Quit Sitting on the Sidelines Waiting on Politicians To Change Your Life!

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 Open phones at 888-825-5225. That's 888-825-5225.

Speaker 1 George Camill, number one best-selling author, host of the George Camill Show, co-host of Smart Money Happy R Ramsey Personnel, and he's my co-host today. Elliot is in Louisville, Kentucky.

Speaker 1 Hi, Elliot. Welcome to the Ramsey Show.
How can we help?

Speaker 2 Hey, can you hear me?

Speaker 1 Absolutely.

Speaker 2 Okay,

Speaker 2 great. So, you know, my name is Elliot.
I graduated from a top twenty business school in college. After college, I sold Triple Net Investment Sales for about two years.

Speaker 2 And then for the last years I've for the last year, I've been a whole life agent that in Louisville, we partner with many different working class companies.

Speaker 2 For discussion purposes,

Speaker 2 the average American retires with about $5,000 in their bank account.

Speaker 2 Personally, I tell my friends and family to cash out their whole life policies. And the way I pitch whole life, it's not necessarily as an investment vehicle, but more so as a savings

Speaker 2 or a savings account, but simply as insurance that accumulates cash value and a paid up coverage over time. In my eyes, I believe I'm leaving my members better off than before they talk to me.

Speaker 2 But why am I doing something so horrible in your eyes?

Speaker 1 Well, because the product is crap, not because you're a bad guy, but the product that you're selling, you're trying to do a good thing, Elliot, and thank you for doing that. And

Speaker 1 I appreciate your heart. But

Speaker 1 basically, I mean, it's a math problem. So if you take a $200

Speaker 1 whole life premium per month, I can buy the same amount of term insurance on that 30-year-old for about $10.

Speaker 1 So the other $190 would go towards cash value

Speaker 1 in the typical policy, the top 10 stock companies out there, okay? That's the actual data that's out there in today's market. And so if I'm paying $190

Speaker 1 extra for the life insurance in order to create a savings account, that's not the end of the world, but it's the rules of the savings account that are the cash value. We'll call it savings.

Speaker 1 You said we're using it as a savings vehicle, that are the problem. The typical whole life policy accumulates zero cash value in the first three years.
Have you noticed that?

Speaker 2 Yeah, I know that.

Speaker 1 Okay. So it's called what we would, what you and I, people in the financial industry, like you, me, and George, we would call that front-loaded commission.
Agreed?

Speaker 1 So I have a savings account that I'm putting $190 in my example in per month, and the first three years I get zero. It 100% goes to the bank, goes to the life insurance company.
Okay.

Speaker 1 After that, the typical whole life policy accumulates at a 1.2%

Speaker 1 rate. Some of them go as high as 3 or 4%.

Speaker 1 Some of the universal policies will go as high as 4% to 7%.

Speaker 1 Some of the indexed universal policies that are indexed to an S ⁇ P after fees will go as high as 7 or 8% rate of return.

Speaker 1 But the typical...

Speaker 1 basic whole life policy, not a universal policy, is accumulating at under 2%.

Speaker 1 So I have a savings account that for the first three years I put money in it, they keep my money. After that, when I finally start saving, it accumulates at 1% to 2%.

Speaker 1 And here's the thing. Okay.
Now, what would be you say, Elliot, in your case, the typical size face value of policy that you sell is? What's a normal policy for you?

Speaker 2 You know, it's going to vary from someone who's 18 to, you know, 70.

Speaker 1 Okay, so, but I mean, you're out there selling. Who's your typical customer? Let's say you had a 30-year-old.
Yeah. What would you?

Speaker 2 The typical customer is Joe. He works construction.

Speaker 1 So he's probably not doing a $200 a month premium like I'm using as an example then.

Speaker 2 No, no. For me, I've never sold a $200 a month premium policy.

Speaker 1 So probably more like $100,000.

Speaker 2 On average, it'd be more like between $50 and $70,000.

Speaker 1 Okay. I would say.

Speaker 1 And so these are $50,000 face-value policies, right?

Speaker 2 Yeah, or less.

Speaker 1 Yeah. I would say.
Okay, so they're small policies. Would you agree with me that a guy that makes $40,000 a year and dies, $50,000 is not enough to take care of his family?

Speaker 2 Correct, it's not enough to take care of his family.

Speaker 1 If you wanted to replace a $40,000 a year income, you would need north of $400,000 invested at 10%.

Speaker 2 Correct. But I would say it's better than nothing.

Speaker 1 It's better than nothing, but for the same money he's spending, he could have bought the right amount of insurance if he bought term.

Speaker 2 And the funny thing about term too is I talk to these people when they hit the age of retirement and they're like, yeah, I paid in this life insurance my whole life, but then I never used it.

Speaker 2 And they're so upset with me about it.

Speaker 1 No, they're not upset with you. You haven't been selling long enough to meet anybody that kept it till retirement.
You just started. But they

Speaker 1 could be upset with the industry, maybe. But I haven't had that problem because here's the thing.

Speaker 1 If you take the $10 a month and you bought in our, let's drop it to $5 a month and call it a $70,000 policy.

Speaker 1 After, let's go back to our savings account. I was using $190,000 a while ago.
Now I've got to drop it down to about $95,000 because I'm $100 a month policy.

Speaker 1 Now, if we're going to do that,

Speaker 1 $5 is covering the insurance. $95 is going into the savings program.
Zero for the first three years. After that, it's accumulating at 2%.

Speaker 1 And after that,

Speaker 1 if it builds up a cash value of $5,000 or $10,000 after 10,000, 15, 20 years, right?

Speaker 1 Yeah. Okay.

Speaker 1 They die with a $60,000 whole life policy with a $15,000 cash value that they've paid extra to build the cash value with a $60,000 whole life policy.

Speaker 1 Would you agree with me that the insurance company is going to send them a check for $60,000?

Speaker 2 Only the $60,000.

Speaker 1 Exactly.

Speaker 1 So you paid for a savings program, and when you die, they keep your money.

Speaker 2 Yes, yep.

Speaker 3 Nice parting gift.

Speaker 1 That's why we think it sucks, man. It's zero,

Speaker 1 100% is kept for the first three years. After that, it's accumulating at a lousy rate.
And when I die, you keep my money. I paid extra beyond term to

Speaker 1 get a whole life policy that has a savings program in it. And my savings program, when I die, doesn't go to my family.
It goes to the insurance company.

Speaker 1 If I opened a bank with those terms, the bank would go broke. No one would put savings in there.

Speaker 3 So it's not enough to actually cover and replace income, and you don't actually get the cash value when you die. I'm confused.

Speaker 2 The only thing that I will say, I think a problem that it is helping is that people do only retire with about $5,000 in their bank account.

Speaker 1 Well, that's because they bought this crap.

Speaker 3 They didn't have any money to invest because they gave it to you.

Speaker 1 If you put the $95 in a Roth IRA, they would retire millionaires.

Speaker 2 Yeah, but I don't think I'm putting a policy in place where it's like that uncomfortable, where they didn't have enough money to invest on top of that.

Speaker 1 Why don't they use the money to invest wisely?

Speaker 3 If I showed them an investment calculator and I put the same amount in there, they would be flabbergasted and they would be running far away from this point.

Speaker 1 If I bought term life insurance and wasted all that money for my whole life and ended up a multi-millionaire as opposed to an insurance company keeping my savings that I paid for, I don't think anybody's going to be mad about that, Elliot.

Speaker 3 It's like telling someone, Dave, this show is great. In season 12, it gets good.
If you can get through the first 12 seasons of this show, I promise it'll be mediocre at best.

Speaker 1 I'm not binging that. No, thank you.

Speaker 1 Elliot, I think you're probably a good guy, but I think you're probably, if you keep doing the math on this, you're going to probably end up doing a different type of financial planning that's more beneficial to the folks you're trying to serve.

Speaker 1 This is the Ramsey Show.

Speaker 1 George Campbell, Ramsey personality is my co-host. Open phones at 888-825-5225.

Speaker 1 So, if you look in the skyline of the typical mid-sized city, the towers in the skylines, particularly 20 years ago

Speaker 1 and before,

Speaker 1 would be two things: banks

Speaker 1 and life insurance companies.

Speaker 1 Santa Claus did not build those buildings.

Speaker 1 You did.

Speaker 1 You did. Your money went to them.

Speaker 1 You chose for it to go to them. They didn't steal it from you.

Speaker 1 But their products

Speaker 1 are so profitable to them,

Speaker 1 not to you,

Speaker 1 that they own the skylines. Don't you just wish you had the bank furniture? They got the best furniture.

Speaker 1 So when we talk to a young man like Elliot, who's selling whole life life insurance, or an old man, or an old woman that's selling life insurance, whole life life insurance, we find the only people that believe that rhetoric, that line that he was, that we just covered with him.

Speaker 1 And honestly, to his credit, I think he truly believes he's doing good. There's two types of whole life insurance agents as far as I'm concerned.

Speaker 1 The ones that understand they're screwing people and the ones that don't. And he's one that he doesn't.
He really thinks he's doing a good thing.

