What Are You Willing To Sacrifice To Get Out of Debt?

Transcript

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 I'm Dave Ramsey, your host, Ken Coleman, number one best-selling author. Ramsey personality is my co-host today.
Open phones here at 888-825-5225.

Speaker 1 Thank you for joining us. Liz starts off this hour in Mobile, Alabama.
Hi, Liz. Welcome to the Ramsey Show.

Speaker 2 Hey, how are you doing?

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

Speaker 2 Me too.

Speaker 2 So I am with someone very committed that I find out he's not filed tax. He's been having taxes taken out of his checks and things like that, but he hasn't actually filed in about 20 years.

Speaker 2 And I'm trying to figure out

Speaker 2 the rest of my life, basically, because we're very committed. He's 10 years older than I am and wants to retire, not where we currently live.

Speaker 2 And

Speaker 2 I don't really want to go because this is where my job is and I'm not ready for retirement. I still have about

Speaker 2 10 more years before I can retire. And I just know that once I leave there,

Speaker 2 leave here, then I have to start over.

Speaker 1 So

Speaker 2 a little advice, maybe.

Speaker 2 I don't know.

Speaker 1 I mean, how do you feel about planning your future with someone that's in jail?

Speaker 2 Not real confident about that. Yeah.

Speaker 1 I'm pretty confident that's where he's going.

Speaker 1 Yeah.

Speaker 1 Failure to file federal income taxes is a federal crime. 2,581 people were incarcerated for that last year.

Speaker 1 Okay.

Speaker 1 It's go to jail. Do not pass go.
Do not collect $200.

Speaker 1 So, I mean, Mr. Off the Grid

Speaker 1 or whatever the flip is going through his redneck brain is about to have a serious problem. And to the extent you're connected to him, you're going to have a serious problem.

Speaker 1 They will catch up with him.

Speaker 2 Okay.

Speaker 1 They're not good at a lot at the IRS, but they're really good at collecting taxes. Okay.

Speaker 1 So

Speaker 1 why has he, pray tell,

Speaker 1 not filed his income taxes?

Speaker 2 I am not 100% sure of that answer.

Speaker 2 I just know that there was a history of no job, and then so he didn't have to do that, obviously. But then when he did,

Speaker 2 I don't really know what the thought process was there.

Speaker 2 So

Speaker 2 I can't answer that one

Speaker 1 100%. It sounds like there wasn't a thought process, is what it sounds like.

Speaker 1 So

Speaker 1 there's just a lot of red flags there. If you were my little sister, I would just tell you to rethink whether you're going to be committed to this guy.
If he is going to clean up his act

Speaker 1 and get caught up on his filings,

Speaker 1 you know, maybe he now, maybe that would entitle him to your attention.

Speaker 1 But he's not entitled to your attention right now because this is not a good guy.

Speaker 1 I don't think he's evil, but he's really slothful.

Speaker 1 This is dangerous. This is dangerous, Liz.

Speaker 3 Liz, if he's willing to withhold information from the federal government, and Dave's made it really clear what the consequences of that looks like,

Speaker 3 what pretel is he willing to withhold from you?

Speaker 1 It's just two pretels in one call. I know.

Speaker 3 I sorry. That just jumped into me.
It's such a great phrase.

Speaker 1 Liz,

Speaker 3 I think Dave was really crystal clear with you.

Speaker 3 I would dump this guy until he cleaned his life.

Speaker 1 If he will not get current on his taxes,

Speaker 1 that's a deal breaker for me. If you're my little sister, I'm going to make you do that.
Okay. Now, if he wants to get current and not go to jail, I can actually walk him through that.

Speaker 1 And I'll give you a little quick overview because now that I've stirred this up, there's other people sitting out there going, oh, God. Yeah.
Okay. So here's what he can do.

Speaker 1 You can go to ramseysolutions.com. You can get in touch with one of our tax-endorsed local providers.
And if you will proactively go to the IRS,

Speaker 1 You usually can file about three, maybe four years' worth,

Speaker 1 and they will call, they will let you get back on the grid, and there'll be no criminal charges. The criminal charges do not occur when people come to them.

Speaker 1 I've never seen anyone get criminal charges that

Speaker 1 we walk them out of the, out of the dark, into the light, into the IRS office with a professional and get them caught up.

Speaker 1 He's going to be okay if he does that. But if they find him

Speaker 1 and he's trying to hide, oh, that's when you get in trouble. So he can get with a tax professional, probably file about three years, maybe four years' worth.
They will call it even.

Speaker 1 They'll call it a day. And he's going to have to go back, dig up his W-2s and figure out what's been withheld.
He may not even owe a lot of taxes.

Speaker 1 He may have had so much withheld that there's actually money due to him. Well, not with the penalties and interest he's going to get.
But anyway, you see what I'm saying?

Speaker 1 It might not be a $100,000 problem,

Speaker 1 but it is a problem.

Speaker 1 It's like a big deal. Okay.

Speaker 1 So

Speaker 1 if he's going to date my little sister Liz

Speaker 1 and ask her to commit to him long-term in the form of marriage or something long-term,

Speaker 1 Big Brother Dave is going to say, uh-uh, unless you're willing to get current on your taxes and stay current, because I don't want my little sister Liz married to a jailbird.

Speaker 3 Yeah, and God only knows what he gets her twisted into, too. I mean, I'm not trying to just pour on here, Liz, with the things that could happen, but this is so bad.

Speaker 3 And I don't like the idea that he wants you to move, start over fresh. I mean, there's just this relationship is really jacked up, and I think the pause is necessary.

Speaker 3 I really think this is a relationship issue is all this is. This isn't a money issue.
It's not your problem, and it shouldn't be your problem.

Speaker 1 Yeah.

Speaker 1 And it's going to, it's going to, it's going to be, it's going to show up in a whole bunch of places.

Speaker 1 It's going to be a problem.

Speaker 3 It's funny that you say that, Dave, because the IRS loves when you come knocking on the door. They love to collect your taxes.
But boy, oh boy, they get mad if you haven't sent it in.

Speaker 1 Oh, man.

Speaker 3 They will turn it into a...

Speaker 1 Oh, I'm one of their favorite hobbies. They've got their own office here auditing me.
They just live with us.

Speaker 1 But, you know, I hate those people.

Speaker 1 And I'm not like a proponent of,

Speaker 1 you know, like I think the federal income tax system is a wonderful thing. I don't.
I think it's horrible. I think it's an out-of-control,

Speaker 1 arcane, horrible process. I'm not any of that, but I'm just saying when you don't file taxes, it's not you're making a statement about them.
You're making a statement about you. That's correct.

Speaker 3 Yeah, we love our freedom more than we hate taxes. And so that's the issue here.

Speaker 1 Well, it's a matter of belief, it's a matter of integrity to do what the law says, even if you disagree with it. I agree.

Speaker 3 You know, so that thus you should go to jail if you break the law.

Speaker 1 Yeah, that's,

Speaker 1 yeah.

Speaker 1 Be careful, Liz. Be careful.
You've been warned, hon, and now you know. Open phones here at 888-825-5225.

Speaker 1 By the way,

Speaker 1 what's tied to that is this.

Speaker 1 Tom Stanley that did the book Millionaire Next Door many years ago. He's passed away since.
It was 1992. He did a book later on billionaires.

Speaker 1 And the number one character quality he found among the self-made billionaires was integrity.

Speaker 1 Hmm.

Speaker 1 That's kind of like the opposite end of the spectrum of Liz's Guy. Yeah.

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Speaker 1 these are great bargains. Patrick is with us in Denver.
Hi, Patrick. How are you?

Speaker 2 What's up, Dave? I'm good. How about you?

Speaker 1 Better than I deserve, man. How can I help?

Speaker 2 That's good.

Speaker 2 So I'm 23 years old, and

Speaker 1 I have a loan.

Speaker 2 I owe my parents $10,000 right now. For what?

Speaker 2 It's an interest-free loan.

Speaker 2 About $8,000 is for my car that I use for work. I'm a farrier.

Speaker 2 And then about $2,400

Speaker 2 is for

Speaker 2 a few previous months of rent that I I needed help with.

Speaker 1 Okay.

Speaker 2 So

Speaker 2 I asked them to

Speaker 2 forgive the loan,

Speaker 2 and they got upset with me. They said I was ungrateful and that I needed to work harder.

Speaker 2 And so I was already kind of on the hunt for a part-time job so that I can,

Speaker 2 a second job so that I can pay off the debt quicker.

