Building Wealth Is a Journey – Don’t Rush the Process

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.

Speaker 1 Jade Washall, Washall, Ramsey Personality, number one best-selling author, is my co-host today as we answer your questions about life and money. The phone number is 888-825-5225.

Speaker 1 I'm Dave Ramsey, your host. Thanks for joining us.
Daniel is in Kansas City. Hey, Daniel, how are you?

Speaker 2 I've been better, Dave. How are you?

Speaker 1 Better than I deserve, sir. What's up in your world?

Speaker 4 My wife is about to pass away and she hid debt from me.

Speaker 5 that I didn't know that she had pre to our getting married five years ago.

Speaker 1 Wow. I'm so sorry.

Speaker 1 So

Speaker 1 what is her illness?

Speaker 8 She has cirrhosis of the liver and it's not working and she doesn't qualify for a

Speaker 8 transplant and then it's starting to affect her other organs

Speaker 7 and she's kind of going into full shutdown.

Speaker 1 So you've been married five years?

Speaker 4 Yes, sir.

Speaker 1 I'm so sorry. How old is she?

Speaker 7 She's 44.

Speaker 1 Oh my goodness.

Speaker 1 How old are you?

Speaker 1 I'm 52. Okay.

Speaker 1 Oh man.

Speaker 1 Okay. And you opened this with she's hidden debt from you during the five years that you were married.
So she ran up debt in her name?

Speaker 5 She ran up debt in her name pre to our getting married back when she was in college.

Speaker 7 This is the second marriage for both of us.

Speaker 4 I have one daughter with her, technically a stepdaughter, but I consider her my daughter

Speaker 4 totally and was saving money for her to go to college.

Speaker 7 And we were, I thought we were anyway, debt-free except for our house.

Speaker 1 So the debt.

Speaker 11 The debt was rung up before you guys got married. You just didn't know about it.

Speaker 5 I did not know about it.

Speaker 1 How much debt?

Speaker 7 Her parents said she ran up $50,000, but I've only received a bill for $15,000.

Speaker 1 And it's on what kind of debt?

Speaker 5 Student loan debt.

Speaker 1 Federally insured?

Speaker 5 I don't know.

Speaker 7 I just received it the other day. It's actually from a bill collection agency.

Speaker 9 I don't have it in front of me.

Speaker 4 I apologize.

Speaker 1 That's okay.

Speaker 11 Is it only you might not know know this, is it only in her name or did her parents sign for it too?

Speaker 9 No, it's only in her name.

Speaker 7 Her parents offered to pay for her to go to school as long as she showed them the grades.

Speaker 7 And evidently, she took the money, was in school for a hot minute, and I didn't know this because she's hidden a bunch of stuff from me

Speaker 7 and used the money to go travel

Speaker 8 and went to Europe and blew the money.

Speaker 1 All right.

Speaker 1 Well, let's talk through a couple of possibilities

Speaker 1 from a tactical standpoint. I'm sorry, Daniel.
I know your heart's broken in about three different places.

Speaker 1 The deception, the loss,

Speaker 1 the illness, everything that's going on here that's just overwhelming.

Speaker 1 And all of that's just a tragedy. I'm so sorry.
Student loan debt that is federally insured

Speaker 1 is forgiven when someone passes away.

Speaker 1 Okay.

Speaker 1 So if this is a federal student loan debt, there's no issue. When she passes away, you will,

Speaker 1 or her parents for that matter, can send them a copy of the death certificate, and the student loan just evaporates. It's that simple.
And don't pay it.

Speaker 1 Okay, that's probably what we're dealing with.

Speaker 1 Okay?

Speaker 1 Let's go another route in case that's not it. Let's pretend this is private student loan debt that she borrowed it from the university rather than through FAFSA and all that, right?

Speaker 1 And that is not.

Speaker 1 I'm sorry?

Speaker 8 I believe she did because her parents' income was too high for her to get FAFSA.

Speaker 1 Well, this is student.

Speaker 1 There's not an income limit on getting a federally insured student loan.

Speaker 1 Okay.

Speaker 1 Okay, so I'm thinking this is a federally insured student loan. If it's not, let's discuss that.
So

Speaker 1 do you own

Speaker 1 anything jointly with her?

Speaker 1 And both of your names on it.

Speaker 5 The only thing with both our names on it is one car. Okay.

Speaker 7 Her credit, her credit from her previous marriage was

Speaker 5 she's had two bankruptcies that she never told me about because I I had money issues in my first marriage and got that all paid off.

Speaker 4 And I got your book, The Total Money Makeover, and followed that

Speaker 9 to get out of debt.

Speaker 1 There's a mountain of deception here. Okay.

Speaker 1 All right.

Speaker 1 Let's pretend that this is not federally insured.

Speaker 1 I would have you con if it's not a federally insured student loan that is forgiven upon death, then I would have you contact an attorney there in Kansas City on probate law in Kansas. In most states,

Speaker 1 when someone passes away,

Speaker 1 what they own

Speaker 1 stands good for what they owe

Speaker 1 and nothing else does. Just because you're married to her in most states does not mean you're liable for her debts that have her name on it.

Speaker 1 And so the car

Speaker 1 is hers, a portion of it. And if the car has any value above what is owed, that might be sold and paid towards this debt.

Speaker 1 But other than that, you don't have anything that is, she doesn't own anything, it doesn't sound like.

Speaker 5 No, sir, she does not.

Speaker 1 Okay, so let's pretend that she were single and she had a car and that was all and she owed more on the car than it was worth and

Speaker 1 you pass away with credit card debt and student loan debt. There's no assets to pay the debts.
Those creditors get nothing when that person passes away with nothing. Your kids aren't responsible.

Speaker 1 Your parents aren't responsible. And in most states, your husband is not responsible, unless, especially in a situation like this where the debt occurred prior to the marriage.
Yeah, absolutely.

Speaker 1 So I'm not an attorney in Kansas. I'm not an attorney, but I'm not an attorney in Kansas for sure.
So I'd want you to check that out.

Speaker 1 You won't have to bother and do that if you can discover that these student loans are federally insured, and I'm giving you a high probability they are.

Speaker 1 If they're federally insured, it's no issue at all. You've got no issue.

Speaker 1 You're not liable, period. No one's liable.
No one pays anything. If someone becomes permanently disabled or passes away with a federally insured student loan, it's forgiven.
It's gone.

Speaker 1 So you're okay, other than your broken heart.

Speaker 1 Okay. And your broken heart from losing your wife and to liver cirrhosis, cirrhosis of the liver, and your broken heart from all the deception that's gone on.

Speaker 1 And both are legitimate pain, brother. I'm sorry you're facing all this.

Speaker 11 Yeah,

Speaker 11 he's got to get in counseling and deal with that because he's got a lot going on. He's got the loss.

Speaker 11 But then it's tough to lose someone that you're angry at or frustrated at for something that's gone on, right?

Speaker 11 And so I think that's the problem.

Speaker 1 Obviously, she had a pattern of this in her life. Yeah.
And now it's coming to a tragic

Speaker 1 conclusion. It's so tough.
Wow. Ouch.

Speaker 1 Ouch.

Speaker 1 This is the Ramsey Show.

Speaker 1 Jade Washaw Ramsey personality is my co-host today.

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Speaker 1 Or if you're on YouTube or podcasts, just click the link there in the owl notes. Rachel's with us.
Rachel is in Cleveland, Ohio. Hi, Rachel.
How are you?

Speaker 12 I'm doing well, thanks. How are you?

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

Speaker 12 I have a question, and it is, can I

Speaker 12 can I reasonably consider home ownership in my future at my salary point?

Speaker 12 It is, I make about $42,000 a year before taxes. I work full-time in ministry.
I love what I do. And that's just, my question is, can I retire well someday and have

Speaker 12 home ownership as part of my future?

Speaker 1 However, immediately.

Speaker 12 $35,000.

Speaker 1 Okay.

Speaker 1 All right, cool.

Speaker 11 I think that it's possible. I think that right now you make $42,000, but I can't imagine that your salary will never go up.
So I think that there's an opportunity there.

Speaker 11 But it is going to depend on the decisions you make today. So my first question would be, do you have debt? Tell me a little bit more about your snapshot here.

Speaker 17 Okay, so I do have a little bit of debt.

Speaker 12 I have about $7,000. I'm working on paying it off.

Speaker 17 According to my figures, I'll probably be debt-free by June or July.

Speaker 12 I've paid off about $12,000 to date so far this year.

Speaker 1 Very good. Very good.

Speaker 11 Okay, and so after that, you're just walking the baby steps through, which anybody can do.