Speaker 1 And so, but I have done a lot of enthusiastically stupid things too.

Speaker 1 By the way, folks, I'll help you with this. You get screwed way more often by enthusiastic ignoramuses than you do actual con men.

Speaker 1 There's not that many actual psychopaths out there, like a Bernie Madoff. There's a few of them.
But your friend who's trying to talk you into Bitcoin is an enthusiastic ignoramus.

Speaker 1 They're not con people.

Speaker 1 They're just passing people.

Speaker 1 Probably even the little fried kid that is going to jail or whatever.

Speaker 3 Sam Bankman, free.

Speaker 1 He might not even be a real crook. I don't know.
I haven't really looked at the details of that. He might just be a massively enthusiastic ignoramus.

Speaker 1 You know what I'm saying?

Speaker 1 And so really what you've got to do is you have to follow the money and, you know, be a fruit inspector. What's the fruit of the products? When we talk to

Speaker 1 multimillionaires and millionaires, we don't find them using

Speaker 1 payday lenders,

Speaker 1 rent to own.

Speaker 1 whole life life insurance.

Speaker 1 We don't find them using rip-off finance products, financial products. They have avoided those things, and it's one of the secrets that causes them to be wealthy.
And that's really where,

Speaker 1 you know, this stuff breaks down. And so,

Speaker 1 I mean, I have really good friends that used to sell whole life life insurance. And

Speaker 1 once they actually, because I just pound the crap out of them, but I mean, they finally just like,

Speaker 1 I get it, and I can't sell it anymore because I have a conscience.

Speaker 1 You know, if you have a good friend that is a payday lender and is ripping off poor people at 800% interest,

Speaker 1 that's called oppressing the poor.

Speaker 1 You do not want to read in the Bible what God does to people who oppress the poor.

Speaker 1 When you mess with the poor on purpose, screwing them, And you mess with widows and orphans, you don't want to be on that list in the Bible. It's not a good list to be on.

Speaker 1 And so you don't want to be on the wrong side of a financial product and be justifying it. Well, it's better than nothing.

Speaker 1 No, it's actually not. You'd be better.
I'll put your money in a fruit jar.

Speaker 1 And so there we go. Now, changing gears, George.

Speaker 1 I know some of you listen to this days, weeks later, whatever, but we just got word a few moments ago. Surprise, surprise, 45 days from the election,

Speaker 1 the Fed dropped the interest rate.

Speaker 3 By half a point, 50 basis points to a range of 4.75% to 5%.

Speaker 1 So that wasn't possible four months ago or eight months ago, but right before the election, it's possible.

Speaker 3 It's amazing the timing of that.

Speaker 1 It's just sus. Yeah.

Speaker 1 Good job.

Speaker 1 I'm using a good millennial word. I'm impressed.
Suss. I learned that from George.
He taught it to me. So, yeah.

Speaker 1 I mean, come on, people. Can you not look at this and go,

Speaker 1 are you, is America that, are you folks in America that stupid that you don't look at this and go, well, that's suspicious timing, boys and girls.

Speaker 3 They're sitting distance of the election. And then all of a sudden they go, all right, pull the lever.

Speaker 1 As if it's going to change anything between now and the election. It's not, by the way.

Speaker 1 But it sure is good PR.

Speaker 1 Yeah, because one of the things that the current administration is getting hammered on is the state of the economy.

Speaker 1 And it's really to keep a party in office, Republican or Democrat, when the economics are bad during the presidential election year. And so right up on it, there it is, just dropped.

Speaker 3 Best part is whoever takes office will then take credit for all of this.

Speaker 1 And here's what's interesting.

Speaker 1 Mortgage interest rates are the lowest they have been since February of 23,

Speaker 1 about 20 months ago.

Speaker 1 In the last almost two years, we have the lowest mortgage interest rates.

Speaker 1 Very quietly, they're down,

Speaker 1 and the market has not taken off and boomed. The real estate market has not boomed.

Speaker 1 And there's a lot of reasons why Jade and I talked about this on yesterday's show, George, and you brought it up at the break that some of it might be that people have a 2% mortgage and they don't want to move.

Speaker 3 So inventory.

Speaker 1 To a 6% mortgage, so they're holding their home off the market, and that's slowing down the

Speaker 1 speed,

Speaker 1 the veracity of the real estate market. I've got another theory.
I brought it up yesterday, and I have no idea if there's any credence to this at all. It's just an idea.

Speaker 1 But that some people might be waiting on the Harris administration or the Trump administration to fix their life, and they're going to wait until after the election to decide whether they're going to buy a house or not.

Speaker 1 So they're just kind of sitting on the bench waiting on the election to roll out because they made the mistake of believing that who's in the White House actually matters more than who's in their house.

Speaker 1 So

Speaker 1 it does matter, and some of these ideas that are being debated matter. None of these personality characteristics that are being debated matter.
None of them.

Speaker 1 But the ideas should be debated, and you should be upset, not upset. You should be, none of you should be as upset as you are.
My God, people, calm down. But anyway,

Speaker 1 neither one of these people are going to change your life. But some of you are sitting on the sidelines waiting because you still think that one of them is going to buy you a house.

Speaker 1 And neither one of them them is going to buy a house. Neither one of them have a buy house program as one of their policies.
We're going to buy Dave a house. I've been doing this a long, long time.

Speaker 1 I'm old. None of them have ever sent me any money.

Speaker 1 They've all asked me for money, but none of them have ever sent me any money. Many of them have raised my taxes and raised my taxes under the idea that I'm not paying my fair share.

Speaker 1 Which when I pay a whole lot and you pay nothing, I'm not sure how that's fair. But okay, anyway, I'm convinced the fair is where Cotton Candy and the Tilta whirl are.
But

Speaker 1 so anyway, all that to say, I think that's hitting this market. What do you think?

Speaker 3 Well, I think the supply and demand issue still is there. There's not enough supply because no one's letting go of their...
two and a half, 3% mortgages.

Speaker 3 And therefore, until we see some of that move, I don't think the housing market as a whole is going to shift.

Speaker 3 But I do think for those that have been sitting on the sidelines waiting for a rate to go down, because it could save you a few hundred bucks with the rate cut like this.

Speaker 3 That could make it affordable for a lot of people who are ready to buy. They're out of debt.
They have the emergency fund. They've got a healthy down payment.

Speaker 1 It won't buy the election, though, because the Fed rate is not a mortgage rate. The Fed rate is what banks borrow from other banks at.

Speaker 1 It affects, by extension, an implication, mortgage rates, but mortgage rates are formed by the bond market, not by the Fed.

Speaker 1 And so if the Fed lowering rates tends towards mortgage rates going down, which it usually does, it has to filter through the bond market, and then that will take another... It'll be

Speaker 1 30, 45 days. So it'll be post-election before you see any benefit from that.
But it's all about perception, is what this is.

Speaker 1 It's a PR move, pretty much like during the congressional elections, midterm stuff. Uh, Biden came out and said he's going to forgive all student loans.

Speaker 3 Oh, that's right, that's good timing as well.

Speaker 1 Yeah, and everybody knew he couldn't do it, and the Supreme Court ruled against him, he couldn't do it. Everybody, you can't do that with an executive.

Speaker 1 But he can say, Well, I tried, and he goes mean old Republicans. But

Speaker 1 it was a political

Speaker 3 strategy, Dave.

Speaker 1 Strategy. That's what the other party called it.

Speaker 1 That's a funny story. Anyway,

Speaker 1 George W. actually thought he invented that, and Saturday Night Live invented that.
He told me that in an interview.

Speaker 3 I missed the simpler times.

Speaker 1 This is the Ramsey Show.

Speaker 1 George Camill, Ramsey Personalities, my co-host today. The best way to make the most of your money is by creating and sticking to a plan.
It's called a budget.

Speaker 1 Yes, I said the B word right here on the radio. You need a budget.
You need a plan. You need to make every dollar behave.

Speaker 1 And every dollar is our budgeting app that will change your life because it's the best budgeting app in the market.

Speaker 1 And I'm telling you, we've got an entire team, a whole floor of people here that work on this all day long. Every month we launch new features and new items.
It's continually getting better.

Speaker 1 It was already robust when we launched it years ago, but it's you know, tens of millions of people have downloaded and are using Every Dollar.

Speaker 1 You can download Every Dollar for free in the App Store and at Google Play, and you really ought to.

Speaker 1 Here's the worst thing:

Speaker 1 go get on a budget, lean into it, especially if you're married, do it for 90 days,

Speaker 1 and if you hate it,

Speaker 1 quit.

Speaker 1 But after, but what I've been doing this for 30 years, when I get people to do a budget for 30 days, they feel like they got a raise.

Speaker 1 It increases the quality and the depth of the communication in their marriage. They feel like they got traction towards their goals.
They feel in control. Their anxiety goes down over money.

Speaker 1 I mean, all because of a budget.