Speaker 1 Good.

Speaker 2 Um, but so right now I'm uh, I've got about 25 clients as a farrier, so I trim and shoe horses.

Speaker 1 Right. So, what is a

Speaker 1 23-year-old farrier with 25 clients make in the in Colorado? What kind of money are you?

Speaker 1 Well,

Speaker 2 so like before gas and tax and supplies and all that good stuff, I'm probably going to make about $15,000 this year. So, not very much at all.
Probably like closer to $10,000.

Speaker 1 That sounds more like a side hustle than a job.

Speaker 2 Right, right.

Speaker 2 And so I really anticipated just being able to grow my business quicker, which is why I was more comfortable getting these loans. Like they're not huge loans, but

Speaker 1 what's your question, Patrick? How can we help you?

Speaker 1 So

Speaker 2 I asked my parents to forgive the loan, and I

Speaker 2 and they got upset with me. You told us that.

Speaker 1 And

Speaker 2 I struggle already with my... How upset did you ask?

Speaker 1 No, I said you told us that already.

Speaker 2 Oh, okay. I'm sorry.
That's okay. So, like, how do I...

Speaker 2 The thing is, I...

Speaker 2 My parents, I didn't go to college. I became a farrier.
And I'm the youngest of five kids. And my parents have given my other siblings

Speaker 2 help with college. And so that's why I was comfortable asking them to forgive the loan.

Speaker 2 Well, I guess, I mean, you're probably going to tell me just get a second job and pay it off.

Speaker 1 And I'm going to tell you, get a real job.

Speaker 2 Yeah.

Speaker 1 You already have the second job.

Speaker 1 $10,000 is not even survival money, dude.

Speaker 2 Right.

Speaker 3 Do you, are you a farrier because you love horses?

Speaker 2 I do, yeah. Okay.

Speaker 3 Then how does one make $40,000? How does one make $60,000? How does one make $80,000 working with horses? I don't know the answer.

Speaker 1 You probably do, correct?

Speaker 2 Right. And so that's why I asked for them to forgive the loan.

Speaker 1 No, no, no, no.

Speaker 1 Listen, we need to quit talking about forgiving the loan. Stop, scotch,

Speaker 1 Patrick. Patrick, stop.
We don't need to talk about forgiving the loan. They're not going to forgive the loan.
They told you to go get a life and pay them. So let's go get a life and pay them.

Speaker 1 Answer Ken's question.

Speaker 1 Why, what does it take to make $40,000 or $80,000 screwing around with horses?

Speaker 2 Well, you can make good money as a farrier if you have a lot of clients. You need like 100 or more clients.

Speaker 1 No,

Speaker 1 you have 23, you make 10,000. 100 would be 40,000, and that's gross, not net.

Speaker 1 That's still not good money.

Speaker 3 The answer, Patrick, is not to double down and say, well, I'm not good at marketing my services. Well, that's a lesson that you've now learned, and Dave's right.

Speaker 3 So what you do have is a decent side hustle. But the answer is, the question is,

Speaker 3 what must one do to get a $60,000 or $80,000 or $100,000 job working with horses? We're creating a ladder here.

Speaker 3 Also, the answer should be, well, Ken, I would have to go work for a large ranch, and I would start out here. And a lower-level ranch hand is going to make $32,000.

Speaker 3 I'm making this up, Patrick, but you know the answer to these questions, or you could go get the answers. And you have now got to get serious to say, I've got to take care of myself.

Speaker 3 And I can't even take care of myself on $10,000 to $15,000. So go get up the next level or the two or three rungs up the ladder in the horse industry.

Speaker 1 And if you can't do that, get into some other type of thing with a ranch. While you're thinking about all that, just go to work for Amazon 40 hours a week and throw boxes.

Speaker 1 Or FedEx and go 40 hours a week and throw boxes right now, $20, $25 an hour and go make $10,000 right quick and hand it to your dad.

Speaker 2 Okay. Yeah, I'll probably go be a stripper.

Speaker 1 Okay. Oh, that'd be great.
Yeah.

Speaker 1 A farrier stripper. Fantastic.
That's a novel idea. That's great.
So he's a whole different motif for stripper.

Speaker 3 Apparently, he's got the clothing.

Speaker 3 I guess he's got the chaps.

Speaker 1 Oh, you're killing me here.

Speaker 3 I know. He did it.

Speaker 1 This kid's not serious. No.
That's not a serious answer to what we just were trying to do. I think I know why your parents are angry with you, Patrick.
I'm kind of getting the understanding now.

Speaker 1 Well, I'll just go be a stripper. Oh, brother.
That's not even funny, really. I mean, it's it's just weird.
Okay, so go get a job, honey, and make you some money. That's the answer to your question.

Speaker 1 All right.

Speaker 1 Open phones at 888-825-5225. Ellie is with us in Rockford, Illinois.
Hey, Ellie, what's up?

Speaker 2 Hi, Dave. How are you guys doing?

Speaker 2 Awesome.

Speaker 2 So I have to say, first of all, our son introduced me to you a while back, and we live completely debt-free, mortgage and everything, and you have changed our whole family's life so thank you so much for that i'm proud of you way to go

Speaker 2 yeah um but the question is so my husband's job is relocating us for the next two to four years and there is potential that we will continue to relocate every two to four years until he retires in 12 years uh the house that we are in right now it is paid off but we're in an area that really never increased with the market so it's probably only going to go for 150 000.

Speaker 2 the houses in the market that we're moving to are going to be more in that three to four hundred thousand dollar range um and that is going to mean that we would have to go back into debt if we would choose to buy a house um the job does provide a three thousand dollar a month stipend um an increase in his wages as well as overtime so all of that together makes it worth the move okay um so we're kind of trying to spend the next 12 years maximizing what we're doing to get to a good spot in retirement.

Speaker 2 But Dave, I got to say, I've done the beans and rice once already. I don't want to live in a beans and rice apartment.

Speaker 1 So

Speaker 2 my question is, should we buy a house or should we rent when we're moving every two to four years?

Speaker 1 Probably in most markets, you're going to be renting. Here's how you can do the equation.
Okay.

Speaker 1 Ask the real estate agent to run some numbers in a five or a 10 mile radius of the neighborhood you're looking in in the new city. Here's the numbers you want.

Speaker 1 I want to know in the last three years what the average rate of appreciation is. How much your house is going up? 2%,

Speaker 1 no percent, 10%.

Speaker 1 Okay.

Speaker 1 The second number I want to know is called DOM, average days on the market.

Speaker 1 Okay, and those numbers will run together. Okay, here's what it'll sound like.
If you hear a zero or a 2%, you might hear 270 days average on the market.

Speaker 1 That means it's not going to go up in value and it's going to be hard to sell. That neighborhood you rent in.
If it says we're going up 10% a year for two years or three years or four years,

Speaker 1 and the average days on the market's seven,

Speaker 1 well, you're going to make some money and you can get out of the house. If you get those two statistics, they'll tell you mathematically whether it's worth buying or not.

Speaker 1 But you don't want a slow market and you don't want a non-appreciating market. You're going to lose money on a two-year or a three-year horizon.

Speaker 3 For free tools and resources to help you reach your home goals, go to ramseysolutions.com slash real estate or click the link in the show notes.

Speaker 1 Ken Coleman, Ramsey Personality is my co-host today. Thank you for joining us, America.
The Ramsey Show question of the day is brought to you by YReFi.

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Speaker 3 Today's question comes from Hayden in Wisconsin. The NFL draft is coming to my city next year, and I own a house close to where it will all be held.

Speaker 3 People in my neighborhood are renting their houses out during that time for upwards of $10,000. I have an opportunity to make enough money to make a huge dent in my credit card debt.
I'm 27.

Speaker 3 I earn $95,000 a year, and I have about $30,000 in debt, and have been working hard to get out of Baby Step 2.

Speaker 3 It is my stepdad's dream to attend an NFL draft, so he and my mom have already assumed they can stay in my house for free.

Speaker 3 My heart is telling me that the money doesn't matter and I will pay off this debt without this opportunity, but friends are are telling me that I'm foolish for not telling them no and renting the house out.

Speaker 3 What would you do in this situation?

Speaker 3 I'll tell you what I would do. I'd tell mom and dad what's going on and go, I'm renting this house out and it is going to massively change my situation.

