, welcome.
Where do you all live? We're in Parker, Colorado, just a little bit south of Denver. Oh, cool.
Well, welcome. Good to have you.

Speaker 1 All the way over to Nashville to do a debt-free scream. How much have you paid off?

Speaker 4 So, Dave, we paid off $305,000 or $305,000, $450,000.

Speaker 1 Sorry. How long did that take?

Speaker 1 Three years, two months, and 13 days. Three years and two months.
Wow. And your range of income during that time?

Speaker 4 Our range of income was $148,000 to $240,000.

Speaker 1 Wow, nice jump. What do y'all do for a living? I am full-time with the Colorado Army National Guard.

Speaker 4 And I'm a civilian with the Army National Guard as a cost accountant.

Speaker 1 Ah, very good. Very good.
Well, thanks for your service. Well done, you guys.
Good work. Very fun.
What kind of debt was this, $305,000? It was our mortgage. I knew it.
You paid off your house.

Speaker 3 I can tell by the smile.

Speaker 1 I love

Speaker 1 Wow. You guys are so weird.
I love it, weirdos. Good work.
How much is this house worth?

Speaker 1 $850,000.

Speaker 1 How old are you two? We're in our early 30s. Wow.
And you have a paid-for $850,000 house. Yes, sir.

Speaker 1 Man. How much in your nest egg and your 401ks in retirement?

Speaker 1 Right around 300 as of right now. Wow.
Excellent. Wow.
So you're millionaires in your early 30s. We are.
I'm so proud of you. Thank you.
Look at you, too.

Speaker 1 Way to go, man. When you got married, how broke were you?

Speaker 1 We are actually fairly new to this merch. We got married about four years ago.
So we were kind of on this journey as singles. Okay.

Speaker 1 Okay.

Speaker 2 Yeah.

Speaker 1 All right. So you just took off and did this quick then.

Speaker 1 Tell us your Ramsey story. How'd you get plugged into this three years and two months ago?

Speaker 4 Well, she started a long time before I did. I was kind of messing around.
and then she gave me your

Speaker 4 Total Money Making. Total Money Maker.

Speaker 1 When we were deciding if we were going to date or not, I was like, read this book and let's talk about it. Whoa.
And we decided if we want to keep it. So I was.
I was talking.

Speaker 1 You better write, I have the right answers on the next dinner.

Speaker 4 So it was funny because I read it and I was like, oh, I'm kind of doing all this stuff anyways because I kind of got fed up with being broke. And then I was like, oh, this is easy enough.

Speaker 4 So being kind of a money person, anyways, I was like, all right, well, this is simple. I read the book.
I had the seven steps, and I was just like,

Speaker 1 okay, let's do it. Here we go.
I love it. Very cool.
Very cool. So you guys met at the National Guard, I assume? Yes.
Yes. Okay, very good.
And man, that's a great situation you're in.

Speaker 1 After just four years of marriage in your early 30s. But it sounds like, Brenda, you had a head start on it.
Yes. I grew up with parents who didn't do debt.
And so when I moved out,

Speaker 1 I didn't do debt. I didn't have a hole to dig out of.
Did y'all buy the house after marriage? We did. As soon as we got married, we became a family of five.

Speaker 1 We had his son and my two kids the day we we got married. So I lived in a tiny little house and we went out and we put over 50% down on our house and decided just to kick it.

Speaker 1 So we made this kind of like our baby step two. Okay.
Just took off running with it. Pretty intense then.
Yes.

Speaker 4 A big part of this was that we wanted to teach FPU, which we had done in the past and we just actually finished doing a week ago.

Speaker 1 Nice. Yeah, we just finished our second course.

Speaker 4 So we wanted to kind of be like, practice what you preach.

Speaker 4 And because we didn't have a step two together, we kind of treated, you know, paying off the mortgage like our step two, even though it's not exactly advised.

Speaker 1 Yeah, that's all right. I get it.

