Is Your Debt Turning You Into an Anxious Mess?

From Ramsey Network, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Camel, joined by Dr.
John Deloney this hour. Open phones at 888-825-5225.
If you're new to the show, here's how it works. You call in, we talk to you, and hopefully we help you take the right next step for your life, your money, and your relationships.
Sydney's going to kick us off in Huntsville, Alabama. What is going on, Sydney? Hey, guys.
Thanks for taking my call. Absolutely.
So I think this is right up George's alley. My husband and I are in a disagreement about how much to contribute to retirement.
We're a little background. We have about $420,000 between both of our retirement accounts right now, and then $160,000 in non-retirement savings.

We don't have any debt besides our mortgage,

and then we also have started college funds for our children.

Wow.

He thinks that once we reach a certain point,

and that number in his mind is about $200,000, $250,000 per person,

that we can take our contributions down to 1%. And i am not for that at all of course um but yeah i'm just trying to why one percent why not just go to zero man well i guess his thought is that he can he's we're still contributing something but when he does like the um you know compound interest calculator in 30 years, it's still

$4 million or something like that. And he thinks that's going to be enough.

Wow. Well, it sounds like 15% is not going to damper your lifestyle at this point.

If you just invest 15% until the house is paid off, then you can invest even more beyond that

or give more. What's the harm in that? It sounds like you guys have a great income.

Um, well, that's another factor is I like am kind of wanting to stay home with our kids. All the more reason to invest, is it not? In my opinion, yes.
So I'm trying to win the argument to him. Do you kind of want to stay home or do you all the way want to stay home? So all the way, but okay.
So my company, they contribute 15% of my salary, which is about 120,000 to my 401k, regardless if I contribute anything, but I also contribute 15%. So that's a big holdup for me is I'm getting 30% of my salary every year into my retirement.
And so I feel like I'm giving up a huge chunk. Why are you contributing an extra 15%? If they're already contributing 15% of your own money, that's the same as you contributing 15% of your own money.
Correct? That's correct, yes. Yeah.
So what if you dial back to 15%? Is he beyond 15% right now with his income? No, so we are, he's probably, he just started a new company, so he's actually not able to contribute yet. The past few years we've maxed out, and then like just this year, so he works in the mortgage industry, so obviously things have slowed down a lot, so he dialed back his contributions to that 1%.
Well, that's my big thing is we don't know what 30 years from now looks like. We don't know if he's going to be able to work three years from now.
We don't know what life is going to throw at us. And so I like the idea of just investing 15% until we get the house paid off.
We can increase it there. And we've had very few calls where someone said, man, I hate that I invested 15%.
We have too much money. Help.
That's my favorite problem to deal with. We get a lot of calls of people saying, hey, we're 62.
We have to work because we thought our retirement was going to do this, but then our account did this. And we didn't realize that our funds weren't in the right spot.
And there's too many variables that I don't like about just not investing or investing 1% because you feel like you can ride it out. Right.
Can I ask you, what is he going to do with the rest of the money? So if I did leave, if I quit working, like all of my benefits, all of our benefits, family benefits, everything on, are on my side. And with his company, the benefits are, I mean, it's like triple what we pay.
So it would kind of even out to dial it back to that 1%. So what does he make? And then the insurance.
It varies. I think this year it will be probably around $250, maybe.
Just on his side. So if you stay home, household income is at $250? Yep.
Yep. With just a mortgage.
What's left on the mortgage? $280,000. And what's the non-retirement funds for, the $160,000? So we just sold a piece of real estate, and we plan to buy some land and eventually build.
So we're kind of just holding it at our high-yield savings right now. Why not pay down the mortgage? We also have a brokerage account that we may just move it there to.
I don't really know yet. Okay.
Well, I would be focused on getting rid of the mortgage, which is only going to make your life staying home even easier, way more margin. And I would continue investing 15%.
And one of the reasons of many is we don't know what 30 years from now looks like. We don't know what inflation is going to do.
We don't know what taxes will be. And so I would rather have a bigger pile of money.
Well, it's not hurting your lifestyle here. You know, we're not talking about 60%.
It's 15. And you guys have done such a great job already.
So I applaud him on that. But now is not the time to let our foot off the gas.
So you would even put that towards the house even if we plan to move in like the next two years? Well, are you going to keep the house and buy the land? Would you sell the house when you get the land? We would probably buy the land, build, then sell the house. Okay.
I mean, I don't like the idea of you guys having two mortgages. If you get the land, are you going to be able to pay for the land in cash and build in cash? Yes.
Not build in cash, no, but we would pay for the land in cash. Okay.
There might be a weird little period there where you've got the mortgage still, plus you've got a new mortgage as you try to build. So I would consider that as well as part of your near future plans.
But I don't know that I can convince him to invest more.