Speaker 3 Well, before you think there's like the boogeyman exists with your money, like, where is it going? And I don't want to look. And then you just finally look and you go, okay.

Speaker 3 We can solve this problem now that we actually looked at it.

Speaker 1 Well, I mean, like, where's all our money going? Oh, wait, there it is. It's going out to eat.

Speaker 3 So you can't complain about feeling that way if you haven't actually done a budget.

Speaker 1 Try it. Worst thing can happen is you hate it.
Because where you are sucks. So you might as well change where you are.

Speaker 3 It's the old political thing that says, are you better off than you were four years ago? Try that with a budget.

Speaker 3 Are you better off than you were 90 days ago when you had no clue what was happening with your money?

Speaker 1 No, you're still sitting there like a hamster in a wheel. Run, run, run, run, run, run, run, run, run, run, run.
Get nowhere.

Speaker 1 Kim is in Charlotte, North Carolina. Hi, Kim.
How are you?

Speaker 2 Hi, good. How are you?

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

Speaker 2 Yeah,

Speaker 2 so just my question is, my husband and I were missionaries, and we came back to the States to give birth and wound up having a medical emergency while we were out of state.

Speaker 2 So we had a state insurance, and we were visiting my husband's family. Wound up giving birth to my son early, and he was in the NICU for a month.
I was in the hospital two weeks leading up to that.

Speaker 2 And because we were out of state, even though we had emergency insurance from my coverage, it was still denied for everything.

Speaker 2 And so right now we're facing somewhere between $400,000 and $500,000 in medical debt.

Speaker 2 And we're in the snowball staging right now.

Speaker 1 Whoa, whoa, whoa. I'm getting out of debt.

Speaker 1 Just stop a second. I got to catch back up.
Yeah.

Speaker 1 So you had a baby that was in NICU,

Speaker 1 and you were a missionary overseas, but you came back to the States and you were under whose insurance? Your husband's?

Speaker 2 A state, just a normal state insurance.

Speaker 1 State.

Speaker 2 Yes.

Speaker 3 And because it was out of state, they wouldn't cover anything?

Speaker 2 Yeah.

Speaker 2 You know, we had the emergency in here.

Speaker 1 What state is the insurance in?

Speaker 2 It was a Florida insurance.

Speaker 1 Why did you not go to Florida to do the medical care?

Speaker 2 We were visiting my husband's family, who

Speaker 2 lives in a different state.

Speaker 1 So we were just traveling.

Speaker 1 And there was a problem with the baby, and they took the baby and put it in NICU.

Speaker 1 Yeah. So it was an emergency, and you didn't have the option to go to Florida.
Correct. I got you.
Okay.

Speaker 1 And Florida's state insurance does not have that as a contingency for an emergency to save the life of a child. It does.
Yeah, it does, but

Speaker 2 for whatever reason, they're still denying all the coverage of it. We've appealed multiple times.

Speaker 1 Well,

Speaker 1 I think you need to get some professional representation then on that. Okay, yeah.
Because

Speaker 1 I'm not going to set up two missionary kids with a kid in NICU to take care of a half million dollars worth of medical.

Speaker 1 Yeah. Because I'm guessing you're poor as church mice.

Speaker 2 Yeah.

Speaker 1 I mean, I never met rich missionaries, okay?

Speaker 2 Yeah.

Speaker 1 I just hadn't run into them. So you're not probably not sitting on a half million in your mutual fund, I'm guessing.
No, no.

Speaker 1 So I think you've got to solve this by throwing this back on to the Florida system.

Speaker 1 And so what you need to do is you need to get in touch with your state senators and state representatives and with the governor's office in Florida

Speaker 1 and start hassling your politicians.

Speaker 1 Okay.

Speaker 1 You remember the story where

Speaker 1 that Jesus told of the woman who would not be denied. She just kept knocking on the door, knocking on the door, knocking on the door, knocking on the door?

Speaker 1 Yeah, that's you.

Speaker 1 Yeah.

Speaker 1 Because you don't have a half million dollars and you're not going to see a half million dollars anytime soon. So you've got to solve this through

Speaker 1 political pressure and or legal pressure, maybe an attorney.

Speaker 1 Because

Speaker 1 if they pick up their part, what they're supposed to pick up here,

Speaker 1 it's going to change your whole life. Agreed?

Speaker 2 Yeah, oh, for sure. For sure.

Speaker 3 It definitely. Have you talked to the administration at the hospital?

Speaker 1 They don't even do it. Yeah, so

Speaker 2 they said that once the third, because I guess there's a rule with insurance companies that once you get three denials, it's like there's no possibility of getting it covered.

Speaker 2 So that they won't let us apply for the financial aid until we get that third denial from the insurance.

Speaker 1 Yeah, you're not going to get a third denial. You're going to get it covered.
Yeah, exactly. That's why I've been really scared.
Yeah, you have to.

Speaker 1 Yeah, I've been really scared if you go through that third denial. Don't worry about it.
You don't have anything for them to take.

Speaker 2 Yeah.

Speaker 1 So you're okay.

Speaker 1 Okay.

Speaker 1 They don't repo babies. So you're okay.
How is your baby? How are they doing?

Speaker 2 He's doing amazing now. The Lord definitely healed him

Speaker 2 while he was within NICU and surprised all the doctors on how quickly he recovered. So

Speaker 1 are you definitely out of the airplane? Are y'all out of the hospital everything now? Is it all behind you?

Speaker 1 Yeah, yeah, it's all behind us.

Speaker 2 Everything but the bill.

Speaker 1 Yeah.

Speaker 1 So you're not, are you in North Carolina still?

Speaker 2 Yeah, we're in North Carolina now.

Speaker 2 Just we're about to launch back out to our country in a week that we serve in over in Southeast Asia.

Speaker 1 So okay. All right.

Speaker 1 Well,

Speaker 1 you have a new hobby.

Speaker 1 Yeah. It's the state of Florida.

Speaker 2 Okay.

Speaker 1 Really? I want you to become an expert on on hassling politicians and insurance commissioners and getting an attorney. Are you serving with a missionary organization?

Speaker 2 Yes, we are.

Speaker 1 Okay. Talk to the senior people in that organization and see if they have anybody on staff that does legal work.

Speaker 1 Okay. And see if you can get an on-staff attorney to start hassling Florida.

Speaker 2 Okay. Yeah.
I know we don't have that, so it would definitely be all on us.

Speaker 1 Let me try one more time, okay?

Speaker 1 You're serving with a missionary organization. How many people serve in the mission field with this organization?

Speaker 2 Around 300.

Speaker 1 Okay.

Speaker 1 Probably some of the host churches, the support churches then, have an attorney who's hanging around that church, goes to church there, who would love to help a young missionary couple

Speaker 1 get rid of a half million dollar problem.

Speaker 2 Yeah, that's definitely a great idea.

Speaker 1 Yeah. And so let's talk to some of the senior pastors, the

Speaker 1 church board members, whatever we want to call the leadership, the deacons, the leadership team of those particular churches and say, hey, got a young missionary couple serving in Southeast Asia.

Speaker 1 We got a NICU problem.

Speaker 1 We need some of the big boys to come in and help here.

Speaker 1 We need a little legal SWAT team. And I think you can put, but that's your job is put all that together rather than sit and watch this thing

Speaker 1 deteriorate before your eyes. And, oh, it's third denial.
And the third denial is the final denial. And nothing can happen after that.
Oh, bull.

Speaker 3 Channel your inner Dave. Bull.
Persistence.

Speaker 1 Be resourceful.

Speaker 1 Cause problems.

Speaker 3 That's what Dave's been doing for 30 years.

Speaker 1 George. Worked out.
George. It's a spiritual game.

Speaker 3 Squeaky wheel gets the grease is all I'm saying. And Dave's been squeaky.
You got to get squeaky to get this done.

Speaker 1 You just called me squeaky.

Speaker 3 You did. You've been called worse today, I'm going to be honest.

Speaker 1 You've been reading the comments again, haven't you? George, I told you, quit reading the comments.

Speaker 3 It's the only enjoyment I get out of life, David.

Speaker 1 Man,

Speaker 1 you know I don't try to please the masses because I'm well aware the M is silent. This is the Ramsey Show.

Speaker 1 George Campbell, Ramsey Personality is my co-host. Today's question of the day is brought to you by Y ReFi.

Speaker 1 93%

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That's the letter YREFY.com slash Ramsey. Might not be in all states.

Speaker 3 Today's question comes from Patrick in West Virginia. My wife and I will be debt-free at the beginning of October.
We have paid off $83,000 in student loans over the last 15 months.

Speaker 3 Our gross income is $250,000 per year. We should have our six-month emergency fund and a 20% house down payment in the next 18 months or sooner.

Speaker 3 Would it be unwise to get a 30-year fixed rate mortgage and make extra payments for two years instead of waiting the extra two to three years to save the down payment needed for the 15-year fixed mortgage?

Speaker 3 If we did the 30-year, we would avoid potential housing price increases. In both cases, the mortgage payment would be 25% or less of our take-home pay.