Speaker 3 Alex, what'd you pay off beforehand? Because for you, that was kind of the

Speaker 4 change. I was working a credit card and my car, paying those off.
And I think together that was $19,000.

Speaker 1 Okay. Wow.

Speaker 3 So Brenda put the screws to it.

Speaker 1 Yep.

Speaker 3 She said

Speaker 3 not allowed.

Speaker 1 Very cool. Well, thanks for teaching Financial Peace University.
That had to be a great class. You guys had to be like cloud nine.
Yeah, pretty excited. Yeah.

Speaker 4 We taught it once and then we took the most motivated couple that was there and we were their co-leaders the next time around. So this last time that we just finished.
Yeah.

Speaker 1 Matthew and Amber, they were our co-leaders this time. They did great.
Yeah, I love it.

Speaker 1 Build the next generation of coordinators. Thank you.
Good for you. Good for you.

Speaker 1 All right, when you're coordinating a class or when someone asks how you're a millionaire at age early 30s with a paid-for $850,000 house and

Speaker 1 you don't make $2 million a a year either.

Speaker 1 When someone asks, how did you do that? What do you tell them the key to getting out of debt is?

Speaker 1 Hard work for sure. I think between the two of us, we had about 13 jobs.
We each had a solid job, and then we took on several side jobs. You can tell you what most of them were.

Speaker 4 So, not all the same time, but over the three years they were doing this. I worked at Home Depot for a summer.
We both worked delivering packages for Amazon. I was a tax assistant at our CPA office.

Speaker 4 We both did landscaping. I did Uber and Lyft.

Speaker 4 I was a reservist in the National Guard. I did handyman work.
She sold items on Nextdoor.

Speaker 4 So it was a whole bunch of, not all at once, but like there was always something going on just to kind of keep it new and different.

Speaker 3 I love that. So what happens next? You've got a paid-for-house.
You don't have a payment in the world. What are you planning?

Speaker 1 I think our next thing is probably cars. Okay.

Speaker 1 Very old, very used cars.

Speaker 3 What are you going to get?

Speaker 1 Nothing new, but new to us. Probably a

Speaker 1 newer minivan, and then he needs a nicer commuter car. He's driving an 06 car with very many miles on it.
Something from this decade. Yeah, I love that.

Speaker 1 I first want to move up to this decade.

Speaker 1 That's a good move. I like that.
That's good. Very cool.
Well, I mean, you drove those beaters, and now you'll never have to again. Make sure you take pictures of them.
We will.

Speaker 1 Before they leave, because

Speaker 1 I've got pictures of every car I owned except one, and I really wish I had that one. Is it the original? No, it was one of those beaters that I had.

Speaker 1 Somehow I managed to not. That was back when you know when we actually had film and stuff like that and cameras.
So, anyway, anyway, sidebar. But yeah, good.
Good job, you guys.

Speaker 1 Who was cheering you on as you went? Oh, we have a whole list of channels. Oh, we have a ton of cheerleaders.
So, Matthew and Amber, like I mentioned, are our co-hosts on Financial Peace.

Speaker 1 Get the little cheat sheet. Yes,

Speaker 1 it's okay to look at them. You can look at it.
I look at them all the time. My youngest brother, Lloyd, and his wife, Haley, are on this journey, and they're right behind us in Baby Step two.

Speaker 1 Paul and Felicity and Sean and Rosa are in our class and FPU are cheering us along and also learning along with us. And then several coworkers.
We have Ms. Cicely, Ms.
Miranda, Ms. Alita, and Ms.

Speaker 1 Jennifer.

Speaker 4 Her mother, Linda. Yeah.

Speaker 1 Did you have anybody telling you not to do this?

Speaker 4 A couple people kept saying we're crazy.

Speaker 1 Probably. I don't have anybody else.
What was the most lucrative side hustle?

Speaker 1 One that made the most money? Probably Amazon Flex, just because they give you blocks of time, and if you finish it early, you get paid for that full block, whether or not.