He can crunch all the calculations he wants, but this is all conjecture at this point.

And so I would recommend you guys sit down with a third party, like a financial advisor,

and have them walk you through big picture.

Here's where you're at.

Here's where you're telling me you want to go.

Is there a gap right now?

What's it going to take to get there?

And he might say, hey, you're 110% on track. Let's scale back.
Or he might say, I'd continue down this path. But two knuckleheads on the radio may not be able to convince him.
That's the problem. No, I appreciate it.
Here's the biggest convincing. Six years ago, I was three jobs and two states away.
And if you had told me six years ago that I would be a YouTuber or that I'd be sitting on the radio next to George and the largest call-in finance show on planet Earth, I would have laughed at you. And so I think it's easy to be like, hey, I don't want to do this principle now.
Cause I got this thing that's going to happen in five years. And what's pretty cool is I didn't say, Hey, I, I might want to be a YouTuber someday.
So I'm going to quit going to college. I'm going to quit showing up to my day job.
I'm going to practice YouTubing. I kept doing my, the day to day principles that I knew, which is to continue to go to grad school, continue to write good papers, continue to show up in my job.

And then when this opportunity came along, it was cool because I had the foundation.

And like George said, like no one's ever called us and been like, man, I just put too much in retirement.

I wish I hadn't done that.

Yeah.

But our show only exists because people don't, they have some scheme that in five years,

I'm going to buy the land and I'm going to get the goats.

I'm going to do it all in cash.

And so I'm not going to put anything in retirement.

You don't know if you're pregnant with twins tomorrow and everything in your life changed. You see what I'm going to buy the land and I'm going to get the goats.
I'm going to do it all in cash. And so I'm not going to put anything in retirement.
You don't know if you're pregnant with twins tomorrow and everything in your life changed. You see what I'm saying? So just keep playing the chords in a 4-4 time.
Just keep doing the things that you know are right. And then on top of that stuff, then opportunities show up because you just kept doing the right thing day in, day out.
It's diet and nutrition. It's just the same boring thing over and over again.
And then suddenly 10 years later, you're a millionaire, right? It all works out. So keep just showing up, keep showing up.
And I know he's smart and wants to hack his way to it, but it's just, it's just not possible. Thanks for the call, Sydney.
More of your calls coming up. 888-825-5225.
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That's BetterHelp, H-E-L-P dot com slash Deloney. Welcome back to the Ramsey Show.
I'm George Camel joined by host of the Dr. John Deloney Show.
Dr. John Deloney himself is with me.
Hey did you hear? I heard uh yes 825-5225 but I heard James may have been a finalist for the presidency of the Smashing Pumpkins fan club. No way.
Congrats. He's one of the best.
I know that's been a long time coming for him. He's a huge, huge, huge fan.
Decades. He's awesome.
888-825- 5225. We're live.
And that is called trolling, my friends. In case you don't understand sarcasm.
Alright, Carol is up next in Tucson. What is happening, Carol? Hi, you guys.
Can you hear me okay? Yeah, you could do a little better, but we can hear you. Okay.
I'll talk as loud as I can. Just right into your phone is what's helpful.
Right into my phone. How's that? That's good.
Better? Sure. Okay.
I'm a little nervous. you take your time.
Okay. So I,

I was forced into an earlier retirement due to some medical reasons.

Um,

but fortunately I kind of set myself up with the anticipation of,

of that.