Speaker 3 I would love for you to stay in any other time for any other situation. My house is your house, but I hope you understand and hope you guys can get a hotel.
And maybe it's 30 minutes out.

Speaker 3 I'll help you find something. But I would actually tell mom and dad, I'm renting it out for the 10 grand.

Speaker 1 I wouldn't even blink

Speaker 1 i i completely agree i was wondering what you were gonna say completely agree the only thing i'm wondering with some of this wording is

Speaker 1 um

Speaker 1 if you have absolutely already decided before they asked that you were going to do this yeah then ken's answer is correct If they asked and then you thought, you know, I could probably do 10 grand, I'm starting to get, you know, it's like, eh.

Speaker 1 But by and large, yes. Just tell them they're going to have to stay somewhere else.
And it doesn't

Speaker 1 crush his dream. Yeah.
If he wants to go to the NFL draft, go to the NFL draft. It's really not.
It's not that big a deal. I mean,

Speaker 1 and I can't believe people are paying that.

Speaker 3 Well, we had the NFL draft here in Nashville, I think it was three years ago, and I took my boys down.

Speaker 3 I'm friends with several guys on the NFL Network, and they showed my boys the red carpet, and they got to go behind the scenes. But Dave, it was unbelievable.

Speaker 1 But were people paying people $10,000 for the week?

Speaker 3 I don't know what the rental was, but I can tell you that the streets were absolutely packed, and it has become a massive event.

Speaker 3 I believe it was in Kansas City last, and we're talking hundreds and hundreds of thousands of people were on the street, the Broadway, Nashville, the main road, on actual draft night.

Speaker 3 It is a massive thing. So it's kind of like a golf tournament.

Speaker 1 Is it Milwaukee, probably? It'll be in Milwaukee. Milwaukee.
That's where he is. Okay.

Speaker 3 Well, no, that's not true because they do it in NFL City. It'll be in Green Bay.

Speaker 1 The Green Bay Packers. Now let me help you then.
So now there'll be a real shortage of housing. And that's why they're getting

Speaker 1 that. It's like Augusta.

Speaker 1 Everybody in augusta georgia it's a little town and it's a one-time thing yeah yeah you're going to get he's going to be driving in yeah i agree or stay 30 45 minutes out that's what i mean he's going to be driving in yeah okay i got you seriously yeah papa papa's gonna be driving in and by the way where are you going hayden i know you're not going to draft you're leaving town i guess huh and uh going to vegas for the weekend i don't know but yeah but uh yeah you're going to figure out what you're doing here and don't go blow the 10 grand while you're gone i love that he wants to knock this debt out love Love this idea.

Speaker 3 And if you can get a windfall of cash because of that, that's awesome.

Speaker 1 I'm in. Camille is in St.
Louis. Hi, Camille.
How are you?

Speaker 2 Hi, how are you, Dave? I'm welcome to the blessings. And I'm just, I feel like you're the preacher to my soul for finances.

Speaker 1 And thank you for that.

Speaker 3 Amen.

Speaker 1 Bless your heart. How can we help you? Amen.

Speaker 2 Yes, my baby brother, God bless him. I love him with all my heart.
He co-signed on a vehicle with my father. And unfortunately, our father passed away.

Speaker 1 Oh, no.

Speaker 2 He was my best friend.

Speaker 2 The original loan amount for the car was over $55,000.

Speaker 1 So

Speaker 2 there's been no payment since his death and my brother said, well, when I sat down at signing, they said, well, if anything happened to dad, it would be paid. I said, they lie.

Speaker 2 You didn't read the fine print. I told you not to do this.
So on and so forth. A settle company sent him something in a mail saying that they would release the lien for a settle amount of $8,400.

Speaker 2 But I'm reluctant because I'm like, are these people even legit? How do I, like, what do I, what do I tell them to do? Yeah.

Speaker 1 There's a tiny possibility

Speaker 1 that these people, while they were ripping your father and your brother off with this car loan, that they put credit life insurance on this loan, that if your dad died, the life insurance would pay off the loan.

Speaker 1 These are the type, and by the way, credit life insurance is ridiculously expensive, a horrible product, never buy it.

Speaker 1 But I got a feeling these are the type of people who would sell that to your dad and your brother because they sound like

Speaker 1 people that are an easy mark for a con. And so

Speaker 1 your brother might have heard them right.

Speaker 1 They might have said

Speaker 1 this credit life right here will pay off the loan. So first I want you to investigate with the lender

Speaker 1 whether there was credit life insurance on the loan. That's the first thing you do.
You call the lender and you ask them that, or you have your brother do that.

Speaker 1 They won't talk to you because your name's not on it.

Speaker 1 And then

Speaker 1 if it is not and he can settle it for $8,400, that sounds like a bargain. Where's the car?

Speaker 2 It's in his possession. It's literally right outside the house.
It's parked. He starts it once in a while.
He's scared to drive it in case he gets pulled over and it gets impounded.

Speaker 2 He says, I'll have no way of getting it out. So it's literally just sitting there and I'm confused as to why it hasn't been repossessed.

Speaker 1 Me too.

Speaker 1 They probably just don't know where it is.

Speaker 2 I mean, it's 2020, so it doesn't have all these newfangled tracking devices, blah, blah, blah.

Speaker 1 I know, but they don't know where it is. I don't know.
I mean, it sounds like they're not hunting it down too hard. If you can settle a $55,000 debt for $8,400, we want to do that.

Speaker 1 What he would do is call them and

Speaker 1 get proof that they are the holder of the loan. Who is this settlement company?

Speaker 1 Are they the actual person I should be negotiating with? And

Speaker 1 do they have the title to the car? Are they

Speaker 1 send me proof of the debt? And if he gets proof of the debt and scrape together $8,400 and gets a $55,000 car for that, that's going to not be bad.

Speaker 2 Okay. Okay.

Speaker 1 But I got a feeling he's got credit life on this thing.

Speaker 2 So if he did, though, why would they even want $8,400? Shouldn't they be able to do that?

Speaker 1 Because they didn't look at it. They didn't have,

Speaker 1 because they're incompetent.

Great. I'll look into all those things you mentioned.
Thank you so much.

Speaker 1 Thank you, darling. Appreciate you, Colin.
Wow.

Speaker 1 The co-signing thing.

Speaker 1 People always do this

Speaker 1 as if everything's going to work out perfectly. And in case you haven't lived long enough, I got a clue for you.
Nothing ever works out perfectly. Nothing goes exactly like it's supposed to go ever.

Speaker 1 And cosigning, I've done it, and I've had people do it for me, and it's stupid. It's just dumb.
It's even in the Bible that it's dumb. Proverbs 17, 18 says, one lacking in sense cosigns for another.

Speaker 1 God just said you're lacking in sense.

Speaker 1 That's pretty strong. Yeah.

Speaker 3 No wiggle room there. Yeah.

Speaker 1 So don't cosign. You get in situations like this.
This is a bizarre one right here. But, I mean,

Speaker 1 who co-signs and thinks the person is going to die? That's not one you come up with usually. But it happens, obviously.
And man, what a deal. What a deal.
So do not co-sign.

Speaker 1 And do not buy credit life.

Speaker 1 Don't take out a loan of this type, period. But for sure,

Speaker 1 credit life insurance is somewhere around 200 times more expensive than term life insurance.

Speaker 3 Dave, real quick, what would would be a default answer to a family member or friend who comes to you and says, will you co-sign? Because it's a tough and emotional situation.

Speaker 3 What would you say to honor them, but also keep that common sense?

Speaker 1 I would say I can't do that because if the bank is not willing to do the loan, then there's all kinds of problems that are going to happen. And I would never want to be crossways with you.

Speaker 1 And you not paying something and I have to pay it would cause me to end up being crossways with you. And I value our relationship more than that.

Speaker 3 That's textbook.

Speaker 1 No.

Speaker 3 All that to say no.

Speaker 3 No.

Speaker 1 This is the Ramsey Show.

Speaker 1 Ken Coleman, Ramsey Personality, number one best-selling author of the book Paycheck to Purpose, is my co-host today. Open phones at 888-825-5225.
Sherry is in Orlando. Hi, Sherry.
How are you?

Speaker 2 Hi, good. How are you, Dave?

Speaker 2 So I'll keep the question short, and then I'll give you the background. Basically, I opened a new business about two, three months ago.
I am not really getting any sales.