Speaker 11 The speed in which this happens is going to be directly reflected by your salary. So I'm not going to say that it doesn't matter.
And there's something to that.

Speaker 11 And then the other part of this is, okay, are we choosing an affordable place to live? You're in Cleveland, Ohio. I mean, what's it cost for you to buy something for, are you single?

Speaker 12 I am single, yes. And I don't live quite in Cleveland.
I live in a small town. I've seen quite a few houses recently for between $80,000 and $120,000.

Speaker 1 Okay.

Speaker 12 It would be kind of what I was looking at.

Speaker 1 That's very doable on your income.

Speaker 11 And what I would do is we've got a really great home mortgage calculator. It's like how much home can I afford?

Speaker 11 And so if I were in your shoes, I'd be trying to put real numbers to these question marks. And I'd say, okay, first things first, yeah, how long is it going to take me to pay off this 7,000?

Speaker 11 Then how long is it going to take me to save three to six months of expenses?

Speaker 11 Then, and a lot of those equations, if I were you, Rachel, I would reverse engineer them and say, okay, for three to six months of expenses, let's say I need $10,000.

Speaker 11 If I do the math on what I'm making now, it's going to take me X amount of time.

Speaker 11 And then you get to decide, is that frame okay with me because if it's not okay with me what do I need to do to make that go faster and even though you're in ministry I got to believe that you've got time on your hands to add to your your income by doing a side hustle right

Speaker 13 I do have a second job I work about 12 to 14 hours a week in a second job okay okay hey what is what is your ministry what do you do I work in a children's ministry.

Speaker 17 We are basically a discipleship program for kids.

Speaker 1 Good. Very good.
That's about as worthy a thing as I can think a human can do. Way to go.
Proud of you. Thank you.
So here's the thing.

Speaker 1 The probability that 15 years from today, you're 50 years old and you're doing this exact same thing, making this exact same income, is zero.

Speaker 1 There's no chance.

Speaker 1 Okay. You will either be making some more, you might still be there doing this,

Speaker 1 but you'll be making some more.

Speaker 1 But even the probability of that, just saying, okay, I'm going to be making 52,000, 15 years from now, doing the exact same thing, and I'm a 50-year-old single lady doing children's ministry at that point, that's fairly low.

Speaker 1 I mean, you're pretty much Mother Teresa if you're doing that.

Speaker 1 Okay, you just got the one thing and you stuck with it all the way through, right? And that's not a bad thing. Mother Teresa's obviously had a good gig, right?

Speaker 1 So,

Speaker 1 you know, that's fine if you go that direction, but it's just not the normal path for a typical person in America. And so

Speaker 1 what oftentimes happens is that you find other ways to serve children and you scale it and your income goes up and your expertise and your experience becomes more valuable in the marketplace.

Speaker 1 It might involve a move. It might involve some kind of life change in your situation.
I don't know.

Speaker 1 But typically what happens is that people progress through their life, right?

Speaker 1 And so and that includes their income and sometimes it means some stair-stepping on their careers and those types of things. So I think that's really your future.

Speaker 1 I just don't know what ⁇ I don't know how to describe it exactly, but I think we can all agree the probability of you being 50 and making exactly the same money doing exactly the same thing is very low.

Speaker 17 And even if I do, there's a slight increase every year.

Speaker 12 I don't know that much.

Speaker 1 Yeah, but I'm just saying, even that's a slight increase. It's not 42,000 so the average household income is $78,000 in America.
That's household, and that includes a whole lot of dinks.

Speaker 1 Double income, no kids. Okay? So that's calculated into that.
So your income is slightly below the average today.

Speaker 1 And that's not a sin. There's nothing wrong with that.
And that doesn't mean you can't do the stuff we just talked about. But you just kind of kind of keep that.
That's my deal.

Speaker 1 And then you're in ministry, and the stuff that we teach is biblical principles of finance, which is stay out of debt, save money, live on a written plan. Those are all from the Bible.

Speaker 1 Live on less than you make. Those are all from the Bible.

Speaker 1 And if you do that and start investing a portion of your income into a good Roth IRA, you could have a serious amount of money at retirement and not have a substantial change in income. That's right.

Speaker 1 If you stayed this track exact.

Speaker 11 Yeah, you're just committing to a more modest lifestyle at the end of the day. And there's nothing wrong with that.
That's your value that you get to choose.

Speaker 1 Yeah, don't call me. You can't call me and say, I was forced to buy a new car.
Right. You can't call me and say,

Speaker 1 I was so tired and fatigued from ministry that I took a year off and went to Europe. You can't call me and do that.
That's not, no. You don't have these options.
You don't have the money to do that.

Speaker 1 So you're in a steady thing and you're going to be a steady person.

Speaker 1 But I like your $80,000, $100,000 house idea. It fits the numbers you're giving me.

Speaker 1 You're not being a princess in this, a negative princess in this

Speaker 1 discussion. So I don't hear that coming from you, but you don't have those options.

Speaker 11 Yeah, you're driving a used Camry for the foreseeable future.

Speaker 1 Exactly. Exactly.
And that's not a bad thing. It's not a bad thing.

Speaker 11 I think that those are the choices that we make when we decide where our passions are going to take us in life career-wise.

Speaker 1 Godliness with contentment is great gain. Rodney is in Atlanta, Georgia.
Hi, Rodney. Welcome to the Ramsey Show.

Speaker 18 Hello, Mr. Dave.
I'm actually, I'm in South South Carolina.

Speaker 1 Okay, that works too. How can I help?

Speaker 4 Yeah, yes, sir.

Speaker 18 I just got a question,

Speaker 14 a couple of questions.

Speaker 18 I'm in pretty good shape financially.

Speaker 4 I have managed to save in cash and sitting at a bank $142,000.

Speaker 1 Wait a minute. And

Speaker 4 I have zero consumer debt,

Speaker 4 no loans,

Speaker 18 not anything. But my mortgage,

Speaker 18 I owe $165,000 on my mortgage, which I'm going to be able to, if I have another good 2025, I'll be able to pay that off next year. So, my question is,

Speaker 4 do I put anything down on my house now?

Speaker 4 Because I've been thinking about just writing a check for $100,000 and putting it straight towards the principal and only owe the $65,000 on it and then just pay it off about this time next year.

Speaker 1 Yep. Yep.
What's your interest rate on the mortgage?

Speaker 4 3.7%.

Speaker 9 Okay.

Speaker 1 That's what you're making on that 100K when you do it.

Speaker 1 You're saving 3.7% on 100K.

Speaker 4 Okay, about how much? Okay, 3.7% on $100,000.

Speaker 9 Okay.

Speaker 1 Yeah, because you just paid, you're not going to be charged 3.7% on that $100,000 because you paid it off. I just paid it off.
And I might pay more than that.

Speaker 1 I don't know what your emergency fund of three to six months of expenses is, but that's all you need. Everything above that, I ought to be dumping towards that mortgage.

Speaker 1 We're on baby step six and wide open. Way to go, Rodney.

Speaker 1 This is the Ramsey Show.

Speaker 1 Jade Walshaw, Ramsey Personality, number one best-selling author, is my co-host today. The Ramsey Show question of the day is brought to you by YReFi.

Speaker 1 Why ReFi refinances defaulted private student loans,

Speaker 1 which are different than federal student loans. YReFi refinances your defaulted private student loan and builds a custom loan based on your ability to pay.

Speaker 1 So kick your private student loan out of your life by going to yrefi.com slash Ramsey. That's the letter Y,

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Speaker 1 dot com slash Ramsey. Might not be in all states.

Speaker 11 All right. Today's question comes from Alex in Florida.
He says, I'm 42, married with no kids, and my wife and I are retired. We clear almost $10,000 a month from our pensions.

Speaker 11 We own brand new vehicles that should last us eight years or so. We own a waterfront home, but we are tied, but we are tired of the heat, hurricanes, and insurance prices.
I bet you are.

Speaker 11 If we buy our dream home for $1 million in cash, we will have over $400,000 in the bank. We have no bills other than our normal expenses, so we save on average $7,000 a month.

Speaker 11 I never dreamed I would be contemplating paying a million cash for anything. I have been penny-pinching and saving for so long that it feels weird to spend.
Is this a stupid idea? Let's see.

Speaker 11 You're 42, married with no kids. You've got this pension.
I would love to know what his current investing rate is if he's continuing to invest any of this money. He doesn't mention any of that.

Speaker 11 He'd still have $400,000 in the bank. Let's just pretend that that's it.
A lump sum is going to double every seven years. So when he's 52, it'll be 800

Speaker 11 plus. So almost a million by that.
I'd probably do it, Dave.