Speaker 3 We could afford to pay an extra $6,000 a month during those two years of extra payments.

Speaker 1 I'm confused.

Speaker 1 Down payment requirements are the same for a 15 years, they are for a 30.

Speaker 3 Is he saying the payment because he said it would be 25% or less of a $10?

Speaker 1 Exactly like during the time he's saving up his down payment, he could have taken out a 30.

Speaker 1 That's what this says.

Speaker 1 And the 30-year has the same down payment requirements a 15-year does.

Speaker 1 So, Patrick, I think you have some bad information.

Speaker 1 I think you have some incorrect information. A 30-year Fannie Mae mortgage, you can do a 95,

Speaker 1 90, 80, an 80%, a 20% down payment avoids PMI, private mortgage insurance, on a 15-year or on a 30%.

Speaker 1 So when you have enough of a down payment to buy your first home, we do not tell you you have to put down 20%.

Speaker 1 By our guidelines, we do tell you that you need to not take out more than a 15-year fixed rate where the payment's no more than a fourth-year take-home pay.

Speaker 1 But if you've got a 5% down payment and you want to close on a 15-year, you can do that.

Speaker 3 And I don't know why it would take two to three extra years just to do a 15-year instead.

Speaker 1 There's no,

Speaker 1 I think he thinks you have to have a larger down payment on a 15%.

Speaker 1 That's the only way that this makes sense.

Speaker 3 I'm confused by the question, Patrick. But

Speaker 1 I think Patrick's confused. So that's the only way this question makes sense is if he's confused.
So,

Speaker 1 yeah, the

Speaker 1 30-year and the 15-year have the same down payment requirements. If you want to put down 5% and eat the PMI,

Speaker 1 and then during that time, I think he's thinking the 20% down. I think that that makes sense in this light of this, that he has to do 20% down on a 15, but he doesn't on a 30%.

Speaker 1 And so you can get rid of the PMI, Patrick, after you take out a 15-year with a 95% mortgage. You're going to get PMI.
Private mortgage insurance, folks, is foreclosure insurance.

Speaker 1 It covers the mortgage company in the event they have to foreclose on you and they lose money.

Speaker 3 It's a risky borrower fee. Yeah.

Speaker 1 It does not cover you for anything. You are buying them insurance on you.

Speaker 1 That's what they're doing when you don't put down at least 20%.

Speaker 1 And it's about $75 a month per $100,000 borrowed. So a $300,000 house, $225 a month is PMI.

Speaker 1 Private mortgage insurance. Okay, if $300,000 loan.
Now,

Speaker 1 what you can do is if you take out, like on a first-time home, if you did a 15-year fixed and the payment's no more, the fourth year take-home pay, and you put down 5%, then you chunk, chunk, chunk away and beat that mortgage down to where it's an 80% loan to value.

Speaker 1 You can apply to have the PMI dropped. And they'll remove it.
And so you would pay PMI for a couple years until you paid down. I think that addresses his question.
Yeah.

Speaker 3 And making $2.50 a year in West Virginia with a 20% down payment, you should be able to buy plenty of house on that 15-year and be fine. Yeah, absolutely.

Speaker 3 You don't need to wait three years.

Speaker 1 Yeah, again, that's the only thing that makes sense here. So, cool question, man.
Interesting. And the good news is you've done this right.
You're the way you're going into it.

Speaker 1 He's gotten out of debt. He's going to have his down payment.
He's going to have his emergency fund. Then he's going to have his down payment on top of that.
That's the right way to do it.

Speaker 3 It's a peaceful way to do it.

Speaker 1 Then you don't get pinched when something comes up on the house. Stephen's with us in Tampa, Florida.
Hi, Stephen. How are you?

Speaker 4 I'm doing good, babe. Thank you for asking.

Speaker 1 Sure. What's up?

Speaker 4 Yeah, I have a small business

Speaker 4 that's in the construction space in Florida. And

Speaker 4 all my profits from my roofing business, I've funneled into real estate over the last 10 years that I've been in business.

Speaker 4 And sorry, I'm a little nervous, first time caller.

Speaker 1 It's okay. We've never lost a patient.
So what's up?

Speaker 4 So basically, my question is, is that over the last year, my roofing company, we had a hurricane came in two years ago, wiped out all the roofs that I was planning on doing over the next five years.

Speaker 4 And now everybody...

Speaker 1 I thought hurricanes caused people to need a roof.

Speaker 4 They did. And we did our fair share of them.
But now, two years after the storm, everybody's roofs are brand new.

Speaker 1 Oh,

Speaker 1 I see.

Speaker 1 That's interesting. Other than new construction,

Speaker 1 anybody that had a questionable five-year roof in the last five years all got blown up.

Speaker 1 So you did a bunch of the hurricane work. Other people did that.
So a lot of houses have a new roof. Oh, that's interesting.

Speaker 3 Demand decrease.

Speaker 1 Yeah.

Speaker 1 That's interesting. Right.
All right. So new construction is about it for you.

Speaker 4 Well, I mean, yeah, we're still getting some replacements from a couple realtor relationships, you know, because people need a good roof to close.

Speaker 4 But the market's completely, you know, my business has slowed down by by 75% in the last 12 months compared to the previous years.

Speaker 4 And so,

Speaker 4 you know, with my real estate portfolio, because I was, you know, doing really well for the first,

Speaker 4 you know, 10 years of my business, we have quite a big portfolio now.

Speaker 4 And so now my wife and I are in a position where our business is losing money every month.

Speaker 4 And we're needing to come up with a solution. We've tried everything we can with our

Speaker 4 systems that are in place for marketing, for sales leads, new salesmen. And we're continuing to try those things to turn the business around into a profitable scenario.

Speaker 4 But the bottom line is that we're losing money.

Speaker 1 Actually losing money or have reduced profits?

Speaker 1 Losing. You're having to feed it.
So you've kept your payroll intact?

Speaker 4 Yes, yes. We've kept our payroll intact for a large business.
We've done some downsizing to the point where, you know, we pretty much just have the managers in place.

Speaker 4 I mean, I have a pretty large roofing business.

Speaker 1 Yeah,

Speaker 1 so you don't have anymore.

Speaker 1 And

Speaker 1 you can't keep the staff.

Speaker 1 Well, yeah, we...

Speaker 1 No, I'm serious. No, you need to quit writing checks to keep this thing open.
You need to get it down where it floats.

Speaker 1 Okay.

Speaker 1 Your lines have crossed, and you've got to get back down where the lines don't cross anymore, and you have at least a break-even, if not a tiny profit.

Speaker 1 I don't mind if you don't make any money, but you've got to downsize to fit the market because you're telling me you don't think this market's going to recover back to where it was, and yet you're keeping all the overhead and the payroll as if it's going to recover.

Speaker 2 That's true.

Speaker 1 Yeah.

Speaker 1 Let me tell you, it's a

Speaker 1 hard decision to make.

Speaker 4 And the other question that I have is regarding my portfolio.

Speaker 4 You know, in order to fund the business,

Speaker 1 to you don't fund a business that you don't have hope in.

Speaker 1 You only fund something you have hope in.

Speaker 1 And we do have hope. No, no, no, no, no, not vague hope, business hope.

Speaker 4 Well, let me tell you what I've done is I started.

Speaker 1 I'm up on the clock. I'm sorry.
If your projections are for the next 24 months, this thing's not going to recover, you've got to stop the bleeding on the business. You don't feed that

Speaker 1 if you don't think it's going to come back. I don't know if it's going to come back.

Speaker 1 But when you have, Henry Cloud talks about this in his book, Necessary Endings, when you have lost hope that something's not going to change is when you end it.

Speaker 1 Now, I'm not saying you end the whole thing, but you've got to right-size this business down to where your current economic situation is and then restaff if it ever comes back.

Speaker 1 But that's what I would do in this case. You don't feed this.

Speaker 3 I wouldn't sell property to keep funding this.

Speaker 1 No,

Speaker 1 not unless you think it's got a fairly quick turn. If you want to feed it for 12 months, fine.
But if you think it's not going to come back for five years, no, don't do that.

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 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. George Camill, number one best-selling author, author, co-host of the Smart Money Happy Hour on the Ramsey Networks.

Speaker 1 Ramsey personality. He's my co-host today.
And guess what we're doing this hour? We're doing a Baby Steps Millionaires Theme Hour.

Speaker 1 And what that means, boys and girls, is we're going to talk to real millionaires, not your broke brother-in-law who has an opinion.

Speaker 1 Real millionaires, people who actually have money, and ask them, Where did you get that?

Speaker 1 How did you do this?

Speaker 1 And what you will discover, as we've been doing this for several years, is that it will be a great encouragement to those of you that are not yet millionaires to show you that it can be done.

Speaker 1 That's why we do this hour. It's about hope.
Baby steps, millionaires. Now, I don't care how you became a millionaire, where your money came from.

Speaker 1 All I know is you're a millionaire and I want to talk to you. What is a millionaire, George?

Speaker 3 Someone with a net worth of a million dollars or more, which means they don't need a million dollars in the bank. They don't need a million dollar income.