Speaker 2 I'm doing like standard advertising through, I'm selling on Amazon right now. I'm doing advertising through them, social media, like WhatsApp, friends, family to try to get the word out.

Speaker 2 And I'm still not getting anything. I'm wondering, is there something that I should be doing more? When would be the time to say this is just a failed business idea and to just stop and cut my losses?

Speaker 1 What are you selling?

Speaker 2 So

Speaker 2 specifically right now, it's a clothing brand. And right now I'm starting with formal dresses for breastfeeding.
I am actually the only one that sells that.

Speaker 2 There is no one else that sells that, which makes it very even more difficult to understand why there is no sales, really.

Speaker 3 Well, can I take a stab at why I think, and I'm a guy, but but I have three kids, I just don't think a lot of women that are in the breastfeeding stage are going to formal events, and therefore there's not a lot of demand.

Speaker 2 So

Speaker 2 from my personal experience, that's the reason I came up with this idea is because I had a very hard time finding this and talking to a lot of people in sort of the community, friends, family.

Speaker 2 There seem to be a demand. There seem to be people that, women, that are interested in.

Speaker 3 Have you done any research to go, what's the market?

Speaker 3 Like, who's the the sales indicate that's not so who's the walmart of those type of dresses and if there isn't one we now have a starting to get a clue like who is the dominant player or two in that particular wardrobe sector did you develop the the product or are you selling someone else's product

Speaker 2 no i developed the product there is no one else that sells the type of product that i am selling

Speaker 1 okay all right um the short answer to your question is there's a wonderful book, and you want to pick it up, by Dr. Henry Cloud called Necessary Endings.

Speaker 1 And

Speaker 1 the way we ascertain whether to end anything, a relationship, a job,

Speaker 1 an employee in their job with working for you, close a business,

Speaker 1 move a tenant out, is when we lose hope

Speaker 1 that there is an actual way to success.

Speaker 1 When we've tried everything and

Speaker 1 we cannot see a way to success, we can't see our way to success. So, let me give you a weird example.
It has nothing to do with your question. Okay.

Speaker 1 A lady is married to a guy who has an alcohol problem. He's been in and out of the rehab three times.
She loses hope that he's ever going to quit drinking.

Speaker 1 She doesn't see a way to success, so she ends their marriage. You follow me? And so you've tried, once you've tried everything

Speaker 1 that you know how to do to get this product out,

Speaker 1 and it's not selling, then,

Speaker 1 yes, we declare that a miss. We declare that a failed business.
And it doesn't mean you are a failure. It means that idea didn't work.
And I've been running Ramsey Solutions for

Speaker 1 years. And the number of ideas that we have launched that didn't work are too numerous to count.

Speaker 1 We have sucked so many times, it's unbelievable. Okay.
Now,

Speaker 1 you guys all know us for the things we're successful at, but we have tried and failed at so many things. So

Speaker 1 this might be just one of those things that your heart told you this was going to work,

Speaker 1 but your statement of there is an actual demand for this product has not, the marketplace is not telling you that.

Speaker 1 If you are getting the message to ladies that are breastfeeding and they are not buying this dress,

Speaker 1 then

Speaker 1 if you're actually targeting them with your marketing and you're getting the message to them, the message is in front of them on Facebook or it's in front of them on Amazon feed or LinkedIn or whatever it is you're doing.

Speaker 1 However, you're getting the message to them and they're not buying it, then the marketplace is telling you there's not as much demand as your heart thought there was.

Speaker 1 and this is the end of the program. Now, you might say, okay, I think I could do this or this.
Okay, good. Then try those two things.

Speaker 1 And if you still don't get it moving, then you don't want to get delusional and just go, I'm going to keep going no matter what. No, no, no.

Speaker 1 There's sometimes the marketplace is looking at you and saying you missed it. Yeah, I agree.

Speaker 3 But before you launch anything, quick little lesson to anybody out there.

Speaker 3 It's worth doing research to see who's in the space that you want to be in and how many are in the space, who's winning, why are they winning?

Speaker 3 And those are just basic things that you want to look into so that you don't get into something that your heart's totally engaged in, but you didn't do the headwork.

Speaker 3 And that's the logical research to see if there is a market. Supply-demand is economics 101.
If there's no demand, then there's not a supply of customers is the way you want to look at that.

Speaker 1 And then the other thing is, if you're starting something like that with the way she's selling it on Amazon,

Speaker 1 you know, that's her distribution methodology. So just buy a very, very small run.
I agree.

Speaker 1 And set up a manufacturer that can turn them real fast if you get a bunch of orders. But don't fill up your basement with something that's not proven.

Speaker 1 And don't spend a bunch of money on a credit card to run the marketing with some Amazon marketing program crap. Okay.
Use real cash to pay for your marketing.

Speaker 1 And when you sell a dress or two, you can reinvest that cash and back into some more inventory and some some more. And do this as a side hustle.
Don't go all in on something that you've not proven.

Speaker 1 It's proven when people actually give you money for it.

Speaker 1 I was in a meeting this morning here at Ramsey and they were, you know, the leadership team was presenting me with

Speaker 1 this thing, this prototype thing we've been working on and they're like, All the customers are just eating it up. And I went, so how much money have we collected on it?

Speaker 1 And they said, oh, we haven't gone to that stage yet. And I said, oh, so you figured out we can give it away.

Speaker 1 Right.

Speaker 1 Next stage is: can we get money for it? Oh, there's that. That's right.
Oh,

Speaker 1 then we'll find out if this crap's real. Okay.
That's funny. Because it's real when people give you money for it.

Speaker 3 We've seen what people do at NFL games when the cheerleaders come around with free t-shirts. It's like they're handing out gold bullion.

Speaker 1 Yeah.

Speaker 3 Grown adults are acting crazy for anything free. That's a very good point.

Speaker 1 Very interesting. And, you know,

Speaker 1 if you thought you had a demand, you got to prove it by collecting money from the customer.

Speaker 1 That's your social proof that the product is doable and is going to make sense. Lexington, Kentucky, Kelsey's on the line.
Hi, Kelsey. What's up?

Speaker 2 Hi, Dave. How are you doing?

Speaker 1 Better than I deserve. How can I help?

Speaker 2 Good. I was calling because I wanted to know when an okay time would be for my husband and I to start trying to have a baby

Speaker 2 and make sure that we're financially stable.

Speaker 1 Now.

Speaker 1 Right now.

Speaker 2 Right now. That's what I'm saying, but he wants to pay off the house.

Speaker 1 No.

Speaker 2 We have no debt. No.

Speaker 1 No.

Speaker 3 Dave, would you be more clear with her, please?

Speaker 1 No, you need to have babies. You need to have them right now.
Well, no, after the call.

Speaker 1 No, right now.

Speaker 1 I'll go work on that. Thank you.

Speaker 1 No, seriously,

Speaker 1 the thing is.

Speaker 1 People have this thing in their head because the media has told them that children are so expensive. They're not that expensive.

Speaker 1 The first couple of years, you buy some formula and diapers and you have to pay the pediatrician's Porsche payment. But other than that, after that, they start eating your food and stuff.

Speaker 1 And they're really not.

Speaker 1 This idea that you have to somehow be wealthy to raise children is absolutely asinine. Poor people have raised lots of children and functional ones, too.
They learn to work. They learn to clean house.

Speaker 1 They learn to be good kids. And so, no, no, no, no, no, no, no, no.
They are not. Those two things are not connected.
Same thing with getting married. You're ready to get married? Get married.

Speaker 1 As long as you're both on the same team and you're in agreement about what we're going to do with money, it's time to get married. Okay, we're going to get out of debt.

Speaker 1 You don't have to get out of debt before you get married. We don't tell people that.
Never have in 30 years on this show. And we don't tell people to not have babies.

Speaker 1 Now, I would say the rare exception, the exception of that would be: okay,

Speaker 1 you're four months behind on your house. And he hasn't worked in two years.
Well, that's, yeah, okay, now we got to fix some stuff. We're in crisis mode.

Speaker 1 But I have to pay off my home before I have babies. Nah.
Nah. Nope.
Not from this show. We never said that.
No.

Speaker 3 He's going to be thrilled with that answer. Oh, he's going to love us.

Speaker 1 I can't wait to see it. He's going to love us.

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. Open phones at 888-825-5225.

Speaker 1 Ken Coleman, Ramsey personality, number one best-selling author of the book, Paycheck to Purpose, and host of the Ken Coleman Show. He's my co-host today.
Melinda is with us. Melinda is in Spokane.