Speaker 1 Would you do it? Absolutely. I'd pay cash for it.
Yeah. There's no reason not to.

Speaker 11 My only concern with you.

Speaker 1 You're sitting with the money to do it. What else are you going to do with it? Take out a a mortgage and put the money in an investment? No.

Speaker 1 Well, the only other option would be. I'm going to buy a poor house to invest it.

Speaker 11 Well, the only other option would be to buy something less expensive in cash. In my mind, that would be the only other option.

Speaker 1 I don't see a need to. I don't either.
I think you buy it. Yeah.
Pay cash for it. No, you're not stupid.

Speaker 1 It is an emotional thing to, you've been sitting on money to let that money go into a house, but it's not like you're spending it.

Speaker 1 If this goes sideways, what are you going to do? Sell the house for a a profit later?

Speaker 11 I mean, here's the thing. He's probably, most of that money probably wasn't just sitting in an account somewhere.
I mean, he's selling the waterfront house to get it. Apparently.

Speaker 11 So that's exactly what you should do. You take the equity, maybe adds a little cash to it, and purchase this house outright.

Speaker 1 Yes, absolutely. And let's see here.

Speaker 1 We own a waterfront home.

Speaker 1 Doesn't say if it's paid for, but, you know, yeah, I'm with you. I'm guessing based on this, we're we're going to sell that, and that's some of the million dollars.

Speaker 1 But anyway, the answer to your question is. Yes.
Yes, pay cash, pay cash, pay cash, pay cash, pay cash. Now, and then take your $10,000 a month, and I'm with Jade.

Speaker 1 You ought to be investing some of it. And your $400,000 doesn't need to be in the bank.
That's a good thing. It needs to be in some good investments.

Speaker 1 So get with a Smart Investor Pro at ramseysolutions.com. Find someone that we're endorsing in your area that you get comfortable with that has the heart of a teacher.

Speaker 1 Start learning about good investments. the bank is not on the list of good investments john's in boise idaho hey john what's up

Speaker 4 hi thanks for taking my call sure how can i help

Speaker 3 uh so my wife and i just pay off our house um and my first instinct was to go ahead and uh ramp up our retirement contributions and try to max those out as much as possible.

Speaker 1 Absolutely.

Speaker 3 But then I'm looking back at what we currently have in our retirement accounts,

Speaker 3 and we got about $623,000 sitting in traditional. And I'm wondering,

Speaker 3 based on our ages, we're 36 and 38, if it would make more sense instead of maxing out new Roth contributions, if we should instead maybe try to focus on converting some of those additional

Speaker 6 or

Speaker 1 traditional retirement contributions to roth you ought to do both uh you ought to max them out and then start working on converting it to roth but i'm not gonna i'm not gonna choose between the two i'm gonna max out first and then i'm gonna get to the above that i'm gonna get to it what's your income

Speaker 3 About 205 household income.

Speaker 1 Okay, and you got no payments and you live in Boise, Idaho, no house payment or anything.

Speaker 1 So

Speaker 1 you're not gonna be able to do that $600,000 in a one-fell one-fell swoop anyway. You don't have the money.

Speaker 3 Right. Well, I mean, we also have some like home upgrades and wife's vehicle needs to be upgraded.

Speaker 1 Okay.

Speaker 3 So I'm kind of looking at the extra money beyond maxing out retirement. You know, a lot of that's going to go that direction.

Speaker 1 That's fine, but that's not for everything. And once the home upgrade's done, the car upgrade's done, then you can start to peck away at it.

Speaker 1 And five years from today, you're going to be making more than 205, agreed?

Speaker 1 Agreed. Yeah.
So just, you know, you're 30. So take a seven-year seven-year plan and let's get that 600 moved by the time you're 40.

Speaker 1 While maxing out, while upgrading the cars, while doing all of this other. You got room.

Speaker 20 Right.

Speaker 3 And then the balance of that traditional at 623 now is going to continue to grow.

Speaker 1 So it's just going to be more taxes as time goes on.

Speaker 1 But that doesn't change it. I'm still going to do ⁇ because here's the thing.
You've got that. under the umbrella.

Speaker 1 If you stop putting money under the umbrella in order order to flip that out, I think that's a bad move.

Speaker 1 I want you to get it all over into Roth. All mine's over into Roth.

Speaker 1 I moved it all over, but I paid cash for it above and beyond maxing out everything and above and beyond being completely debt-free and above and beyond upgrading cars and fixing the house.

Speaker 1 And so, you know, but you're not going to be able to do it quickly unless your income doubles, but you will be able to do it over a five-to-you know, a 10-year period, seven-year period, whatever.

Speaker 1 I mean, you're not going to be 45 asking this question. I can tell you that mathematically.

Speaker 1 Okay.

Speaker 1 So, and so you'll be fine. You're going to get there.
And, you know, but yes, I think that is a good strategy to move traditional to a Roth.

Speaker 11 At what point, okay, I'm trying to think through this. I'm thinking of a good question here.

Speaker 11 So, if you're listening to the show and you say, oh man, Dave, like I've contributed to a traditional 401k most of my working life, I've got a lot over there. At what point do you go,

Speaker 11 this is too much to move? Or, and, or, what's an, what's a fair percentage to have in traditional versus Roth? Maybe that's the better question.

Speaker 1 In game, I don't want you to have any in it, right?

Speaker 11 But if you're, if you've been doing that, that's okay.

Speaker 1 I mean, but I wouldn't be, I wouldn't be continuing traditional. I'd move everything to Roth today

Speaker 1 on fresh contributions.

Speaker 1 And in game, I want you to move it all out into Roth over a period of time. And here's why.
Let's fast-forward this 33-year-old to 65. Sure.
Okay.

Speaker 1 He's not going to cash all of this out suddenly at retirement anyway. That's right.

Speaker 1 And very likely this guy making quarter million dollars a year at 33 years old is going to have a bunch of other non-retirement investments

Speaker 1 like Dave. Right.
Okay. I got a bunch of non-retirement investments called real estate and other things, right? Mutual funds that aren't in a retirement plan.

Speaker 1 So the chances of me actually touching, I'm 64, of ever touching my retirement accounts, it's close to zero. Yeah.
I will never touch them. So now what are we doing?

Speaker 1 Well, now we're looking at 72 and a half RMDs, required minimum distributions. I don't have those because it's Roth.
Yeah.

Speaker 1 Inherited IRAs,

Speaker 1 they are taxable if they're traditional. That's right.
If they're Roth, they're not.

Speaker 1 So Rachel Cruz

Speaker 1 and her brother and sister will be getting someday all of our Roth products. Yeah.
No taxes. And guess what? Let's say I live 25 years from today,

Speaker 1 64 to 90s, right?

Speaker 1 Put what's in there right now, all tax-free, all dropped into their name, tax-free.

Speaker 1 Talk about changing a family family tree.

Speaker 11 My mind is exploding.

Speaker 1 The numbers are astra-freaking nomical. Oh, yeah, they are.
I mean, it's cray-cray how big those numbers are.

Speaker 1 And that's where this kid's going. Yeah.

Speaker 1 Because he's going to have other investments by the time he gets there.

Speaker 1 And if he gets all of this into Roth, he's got the inheritance benefit, the no RMD benefit, because you're really probably not going to use that money to live on.

Speaker 1 It's very good. This is the blueprint.
Yeah, I mean, because this guy's not looking at a $2 million net worth here. This guy's looking at a $12 million net worth here.
He's going to be very wealthy.

Speaker 1 Yeah. Okay.
If he stays on this track, because of the numbers we're giving him with compound interest is magical, people. This is beautiful.
Man, you are a bright guy.

Speaker 1 John, you got to run these numbers out. It'll blow your freaking mind.

Speaker 1 Jade Washaw, Ramsey Personality, is my co-host today. Stacy is in Spokane.
Hi, Stacey. Welcome to the Ramsey Show.

Speaker 21 Hi, Dave, thank you very much for having me on.

Speaker 1 Sure. What's up in your world?

Speaker 21 Yeah, so I would like to just get an idea of how to deal with our situation.

Speaker 17 My husband is up in age.

Speaker 21 He is actually 72, going on 73. He has been working all his life and

Speaker 21 I am only 49.