Speaker 3 It just means their assets minus their liabilities, what they own minus what they owe is a million dollars or more. That's not our opinion, by the way.

Speaker 1 That's an accounting definition. It's not a feeling.
It's not a moral construct. I don't know if I agree with your inflation rate.
I don't give a crap what you agree with.

Speaker 1 This is a math thing.

Speaker 1 And I actually heard an idiot congressman the other day say, he's not a millionaire. He doesn't make a million dollars.
Oh, my God.

Speaker 3 I saw that clip.

Speaker 1 Dumber than a rock and got elected to Congress, which means the people that elected them are dumber than they are. But there you go.
So here we go. A millionaire is not.

Speaker 1 If it's in their house, it doesn't count.

Speaker 1 Yes, it does, Bozo.

Speaker 1 You can have what you, you could call someone a cash millionaire. That would mean they had a million dollars cash.

Speaker 1 But if they're a millionaire, the definition is assets minus liabilities, what you own minus what you owe.

Speaker 1 When that equals a million million dollars, you'll discover when you get there, it's not that much.

Speaker 1 Because millionaires don't have jets,

Speaker 1 billionaires do. Millionaires don't have seven homes, billionaires do.
Millionaires don't have seven cars, billionaires do. There's a difference.
A billion is a thousand million.

Speaker 3 It's a big gap.

Speaker 1 A lot of difference in a billionaire and a millionaire. Okay.

Speaker 1 So

Speaker 1 you will discover that these people drive Camrys and Toyotas.

Speaker 1 And they can afford to do more. They just, nobody told them.
Matter of fact, I'm going to tell some of them to get a new car during this hour, probably. I can't wait.
Because here we go.

Speaker 1 All right, George. So who's got a million dollars? Who wants to be a millionaire? Here we go.
Phone number, 888-825-5225. Jenny is in Seattle.
Jenny, what's your net worth?

Speaker 2 Hi. Hi, Dave.
Hi, George. It is 1.4.

Speaker 1 Good for you. And give me a little breakdown by category, how much real estate, how much mutual funds and retirement, that kind of stuff.

Speaker 2 All right. My husband has a TSP that's $800.

Speaker 2 And then we have IRAs and a little miscellaneous cash that's $100,000.

Speaker 2 And our house is about $5,000.

Speaker 1 Gotcha. Okay.
Classic. All right, cool.
How old are you guys?

Speaker 2 I am 42, and my husband Chad is 43.

Speaker 1 Excellent. Excellent.
How much of the 1.4 million net worth did you inherit?

Speaker 2 We had about 10,000 from my husband's grandma when she passed.

Speaker 1 Okay. So it's safe safe to say mathematically that you're not a millionaire because of inherited money?

Speaker 2 Yeah, no.

Speaker 1 10K don't do it. It was sweet, but 10K didn't do it.
All right. So

Speaker 1 and your best year of income since you've been working, household income, and your worst year since you've been working?

Speaker 2 Okay, our best year is now, so it's $150,000.

Speaker 2 And our worst was probably right out of college, about $50,000.

Speaker 1 Okay, cool. What do y'all do for a living?

Speaker 2 I am a homemaker, and I've been a homemaker for almost 20 years. Cool.
And my husband works for the Bureau of Reclamation as a water manager.

Speaker 1 Okay, all right. Oh, TSP.
So he's federal.

Speaker 2 Yep. Bureau of Reclamation federal.

Speaker 1 Okay. All right.
And what does he do? Is he an engineer?

Speaker 2 No, he manages and distributes the water rights for the Washington, Oregon kind of area.

Speaker 1 Gotcha. Okay.
All right. Cool.
All right. Neat.
And what is his degree in?

Speaker 2 Environmental studies.

Speaker 1 Ah, that makes sense. Okay.
And you remember what his GPA was?

Speaker 2 Yeah, it was 3.5.

Speaker 1 Okay, cool. All right, cool.
All right. So you guys have done this basically from nothing over a period of 20 years

Speaker 1 while you were a homemaker and he was working in the federal government, working his way up through that career.

Speaker 1 Can this still be done if someone's listening today and they're 22?

Speaker 2 Yes, absolutely.

Speaker 1 Why do you think that?

Speaker 2 I think that if you

Speaker 2 educate yourself, be your own advocate, and are really intentional,

Speaker 2 distill down what you find value in, and place it in that, then you can be budgeted, all those things. I think you can get there.

Speaker 1 Cool. So what do you drive?

Speaker 2 Okay, I have the fancy car.

Speaker 1 What's the fancy car?

Speaker 2 I have a 2018 Nissan Armada.

Speaker 1 Okay. All right.
Not a Ferrari, but an Armada. Okay.
All right. Good.
Good.

Speaker 2 And my husband has the not-so-fancy car, a 2008 Toyota Corolla.

Speaker 1 There it is. Tell your husband he needs a better car.
All right. That's what we're saving for right now.
$1.4 million. You need a better car than a 2008 Toyota.
Okay. Time to move up.
Yeah.

Speaker 1 Because I tell you, we get stuck.

Speaker 1 The young millionaires, I talk to you guys all the time. We get stuck emotionally and go, well, that car is what got me here.
No, that car is not going to get you anywhere.

Speaker 1 You need to get another one.

Speaker 1 I'm glad you're saving for him a better car. And your car is not that fancy.
It's great. It's a nice car.

Speaker 3 I thought you were going to be like, it's a Rolls-Royce. It's modest.

Speaker 1 I've got a Bentley, Dave. No, you didn't.
You know, you don't.

Speaker 3 It's a six-year-old Nissan SUV.

Speaker 1 A great car. That's a great car.
Good for you. How many kids y'all got?

Speaker 2 Two.

Speaker 1 Cool. How old are they?

Speaker 2 11 and 13.

Speaker 1 How much do they know about all this?

Speaker 2 Actually, a lot. We talk to them a lot.

Speaker 1 Good. Good.
So they're ready. Good.
Yep. You guys are doing a great job.
Congratulations, Hero. Honored to meet you.
Very well done.

Speaker 1 Stephen and Michelle are in Fort Wayne, Indiana. What's your guys' net worth?

Speaker 1 What's so funny?

Speaker 1 What?

Speaker 2 Nothing. I'm just thrilled to be here.

Speaker 1 I could tell.

Speaker 1 All right. What's the net worth?

Speaker 2 1.3 million.

Speaker 1 Cool. Give me a little breakdown by category.

Speaker 2 Retirement, roughly a million. House, 230K,

Speaker 2 and about 70K in cash.

Speaker 1 Good for you. All right.
And how old are you guys?

Speaker 2 I'm 44.

Speaker 2 I'm 54.

Speaker 1 Okay, cool. And how much of this 1.3 million did you guys inherit?

Speaker 2 One of my grandmas passed away a few years back, and we got

Speaker 2 about 25 grand from that. But

Speaker 2 as you said to the last caller, that's not what took us over.

Speaker 1 Yeah, obviously. Yeah, 25K does not make 1.3.
Okay.

Speaker 1 And your range of income, best year and worst year?

Speaker 2 Best year is 200K, which is this year.

Speaker 2 When we met, we were making about a combined 80K.

Speaker 1 Okay, cool.

Speaker 2 My worst year was when I started at my parents' store at 16.

Speaker 1 Ah, I understand. All right.
I want to come back and get the rest of your details after this break, so hang with me, you two. And I also, I definitely have to find out what's funny.

Speaker 1 This is the Ramsey Show.

Speaker 1 This is a Baby Steps Millionaires Theme Hour. George Camill, Ramsey Personalities, my co-host.

Speaker 1 One of the reasons we start doing this Baby Steps Millionaires theme hour where we talk to real millionaires.

Speaker 1 By the way, if you're a real millionaire, you have a net worth of a million dollars or greater. Call us at 888-825-5225 right now.
We'll put you on. Now, because we want to know about you.

Speaker 1 The reason was, is there's, George, there's a lot of lies spread out there about where wealth comes comes from.

Speaker 1 And when you spread a lie about where wealth comes from, what you are doing is stealing someone's hope.

Speaker 1 You're a hope stealer. You should stop that.
Don't be a hope stealer. Things like, well,

Speaker 1 you know, I can't play professional sports, and I'm not going to be in a rock band or be an actor in Hollywood, so I won't be a millionaire.

Speaker 1 1% of millionaires are famous.

Speaker 1 1%.

Speaker 1 99%

Speaker 1 you will never meet.

Speaker 1 You will walk past them on the used car lot and have no idea who they are.

Speaker 1 You'll walk past them at Costco and never have any idea who they are unless you know George and you would say, George is a millionaire. That happens.
So there you go.

Speaker 1 Because George spends way too much time at Costco. It's a hobby.
Yeah. But anyway, there we go.

Speaker 3 That's true. There's a lot of mythology out there.
People think, well, you got to inherit it. You got to to be a trust fund baby.
You had to do something illegal or scam people or

Speaker 3 run a company. And so we just are out here trying to displace all of that.