Speaker 1 Hi, Melinda. How are you?

Speaker 2 Hi, I'm healthy and well. Thank you.

Speaker 1 Good.

Speaker 1 How can we help?

Speaker 2 I am. my question it's about estate and inheritance we on our property we I call her my mother in love

Speaker 2 someone she

Speaker 2 put a ADU manufactured home on our property and we love her and she wants to leave that home to my daughters,

Speaker 2 young adult daughters, eventually. And it has a DMV title and

Speaker 2 looking into she wants it to just be a very simple probate avoiding kind of a thing.

Speaker 2 So if we if she adds the girls names to the title, I just want to make sure that there's no unintended consequences. Would she lose her homeowner's exemption?

Speaker 2 Is there any risk to adding names to the title ahead of time?

Speaker 1 I don't know because I don't know the law in the state of Washington, and that's what you'd need to find out.

Speaker 1 I'm not worried about the insurance, but because this is a DMV title,

Speaker 1 a Department of Motor Vehicles title, it's more like a car

Speaker 1 we're dealing with title than we are a house.

Speaker 1 And so,

Speaker 1 and car titles are

Speaker 1 sometimes dramatically different from from state to state as to how they're handled.

Speaker 1 What I would tell you to investigate with the DMV is

Speaker 1 is there a

Speaker 1 mechanism there in the state of Washington that allows a POD

Speaker 1 paid on death is what that stands for. And so

Speaker 1 you could put it, it's almost like the beneficiary of a policy. that can you put that upon death, this transfers to your daughter automatically.
And it may be, it may be.

Speaker 1 For instance, some states allow you to do that on a bank account, that a simple savings account at your bank can have a POD on it, a paid-on-death to someone. And it goes directly to them then.

Speaker 1 It's not an issue of the will or probate at that point.

Speaker 1 I mean, the mechanics of it is that there shouldn't be any tax issues. Does she owe money on the property,

Speaker 1 on the mobile home?

Speaker 2 No, it's paid in full.

Speaker 1 Okay, that's good.

Speaker 2 What's confusing to me is that I'm near Spokane in Idaho. If she pays property tax,

Speaker 2 she gets the same kind of a tax bill that we do for our home.

Speaker 1 She pays a personal property tax on it because she doesn't own the dirt under it, right? You do.

Speaker 2 Yes.

Speaker 1 Okay, so she's not paying property tax. There might be a personal property tax on a mobile home in that area.
That wouldn't be unusual at all. But

Speaker 1 she does not get a real estate because she doesn't own any real estate.

Speaker 2 Right.

Speaker 1 Now,

Speaker 1 can I interfere in your situation?

Speaker 2 Yes.

Speaker 1 Don't do this.

Speaker 2 Okay.

Speaker 1 Your grown daughters are going to own a mobile home sitting on dirt you own. This is going to cause a conflict.

Speaker 2 Okay.

Speaker 1 She needs to leave it to you because it's sitting on your property.

Speaker 1 And then you're going to promise her you're going to leave everything to your kids. And so whatever wealth this represents will ultimately go to your kids.

Speaker 1 But it's going to cause all, I mean, your daughters can't do anything with it. It's sitting on your land.

Speaker 2 Exactly. Yeah.
And I think what I appreciate about

Speaker 2 what you're saying is we are in a situation where everybody is so amicable and there's no conflict right now that it just wouldn't open up opportunity to.

Speaker 1 Yeah, but let's say your daughter wants to sell this thing.

Speaker 1 Okay. Now she's got to hook up to it and haul it somewhere and sell it.

Speaker 1 Or she or she's going to come to you and want a piece of dirt under it given to her.

Speaker 1 And then you're going to have a next door neighbor that has nothing to do with anything because your daughter wanted to take this money and go buy a whatever.

Speaker 1 And everybody's still happy and amicable, but it's just really

Speaker 1 awkward.

Speaker 1 You're just begging. You're begging for conflict in this.

Speaker 2 That's so interesting. I love hearing an outside perspective on that.

Speaker 1 Yeah, well, it's up to you. I'll do whatever you want to do.
And I think your mother's sweetie, mother-in-law, as sweet as she can be, and she's trying to do a sweet thing here.

Speaker 1 But I personally wouldn't wouldn't do that.

Speaker 1 And

Speaker 1 if I were your mother-in-law, I wouldn't do it because I don't want to cause potential trouble between my grandbabies and their parents.

Speaker 1 I want to keep this thing clean. The cleanliness of it is a big deal.

Speaker 3 Yeah, I agree. I just think whatever it's worth, I'd sell it and then

Speaker 1 just keep the money and then eventually put it.

Speaker 3 I just keep it super simple.

Speaker 1 Well, or if she does do that, go ahead and have an agreement with your daughter that immediately upon mother-in-law's death, she's just going to hook up to the thing and sell it.

Speaker 1 We're going to get rid of it. And turn it into money, and you take that money, and that was a blessing from your grandmother, and that's good.

Speaker 1 But we're not going to leave it there and rent it sitting on, having a rental property in a mobile home next door to you, Melinda,

Speaker 1 on land that you own. That's just starting to get

Speaker 1 awkward.

Speaker 3 It wouldn't be on their land if it wasn't the mother-in-law. Exactly.
So it's like they don't want it there when she's gone.

Speaker 1 Exactly. Well, I mean, unless one of the daughters moved into it.
But then you've, now we've, you know, we've, we've continued this.

Speaker 1 So it's just, there's all kinds of, you'll end up being a caller on the show later, I'm afraid. Open phones at 888-825-5225.
Jake is with us in Miami. Hi, Jake.
What's up?

Speaker 2 Hey, Dave. Good.
Thanks for having me on.

Speaker 1 Certainly. How can we help?

Speaker 2 So I just wanted to get some guidance. My wife and I recently got married about two years ago.

Speaker 2 We're doing the budget, you know, month to month, every dollar. We're doing great.
It's just, it's harder for her sometimes to cut back.

Speaker 2 And I've been doing that a little bit before we got married, so I'm a little bit more used to it. And I'm a little less materialistic.
I don't really spend a lot of money on myself and all that stuff.

Speaker 1 You don't have children.

Speaker 2 No, no, no children yet.

Speaker 1 Okay, the reason is she feels like she's having to cut back to

Speaker 1 there's no vision in this. Meaning, the two of you need to agree that we're trying to get somewhere with the management of this money.
And whatever that somewhere is.

Speaker 1 We want to save up money to buy a house. We want to get out of debt.
We want to do this or we want to do that. You need to have something big that you're both agreed to, a why.

Speaker 1 Why are we doing this? Right now, the only why is you put her on a budget. That don't work.
All right. If she agrees with the why,

Speaker 1 she will want to sacrifice to get to the why, and you won't have to talk to her about it. I'm a spender, but it's easy for me to cut when I have a good reason because I'm going somewhere.

Speaker 1 Ken Coleman, Ramsey personality, is my co-host today.

Speaker 1 Julia is in Tulsa, Oklahoma. Hi, Julia.
Welcome to The Ramsey Show. Hi.
Hi. Hello, Dave.

Speaker 2 So my husband had a stroke a year ago, and he hasn't been able to work, and I had to quit also to be able to care for him.

Speaker 2 And so we've gone through savings this last year and

Speaker 2 so I'm at a point now I need to dip into R401.

Speaker 2 And I don't know whether I should just do like a three-month chunk. Should I do a six-month chunk?

Speaker 2 He probably will not be going back to work.

Speaker 2 Maybe hopefully six months, maybe a year down the road.

Speaker 2 I don't know. I didn't know what financially I should do about that.

Speaker 1 Wow. Sorry.
How old is he? Yeah.

Speaker 2 Well, he'll be 50 in January.

Speaker 1 Whoa.

Speaker 1 What a devastating thing. I'm so sorry.
Definitely.

Speaker 2 He was definitely the breadwinner of the family. And so it has been difficult.

Speaker 1 I can imagine.

Speaker 1 Wow. I'm so sorry.

Speaker 1 Well, what we always want to do is to get

Speaker 1 what's going to get us to sustainability. And sustainability is not going to come from draining the 401k.
It's going to come from you all someone creating an income there.

Speaker 1 So what were you making at your old job before?

Speaker 2 Maybe $10,000 a year.

Speaker 1 Oh, you weren't working much?