Speaker 21 I have health issues that prevent me from being able to work a full-time regular job. And so currently what happened was recently, last year,

Speaker 21 we were living on a friend's property taking care of

Speaker 21 the father of the son that lives there. And

Speaker 21 we were doing really well. My husband was working.
We were doing just fine financially. Unfortunately, we didn't have a home there and we

Speaker 21 We were told that the owners of the property, which is multiple family members, were having a dispute and so we were having to get out of that situation due to the circumstances and when we saw what was happening after COVID and everybody losing their homes and losing rentals because people were selling their rentals like crazy we also had pets which was restricted us from getting into a rental

Speaker 21 So we decided to go ahead and purchase a home, knowing that technically the economy wasn't great for doing that. My husband makes about

Speaker 21 with Social Security included because he gets his retirement Social Security as well as his income.

Speaker 21 That is about $90,000 a year. We purchased a home last October at the price of $423,000.
Good Lord. And unfortunately, the interest rate was at 6%,

Speaker 21 like 6.2.

Speaker 21 And so right now, currently, I still owe a school loan debt of about $20,000. I was hospitalized this last summer and now owe $10,000 for a one-night stay.

Speaker 21 And so and then also my daughter, there's no schools in our area that are safe for her to attend, unfortunately.

Speaker 21 And so we had to send her to a boarding school.

Speaker 1 What does that mean when you say there's no school? What does that mean? In Spokane, Washington, the schools are not safe to attend?

Speaker 11 I was was born in Spokane. Tell me what does that mean?

Speaker 21 So actually, we are actually in northern Idaho, but like right next to Spokane.

Speaker 1 And so... In rural Idaho, the schools are not safe to attend.

Speaker 1 Right.

Speaker 1 I'm not buying that.

Speaker 17 They've been pushing the whole

Speaker 1 gaping, you know,

Speaker 1 safe is one thing. I don't agree with what they're pushing is another thing.
That's a different thing. Yeah, that's very different.
Okay.

Speaker 1 So I don't have a problem with that. Okay.
Now,

Speaker 1 so

Speaker 1 what's the question? Why don't you sell the house? Yeah. You bought a house you can't afford.

Speaker 15 Right.

Speaker 1 Sell it. Right.

Speaker 21 And then go with a house.

Speaker 1 Well,

Speaker 1 move to something you can afford.

Speaker 1 Okay. You bought a house you can't afford.

Speaker 15 Yeah.

Speaker 11 And to your point, you're in a rural area that's far less expensive than anything that'd be close to a city. So there should be options, right?

Speaker 1 There are options. Actually,

Speaker 21 unfortunately, the areas out here are really,

Speaker 21 it's gone up.

Speaker 12 Just from the one.

Speaker 1 Stacey, there's not a situation.

Speaker 1 There's not a situation where there are no options except sit there and be bankrupt. Bull.
Okay? You keep pulling the plug on. Everything seems to be forced upon you and you don't have any choices.

Speaker 1 You don't have any choices. You got choices.
You didn't have to send your kid to boarding school.

Speaker 1 You could have up, sold the house, moved to a school system you agreed with in a $200,000 house and had no issues.

Speaker 1 Okay. You weren't forced into any of this.

Speaker 1 But the language you use is as if you're a victim of your own choices. You're not a victim.
Change it. Yeah.
Sell a stupid house. It's a freaking house.
It's a bad decision.

Speaker 1 And you bought it and then you justified it as if there was no other choices. Of course there was other choices.
There's always other choices. We have pets.

Speaker 1 There's lots of choices with pets.

Speaker 1 And I'm not going to bankrupt my family for pets.

Speaker 1 I love my dog. It's one of my favorite people, but I'm not going to bankrupt my family for my pet.
Yeah.

Speaker 11 I also want to challenge the fact, and she said she wasn't working.

Speaker 11 I know she said health issues, but I always filter at this point, whenever we get calls where someone is struggling to work, whether it's because of a disability or health, I always tell this story.

Speaker 11 I bought two recliners on Wayfair. They didn't work and I sent them back and all of the customer service was done via text.

Speaker 11 And I realized there's somebody on the other end doing this whole thing on their computer at home via text.

Speaker 11 There are jobs out there that you don't have to have contact, that you can be on your own timeline. So I even want to challenge the fact that you're not working.

Speaker 11 I bet there's something that you can do. So there's a lot in this conversation that needs to be accounted for.

Speaker 1 Yeah, we've got to get on top of this and in front of it rather than behind it. Everything's not chasing you, kid.
You've got to start chasing life instead of it chasing you.

Speaker 1 So sell the house, move into a house half the price, get the kid back out of the boarding school, homeschool them. If you're not working, homeschool your kid.

Speaker 1 You can control the woke agenda that way.

Speaker 1 And, you know, there's a lot of options here. It's a lot of options.

Speaker 1 But you guys just keep reaching over and doing crap you can't afford, and then you're shocked that you're broke.

Speaker 11 Yeah. And in this situation, you really need to have some foresight when you've got a 72-year-old husband and you're you're 50.

Speaker 11 You've got to start thinking through what the future holds and how you're preparing for that because it's going to hit you like a ton of bricks.

Speaker 1 Now, Sharon is slightly older than me, and she's planning for me to die first.

Speaker 1 So I'm not sure what that means exactly. I need to sleep with one eye open, possibly.
All of our estate plan is predicated on me pre-deceasing her. I'm a little worried about this.

Speaker 1 Of course, she is in much better shape than me, but other than that, you know,

Speaker 1 come on.

Speaker 1 Yeah. So, I mean, yeah, you're right.
And I'm not 20 years or whatever it is, 15 years older. So there you go.

Speaker 1 All right

Speaker 1 Open phones at triple 8 825 5225 Connor is in Pensacola. Hi Connor, what's up?

Speaker 18 Hey Dave, this is how are you?

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

Speaker 4 So I made some bad financial decisions right when I turned 18.

Speaker 10 I thought credit meant I was rich.

Speaker 1 So I me too. You're the only one, Connor.

Speaker 1 Yeah.

Speaker 23 So I decided to, I was going to start my own lawn care company.

Speaker 10 It worked all out, but I ended up taking out a loan for a truck. Well, I did that.

Speaker 23 I ended up selling the landscape company not for much. I mean, it was just

Speaker 18 $1,300.

Speaker 23 I ended up moving to Florida from Minnesota. And I'm just trying to figure out how to get out of this loan as I have no reason for a truck anymore.

Speaker 4 And I owe about $31,000 on it.

Speaker 23 It's worth about.

Speaker 25 Yeah,

Speaker 23 I owe about thirty one thousand it's worth about twenty six what do you make i've gone down i make twenty four hundred dollars a month what do you do

Speaker 18 uh i just got a job doing logistics sales

Speaker 1 for thirty thousand dollars a year

Speaker 24 it's forty thousand so it's i mean it's really twenty eight hundred a month um but i mean there's potential for commission on average 46 weeks of sale i'm twenty one years old okay and you're working forty hours doing that.

Speaker 23 I'm working about

Speaker 23 50 hours a week, but I'm on a base salary of $40,000 a year.

Speaker 24 After 26 weeks of training, I'm eligible for untapped commission, but

Speaker 7 there's really no guarantee that you'll make commission.

Speaker 11 Well, it's how hard you work. Yeah.

Speaker 1 All right. So you're 21.

Speaker 1 You're in a place where you just moved to. You don't know anybody.
You need six more jobs. Take it to 80 hours a week.

Speaker 1 You need $5,000 to write a check and cover the difference so you can sell the truck, right?

Speaker 1 Correct. Yeah.
I want you to go get $5,000. Ready, set, go.

Speaker 11 Then you're going to have to figure out a way to get something in cash that you can drive around.

Speaker 1 And yeah, I'll get you a $5,000 car.

Speaker 1 So

Speaker 1 we really need $10,000.

Speaker 23 Yeah, that was kind of my plan: to just kind of get rid of this loan and just buy a car cash.

Speaker 1 You can do that.

Speaker 1 You can do it, man. But you're going to be living on beans and rice, and you're going to increase your income.
And there's no eating out. There's no happy hour.
And And I hope you got it.

Speaker 1 There's no weekend trips with the buds.

Speaker 1 You're a broke dude with a truck you can't afford. And the way to get out of that is go to bare bones and attack it with a vengeance.
Yeah.

Speaker 11 And get you a roommate.

Speaker 1 Oh, there we go. Ding, ding.

Speaker 1 This is the Ramsey Show.

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, is my co-host today. This is a Baby Steps Millionaires Theme Hour.
We're going to talk to real millionaires and ask them how they did it.

Speaker 1 We started doing this theme hour several years ago because I kept hearing all the mythology in the marketplace, the lies that are out there about where wealth really comes from.

Speaker 1 People don't seem to know where wealth really comes from. So let me help you with this.
A millionaire is a million-dollar or greater net worth.

Speaker 1 There is only

Speaker 1 one definition of a millionaire. It is a math

Speaker 1 process.