Speaker 1 When I was a kid growing up in a

Speaker 1 middle-class neighborhood, those folks, most of my parents and their contemporaries, grew up on a farm and then moved into the suburbs. And that's the suburb that I grew up in.

Speaker 1 And in the South, they would say when someone's saying, oh, the little man can't get ahead,

Speaker 1 and they never say it like that. They say, well,

Speaker 1 the little man

Speaker 1 can't, it sounds like Eeyore,

Speaker 1 right?

Speaker 1 You know,

Speaker 1 it's bad.

Speaker 1 We're all stuck.

Speaker 1 You know, that's how it sounds. And we would call that in the South.
I don't know what you people call it up north, but we called it poor mouthing.

Speaker 3 Oh, I never heard that before.

Speaker 1 Yeah. Talking poor.
And Mike Todd said, I've never been poor. I've only been broke.
Poor is a state of mind. Oh, that's good.
So that's what we're fighting against by doing this hour.

Speaker 1 Now, we're talking with, we started the discussion before the break with Stephen and Michelle.

Speaker 1 They got a $1.3 million net worth, million in retirement, $230 in house, $70 in cash, 54 and 44 years old. They did not inherit their money.
They had a little bit, but not enough to make them.

Speaker 1 Making $80 to $200 during their working lifetimes. Now, what do you guys do for a living?

Speaker 2 I am a computer operations manager.

Speaker 1 Okay.

Speaker 2 And I'm a youth well-being coach. Cool.

Speaker 1 Okay. And so

Speaker 1 degree in information management, Stephen?

Speaker 1 Computer science. Computer science.
Okay. Of course.
And what was your GPA?

Speaker 2 Just enough to graduate.

Speaker 1 Right answer. He graduated.
Thank you, Laudie.

Speaker 1 It's a past five. Yes barely.

Speaker 1 No, I mean, really? You're like a two? I mean, what do you graduate with?

Speaker 2 I think it was like a two, five, six.

Speaker 1 Two, five, six.

Speaker 1 Yeah, okay. gotcha.
And what about you, Michelle? What's your degree in?

Speaker 2 My degree is in elementary education, and my GPA was whatever it was to be on the dean's list.

Speaker 1 I don't remember.

Speaker 1 3.0, probably. Yeah.

Speaker 1 Okay. I'm guessing, but yeah, that usually is it.
All right. Good for you guys.

Speaker 1 So

Speaker 1 you're talking to a 24-year-old version of you

Speaker 1 20, 30 years ago. In today's world in America, can they do what you have done?

Speaker 1 Bill Wells.

Speaker 2 Well, yeah,

Speaker 2 you just have to

Speaker 2 not listen to the TV all day. This is my

Speaker 1 God. That's for sure.
So,

Speaker 1 what's the dumbest thing you all have ever done with money?

Speaker 2 Bought a new car right out of college because I didn't know anybody yet.

Speaker 1 There we go. All right.
What do you drive now?

Speaker 2 I just got a Mercedes ML 350 2010, but I still have my O2 Mini Cougar S that I've driven for 19 years.

Speaker 1 You've got a 2010

Speaker 1 Mercedes 350 ML.

Speaker 1 Yep, it is 14 years old.

Speaker 2 Yeah, but

Speaker 2 it's pretty much mint, and my friend works on.

Speaker 1 Yeah, 90% of the people walking up beside that have no idea it's not new.

Speaker 1 Right. Because the body style hadn't changed that much.
That's a good car. Okay, cool.
Good for you. That's neat.
What do you drive, Michelle?

Speaker 2 I drive a 08, right, Steven?

Speaker 1 Yep. An 08 Honda Fit.
What's the most either one of you spent on a pair of blue jeans?

Speaker 2 Maybe $50.

Speaker 1 Okay.

Speaker 2 Probably $35 when I graduated from college. I didn't know anybody.

Speaker 1 For those of you that live on Instagram, you just got a reality check. You're talking to a couple of millionaires here, and he just moved up to a 14-year-old car.
Woo!

Speaker 3 Living large. Okay.

Speaker 1 And so you guys are amazing. Way to go, heroes.
I'm so proud of you. Thank Thank you for sharing your story with us.
Denise is in Denver. Denise, what's your net worth?

Speaker 2 2.8 million.

Speaker 1 Give me a little breakdown by category, real estate, retirement, and so forth.

Speaker 2 Okay, 1.2 in my retirement, 200,000 in liquid stocks mostly,

Speaker 2 and then 1.4 million equity in my house.

Speaker 1 Okay, cool. What's your house worth?

Speaker 2 Oh, 1.9, maybe 2.

Speaker 1 Okay, she got about a half million dollar mortgage on it. Okay, cool.
How old are you?

Speaker 2 I just turned 60.

Speaker 1 Good for you. All right.
And how much of the 2.8 did you inherit?

Speaker 2 75,000 like 20 years ago.

Speaker 1 So am I safe to say mathematically you're not a millionaire because of that? Correct. Okay, cool.
And what's your best year working income and worst year working income?

Speaker 2 Best year,

Speaker 1 oh,

Speaker 2 400 and worst year, 50-ish.

Speaker 1 Okay, cool. And what's your career?

Speaker 2 I've always been in a real estate,

Speaker 2 you know, related business. So I started in the mortgage business, did that for 25 years,

Speaker 2 took a little time off to raise my son, and then went back selling real estate. And then when I was doing that, I learned how to fix and flip houses,

Speaker 2 which

Speaker 2 I did that on a couple of them, and that's proved to be

Speaker 2 very prosperous.

Speaker 3 And that's what you're doing now.

Speaker 1 You have a degree?

Speaker 2 In psychology.

Speaker 1 Psychology, okay. And what was your GPA?

Speaker 2 Like 3.4-ish.

Speaker 1 Okay. Cool.
Cool. Now, are you

Speaker 1 divorced, widowed, or always single?

Speaker 1 Divorced. Okay.
How long ago?

Speaker 2 Nine years ago.

Speaker 1 Okay.

Speaker 1 How much of this has happened since then?

Speaker 1 Probably half. Okay.
I would say. That's hopeful for somebody out there that's 50 going through a divorce after 23 years of marriage.
I'm making this up. But,

Speaker 1 you know,

Speaker 1 I appreciate your story. Thank you for sharing that part of it.

Speaker 1 You're amazing. Way to go.

Speaker 2 Aw, thank you.

Speaker 1 So

Speaker 1 do you think it's still be done? That girl that's out there listening that's 50 or 48 and her 23-year marriage just ended and she's getting a little bit out of that marriage.

Speaker 1 Could she still go do this?

Speaker 2 Yeah, I would recommend people, I mean, most of my wealth has been a result of real estate and,

Speaker 2 you know, creating windfalls for myself along the way. It was really hard for me to always live on a salary, but, you know, or my commissions.

Speaker 2 But, you know, if you come up with a plan to, you know, buy a rental house, fix it up, sell it, you know, something where, you know, you can get two, three hundred thousand dollars and then roll it back in.

Speaker 2 That's really been one of the secrets to my wealth.

Speaker 1 Yeah. Amen.
Amen. You've done a great job.
Congratulations. Thank you.
Wow.

Speaker 3 I'm impressed. And this is, this goes to show you, Dave.
I mean, so far, very little inheritance, nothing that caused it. These are people in their 40s, 50s, 60s.

Speaker 3 So no one in their, you know, at 22 yet that did Bitcoin. A lot of basic stuff, retirement accounts, equity in the home, a little bit in cash.

Speaker 1 Occasionally we talk to someone that inherited it. Occasionally we talk to a lot of winner.
Occasionally we talk to someone in Bitcoin. But they're less than 5% of the time.
You and Farby?

Speaker 1 95% of them sound just like these.

Speaker 3 That's so encouraging.

Speaker 1 Means like I could do it. Yeah.
You did do it.

Speaker 3 I did do it. Following the same steps.

Speaker 1 Just that.

Speaker 1 Sitting next to a baby steps millionaire. That's what I'm doing right now.
This is the Ramsey Show.

Speaker 1 The Money and Marriage Date Night virtual event is on sale now. That's Rachel Cruz and Dr.
John Deloney. It'll feature a lot of the incredible parts from our Money and Marriage Getaway.

Speaker 1 They're going to be diving into real topics like goal setting, budgeting, and working through every season of life as a team.

Speaker 1 When it's John and Rachel, you can pretty much be guaranteed you will also be laughing.

Speaker 1 It's happening October 29th, and you can attend from anywhere from the comfort of your home or whatever. There will also be a QA so Rachel and John can answer your questions live.

Speaker 1 This is a virtual event, October 29th. Money and marriage date night virtual event.
You don't want to miss this. Early bird tickets are only $39.

Speaker 1 That will go up October 6th, so go ahead and get them now. Your tickets today at ramseysolutions.com slash events.
It's a millionaire theme hour.

Speaker 1 Now, some of you are not aware, you need to pick up the book Baby Steps Millionaires, which is my latest number one bestseller.