I've been a low wage earner most of my life,

no college degree,

waitress and all of those things finally ended up in a customer service position that, you know, got me by paycheck, kind of paycheck. But I had, um, you know, Dave Ramsey kind of mindset about just saving every penny, save every penny, save every penny.
And I ended up with a small savings of about $70,000 that during the 08 housing crash, I decided to funnel it all into buying real estate, which paid off big time because I got three single family homes that were bottom dollar, either foreclosure or short sales, and they're all paid in full now. Awesome.
Yeah. And they've been rented? Oh, yeah, they've been rented the whole time.
I've been doing rentals. This has been since, well, right around the 2009-ish time frame.
I also, early on, bought a duplex that I lived in the front and rented the back door. I helped have that.
So I never really have paid a mortgage or a rent because the renter has always paid for that. And that's now paid in full as well.
So you have four paid-for properties, including the one you're living in. Yeah, three single-family homes and one duplex that are basically all paying full.
I do have a small mortgage on one of the single families. It's about $50,000 or so.
So I'm working on kind of paying that down. But I ended up in an early retirement.
And it worked out because I was able to because I have about $4,000 coming in from the long-term rentals. And I turned the back of the duplex and then an also little area in the back into Airbnbs, which brings in its own money.
So what's your total monthly income from all this real estate? I mean, it varies because the Airbnbs fluctuate based on seasons. I tried to kind of average that out.
And the average is roughly because some months I'm doing $10,000 a month and some months I'm doing $150,000 a month. So it's really all over the place.
But I average it out to around either $18,000 to $2,000, maybe a little more per month as an average year for the year on the Airbnb. Okay.
And then the rentals, the long-term rentals bring in, again, this is gross, but, you know, it's pretty close, about $4,000 a month. Okay.
So your gross income, let's just call it for easy numbers. We're going to say you're making $70,000 a year.
Okay. Let's go with that.
And what is your question today? Well, I have no debt. I have no car payments, no credit card payments.
I have a small medical debt. I'm questioning whether I should be, to simplify my life, sell these long-term rentals, sell these houses, which I'm guessing would get me close to a million dollars in hand.
Okay. I'm concerned about capital gains because I'm going to make a fortune on me.
From what you bought it for and what it's worth today. Astron and if i do is there a way to protect so i don't have to and is that a wise idea is that a bad idea should i just keep going where i'm going or should i really kind of rethink and simplify and put it into something that earns interest um i don't well there's nothing wrong with, Dave loves real estate.
Most of his net worth is in real estate. A lot of his income comes from real estate.
And I would also say it's wise to be diversified. And so maybe you split the difference.
Maybe you don't go, I'm going to liquidate all the real estate and pay the taxes and put it all into the market. Maybe you go, I'm going to sell two of these and put that money into the market so that I'm diversified.
And I have some income from the real estate, some income from the stock market, and they can balance each other out in that way. If the real estate market takes a dip or you got a bad renter, well, your investments are still trucking along the stock market.
The stock market takes a big dip, but real estate spikes. Well, we've got a good hedge there.
So I like that mentality for now. And as it becomes more of a headache, you can liquidate more real estate.
As you get older and you don't want to do landlord stuff, you can get rid of more. Okay.
There's no way to avoid capital gains on that scenario, though, right? There's 1031 exchanges and you can do that until the cows come home. But at some point, someone's going to have to pay the taxes if this thing sells.

And I would be working with a tax pro

as well as a financial advisor

to develop the best game plan

because you've built a sizable net worth here

and some real assets.

What is your total net worth?

I mean, right.

For somebody who's never made money in her life on a career, like on a W-2, I'm a millionaire.

Good for you. Well, there's a lot of paths to get there and you did it.
And Dave bought a lot

of real estate during the crash and it panned out for him, just like it did for you. And he bought,

you know, a hundred X of what you bought probably. So I don't think there's anything wrong with

diversifying. I think it's a smart move.
And I would look at the tax implications and see,