Speaker 1 It's not up to you.

Speaker 1 It has nothing to do with your feelings. It doesn't care what your feelings are.

Speaker 1 Okay.

Speaker 1 What your assets are minus your liabilities is your net worth. What you own minus what you owe.
Not a salary. That is your net worth.
It has nothing to do with your income.

Speaker 1 And your net worth determines if you're a millionaire. When you have a $1 million or greater net worth, whatever you own

Speaker 1 minus whatever you owe.

Speaker 1 And there's no... qualification on that.
This is an accounting term.

Speaker 1 And just because you're on TikTok doesn't mean you get to change it.

Speaker 1 This is a definition.

Speaker 1 And so someone that makes a million dollars might or might not be

Speaker 1 a millionaire. That is not the definition of a millionaire.
When people say net worth millionaire, that's redundant

Speaker 1 because 100% of real millionaires are nil millionaires based on their net worth. You don't need to put an adjective in front of an adjective.
It makes you look stupid. So it's just a millionaire.

Speaker 1 That's all it is. So we're going to talk to people that really have that net worth and ask them where they got it.
And that's what we do here. The phone number is 888-825-5225.

Speaker 1 We're starting with Charlie and Stacey in Midland, Texas. What's your guys' net worth?

Speaker 26 Dave, we think it's about 10.8.

Speaker 1 Hey. Hey, way to go, guys.
Okay, give me a little breakdown by mix on that. How much of that is like investments or retirement, real estate, so on?

Speaker 26 We both have an RA, and they total about 2.5.

Speaker 26 Got two houses, 1.4,

Speaker 26 and then got 6.7 in

Speaker 26 investment account,

Speaker 26 high-yield savings accounts, and land.

Speaker 1 Way to go.

Speaker 1 Good for you. How old are you two?

Speaker 26 61.

Speaker 1 6'1 or 5'1?

Speaker 27 61.

Speaker 1 61. Good.
Okay. How much of this $10.8 million did you inherit?

Speaker 4 Oh, wow.

Speaker 26 About $250,000 three years ago when my mom passed.

Speaker 1 After you were already millionaires.

Speaker 19 You bet, yeah. Okay.

Speaker 26 And I haven't spent a dime of that inheritance.

Speaker 1 Okay. And obviously, that's not what caused you to become a millionaire because you already were.
Now, income. No.

Speaker 1 Your lowest income since you've been working and your highest income since you've been working?

Speaker 26 I think when I got out of vet school in 1990, I got one of the best jobs in my class, and I made $24,000

Speaker 26 health insurance for my family and a car to drive.

Speaker 1 Stacy, you married a rich man.

Speaker 1 $24,000.

Speaker 1 I love it.

Speaker 1 And

Speaker 1 what's yours' best year of income?

Speaker 3 Oh, wow.

Speaker 26 Last couple of years, half a million or so.

Speaker 1 Way to go. So now you own a vet practice, obviously.

Speaker 28 I sold it.

Speaker 1 Ah. I did.
Oh, would you?

Speaker 26 For 34 years.

Speaker 20 Yes.

Speaker 11 Okay. So what portion of the net worth came from that? Would you bring from that, sill?

Speaker 6 Oh,

Speaker 26 that was a bunch of that was just realizing equity in the business, but then there was some goodwill on top of that. But you've got to hear what Stacey, she taught when I was in vet school.

Speaker 26 She can tell you what she taught and coached two sports for when we were going to vet school.

Speaker 1 Okay.

Speaker 27 Yes, I taught elementary PE.

Speaker 16 I coached basketball and tracks. I also taught freshman high school physical education.

Speaker 27 And my starting pay was $15,400.

Speaker 1 Way to go, guys.

Speaker 1 Way to go.

Speaker 26 Teaching and two sports.

Speaker 1 Way to go. Proud of y'all.
So

Speaker 1 what would you, do you think people could still do this today?

Speaker 26 Oh, it's easier today than it was when we did it, Dave.

Speaker 1 Why?

Speaker 28 Way easier.

Speaker 26 There's so many more investment opportunities.

Speaker 26 We didn't have 529s for the kids. We didn't have college savings accounts.
We didn't have health savings accounts. We didn't have 401ks like they do now.

Speaker 26 When you think back to the 90s, when I found out about you, when you're the only vet in a small town, you get to go out in the middle of the night.

Speaker 26 And in the mid-90s, you had the prime time on AM radio about three in the morning.

Speaker 1 I did.

Speaker 1 In Midland, Odessa. I remember this.
That's right.

Speaker 4 Yes.

Speaker 26 And that's where I heard about you.

Speaker 4 That's where I heard about you.

Speaker 19 Wow.

Speaker 1 That's crazy.

Speaker 26 It's so much easier, I think, today, because when you think in the 90s,

Speaker 26 I did not know what a no-load mutual fund was. If you were going to buy stocks, you had to buy a block 100 at a time or something like that.

Speaker 27 And now you can buy fractions.

Speaker 26 It's got to be so much easier now than it was for us.

Speaker 1 Now, the vehicles are a lot cleaner. You're right.
And

Speaker 1 there was no Roth back then either. No, there was not.

Speaker 1 I agree with you. So, what do you guys drive?

Speaker 26 She drives a Subaru.

Speaker 1 Yeah.

Speaker 26 And I drive a three-quarter-ton Aggie Maroon GMC pickup truck.

Speaker 1 Aggie Maroon.

Speaker 1 That's a particular color they sell in Texas. I'm volunteers.

Speaker 20 I really am.

Speaker 11 So,

Speaker 11 how important is budgeting? Were you guys budgeters? Does that play a part in building wealth?

Speaker 19 Yes.

Speaker 1 Yes.

Speaker 4 Yes.

Speaker 27 Yes, Jade. We followed the envelope system and I carried around envelopes, the white envelope, which I penciled on each envelope

Speaker 27 where that cash was going to go, whether it was going to the grocery store, gas, the kids' needs.

Speaker 27 And the envelopes played a huge part

Speaker 27 because it just, it really gave a visual.

Speaker 27 I'm a visual person, and it showed how much money we had and, you know, to use it.

Speaker 15 And when it was gone, it was gone.

Speaker 27 And

Speaker 16 starting off with the program, I was a little hesitant.

Speaker 27 But once we got started, boy, we stuck with it and we just went crazy with it. We also made our kids listen to the show on our trips when we traveled.

Speaker 1 Wow.

Speaker 1 First, Charlie stuck with me in the middle of the night, and then the kids are with the trip. Hey, I'm proud of you guys.
That's amazing. $10.8 million net net worth.

Speaker 1 That's where money comes from, boys and girls. I love it.
Way to go, Charlie and Stacey, hero. Both of you are heroes.
This is the Ramsey Show.

Speaker 1 If you believe a lie,

Speaker 1 an untruth,

Speaker 1 and you act on your beliefs, which everyone does act on their beliefs,

Speaker 1 it leads you astray. In other words,

Speaker 1 if you thought one direction was north and that was actually south,

Speaker 1 you acted on a lie. You acted on

Speaker 1 an untruth and you get what's known as lost, right? You didn't, you know, that way's Florida, that way's Maine. Yeah.

Speaker 1 And you can't head towards Maine and get to Florida. Well, you can.
It's just a long way around, right? So you're going to go all the way around the globe.

Speaker 1 And the same thing's true with building wealth. And that's why we started doing this, because there's so many people out there lying,

Speaker 1 some of them intentionally, and some of them just because they're ignoramuses, about where wealth actually comes from.

Speaker 1 Here's one.

Speaker 1 All wealthy people get their wealth by being crooks.

Speaker 1 That's just completely asinine.

Speaker 1 Let me give you an example, okay? That guy was a veterinarian. Uh-huh.
Okay. If he was a crooked veterinarian, overcharged, people would take their animals somewhere else.

Speaker 11 Yeah, his business would be out of the way.

Speaker 1 If he stole from his customers, they take their business somewhere else.

Speaker 1 Instead, he grew a large business by not being a crook, by being an honest guy, sold the business later, and became very wealthy as a result of doing that. So crooks actually do not prosper.

Speaker 1 Well, crook,

Speaker 1 you can prosper as a crook, but it's not sustainable. It's not a long-term strategy.
And so what we find is most wealth building is long-term.

Speaker 1 Now, you can become wealthy for a hot minute being a crook, but we don't find the typical millionaire to be a crook.

Speaker 1 As a matter of fact, we find the percentage of crooks among them to be lower than the general population percentage of crooks.

Speaker 1 And so, because one of the issues is integrity, it seems to be correlated with building wealth.