Speaker 1 I really didn't intend to do that book, but I got tired of people saying it couldn't be done when I was meeting people everywhere that did it.

Speaker 1 Every time I go out at a break to take pictures on this show, I meet a millionaire. I met two a while ago at the break, and they go, yeah, I can do it, Dave.
I mean, yeah,

Speaker 1 and they look like regular people because they are.

Speaker 1 So we did the largest study of millionaires ever done.

Speaker 1 10,167 of them studied here in North America. Tom Stanley, my friend who passed away several years ago in 1992, did a book called The Millionaire Next Door.

Speaker 1 He came to his conclusions with a sample size of 750 millionaires. That's what he studied.

Speaker 1 He was a Georgia State University professor when he did that, and sold enough of those books to become a millionaire next door.

Speaker 1 But it's a wonderful piece of work. But he got criticized because of the sample size by journalism students who had never had a statistics class.

Speaker 1 If you've ever had a statistics class, you would know that a sample size of 750 out of approximately at that time 10 million millionaires in North America is

Speaker 1 statistically significant, meaning that the sample size was large enough to get to draw conclusions from that are accurate statistically.

Speaker 1 Okay, now if you're only a journalism student, you probably wouldn't know that, and so you would bitch whine and moan because you're a leftist that this study was inaccurate, but it was accurate.

Speaker 1 So we decided, all right, we're going to go ahead and put all that to bed, and we're not going to do 750, we're going to do 7,500, 10x what is needed. to make proof.

Speaker 1 And we're going to hire an outside firm to look over our shoulder and make sure sure there's no confirmation bias and all of our research and our

Speaker 1 processes and models are accurate and cannot be questioned. So we ended up going crazy.
We did

Speaker 1 about 7,000 from the public and then we threw in another 2,000, 3,000 from our files. that we talked to.
They were Ramsey millionaires, in other words, people that were in our tribe.

Speaker 1 But these were not Ramsey tribe members, the first 7,500. So there's 10,167 of them, and

Speaker 1 the sample size is 10x what it needs to be to be significant. The research is airtight, so if you disagree with the conclusions of this study, you're what's known as wrong.

Speaker 1 That's how this works, okay?

Speaker 1 These are known as data called facts, not your feelings from your communist college professor. I couldn't care less what your communist college professor thinks.
Okay?

Speaker 1 This is the truth.

Speaker 1 79% of America's millionaires inherited precisely nothing.

Speaker 1 Eight out of 10.

Speaker 1 5%

Speaker 1 inherited a small amount like people we have talked to this hour, 5,000, 10,000, 25,000, but not enough to mathematically cause them to be millionaires.

Speaker 1 So they're not millionaires because of inheritance. Another 5%

Speaker 1 got substantial inheritances after they were already millionaires.

Speaker 1 So 5 and 5 and 79 is called 89.

Speaker 1 That means that 90%, 9 out of 10 of America's millionaires, there's approximately 24 million of them right now,

Speaker 1 9 out of 10 of them are not millionaires because of inherited money.

Speaker 1 So the next time someone says that, you can be nice, you should be kind, but you can think to yourself, you're an idiot

Speaker 1 because they're that dumb. They are absolutely stone cold wrong.
Okay?

Speaker 1 They've been watching too much YouTube about wealth inequality and they're studying Chinese Tic Tac to try to figure out how the capitalistic economy works.

Speaker 1 Just dumb sources. Okay, if your information on finance is coming from Tic Tac, you probably have a problem.

Speaker 1 I mean, we're the only ones on there making sense. And the only reason we got on there is so that something on there made sense.

Speaker 3 Just making me angry how much dumb stuff was on there. My favorite, Dave, on my YouTube comments now is, Dave, a million dollars, that's not even a lot of money in today's world.

Speaker 1 And they're all broke. Yeah.
Well, it's more than you got, Bubba.

Speaker 3 So you can't make these people happy because they're miserable.

Speaker 1 Yeah, I'm hell-bent on being a victim. So stop it.
Okay.

Speaker 1 That's the point of this, guys. It's called hope.
You can do this. We have shown you how to do it.
I'm so dumb. I had to do it twice.

Speaker 1 I was a millionaire by the time I was 26, lost everything, went bankrupt, had to start over

Speaker 1 without even my hair.

Speaker 1 And I still did it again.

Speaker 3 At least we know it wasn't a fluke.

Speaker 3 You do it two times with skill.

Speaker 1 All right, Andy is up next. Andy's in Atlanta.
Andy, what's your net worth?

Speaker 2 It's three points, just over $3.5 million.

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

Speaker 2 All right.

Speaker 2 Retirement amongst all the different accounts is 1.46.

Speaker 1 Okay.

Speaker 2 Non-retirement is $780,000.

Speaker 2 And then real estate would be $1.3 million.

Speaker 1 Good for you. How old are you?

Speaker 2 I'm 56.

Speaker 1 Okay, cool. How much of this did you inherit?

Speaker 2 I inherited $60,000 when my mom passed 22 years ago, and that's that's it.

Speaker 2 That allowed us to move up from the starter house to our house with kids.

Speaker 1 Okay. All right.

Speaker 1 And it helped a bunch if it's 22 years ago. Mathematically, it would have helped a bunch, but still not enough to be the cause of a $3.5 million net worth.
Agreed?

Speaker 2 Oh, totally. I mean, it let us get into a bigger house that really didn't appreciate during the time at it.

Speaker 1 So, yeah, had I put that in the market, it would have been a different story. Gotcha.
Okay. Cool.
So what is your best year working income, your worst year working income?

Speaker 2 Worst year was right out of college, $19,500.

Speaker 2 And best year, probably last year, combined with my wife, probably about $450,000.

Speaker 1 Cool. What do y'all do?

Speaker 2 I own a small business that creates sensory rooms for kids with special needs, and my wife is a health coach.

Speaker 1 Okay, cool. What's your degree in?

Speaker 2 Industrial management.

Speaker 1 Perfect. Yeah, okay.
That's cool. What a great application for that.
And what was your GPA?

Speaker 1 What was your GPA?

Speaker 2 3.6.

Speaker 1 Good for you.

Speaker 1 Okay.

Speaker 1 And so you're 56 years old. What would you tell people again?

Speaker 1 Can this be done if they're 26 and they're listening and their friends are telling them they can't do it? I think they can do it. Do you?

Speaker 2 Yeah,

Speaker 2 my kids are around that age, and I tell them all the time, of course you can.

Speaker 1 Yeah. What should they do if they want? What should they do? What do you think the key is?

Speaker 2 It's just save early and save often and

Speaker 2 just make it part of your life.

Speaker 2 Don't neglect putting that money away.

Speaker 2 I explained to my young employees, male employees, my wife saved $10,008 in her PERS account in Ohio, and then when she left that job over 20 years ago, it just stayed there because we can't move it.

Speaker 2 And that $10,000 is worth $173,000 today.

Speaker 1 Wow.

Speaker 3 What's in the retirement account? What kind of, you know, was it a single stock? Was it mutual funds? What got you there?

Speaker 2 It is a mutual fund, but I mean, this was before we knew anything about managing that. It's all large cap stocks.

Speaker 3 So you're not an investing prodigy, safe to say.

Speaker 1 Yes. Well, no, I am not.
What do you drive?

Speaker 2 Well, most days I drive my 2009 Honda Odyssey minivan with 175,000 miles on it.

Speaker 1 Get a better car.

Speaker 2 Well, on the other days, I drive my 2023 mid-engine Corvette.

Speaker 1 Oh, there we go. You did it.
All right.

Speaker 3 He buried the lead.

Speaker 1 Boom. He set me up.
What a trickster. It's not his daily driver, though.
Okay. It's a Garage Queen.
Good. I like it.
I like it. That's fun.
This is the Ramsey Show.

Speaker 1 It's a Baby Steps Millionaire's Theme Hour. George Camill.
Ramsey personality is my co-host today. We're talking with real millionaires this hour.
How did they really do it?

Speaker 1 Jessica is in Mobile, Alabama. Hi, Jessica.
What's your net worth?

Speaker 2 Oh, gosh, hi, 2.3.

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

Speaker 2 1.2 is in investments, and 1.1 is in real estate and tax liens.

Speaker 1 Okay, good for you. All right.
And how old are you?

Speaker 2 52.

Speaker 1 52.

Speaker 1 And how much of this did you inherit?

Speaker 2 $100,000 from my father's death in 91 and 200,000 from my mother's in 21.

Speaker 1 Okay. So that took you a long way towards this goal.
I can't do the math fast enough in my head.

Speaker 1 That might have actually pushed you over the edge for sure. So you're kind of on borderline as to whether this was inherited money or not.
Okay. Is that right?

Speaker 1 I mean, 300,000 over a couple decades would turn into a million.

Speaker 2 Well, I just got the 200. So

Speaker 1 you got 300. You got 100 and 200.

Speaker 3 The 200 was in the last three years, though, is what you're saying? After you were already a millionaire? Okay.