all right, which one do I want to kind of dip my toe in the water with? Let's sell this property. Here's the taxes I'm going to owe.
I'm going to put it into the market. Here's the general rate I might see over that time.
And that kind of guarantees that you have some level of income from real estate and the investments. Okay.
And what type of investments do you recommend for something like that? Like, is it like a boss thing? Or I mean, I'm not, here's the thing. I'm really naive about investments.
So I really would have to 100% rely on the trustworthiness of a financial person. Yes.
Well, we have a whole network of those. If you jump onto RamseySolutions.com and click on Trusted Pros, you can connect with one that we trust to help you with this stuff.
And what they're going to recommend is mutual funds. And so these are giant piles of stocks.
We're talking like 200 plus stocks in one of these funds. And that keeps you diversified.
What they're not going to do is say, hey, I heard that Tesla is going to go, you know, skyrocket after this move they make. We don't recommend that.
You want to be diversified among the best top companies out there that we're all rooting for. And even then, they'll diversify you amongst different mutual funds.
Maybe there's an aggressive growth one with smaller companies that are more startup. Maybe there's growth in income, the big companies we've all heard of for the last 50 years.
And so that will help you sleep better at night and avoid giant roller coasters in the stock market. Okay.
Do I get dividends from that every month? I set it up that way so that it kind of supplements my income, or is that something that should be continued to just kind of roll over on itself? I'm more of a fan of reinvesting the dividends. You're not really getting any benefit there.
What's happening is they're selling off the shares, and then they're going to give you the profits. So instead of sharing the profits now, I'd rather see those profits reinvested and add to the compound snowball that's happening.
Okay. But then that means my monthly income is really going to take a dive if I get rid of- Potentially, depending on when you need the money.
And so that's another thing to think about is, are you not going to touch this money for five years or do you need this money next month? And that's the kind of stuff the financial advisor will walk you through and go, here's a plan based on what your expenses are, what your needs are, and your age and your time horizon for retirement. And so that's where, you know, you want a big holistic picture and a third party looking at that's really going to be beneficial for you.
Right. Well, I'm in retirement now early due to medical reasons.
How old are you? And I'm not trusting Social Security. So I do rely on this income.
Yeah. And that might be part of the picture.
That's why I would say, let's not go liquidate it all and then go, oh gosh, I need this income right now. So get connected, RamseySolutions.com, click on Trusted Pros, and they'll steer you in the right direction.
But you've done a great job, even if it was accidental, John, I'll take that. Still a win.
Still a win. So thank you so much for the call, Carol.
More of your calls coming up. This is The Ramsey Show.
This is The Ramsey Show. Open phones at 888-825-5225.
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Today's question comes from Victoria in Kansas. Victoria asks, my son is 21 and has been living with his girlfriend since they graduated high school.
She's taken over his life and money to the point that he has cut off contact with me three times. She grew up Already she stepped in it She grew up with limited means

And I was his life and money to the point that he has cut off contact with me three times. She grew up,

oh man, already she stepped in it. She grew up with limited means and I was a single parent, but did well financially.
I showed him how to save money and be frugal. I raised him to earn the things he wanted.
Before cutting off contact with me this time, he said that they have leased brand new matching cars and he now has credit cards to build credit. This time, if anything were to happen to me, I would not feel comfortable leaving him any of my assets.
This girl has driven a wedge between us and I don't want her to have a single red cent of my hard earned money. I fear he will give her everything.
Any advice on how to get him to come home? And if he doesn't, should I go ahead and remove him from my will? Oh, yeesh. All right.
So, um, a couple of things here. Dave's talked about this pretty eloquently and I won't be as eloquent, but when your son's 21 and he moves out, you are now in the influence business, not in the dictation business and the dictator business.
When you have a 16 year old in your house, you can kind of say, here's what you're going to do, right? When they're 21 and they've moved in with a romantic partner and they're out, they don't have to do what you say. So Victoria, you worked really hard.
Single house, single mom, you busted your butt. You want to make sure they learn some lessons, some real important stuff.
It's heartbreaking to watch your son living a life that you worked so hard for him to not live. I get it.
It's heartbreaking. You have some hard choices to make.
So A, you got to grieve it. You had this picture of how it was all going to work out.
He was going to marry someone who's amazing. Y'all are going to be close.
That picture is not reality right now. Number two, I say this with all due respect, your best bet is to become someone who is likable.
And what I mean by that is, if every time you're with him, you're lecturing him. If every time you call him or talk to him, he knows you hate his girlfriend and you want to make sure he, nobody wants to be around that person.
If he knows, yeah, I know where my mom stands on these issues. We don't share values, but my mom loves me.
And I feel, whew, after being around my mom, then you've got a better chance at influencing. And that's not, being likable doesn't mean I'm going to sign up for everything he's interested in.
I'm not going to like say, oh sure, to any, all of his crazy ideas, but he knows I love him and I'm not going to lecture him every time I'm going him right so that's number two number three here's a hard thing man if you don't want to give him your money don't give him your money if he is living a life and is expressing his life with values you don't agree with um then don't give him your money don't not give him his money because you hate his girlfriend, right?