Speaker 11 Do you also feel that people have

Speaker 11 sort of a negative framework or an improper framework about millionaires? because A,

Speaker 11 they're thinking of

Speaker 11 celebrity status. They're thinking of people who have 200 million.
And all the, they're not thinking of the everyday person that might have two or three million or eight or ten million, right?

Speaker 1 Well, they've gotten confused between the difference in a billionaire and a millionaire.

Speaker 1 A billionaire has a jet. Right.
A millionaire does not. A billionaire has seven cars.

Speaker 1 A millionaire is driving a,

Speaker 1 what do you call it, an Aggie Maroon

Speaker 1 pickup truck.

Speaker 1 Okay.

Speaker 1 Right. And, you know, a billionaire has five houses.
A millionaire has one medium-sized home.

Speaker 11 Yeah.

Speaker 11 You may not know the person that's sitting next to you has.

Speaker 1 You generally won't know it. That's right.
Okay.

Speaker 1 And the methodology to build a billion-dollar net worth is different than the methodology to build a $10 million network, substantially different. That's right.
Okay.

Speaker 1 And neither one involves being a crook. But I think people get confused.
And I think they get a negative view on wealth because some of the uber-rich are just weird humans. They're just.

Speaker 11 I won't name any names.

Speaker 1 Well, they're just wacko. They're wacko.
I mean, they're not who you want to be.

Speaker 11 That's right.

Speaker 1 But that veterinarian, I want to be him. Yeah.
If you're a young person, you could want to be that guy. He's a man of character, a woman of character.

Speaker 1 She taught phys ed at the high school while he was going through vet school. Shut up.
He made $24,000 a year when he started. Shut up.
You do want to be that couple.

Speaker 1 They're people of character, of substance. But you don't, these wackos that are are on TV and stuff.
And here's the thing. Here's the interesting thing.

Speaker 1 I'm not going to be a wealthy because I'm not going to be a celebrity. Well, only 1.6%

Speaker 1 of millionaires in the United States are celebrities. Wow.
Sports figures, music people, actors, and so on. And a lot of them are just weird.
Yeah.

Speaker 1 Not all of them. Not all of them.
Some of them are normal people that just play a get-fiddle,

Speaker 1 but a lot of them are just weird. I mean, and I know some of them that are weird.
I mean, they're weird.

Speaker 1 And so, you know, that's not normal either. But what is normal is the guy we just talked to.
And that should give you people great hope.

Speaker 1 If you're sitting there going, where's all the hope is gone in America? No, it's not. It's not gone.
Don't let people steal your hope with bad information. That's what this is about.

Speaker 1 Matt is with us in Kansas City. Matt, what's your net worth?

Speaker 25 My net worth is approximately $1.5 million.

Speaker 1 Good for you. Give me a little breakdown by category.

Speaker 25 All right. We have $60,000 that we keep in cash just in the bank just for emergency fund.
Got it. We've got about $100,000 in 529s for our children.

Speaker 1 Good for you.

Speaker 25 We've got about half a million dollars in American funds.

Speaker 25 I've got

Speaker 25 we've paid our home off. It's worth about $400,000.

Speaker 25 And then there's a bunch of other things that kind of break up. We've got a a 401k that's my wife that's $155,000.

Speaker 25 She's vested in a pension. I'm vested in a pension.
She has a retirement plan that's worth about $203,000 if she were to cash it out.

Speaker 25 I've got a deferred comp

Speaker 25 through my work that's got about $70,000 or $80,000 in it.

Speaker 1 Gotcha. Matt, how old are you?

Speaker 25 I'm 45 years old.

Speaker 1 Cool. Wow.
And how much of this $1.5 million did you inherit?

Speaker 25 We inherited zero.

Speaker 1 Zero. And what was your worst year of working income and your all's best year of working income?

Speaker 25 Well, I would say when my wife and I first got married was probably the worst, and it was probably around $60,000 combined.

Speaker 1 Okay.

Speaker 1 What has been your best year?

Speaker 25 Probably this last year was right around $200,000.

Speaker 1 Cool. What do y'all do for a living?

Speaker 25 I'm a state trooper, and my wife is a business analyst for for a large global company that does pet food.

Speaker 1 Got it. Got it.
Okay, cool. And what do you got? Have you got a four-year degree?

Speaker 25 I do. Yes, I have a four-year degree from, at the time, was just from a state college.

Speaker 4 And I taught high school for three years before I changed careers.

Speaker 1 What was your degree in?

Speaker 25 I have a teaching degree in secondary education.

Speaker 1 Gotcha. Okay.
What was your GPA?

Speaker 25 My GPA was about 3.75.

Speaker 1 Good for you. Well done.
Okay, cool. Very good.
What do y'all drive?

Speaker 25 My wife drives a 2020 Jeep Wrangler, a four-door Jeep. I drive a 2001 Jeep Wrangler, and I newly acquired a Harley-Davidson motorcycle to replace one that I'd gotten rid of.

Speaker 25 And we also own a brand new 2024 Toyota CNM minivan for the kids. And I've also got a 2018 Ford F-150 that my 16-year-old is going to be driving.

Speaker 1 When did you? Your 16-year-old has a better car than you have.

Speaker 1 He does.

Speaker 25 I just want him to be in the, I want him to be in the safest thing he could be in.

Speaker 1 Yeah,

Speaker 1 you see some stuff out there on the road, I'm afraid.

Speaker 1 Yeah, I've seen a few things. Yeah.

Speaker 11 When did you get serious about building wealth? Because you're 45 years old. Somebody is listening.
They're maybe 40 or 43 and they're going, gosh, how did this guy do it? When did you get serious?

Speaker 25 We were very fortunate. My uncle Doug gave my wife and I a copy of the Total Money Makeover.
This was probably,

Speaker 19 I want to say about 15 years ago.

Speaker 1 And

Speaker 25 my wife is on the financial side of things and she just ate it up.

Speaker 4 It was really quick for her.

Speaker 9 Everything worked for her.

Speaker 25 We did envelopes. We did peanut butter and jelly.

Speaker 1 We

Speaker 25 did all of those

Speaker 25 things that were talked about in the book.

Speaker 25 So a 15-year horizon from the time you learned the plan till the day that you're calling in today basically absolutely and when we when we started we had car payments on two cars and a house payment so and maybe a little bit of credit card debt maybe just a few thousand dollars worth of credit card debt so you're baby steps millionaires i mean this is pure you did ramsey all the way through absolutely yes wow Very cool.

Speaker 1 I'm proud of you guys.

Speaker 25 Yeah, we're currently using one of your investors in the Kansas City area, and he's been really good to us.

Speaker 9 You know, no complaints from us at all.

Speaker 1 Wow. Proud of you, man.
Very, very well done. Congratulations, sir.
And thank you for being out there protecting the people of Kansas on the highways and byways, brother. Very cool.

Speaker 1 $1.5 million net worth in 15 years from being broke.

Speaker 4 Wow.

Speaker 1 That's a good question you asked there.

Speaker 11 Well, I wanted to paint the picture because people think that this takes 40 years and 50 years to do.

Speaker 1 Our average in our millionaire study that we did is 17 years. This took 15.
Yeah. And he's way above.
He's above a million. Yeah.
Good. This is the Ramsey Show.

Speaker 1 It's a Baby Steps Millionaires Theme Hour. I'm Dave Ramsey, your host.
We're talking to real millionaires. What you own minus what you owe is your net worth, assets minus liabilities.

Speaker 1 When that reaches $1 million or greater, by definition, you are a millionaire. Well, Dave, a million dollars is just not enough anymore.
Well, we're not discussing that today.

Speaker 1 Dave, no one should have that kind of money. It's not a moral construct for you socialists to discuss.
It's a math thing.

Speaker 1 It's a facts

Speaker 1 thing.

Speaker 1 So if you have a million dollars, it's that simple. We want to talk to you.
I don't care where you got it. If you stole it, that's fine.
Call us and tell us. Okay?

Speaker 1 If you want a lottery call us and tell us if you whatever i'd love that story to come through if somebody stole it yeah we'll put you right here on the radio and see if we can't get you convicted of your crime but yeah but i mean really i mean i we've i've talked to a lot of winners

Speaker 1 i talked to people that did the game stop thing and that got a million dollars out of it you know i mean we talked to people that did it ways get bitcoin guys i've talked to them they got a million dollars i've talked to people that did it ways i don't recommend and that the data tells us are not normative yeah don't normally work, but I'll talk to you.

Speaker 1 I don't care. I want to hear, I want everyone in America to hear where wealth really comes from.
So you call 888-825-5225. Diane is in Sacramento.
Diane, what's your net worth?

Speaker 22 $1.2 million.