Speaker 2 No, no. It was I mostly was pretty much taking care of the kids.
I have a college-age daughter, a high schooler, and a

Speaker 2 middle schooler.

Speaker 2 And so I just kind of worked here and there. Well, I worked an office job around their schedules kind of a thing.

Speaker 1 What was he making?

Speaker 3 And what did he do?

Speaker 2 He was a computer programmer. He was a senior software computer programmer,

Speaker 2 made

Speaker 2 well over $100,000.

Speaker 3 And what you were kind of saying six months, 12 months. I mean, what are the doctors telling you about his recovery?

Speaker 2 Well, we just got approved for disability. So they definitely see that he's not going to be going back anytime soon.

Speaker 2 He feels like he keeps saying that he would like to go back, and he'll say three months or six months. I don't know.

Speaker 2 I mean, we would love for him to be able to go back in six months.

Speaker 1 How long ago was the stroke?

Speaker 2 Almost a year ago.

Speaker 1 How is he progressing as far as his healing goes?

Speaker 2 So he's still paralyzed on one side of his body. He has a little bit of movement in one of his legs.

Speaker 2 His one arm doesn't have movement yet. He

Speaker 2 mentally he's there.

Speaker 2 He has

Speaker 2 difficulty getting things out. Like he can't type on a typewriter.
He can talk or typewriter. That's old.
A computer.

Speaker 2 So he has tried, like he can check emails. He can't respond.
It's just not there yet.

Speaker 2 He has been able to do a few little things, like he has picked up his phone sometimes and been able to text.

Speaker 1 Okay.

Speaker 1 If you were at work all day, can he care for himself? No. No.

Speaker 2 No, I have to be with him

Speaker 2 at least every couple hours. He has to go to the bathroom and I have to help him.

Speaker 1 So we have to.

Speaker 1 How much is the disability?

Speaker 2 It's $3,500 a month.

Speaker 1 What does it take for you all to survive monthly?

Speaker 2 I've cut back as much as I possibly can. And, you know, we're

Speaker 2 like $6,000 or $8,000 a month.

Speaker 1 Okay.

Speaker 2 But we just got approved. This is our

Speaker 2 last month was our first

Speaker 2 check that we were able to get from Social Security. And so

Speaker 2 this month will be the second month.

Speaker 1 Okay.

Speaker 1 So where is the $8,000 going? Help me with it. You got a huge house payment?

Speaker 2 No, we have

Speaker 2 $1,300 of a house payment.

Speaker 2 I have a car payment.

Speaker 1 How much?

Speaker 2 $430,000.

Speaker 1 Food.

Speaker 2 Kids are expensive.

Speaker 2 You know, internet.

Speaker 1 Okay.

Speaker 1 No, none of that adds up to $8,000.

Speaker 1 Well, we have... I got $1,700 plus food, and the kids don't get expenses.
Their dad had a stroke.

Speaker 2 I know.

Speaker 2 I have a daughter in college.

Speaker 1 So we pay for that.

Speaker 3 What's the tuition on that? Monthly.

Speaker 2 Tuition, actually, we just got it approved for

Speaker 2 FAFSPA gave us a, it's not FAFSPA, the government gave her enough to cover this month the this semester's tuition so I'm not out any more money now we had to prove a bunch of stuff and okay then we're not at eight thousand dollars because she gets a job while she's in school yes to cover her expenses is she living at home

Speaker 2 no no she's in an apartment she had worked all summer yeah she's gonna have to self-support she's gonna have to have self-support

Speaker 1 yes yes she didn't have a a choice. She didn't have a choice.
That's where you all are. Okay.
Because here's the thing.

Speaker 1 You guys have got to get your outgo

Speaker 1 within your income because otherwise you're going to burn through the 401k and then you don't have a plan.

Speaker 1 Right. There's nothing you can do then.

Speaker 1 Okay. So

Speaker 1 we've got to do something to get incomes coming in in addition to the disability. I don't know what that is or how that is.

Speaker 3 Yeah, I was going to ask really quick,

Speaker 3 what kind of work did you do before, Julia?

Speaker 2 So I have a psychology degree. Okay.

Speaker 2 And I was an office manager. Okay.

Speaker 1 Great. Great answer.

Speaker 3 Because I'm just going to say this really quickly. Yes, you have to be anchored at home,

Speaker 3 but it sounds like to me you could put in a pretty good day there with some slight interruptions. Remote work.
Remote work right now.

Speaker 2 Well, he goes, we have physical therapy, speech therapy, occupational therapy that I take him to.

Speaker 2 I probably could do

Speaker 3 Julia. You're in a desperate situation, and I want to be very sensitive to this, but this is where friends and family come in.
You are the breadwinner now.

Speaker 3 And so we got to have friends and family that we rely on. And maybe the kids, one of the kids can drive.
And

Speaker 3 we got to figure this out to get him to this therapy.

Speaker 1 But you can do remote work. You can't be in a burn rate of $5,000 a month and survive.

Speaker 3 You can be making $20,000 to $25 an hour in a remote situation doing

Speaker 3 the same kind of work you did as an office manager. It's organizational in nature.
You could be a remote assistant.

Speaker 3 I want you to do the research on the type of work you can do because I think you'd be surprised the kind of income you can make.

Speaker 1 You have to make that right now.

Speaker 1 He's not going to be doing coding anytime soon, the guy you described to me. No.

Speaker 2 No,

Speaker 2 he tells me he is.

Speaker 1 I know, but the guy you described to me is not. No.

Speaker 1 He's not even sending an email back. So not yet.
I hope he is. I hope he heals.
I hope the therapy kicks in. But I'm saying if this takes 12 months

Speaker 1 and you're 3,000 coming in with disability and $8,000 going out, that's a $5,000 burn rate. You see what I'm doing? That doesn't work.

Speaker 1 You've got to get the burn rate down and get the incomes up a little bit.

Speaker 1 It doesn't have to be, you don't have to make $100,000 a year, but you've got to get to survival level mathematically where you're breaking even.

Speaker 1 And when you do that, then if you need to take a little out of the 401k for one little short period of time, fine.

Speaker 1 But do you want to just burn and burn and burn and burn and burn this 401k because you didn't make those other two adjustments? No, you do not. Yeah.
No, you do not.

Speaker 1 That's not going to be at the end of a 10-year discussion on this. Where are you? You don't want to have done that.

Speaker 1 You can,

Speaker 1 but you don't want to.

Speaker 1 You want to begin to make the the life adjustments to the finances, to the math that fit with this tragedy that you guys are going through. Man, you got a tough sled here, girl.
Yeah. I'm sorry.

Speaker 1 And yeah, friends and family helping, your church helping,

Speaker 1 people coming around you, putting their arms around you and helping with different things.

Speaker 1 It can be financially helping, but it can also be taking him to speech therapy because you can work that week, that day.

Speaker 1 It can be something like that. The 17-year-old can step in and do some of that too.
But you can't just be the provider to two grown girls anymore.

Speaker 1 You do not have that option at least for the next 12 months. It doesn't sound like

Speaker 1 they're going to have very limited lives and that's going to be part of their story when they're 30. That when I was 17, my dad had a stroke.
It's part of our story.

Speaker 1 Thank you for joining us, America.

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Speaker 1 Yeah.

Speaker 1 That's the plan. All the Ramsey personalities, we got Stephen Kurtz Chapman, comedian Trey Kennedy, who I'm paying to make fun of me, apparently.
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Speaker 1 Got just a moment before they're all gone, boys and girls. Justin's in Des Moines, Iowa.
Hi, Justin. How are you?

Speaker 2 Hey, I'm doing great, Dave. Thanks for taking my call.
Sure.

Speaker 1 What's up?

Speaker 2 Well, yeah, I'm a grandfather of six, so not quite up to your level yet, Dave, but I'm catching you.

Speaker 1 Okay, good.

Speaker 2 Well, I have two of them actually have graduated high school within the last three years.

Speaker 2 And, you know, I gave them a book.

Speaker 2 I gave them your total money makeover book when they graduated as a graduation gift and kind of inscribed in there some things that I learned from the book that I found really interesting and really helpful through life.

Speaker 2 Just basically winning with money makes life a heck of a lot easier. And

Speaker 2 I'm now at the point where I actually have a little bit more money and would like to give them to them now rather than wait until I'm dead and gone and try to help them pay down on some of the debt that they do have.

Speaker 2 They do have, both of them have car loans. One of them has some credit card debt.
And what I don't want to do is become an enabler.