That's a weird, I guess here his girlfriend is going to spend it doing dumb things, and I get that, but I think, Victoria, this is worth having a conversation. And if I'm a parent, here's how I would start it.
I have divided us up over issues, and I'm sorry. You know how I feel about moving with your girlfriend.
You know how I feel about leasing cars. You know that.
You're my son, and I love you to the end of time. I've got some pretty hard and fast rules around my money and I'm making my will.
Before I just leave it all to you, you got to know I can't, I feel like I'm enabling these behavior if I give you this money. You got to have that hard conversation.
Don't leave it to the executive of your will to have the hard conversation for you. That conversation is going to be had.
Break it to him 30 years from now. Hey, by the way, you get nothing.
You get nothing because you moved with your girlfriend. You're 21.
Like, don't do that. Have the hard, have the courage to have the hard conversation.
You're the parent. But this is about influence now.
This is about love and connection. It's not about, I'm going to tell him because he's 21.
He's out. He's no longer living by your rules and in your home.
And that's so hard for a parent, George. You and I both have young kids.
I can't imagine that. You know what I mean? It's tough.
And the other thing is I hope this is a season. I mean, he's 21.
You know, at 18 when you're dating a girl, it's very different than at 25 or 35 when your prefrontal cortex is fully developed. Yeah, you know what I knew at 21? I knew everything.
I knew everything. And there's that old, that great, I'll screw it up, that old great Mark Twain quote.
When my dad was 14, he was the dumbest man who ever lived. And when I talked to him again when I was 21, I was stunned at how much my dad had learned in seven years, right? Like, that's true.
At 21, you're a moron. So here's the thing.
The chances of this relationship not working out,

strong to quite strong.

And if you have burned the bridge,

he knows you are not a safe place for him to come home to.

Not that you're going to agree with everything.

You're not a safe place for him to come home to.

He won't.

He'll go somewhere else.

He'll go into the arms of some other goofball or he'll run to a house full of knuckleheaded men that,

you know, whatever.

Let him know, come hell or high water,

you're my son and I love you.

Always, and you can always come home.

She can't come with you.

I don't like her. You can always come home.
I'm reminded of the prodigal son. I can't help but think about that parable.
And there was no caveats where he went, well, if you lease a car, you're not coming back here, son. Don't even think about it.
There'll be no feast for you. I'll meet you in the street because I'm so excited to see you exactly and so i obviously the analogy breaks down pretty quickly here but i still think there's an element of that just open-handed love and connection don't make it about the financial matters make it about the love and the relationship because if you make it transactional and go well you're only going to get this in the will if you don't lease a car relationship's over right because you've made it transactional i will exert my power over you even after i'm dead.
Well then cool. Keep your money.
I'm going to move on with my life. And if I sign a piece of paper that says I get XYZ when you pass away.
Well our relationship is largely over. That's what it's based on.
If it is I'm your mom till the end of time. And hey I can't.
You know me well enough. I can't put money in that account if that's how you're choosing to live.
You know that. I know that.
And that's a different conversation there.

Thanks for the question.

Yeah.

All right.

Tough stuff.

Let's get to a call here from Chris down the road in Nashville.

What's going on, Chris?

So my question is, can I retire?

And my net worth just exceeded $4 million.

So I've got $826,000 to pay for property.