Speaker 1 Good for you.

Speaker 1 And give me a little breakdown by category, please.

Speaker 22 Well, pretty simple. About $300,000 in home equity and $900,000 in IRAs and an active 401k.

Speaker 1 Good. Good for you.
How old are you?

Speaker 22 69.

Speaker 1 69? Very good. How much of this 1.2 did you inherit?

Speaker 22 Not a penny.

Speaker 1 Z at all. What's your best year of working income and your worst year of working income?

Speaker 22 Working income,

Speaker 22 probably about 95.

Speaker 22 And my worst year was when I was just 18 and started working about $4,000.

Speaker 1 Gotcha. Okay.

Speaker 22 A long time ago.

Speaker 1 I hear you.

Speaker 1 What was your career?

Speaker 22 My career has always been in the insurance industry.

Speaker 1 Good for you. Okay, good.
And do you have a four-year degree?

Speaker 22 No, I do not.

Speaker 1 No, okay, good. Very cool.
All right. Do you think people can still do this today?

Speaker 1 Absolutely. Why?

Speaker 22 I think they need someone to give them guidance. and encouragement.
And

Speaker 22 I don't know. One of the things I'm proudest of are my girls, because they're both doing it.

Speaker 22 And they started hearing this from me at a very young age. And when they were in positions, jobs with 401ks, they both started contributing.

Speaker 22 And I'm excited to see one of my girls just showed me her 401k balance the other day, and she's just in her mid-30s. And

Speaker 6 I was so proud of her.

Speaker 1 Yeah, very good.

Speaker 1 Yeah.

Speaker 1 She's going to beat mom.

Speaker 22 They are. They both will.

Speaker 1 Yeah. They absolutely will.

Speaker 22 I did not start investing until I was 40 at the strong encouragement of a coworker. And this was in about the mid-90s before we knew an awful lot about 401ks and certainly before the Roth IRAs.

Speaker 22 But I started

Speaker 22 investing a very tiny amount because my friend Bruce would not let up on me until I did.

Speaker 1 And you never did.

Speaker 1 You never made over 100K.

Speaker 22 Never in my life.

Speaker 1 Wow. I'm proud of you.
What do you drive?

Speaker 22 I have a 2015 little Subaru that's my commuter car and a 2018 Ram halfton pickup because I'm a mountain girl.

Speaker 22 I do not live in the city of Sacramento.

Speaker 1 I love it. I love scales.

Speaker 1 Good for you. We head to the mountains on the weekends.
I like it.

Speaker 19 Oh, no. I live in the mountains.

Speaker 1 Oh, okay. All right.

Speaker 11 You sound intentional. You've been intentional about putting money aside, intentional about teaching your kids the same way of life.
How much has a budget played into this?

Speaker 11 Because we know that that's a big part of this, right? Being intentional about your money.

Speaker 1 Absolutely.

Speaker 4 Absolutely.

Speaker 22 I started when I first learned the Excel product back in the mid-90s, that was when I created a budget for myself.

Speaker 22 And that developed into a document that I now project out a year ahead of my monthly expenses and my allocations and when things are coming up.

Speaker 22 So, you know, it contemplates savings, it contemplates money going into my 401k,

Speaker 22 you know, vehicle registrations, all the little details of life. And I make sure that I pay myself first.
I started maxing out my 401k

Speaker 22 in my very early 50s with some home equity rather than putting all of the equity into my next home purchase. I reserved $100,000.

Speaker 1 So

Speaker 1 in the last 20 years,

Speaker 1 what do you do for fun?

Speaker 22 Enjoy my home. I've always enjoyed living in the mountains.
It's always felt like a vacation destination for me.

Speaker 1 It is.

Speaker 22 So for me, my fun is coming to my home. It's working in my yard.
And

Speaker 22 that's my fun.

Speaker 22 I do like to camp, but I don't do much of it anymore. But my fun is pretty simple.
I don't require elaborate vacations.

Speaker 22 I like coming home and sitting on my house and looking at my living room window to all of the beautiful trees that surround me.

Speaker 1 It's lovely. Life is good.
Good for you. I'm proud of you.

Speaker 1 Very, very well done, Diane. Excellent.
I love it. I love it.
I love it. Megan in Raleigh, North Carolina.
What is your net worth?

Speaker 17 Hi, Dave.

Speaker 13 It is $1.9 million. Yeah, yeah.

Speaker 1 Very good. Give me a little breakdown by category, please.

Speaker 13 In Roth IRAs, $351,000. 401ks, $276,000.

Speaker 13 Our non-retirement investment and savings, $260,000. And then our real estate portfolio, $1.062 million.

Speaker 1 Good for you. Way to go.
How old are you?

Speaker 15 35.

Speaker 1 Wow. Get it.
Wow. I love it, love it, love it.
How much of this did you inherit?

Speaker 13 My husband inherited $50,000 when he was a junior in college when his dad passed.

Speaker 1 Okay. Did that money

Speaker 1 cause you to become a millionaire?

Speaker 13 Absolutely not.

Speaker 1 Okay.

Speaker 1 All right.

Speaker 1 And what's your all's best year working income and worst year working income?

Speaker 13 Our worst year, we made about $77,000 and our best year $220,000.

Speaker 1 Good for you. Wow, good job.
What do y'all do? What's your careers?

Speaker 13 My husband is a major in the Army and I work in healthcare IT.

Speaker 1 Got it. Okay.
You got a four-year degree?

Speaker 17 We actually, between the two of us, have four graduate degrees.

Speaker 1 Wow. You collect them.
Okay.

Speaker 1 We do.

Speaker 13 Although three were

Speaker 13 employer-sponsored and one was fully cash flowed.

Speaker 1 Wow.

Speaker 11 I was going to ask about that.

Speaker 1 Wow.

Speaker 1 Okay. So what's the fanciest of the four degrees?

Speaker 1 Do we have a Ph.D. in the bunch?

Speaker 13 No, no, they're all master's degrees.

Speaker 1 Okay, all right.

Speaker 13 But my fanciest one, I would say it sounds cool, is cybersecurity management and policy.

Speaker 1 Ah, yeah, yeah, that's big. Good for you.
You're right in the hot seat right now. And your GPA when you were doing that particular degree?

Speaker 6 4.0.

Speaker 1 Yes, I got a feeling.

Speaker 1 Yeah. All right.
Good for you. Well done.
Well done. Can people do this today?

Speaker 13 Yes.

Speaker 1 Well, crap, you're only 35. Of course they can do it today.
All right.

Speaker 11 Well, I want to know how long have you made 220,000?

Speaker 13 One year.

Speaker 1 I just wanted to clarify.

Speaker 11 I always hear the voice of the naysayers in my mind, and so I like to debunk it.

Speaker 11 And when did you get started on this journey? Because 35 is really young. And I mean, you're one point, I mean, two million dollars really is where you're at.
So when did you start this?

Speaker 13 Well, I first got plugged into the Ramsey show back in 2019.

Speaker 13 We had bought a house. We didn't have any other debt.
So we were fortunate in that even before I met my husband, we were both

Speaker 13 very financially savvy and knew not to spend more than you made.

Speaker 13 But I got pregnant with my daughter and instead of getting in that nesting phase of setting up the baby's room and everything, I got into the financial security mode.

Speaker 1 Love that.

Speaker 13 And there was just a particular lifestyle I envisioned for our family. And I wanted to be able to have the financial means to do it.

Speaker 11 So avoiding debt and six years of being intentional about what comes after paying off and avoiding debt.

Speaker 1 Yeah. Way to go, kiddo.
Proud of you. Well done.
Wow. $2 million net worth at 35 years old.
Ding, ding, ding, ding, ding, ding, ding. She wins.
Yeah. This is the Ramsey Show.

Speaker 1 Jade Washall Ramsey Personality is my co-host today. This is a Baby Steps Millionaires theme hour.
Folks, we just launched a brand new tour. Dave Ramsey, that's me and Dr.

Speaker 1 John Deloney are hitting the road and coming to a city near you on the Money and Relationships Tour. And we're putting a new twist on these live events.

Speaker 1 You are going to shape the conversation each night. In the pre-show, we're going to give you a list of topics, and you're going to pick the ones you want me and John to talk about that night.

Speaker 1 And we're going to walk out and do it. Louisville, Kentucky, April 21.
Durham, that would be April 23. Atlanta, April 25.
Phoenix, May 5. Fort Worth, May 7.

Speaker 1 And Kansas City, May 9. These tickets are selling briskly.
If you want to come, you should get one before they're gone. Go to Dave Ramsey and Dr.
John Deloney, or join Dave Ramsey. That's me and Dr.