Speaker 2 I don't want to be grandpa will give me two, $3,000 a year if I go ask him.

Speaker 2 It's just right now I'm working and

Speaker 2 I'd like to set him up to succeed. And I thought maybe of opening a Roth IRA for them and putting a little bit towards that in there.
But I do know they have this debt out there.

Speaker 2 And your principles would say pay down the debt first. So, I wanted to get your thoughts.

Speaker 1 The best gift you can give them is

Speaker 1 for them to follow your financial example.

Speaker 1 That's a bigger gift than money. You can give someone who misbehaves with money money, and it will leave, obviously.
You give someone knowledge,

Speaker 1 um, and they'll always have money. So, I, I, if I were in your shoes, I would tie the gift to a behavior that I want.

Speaker 1 So,

Speaker 1 you know,

Speaker 1 I'm willing to give you a gift of up to X number of dollars. You said $2,000 or $3,000, right?

Speaker 2 Yeah, about.

Speaker 1 Okay. I'm willing to give you a $3,000 gift.
And the way I'm going to do it is that's a match

Speaker 1 on you paying down your debt on your car.

Speaker 1 So if you pay down your car by $3,000, I'll put another $3,000 $3,000 with it and we'll knock six off your car.

Speaker 1 If you pay down your car nothing other than pay the monthly payment, I'm going to give you nothing.

Speaker 2 You're right. Gotcha.

Speaker 1 That's what I would do.

Speaker 2 No, that's great. No, I was thinking of something along that line.
I just, what I hate is I don't want them to come to, you know, Thanksgiving, as you always say, when it's not alone.

Speaker 1 No, no, no.

Speaker 2 Yeah. I don't want them to think grandpa's going to lecture me again about paying down my debt this time.

Speaker 1 No, I'm not going to lecture at all. I'm just not going to give you anything.

Speaker 2 Right, right. I like it.

Speaker 1 You know, I would wrap this in like a cup of coffee in a discussion and say,

Speaker 1 I know that

Speaker 1 if I give a man a fish, he eats for a day. If I teach him to fish, he eats for a lifetime.

Speaker 2 Right, right. Well, that's what I was trying to do with your book.

Speaker 1 Yeah, and so this is me talking to my grandson if I'm you. I'm telling him that.

Speaker 1 And so what I want to do is your grandpa, because I love you more than life itself, is I want to make sure you learn some of the principles that will cause you to become very successful.

Speaker 1 Not because I lectured you, but if you learn those things, you're going to make a lot of money. And one of those is getting out of debt.

Speaker 1 And so what I'm going to do is I'm going to help you get your car paid off.

Speaker 1 And what I'm going to offer you is if you want to pay extra on your car, every time you pay extra on your car, I'll pay extra that same amount.

Speaker 1 You just send me the receipt and I'll send it right into the bank.

Speaker 1 And up to $3,000 because because I want to teach you to get out of debt.

Speaker 1 And that's why I'm doing this, honey, because I love you. And

Speaker 1 this is wisdom.

Speaker 1 And I'm not going to pester you about it. If you don't do it, I'm just won't send you any money.
I'm not going to send you any money anyway. I'm going to send it to your bank.

Speaker 1 Right, right. Oh, I love that idea.
Thanks, Dave. Yeah, but just couch it in a loving, teachable cup of coffee, right? Yeah, I think that's right.
And I would also say model it.

Speaker 3 And you said it best. I mean, they watch it.
So instead of sitting them down at Thanksgiving and Christmas and being the grandfather that's teaching and harping, they're not ready for it.

Speaker 3 And, you know, the old phrase, when the student is ready, the teacher appears. That's kind of true.
But in this case, you know what I'd do?

Speaker 3 I'd be talking in earshot so they could hear you talking about your investments. And, you know, it's one of those deals.
I do that with my kids on certain things.

Speaker 3 I talk to my friends about certain things. that I want them to hear.

Speaker 3 And so I'm not telling them this. I'm just going, well, you know, I thought about this the other day, talking about the election and politics in my house.

Speaker 3 One of my kids doesn't doesn't see things the way I see things.

Speaker 1 And we've never had, we've never had an ill word about it. Oh, no.
Yeah.

Speaker 1 I know. Right.
I know. But you know what I do?

Speaker 3 I'll talk about things in earshot. And then they know what I think.

Speaker 3 And I'm not telling them what to think.

Speaker 1 They know what I think.

Speaker 3 And I've never sat down and said, you got to think this way, you got to do this. But they know.
And I think the same thing with Dave is saying that. I think modeling the way and letting them see it.

Speaker 3 And it's a part of everything that they come in contact with you,

Speaker 3 they'll pick it up and they may not agree with it at first, but I just think that that truth, which is what we teach, is I think the best model on finances.

Speaker 3 So that would be the approach that I would take as the grandfather.

Speaker 1 Yeah, more is what Rachel says, more is caught than taught. Yeah.
Classes. And that's a great line.
That's a good line.

Speaker 1 It's from the old book, Smart Money, Smart Kids, that she and I did about teaching your kids. how to handle money.
I mean, I think about that with my grandpa. Yeah.

Speaker 1 My grandpa Ramsey was, I mean, he saved every penny. Yeah.
I mean, you're there, you pull a nail out of the board, you straighten the nail out, you put it in the coffee.

Speaker 3 You knew it. You just saw it at work.
Yeah.

Speaker 1 And he

Speaker 1 had the garden out there, and we go work the garden. Why? Because

Speaker 1 that's why we get vegetables, and they're, you know, they're better to start with, but they're also cheaper.

Speaker 1 And so, um, you know, everything, you know, everything was a lesson built into everything. And he was head cost accountant in alcohol aluminum, right? Wow.

Speaker 1 And always drove a used car and always had money in the bank.

Speaker 1 Always in great shape. Very conservative.

Speaker 1 But

Speaker 1 I was a cool dude. So I went and bought a Jaguar.
I'm making all this money in real estate. And I went and bought a Jaguar that I couldn't afford.
And I wheel up in the yard down there with a Jaguar.

Speaker 1 And he comes out and he goes, what is that?

Speaker 1 So, Grandpa, that's a Jaguar. He goes, really?

Speaker 1 He goes, what'd that cost?

Speaker 1 And I told him, he goes, dad, gum, that's awful. I said, awful? It's one of the finest automobiles out there.
And he goes, yeah.

Speaker 1 What will that car be worth in 10 years? And I said, well, it'll probably be worth, you know.

Speaker 1 And he said, I said, but it's a great investment. And he goes, honey, my investments go up.

Speaker 3 That's great.

Speaker 1 Yeah.

Speaker 3 Just such a classic way of confronting that.

Speaker 1 Just ask questions. Right.
My investments go up. Right.
And, you know, that's

Speaker 1 35 years ago that story happened. And I can see it and feel it right now.
It's fresh. Yeah.
So that's the power grandpa's have. You got to be careful with it.
That's right. That's right.

Speaker 3 You get the opportunity to kind of say things that or do things that they're sick of their parents doing. They'll put up with you.
Yeah. There's a little extra kind of.

Speaker 1 Yeah.

Speaker 3 So model it. Talk about it all the time to everybody, not to them.
Don't preach it there.

Speaker 1 And I'm thinking to myself, what do you know? You're driving a 10-year-old truck. Yeah.
And he had more money. Oh, yeah.
Buried in the backyard Than I had, yeah, for sure.

Speaker 1 I didn't have two nickels rubbed together, but I was looking good. Right.
Yeah. What an idiot.
This is the Ramsey Show.

Speaker 1 Thank you for joining us, America. After we finish this segment, if you want to hear the next

Speaker 1 segment of the show, jump over to the Ramsey Network app. It is a free app.
that you can download and you get the uh what is the third hour on talk radio if you're there.

Speaker 1 And you can catch, it's all video and audio and everything, everything you want. You can search the show.
You get all kinds of stuff there. And you can ask questions there as well.

Speaker 1 You can send us emails on the app. So the Ramsey Network app is a free download.
There is no subscription. And you get all kinds of behind-the-scenes extra interviews, early access to things.

Speaker 1 Like we put the Donald Trump interview on there the day before we put it on everything else, that kind of stuff.

Speaker 1 And you get the third hour, the third segment of the show here, which comes up up after we finish right now.

Speaker 1 So, Ramsey Network app, it's a free download, of course, and Apple and Google Play and all that. Be sure you go check it out.
A question there comes from Eddie.