Speaker 1 Oh, I see. Oh, I missed up.
Okay.

Speaker 3 The 100 was back in 91. So that one did have a 100%.

Speaker 1 Well, the 200 was just the other day. Oh, I missed that.
Okay. Thank you.
Thanks for catching that. All right.
Now, your best year in working income and your worst year in working income.

Speaker 2 Best year was 80, worst was 12.

Speaker 1 Okay. What do you do?

Speaker 2 I'm a chiropractor.

Speaker 1 Ah, okay. Good for you.
And obviously,

Speaker 1 chiropractic degree, right?

Speaker 1 Yes, sir. What was your GPA?

Speaker 2 4.6 out of high school, 3.9 3.9 out of college.

Speaker 1 Wow. Smart cookie.
Yeah. There's New York up front.
Yep. I knew there was a smart one in here somewhere.
Okay.

Speaker 1 And

Speaker 1 what do you attribute this net worth to at 52 years old? What would you say the secret sauce is?

Speaker 2 Being so scared to be poor again. I was poor until I was 40.

Speaker 2 And I didn't ever want to go back there. I don't want to rinse out my Ziploc bags anymore.
I want to buy new ones.

Speaker 1 Wow.

Speaker 3 I mean, you're talking like poverty level for the first four decades of your life.

Speaker 2 Oh, yes, sir.

Speaker 3 And in 12 years, what happened?

Speaker 2 So

Speaker 2 when you're self-employed, there's a lot of variables. Some years we paid to go to work.
Some years

Speaker 2 BP stuff happened. Like there's so many variables.

Speaker 2 And I was always scared of spending money. So I literally lived like a poor person.

Speaker 3 So once you started making money, you just lived on very little and saved and invested the rest?

Speaker 2 Totally.

Speaker 1 Okay.

Speaker 1 So is there any part of that you regret?

Speaker 2 No, because I'm sitting and breathing now.

Speaker 1 Yeah. Yeah.
You're sitting here. You're sitting in a sweet place.
What do you drive?

Speaker 2 Yeah, that's my problem. I buy high-end new cars every two years.

Speaker 1 You do. Cars are your weakness.
It is. Okay.
What are you driving?

Speaker 2 I'm an S Porsche.

Speaker 1 Ooh, sweet. Good for you.

Speaker 1 We have $2.5 million. You can afford a Porsche.

Speaker 2 Exactly. It's fine.
It's paid off. It's fine.

Speaker 1 Yeah, Yeah, absolutely.

Speaker 1 It fits the program. Love it.
Way to go, Hero. I'm proud of you.
Good work. Richards in Harrisburg, Pennsylvania.
Richard, your net worth.

Speaker 2 Hey, Dave, it's an honor to speak with you. My wife and I are at $3 million.

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

Speaker 2 Sure. $1.5 million in a 401k, $600,000 in a 403B, $750,000 in real estate, $150,000, and an airplane, $50 in cash, and 35 in other vehicles.

Speaker 1 Okay, good for you. And how old are you?

Speaker 2 61.

Speaker 1 All right, good. And how much of this did you inherit?

Speaker 2 Well, I did inherit a bowling ball.

Speaker 2 But my grandfather was, well, his nickname was Shorty. So I'm six feet tall.
My fingers don't fit in the holes. I'm not going to pay to have it redrilled.

Speaker 1 Wow.

Speaker 3 You can't make that up.

Speaker 1 You've been working on that one a while.

Speaker 2 No, it's really true. It's sitting out in the garage collecting dust.
Yeah, I mean, it was his. I don't want to throw it away.

Speaker 1 It's a great paperweight.

Speaker 3 So other than that, no money.

Speaker 1 I'm putting down a bowling ball. I'm writing it down.

Speaker 3 It's Dave's favorite item of inheritance.

Speaker 1 This is great. And your best year working income, worst year working income?

Speaker 2 Best year was two and a quarter, and worst year was my first year at $3,000.

Speaker 1 What do you do? Or what did you do?

Speaker 2 In IT system engineering and management.

Speaker 1 Four-year degree?

Speaker 2 My wife actually works as a customer service rep for a large health organization here in the state.

Speaker 1 Okay. What's your degree in?

Speaker 2 Don't have one.

Speaker 1 What's hers in?

Speaker 2 Doesn't have one. Okay.

Speaker 1 Both of you high school.

Speaker 2 Yep. I've got about 40 technical certs, but they were all past fail, so I can't give you a GPA.
Yeah.

Speaker 1 Yeah, that's exactly right. Okay.

Speaker 1 And that sets you up to win in the IT field with a high school diploma. Excellent.

Speaker 1 30 certs is better than a four-year degree. We know we've got them working for us.
Good. Good work.
I agree. Good work.
Good work. Good work.
In that field, for sure. Yeah.
Way to go.

Speaker 1 Congratulations, sir. Can this still be done?

Speaker 2 Oh, my goodness, yes. I know it can because I did so much of it wrong.

Speaker 1 What was the dumbest thing you've done?

Speaker 2 Oh, my God. Well, you mean, besides buying the airplane?

Speaker 2 I guess, let me, I can just give you a couple things.

Speaker 2 I've bought eight brand new cars before I was a millionaire. I've bought zero since I've been a millionaire.
I did all the baby steps, and I did them completely out of order.

Speaker 1 Right.

Speaker 2 So if I can do it all wrong and come out with some reasonable measure of success, then absolutely anybody who's willing to.

Speaker 1 What do you think you did right?

Speaker 1 What was the saving grace? What did you do right?

Speaker 2 The saving grace was at the age of 34, I started contributing to my 401k. And then every year that I got an increase, I just threw the increase in there.

Speaker 2 And then my wife, who hates to spend money, never shops, does her own nails and drives a 10-year-old car and loves it, it, was perfectly fine with us putting her entire salary into her 403B.

Speaker 1 And so you've got 2.1 in those two.

Speaker 2 Yeah,

Speaker 2 this just went on and on. And we just, you know, if you don't ever have it, you never miss it.
Yep.

Speaker 2 And we just committed ourselves to the systematic methodology of putting the money away every paycheck.

Speaker 3 There's the real wealth hack. Marry a frugal saver.

Speaker 3 And you'll be okay even if you mess it up.

Speaker 1 Yeah.

Speaker 3 What did we learn today, Dave?

Speaker 1 Well, we learned that the average GPA is 3.5, 3.0, 2.5, 3.4, 3.6,

Speaker 1 one 4.6, caller before last, and one high school graduate.

Speaker 1 So the mythology that you have to be a genius and be the valedictorian is not true.

Speaker 1 These people are smart. I mean, they're not 1.6.

Speaker 1 You do need brain cells,

Speaker 1 but

Speaker 1 they're not genius level. Yeah.
Okay. So, you know, which is, you know, I'm glad to hear that because I'm actually, I have a 2.97.

Speaker 1 Wow. I'm still pissed about that 3100.
Couldn't hit the three.

Speaker 1 They didn't just give it to you. There was beer involved.
I'm just saying. But yeah.

Speaker 3 You can't round up.

Speaker 1 But yeah, it was,

Speaker 1 and, you know, and I'm

Speaker 1 doing it. It worked out.
So I'll leave it at that. And income.

Speaker 3 Here's what's interesting. Millionaire study found a third never made six figures in a working career.
And here we got, we had one today, Making 80 grand was the max. Max.

Speaker 3 And a $2.3 million net worth. So you don't have to make, you know, $150,000 or $200,000 like some of these callers.

Speaker 1 Yeah,

Speaker 1 we had a $150,000 a $200,000 a $400 as a high, $450.

Speaker 1 That was the big one. $450 was the biggest income.
So this idea that you have to make $800,000 a year or something like that to be ⁇ no, you don't.

Speaker 1 What we do know mathematically and culturally and demographically is the tortoise wins, not the hare.

Speaker 1 Slow and steady wins the race. Like the last guy, he consistently dumped money in his 401k.
He's got 1.5 in there. His wife consistently filled up her 403.
She had 600 in that.

Speaker 1 That's 2.1 million just in those two numbers of their 3 million.

Speaker 1 And that's slow and steady wins the race. He got a later start.

Speaker 3 He didn't even start investing until 34.

Speaker 1 Slow and steady wins the race. Slow and steady wins the race.
Slow and steady wins the race.

Speaker 1 But we live in a culture where you look at Instagram and the pretty people who are broke,

Speaker 1 wearing $500 jeans, driving cars they can't afford, living in houses and going on vacations that they can't afford, is who you're comparing yourself to instead of the people we've been talking to today.

Speaker 1 And that is a mistake.

Speaker 1 Comparison is not only the thief of joy, the number of hours that you spend on social media is directly correlated with how broke you are.

Speaker 1 Did you hear me? The more time you have with media in front of your face, the more they're telling you that your life sucks and you need to go spend money you don't have.

Speaker 1 Turn it off.

Speaker 1 You can turn this show off if you want, as long as you go save money.

Speaker 1 Go save money and invest money.

Speaker 1 This is the Ramsey Show.