Speaker 1 John Deloney live in person that night. You're going to laugh, you're going to cry, you're going to learn.
Your ribs will be sore where your spouse is elbowing you. All of that will happen.

Speaker 1 Ramsey Solutions.com slash tour, the money and relationships tour. You can always look at the live events we're doing all over the place on our homepage and check in.

Speaker 1 There's all of us doing stuff all over the place all the time.

Speaker 1 Now, Now,

Speaker 1 Diane, two callers ago, 69,

Speaker 1 never made over $100,000.

Speaker 1 That is one of the myths, one of the lies that are out there that you have to make $650,000, $50, $10,000 a year, $600,000 a year to be a millionaire. You don't.

Speaker 1 As a matter of fact, we did the largest study of millionaires ever done in North America. We studied 10,167 of them.

Speaker 1 The conclusions of that research and the methodology of that research are the white paper in the back of my best-selling book, Baby Steps Millionaires.

Speaker 1 And Baby Steps Millionaires goes through the discussion of where millionaires come from in detail.

Speaker 1 So if you want to learn about the millionaire subject, the study is in there and also the best-selling book is in front of the study.

Speaker 1 One of the things we found in the study was 33% of millionaires never made over 100 grand. One-third.

Speaker 4 Wow.

Speaker 1 That one surprised me. Yeah.
I was, you know, if you told me not over 200 grand,

Speaker 1 sure.

Speaker 1 I could have go with that one, but 33% never made over 100 grand. They fall in the category that Diane fell in.
Pretty cool. Richards in Kansas City.
Hey, Richard, your net worth.

Speaker 28 $3.1 million.

Speaker 1 Good for you. Give me a little breakdown by category.

Speaker 29 Basically, joint account, $117, emergency fund, $110,000, $401K, which is now a rollover because I am recently retired, $1.167 million.

Speaker 28 And then we have my wife and I have Roths at $750,000, a donor count of $56,000, our homes about $425,000, farmlands, $450,000, and miscellaneous items

Speaker 4 about $40,000.

Speaker 1 Cool. How old are you?

Speaker 28 I'm 57 years old.

Speaker 1 Good for you. Well done.
How much of this did you inherit?

Speaker 4 Well, I did inherit a little bit.

Speaker 30 And that's part of my story a little bit. I got 200,000 when I was 35 and 200,000 when I was 45.

Speaker 31 Wow. Cool.

Speaker 1 Good. Very good.
So that did really legitimately boost this.

Speaker 4 It did. It did.

Speaker 30 But the way I look at this is the 401k, my goal is to always get a million over that and did that, but it helps.

Speaker 2 But the big thing I find is one thing that I don't always hear you talk about, but you do, is people inherit things.

Speaker 28 And sometimes it's a woohoo moment.

Speaker 30 Now we're going to go out and spend money.

Speaker 20 We're going to go buy that big car or that big boat.

Speaker 28 But my wife and I kept away from that. And so I like to feel that I did it without those things.

Speaker 1 Yeah. Well, what you you did was you got the best use of that, but you've got 1.1 in your 401k, so you would have been a millionaire anyway.

Speaker 9 Yes, absolutely.

Speaker 1 But this did legitimately, I mean, the $450,000 farm probably had something to do with that.

Speaker 1 Some of these other cash positions probably had something to do with that. But your 401k has to be payroll deduct.
It's not your, none of that inheritance can go in there legally.

Speaker 1 So I know that didn't where that came from.

Speaker 30 Well, that, and you know, my wife worked outside the house part-time and raised our kids. So we were a one-income

Speaker 28 household. And with her, what she brought in is one of those things where you basically had to learn how to do without.

Speaker 30 And we did in those early years.

Speaker 8 And we had two young, successful kids.

Speaker 28 And I think they've learned from watching us.

Speaker 2 And I got to tell you, when they used to hear your music come on, when we'd be driving down the highway, their heads would hit the ground.

Speaker 1 I love it.

Speaker 1 What was your career, Richard?

Speaker 28 I was in packaging.

Speaker 1 Packaging.

Speaker 1 All right. Yep.
All right. Very cool.
Good for you, man. Hey, thanks for the call.
You're a hero, man. I'm so proud of you.
Excellent. Excellent work.

Speaker 1 Okay.

Speaker 1 Baby Steps Millionaires Theme Hour. All right, Jade.
We found one that actually inherited some money. Yeah.

Speaker 1 And here's the statistics on that, because that's one of the last lies. that we want to defeat.
Okay.

Speaker 1 When we studied the largest, when we did the largest study, airtight airtight research, an outside research firm looking over our shoulder so that we weren't doing confirmation bias, we wanted to get the surprises of the study.

Speaker 1 We wanted to learn where it really, really is. What are the facts? And this study is so airtight that

Speaker 1 this data is what's known as the truth.

Speaker 1 So if you disagree with the conclusions of this study, you're what's known as wrong.

Speaker 1 That's what I'm saying, okay? That's right. So 79%

Speaker 1 of America's millionaires have inherited precisely zero. That's eight out of ten.

Speaker 1 So when the wealth, equality, socialist, communist people are whining and crying and say we need to restructure society because all wealth is inherited, they are either ignorant

Speaker 1 or evil

Speaker 1 or both.

Speaker 1 Got it?

Speaker 1 5% of millionaires inherited a small amount, like $5,000 from their grandmother,

Speaker 1 which is not enough mathematically to cause you to become a millionaire. And another 5% inherited money

Speaker 1 after substantial money, like a couple hundred grand, after they were already millionaires. So it did not cause them to become millionaires.

Speaker 1 So what do I help you with this? 79 plus 5%

Speaker 1 plus 5%

Speaker 1 is 89.

Speaker 1 90%, 9 out of 10 of America's millionaires are not

Speaker 1 millionaires because of inherited money. So don't let some left-wing communist professor tell you that in college.

Speaker 1 Don't do it.

Speaker 11 I mean, I'm just sitting over here thinking, even if it was inherited, even if somebody did inherit money, who cares?

Speaker 1 It's not bad,

Speaker 1 but don't tell people that's the only way because if you don't have a rich uncle, that tells you you don't have a chance.

Speaker 11 That's true.

Speaker 1 I mean, but people like me, people like you, we don't have a chance.

Speaker 11 Yeah, I never even knew the idea of inheriting money. Yeah, I never thought of it.

Speaker 1 Never occurred to me that was going to happen. Now, it's not to say if you inherited money, you did something wrong.
I mean, our last caller got $400,000.

Speaker 1 It was part of his equation, and it didn't cause him to be a bad guy. He wasn't a bad guy.

Speaker 1 There's nothing wrong with inheriting money, but there is something wrong with telling people that's where wealth comes from as the primary

Speaker 1 methodology. And it's not.
It is a methodology. It's like telling people people get wealthy playing the lottery.
No, they don't.

Speaker 11 Well, then there's a part of it that if you paint that as a negativity in your brain, then it's never something for you to aspire to to say, I'd like to leave an inheritance, right?

Speaker 11 Because now you've told yourself this is an evil, horrible thing, and so therefore you'll never do it either. Yeah,

Speaker 1 I'm 100% sure. It's the opposite, that it is a godly thing.

Speaker 1 Because the Bible says a godly man leaves an inheritance to his children's children. Yeah.
So

Speaker 1 those eight Ramsey grandbabies are going to, it's going to turn out well for them. Thank goodness.
That's great. Just assuming they have the character to manage it.

Speaker 1 Now, if you're doing heroin, you don't get any money in the Ramsey estate plan. That's not how it works.
But,

Speaker 1 you know, you've got to be an upstanding citizen and all that.

Speaker 1 But the deal is,

Speaker 1 because we're not raising trust fund babies snorting cocaine on the back of a yacht doing a reality show. I don't have any need to produce those.

Speaker 1 Other people can produce those. I don't want to do that.
But that's not the norm. No.
The norm is good people work their butts off and they don't ruin their children.

Speaker 1 That Richard guy, his dad left him 400 grand and two blocks and it didn't ruin him. As a matter of fact, it didn't even hardly change anything.

Speaker 1 He was already had learned to live on nothing, two broke kids, being successful. He was talking about that.

Speaker 1 You know, he did a great job and the money just accentuated his life is always. That's right.

Speaker 11 Made him more of who he already was. Yeah.

Speaker 1 So don't let people tell you that wealth is evil or that wealthy people are evil or that it's the wrong thing to aspire to be successful. This war on success

Speaker 1 in our culture has got to stop. We need to teach people to go win and how to go win.
That's what this show is about. The book is Baby Steps Millionaires.
Check it out.

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