Speaker 1 So we would take our older kids along with us, and they would throw us packages from the back, and we could finish a three-hour route in an hour and a half, and then go pick up another one.

Speaker 3 Which one did you dislike the most?

Speaker 4 Probably Amazon Flex.

Speaker 1 It was a lot of work.

Speaker 4 There were days that we would be up at 3.30 in the morning. We'd go, well, actually, it was earlier than that.
We'd be there at 3.30. And we'd go to our real jobs at 6.37.

Speaker 4 And then sometimes after that, we'd want to go back to the week.

Speaker 1 We'd go another Amazon route. We'd work on a shift.

Speaker 1 It was crazy.

Speaker 4 Both of us sometimes work at 90-hour plus weeks.

Speaker 1 Was it worth it? It was totally worth it. The grass really does feel different under your feet.

Speaker 3 Yeah, tell somebody why, because people call in all the time and they're like, you know, I've got a low interest rate.

Speaker 3 They feel like it's not worth it to them, but here you are doing it and you sacrificed to do it.

Speaker 4 I'm a

Speaker 4 simplifier kind of person, so it's just one less thing to worry about.

Speaker 4 And now we really get to

Speaker 4 put it towards our retirement accounts. So we're able to max out our Roths.
And I think five years ago, I was looking at my

Speaker 4 net amounts, and I was like, I wasn't even making this amount, you know, five years ago. And that's after putting in max Roth contributions and having other things come out.
So it's just

Speaker 1 a big

Speaker 1 thing out of the way. And now I get to stay home.
Oh, really? Oh, wow. That's a big one.

Speaker 1 I'm not yet, but I'm in the process. Oh, wow.
Very sound. Good.

Speaker 1 Well, I guess so. You're a millionaire.

Speaker 1 That's neat. Love it.
I'm so proud of y'all. You're amazing.
I mean, in their early 30s. So well done.
All right. Are the kiddos going to scream with you? They are.
All right.

Speaker 1 Let's get them up here, introduce them, give us their names and ages. Oh.

Speaker 1 We might have a sad one. Uh-oh.
Did we lose one?

Speaker 1 Here they come.

Speaker 1 Oh, the little one sad. That's okay.

Speaker 1 Just look at how cute that dress. Oh, my God.

Speaker 1 That's all right. How that's perfect.

Speaker 1 All right, Alex and Brenda, Addie, Liam, Logan, and Anna Lee. 305,000 counted down.
Let's hear a debt-free scream. All right, three, two, two, one.
We're debt-free.

Speaker 1 Trying to scare the little one to death. That's good.
Baby steps millionaires in their early 30s, what'd they do?

Speaker 1 Follow the stuff we teach. This is the Ramsey Show.

Speaker 1 Jade Washall, Ramsey Personality, my co-host today. Ramsey's Black Friday sale is going on right now.
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Speaker 1 We got a lot of fun stuff there. If you're on this journey, you got to have some fun with it.
Ramseysolutions.com slash store or click the link if you're on podcast or YouTube. This is nice.

Speaker 1 That is nice. It's a little champagne action there, I heard.
That's what they call it.

Speaker 1 Grand Rapids is in Michigan, it is. Dan is there.
Hi, Dan. How are you?

Speaker 2 Hey, Dave, doing good. How are you doing today?

Speaker 1 Better than I deserve. What's up?

Speaker 2 Okay, make a long story short. I'm in between baby step one and baby step two.
You know, things are going good. Stuff stuff breaks.
Spend my thousand dollars. Got to rebuild baby step one.

Speaker 2 I got my girlfriend. She's kind of starting to go to me too.
We want to be married, have a family.

Speaker 2 She has $21,000 in credit card debt.

Speaker 2 She found this company accredited debt relief. They offered us a payment of $342 a month for 48 months.

Speaker 2 That's to pay off the credit cards. The problem is that's only $16,400.