Speaker 1 I have $1 million in my 401k, but after I pay taxes, when I withdraw funds, I will only pocket about $600. Am I still considered a 401k millionaire? Yes.

Speaker 1 Today,

Speaker 1 your net worth,

Speaker 1 what you own,

Speaker 1 minus what you owe, equals over a million dollars. So, yes, you're a millionaire.
That is the definition of millionaire. And people say net worth millionaire.
Well, that's redundant.

Speaker 1 That's like saying your car is blue-blue.

Speaker 1 No, it's just blue. That's it.
I mean, that's it. So, that's the whole thing.
So,

Speaker 1 there is, you know, if you, what you own minus what you owe. Now, it doesn't mean that you won't have those taxes, and it doesn't mean that doesn't affect it.
But today,

Speaker 1 you have a million dollars.

Speaker 1 Now, if you took it out, you only had 600 after paying taxes, then you wouldn't have a million dollars anymore. Ta-da.
That's how this works. Wow, that was good.

Speaker 1 It reminded me of the old Steve Martin thing: how to be a millionaire. First, get a million dollars.

Speaker 1 How to be a millionaire and not pay taxes. First, get a million dollars.
Then don't pay taxes. That was a great comedy bit.
But yeah, that's back from the 70s.

Speaker 1 Yeah, that's it, though.

Speaker 1 And the good news is this, Eddie.

Speaker 1 You're using the Ramsey Network app, so I'm guessing you're under 80. And I'm guessing this money is going to continue to grow.

Speaker 1 And that net of taxes, when you take it out someday soon, you'll have more than a million dollars anyway. So it's a redundant.

Speaker 1 I mean, it's a question that really doesn't matter at this stage of the game. John is in Vancouver, Washington.
Hi, John. Welcome to the Ramsey Show.

Speaker 2 I'm really glad to hear your guys' voice. I was worried that I'd get somebody who wouldn't understand this question.

Speaker 1 Okay.

Speaker 2 So

Speaker 2 I got night hunting equipment. So a thermoscope, nods, night observation device, helmets,

Speaker 2 lasers. I got all the gadgets.

Speaker 2 But I owe $20,000 on my car. I could get right around that if I sell that equipment, but

Speaker 2 I really don't want to sell it. I'm not going to lie about it.

Speaker 1 Okay. I have other stuff.
What are you hunting at night that you're so amped up about this?

Speaker 2 Coyotes.

Speaker 3 I was thinking hogs or something. Yeah.

Speaker 1 Okay.

Speaker 1 I knew it was something legal. I didn't, I wasn't going to accuse you of poaching, but yeah.
Okay.

Speaker 1 Let's see. And you're in Washington State.
So yeah. Yeah.
There you go. You got some.
What's your income?

Speaker 2 So my base wage is $99,000. Right now I'm on track for $150,000.

Speaker 1 Okay.

Speaker 1 What's the car worth?

Speaker 2 I believe it's worth like $32,000.

Speaker 1 Are you single?

Speaker 2 I look at Marketplace.

Speaker 2 No, I'm engaged, but

Speaker 2 I'm not married yet.

Speaker 1 It really hasn't got anything to do with the fact that I empathize with the equipment, and I think it's cool. It hasn't got anything to do with that.

Speaker 1 The principle is can you become debt-free very, very quickly without selling this equipment or without selling this car? You're making $150,000. You're a single guy.
You have one debt of $20,000.

Speaker 1 Yeah.

Speaker 1 You know, what would you, how much of your lifestyle will you sacrifice?

Speaker 1 to keep the hunting equipment and get the car paid off in three months.

Speaker 2 Well, and that's the thing. I'm still going to work the same amount of overtime because my phone's ringing like crazy right now.

Speaker 1 That wasn't what I said.

Speaker 2 I would likely make that in three months, three, four.

Speaker 1 I know.

Speaker 1 You make enough to pay the car off in three months. You told me that.
You make $150,000.

Speaker 1 You can pay the car off in three months and have absolutely no life during that three months and keep your stuff.

Speaker 1 Yeah.

Speaker 1 So

Speaker 1 there's a third thing we can sacrifice here. We can either sacrifice sacrifice the hunting gear, we can sacrifice the car, or we can sacrifice the next three months of your life.

Speaker 1 Right.

Speaker 1 I'm going with C, the next three months of your life. Keep your car and keep your hunting gear.

Speaker 1 But if it's going to take you three years to get out of debt, we're selling all your crap.

Speaker 2 Right.

Speaker 1 But it doesn't take you three years.

Speaker 2 And if the game changed and if the game changed and I lost my job, that stuff would go right out the door. I'm not worried about that.

Speaker 2 I just feel like I make enough to not sell it and then end up rebuying it, if that makes sense.

Speaker 3 Yeah, did somebody tell you to sell it or is this just your idea?

Speaker 1 You know, if it took you a long time to get out of debt, I would sell it. But I don't, regardless of whether you buy it back later, it'll ba-ba-ba- all that crap.

Speaker 1 But the bottom line is you could do this really, really quick.

Speaker 1 And while you're really tired from working all the time and you're pissed because you can't go out to eat and your girlfriend's pissed because you won't take her out to eat because you're not doing nothing but getting a stinking car paid off in the next 90 days.

Speaker 1 I'm talking February 1. You're done.

Speaker 2 Right.

Speaker 1 Okay.

Speaker 1 You got no life. If you're willing to do that, yeah, that's what I'd do.
That's what I personally would do because I don't think you, the same thing's true of your car.

Speaker 1 You sell it, you're going to get another one later. Same stuff.
Right. So now, part of that also entails that you raise your right hand and quit buying crap for hunting.
You got got enough. Right.

Speaker 1 Forever. I mean, you don't need anything for a long time.
The outfit you just described to me is world-class.

Speaker 1 Right. Yeah.
Okay.

Speaker 3 And here's the benefit. When everybody's mad at him, he's mad at himself.
He goes out late at night and shoots a coyote.

Speaker 1 It's good therapy. Or six of them.
Okay.

Speaker 3 It's like a video game. Yeah, they don't have

Speaker 1 They don't have a bounty on those hides in Washington, do they?

Speaker 2 No, they don't. Oh, darn.

Speaker 1 Thought we could make this into a side hustle. Okay.
No, I see where we're going there. I like that.
That's a good call.

Speaker 1 All right. Just open season because the dadgum things are eating everything.

Speaker 1 You would change your advice to rice and beef to living in a tree and shooting coyotes skins, right?

Speaker 1 But the,

Speaker 1 yeah.

Speaker 1 Have some fun with this, but the principle is not the hunting gear stuff, John. The principle is you quit buying things you can't afford and you have been because you had a car debt.

Speaker 1 You shouldn't have been this invested in this hunting gear. You got that out of order.
You're admitting that.

Speaker 1 And the principle is that you can pay all this stuff off very, very quickly by working like a crazy man. And that's what I would do.

Speaker 1 And then you're going to go into the marriage with zero debt and a well-equipped or well-equipped gun safe. And so that was a nice slip there.
Clipped. Clipped.
I see what you did there.

Speaker 1 See what I did there? Yeah.

Speaker 1 Lots of clips. Yeah.
Lots of mags there. But the

Speaker 1 fun. That's fun.
Yeah. I mean, the same's true with your boat.
Same's true with your collection of coach purses, ladies. Same's true with whatever it is we're dealing with.

Speaker 1 I mean, at what point do we have to sell off all this junk? It's if we can't get out of debt

Speaker 1 super quick

Speaker 1 without doing it, then the junk has to go. You sell so much stuff, the kids think they're next.

Speaker 1 You put the dog on eBay, the cat on Craigslist.

Speaker 3 You've said this for years, and I think you're right, and this applies here. If he were to sell all that equipment, fine, but it doesn't really necessarily curb the behavior that this discipline will.

Speaker 3 And it's that quick fix doesn't really help stop the problem that got him there.

Speaker 1 Yeah, John, if you got to go do nothing but work for 90 days and you go, okay, next time

Speaker 1 next time I'm not buying stuff while I got and have a car debt. Because, you know, in a sense, we financed a bunch of hunting gear against a car in one sense.

Speaker 3 I think you could make the case.

Speaker 1 Yeah, that's kind of what happened here. Yeah.
And so the way we're going to do that is just go crazy for a short period of time. See none of the above.

Speaker 1 That puts us hour of the Ramsey Show in the books.