Speaker 2 I don't understand how this could work.

Speaker 1 Okay.

Speaker 1 Because it's the same as filing bankruptcy.

Speaker 1 It's going to destroy her credit.

Speaker 1 Here's the way they work. Stay away from them.

Speaker 1 Stay away from them, but here's why.

Speaker 1 The way they work is when you sign up with them, they take over all of your payments. And the first thing they do is they stop making any payments.

Speaker 1 And they let all the credit cards go into default if they're not there already. And so they go into default and the credit card companies then will settle a bad debt.

Speaker 1 Now she will be in collections on every one of them. And then they'll settle the bad debt.
for a lesser amount than is owed and set up payments on that.

Speaker 1 And that's how they know that they can get you a $16,000 deal. By the way, if you did this yourself and just quit paying for a year, which I don't recommend, same thing would happen.

Speaker 1 Then you can call them and settle for probably a quarter on the dollar. So you probably settle all this for $5,000 or $6,000.

Speaker 1 But that is also not paying your bill when you're able to, number one. Number two, you've completely destroyed your credit.

Speaker 1 I mean, nasty bad, nasty. You got a bunch of outstanding bad debt at that point.
And that's the way these people work.

Speaker 1 And it basically does the same thing to your credit as filing Chapter 13 bankruptcy does. You could do the same thing with Chapter 13 bankruptcy.
You can file with the Chapter 13 bankruptcy.

Speaker 1 If you qualify for the bankruptcy under guidelines, then you can pay a percentage, not 100%,

Speaker 1 but you could pay, in this case, you said 16 out of 21, right?

Speaker 2 Yeah.

Speaker 1 Yeah, you could pay. So you could pay 75 cents on the dollar.
You could agree to pay 75% to my unsecured creditors in my Chapter 13. That's not 48 months.
That's 60 months. But

Speaker 1 they could do the exact same thing there, and it'll do the exact same thing to her credit. Only technically she's filed for bankruptcy.
And the other one, she didn't technically file for bankruptcy.

Speaker 1 But it does the same amount of damage, if not more, to your reputation and to the process. Plus, you're screwed.
You're in debt $21,000 for 48 for four

Speaker 1 years when you could have paid it off by next Christmas working five jobs.

Speaker 3 Yeah, why can't you just pay it off? Why can't you just work more and pay it off? Tell us more about that. What's the income?

Speaker 2 I work for the railroad. I'm on 12s right now, which is legally the most I can work.

Speaker 2 She's a teacher and she's starting to do Amazon Flex, but she has a daughter who I love to death.

Speaker 1 What's she too?

Speaker 2 She's like the director of a bunch of different

Speaker 2 daycares.

Speaker 2 She used to be a daycare teacher, but she's now like the director of a bunch of those. She makes about $55,000 a year.

Speaker 1 Okay. All right.
Now, instead of doing, now that I've explained to you and answered your question what it does, I'll give you a suggestion rather than doing that. Okay.

Speaker 1 And what I'll do is I'm going to give you Financial Peace University and every dollar plus for both of you. She's going to have her account.

Speaker 1 You're going to have your account because you're not married. Okay.

Speaker 1 And I want both of you to get on a detailed tight budget. Don't spend any money on anything.
Live on beans and rice. No eating out, no vacations, and working extra.

Speaker 1 If she has a teaching degree and a talent in a particular subject like math or English, she can do tutoring and make more than Amazon Flex.

Speaker 1 Okay. If she can get some students.
from the local elementary or local junior high or whatever, and she teaches math in the afternoons or the math in the evenings after she gets home.

Speaker 1 I mean, you can make $30 to $50 an hour doing that.

Speaker 3 Yeah, childcare too.

Speaker 1 And your kids sit in the other room while you're doing this. They come to your house.

Speaker 1 That's a great idea. Yeah, I've got a friend that's a reading specialist that makes bank while her kids sit in the other room.
and on the side.

Speaker 1 And I mean, it's serious money there because they got reading problems. And, man, she's, wow, it's really cool stuff.
So anyway,

Speaker 1 yeah, that's what I would add to this and say, all right, we're going to increase our income. We're going to tighten down everything.
We're going to have a new thought.

Speaker 1 We're going to get all these credit cards tonight and have plastic surgery. And we're going to pay them at 100%.

Speaker 1 We're going to pay them so fast

Speaker 1 that they're in our rearview mirror and we get a life.

Speaker 1 But 48 months, man, that's like ridiculous. That's like saying, I'm going to jail.

Speaker 1 You get to go to jail for four years.

Speaker 1 And you barely just get to, you know, you bring the food and slide it under the bars. You know, no, thank you.
I don't want to live like that. I want to get, geez, no, man.

Speaker 3 The goal needs to be if you can find an extra, if you can make a goal that we're going to make or she's going to make $1,700 extra dollars, find it every single month. What does it look like?

Speaker 3 Is it Amazon Flex? Is it tutoring?

Speaker 1 That pays it off in one year. Yeah.
Is it child care?

Speaker 1 And is it a cut in the budget? She makes $55 already. Yeah.
Yeah. So, yeah, that's the kind of stuff we're doing, Dan.
So we're going to help you with that.

Speaker 1 It's the hard way, but it's the fast way.

Speaker 1 It's deep sacrifice, but it's in your rearview mirror and you get to have a great life on the other side of it versus signing up for a long slug through the mud.

Speaker 1 That's what we're doing.

Speaker 1 And at the end of it, at the end of the story, you're still screwed because you just completely destroyed everything as far as credit goes.

Speaker 1 So she's probably going to have some dings on her credit, probably already does.

Speaker 1 But nothing like what you'd be signing up for if you go to those comp type of a company. So we do not recommend them at all.
Hang on the line.

Speaker 1 The team will pick up and we will get you signed up for Financial Peace University. Get her signed up.
You guys, you can go through the class together,

Speaker 1 but you need your own separate budgets because you're not married yet and you keep your finances separate until you're married. So good question, sir.
I appreciate you checking on her behalf. Wow.

Speaker 1 Those things are, you see them on cable TV.

Speaker 1 And man, there's a couple of them have been fined like 400 million. I mean, one of them got fined, like, was it, it can't be 400 million.
Was that the fine?

Speaker 1 It was some ridiculous one that Tom Selleck endorsed, and the Federal Trade Commission hammered them with fines a couple of years ago because they just,

Speaker 1 it's just a scummy side of the world.

Speaker 3 Yeah, it's scummy. And I don't, I don't like situations where you take control from you and give it to someone else to do things on your behalf.

Speaker 1 And what they're doing is acting like I didn't pay my bill so that they can get a discount. Yeah.
I mean, and trashing my stuff in the meantime. But

Speaker 1 we're in the debt relief business just like Dave Ramsey.

Speaker 1 No, you're not. No, you're not.

Speaker 1 It's

Speaker 1 not even close. Not even close to the same thing.
So you got to stay away from those things. And they call themselves also

Speaker 1 debt consolidation. Yeah.
And it's not debt consolidation at all. You're not consolidating debt.
Consolidating debt's when you get one debt and pay off all the others with the one debt.

Speaker 1 Well, you don't pay it off. You move it to the one debt.
But that's like a home equity loan. That's debt consolidation.

Speaker 1 But not paying them and you paying these goobers one payment, that's not consolidation at all. And it's really not debt relief.

Speaker 3 No, it's not relief.

Speaker 1 It's, well, at the end, I guess it is in one sense, but ugh. I wonder what the percentage of people that complete it is.
Probably pretty low.

Speaker 3 That's a good question. That's pretty interesting to look at.

Speaker 1 Yeah, you don't finish it. You're really screwed.
That puts this hour of the Ramsey Show in the books.