The rest of this is mutual funds. I've got $995,000 in Roth, $1.6 million in pre-tax, and $610,000 just in regular investment, mutual funds.
That's outside of retirement. You've been busting your butt for a long time, Chris.
Yeah, brother. You're what we call rich.
I've been working at this company for going on 38 years. Wow.
And how old are you? I'm 61. Okay, so you can access these funds.
George is not even 38 years old, Chris. Yeah, that's pretty wild.
Before I was born, you were working hard. I started here when I was 24 in 1987.
I'm proud of you. So your question is, can I retire at 61? Sounds like you're ready to.

I've been here a long time. Yeah.
What's next? The question is,

what are you retiring to? I don't know that. Are you single?

No, I'm married. My wife is 54.
She works full time.

What'd she have to say about this? She wants me to retire. She wants me to.
It sounds like she could retire along with you if she wanted to. You guys got a big pile of cash.
Well, you got to have insurance. Well, here's the deal.
If you just crunch the numbers on paper, we could go, all right, we could cover it. We're self-insured.
Yes, it's going to add a monthly expense. Here's what health care will be.
What does the next 30 years look like? Our retirement, these investment accounts, they've been producing on average, you know, 8% a year, 9%, 10% a year. Here's what that means if we retired, we could pull this much to cover our expenses.
Have you crunched all those numbers? Yeah, yeah. I mean, I think I can do it.
But, you know, it's just hard to pull that trigger because, you know, I would stop all my investments and all my investments and start pulling money instead of putting money in. Here's way harder than that.
What do you do for a living? I'm an IT guy. That's the problem.
Chris, you're wealthy beyond most people's imagination. You're a multi-multi-millionaire with a paid-off house, so you've captured the risk side of this equation.
Your identity has been, I'm an IT guy at this place for four decades. George's question to you is really important.
Who are you going to be the Monday after you retire? That's the question you need to ask, and that's a question you and your wife need to do together, but it's an identity question. Who am I going to become? And I would really recommend you not quit to do nothing.
Quit to go do a new thing. I'm going to go work at Chick-fil-A.
I'm going to go do a thing even for six months while I get my feet under me, but you got to have something you get up and go to every day and not just do nothing, but it's about identity. You got the money, brother.
Yeah. Financially, you got my green light, but we just got to figure out the rest.
But man, that's a big step. You've done really well.
I'm proud of you, man. This is The Ramsey Show.
All right, Dave, you have some strong opinions. Possibly, yeah.
I think so. Okay, because you really prefer credit unions over big banks.
So why is that? Well, credit unions, for one thing, are non-profit, which means that the members, the customers, own the credit union. So any profits that the credit union makes goes back into customer pricing.
So you get better interest rate on savings, cheaper checking, and so on, that kind of thing. But what's more important than that, though, is the fact that the customer is the owner changes the spirit on the credit union.
So I find very few credit unions that aren't very customer-centric. Yes.
Well, and I think we have found one that is incredible, and that's Fairwinds. They are an incredible credit union that is really out with the heart to help the customer.
You know, that's why we're partnering with them because they've got a scope to be able

to handle the Ramsey audience and they're the right kind of people with the right kind of values.

And they've done a really, really good job with customer service and the deals that they're

offering. The Ramsey tribe is incredible.
Yeah, absolutely. And you're right.
Their customer service is unbelievable. Winston and I just signed up and we got an account.
And I'm not kidding. It took less than five minutes.
It was so user-friendly. The step-by-step approach was unbelievable.
And then the next day, my phone rings and it says Fairwinds on my phone. So I answered it and talked to someone there.
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Yeah, you guys, it's so

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That's F-A-I-R-W-I-N-D-S dot org slash Ramsey. Welcome back to The Ramsey Show.
I'm George Campbell joined by Dr. John Deloney.
John, I'm on social media a lot. I know you're less so, but I like to watch all the funny videos that people send me that I come across.
And one of them makes fun of us. And I like a good razzing.
One of them? All of them make fun of us. A lot of them make fun.
And I don't know why the algorithm says, show this guy Ramsey show spoofs and gags. But I like it.
I think the social media algorithm knows who is the most insecure oh so they show him to ken coleman oh oh that was me all right all right didn't i didn't pick up what you're putting down there well one of these videos is from one of my favorite online comedian content creator guys and his name is trey kennedy have you heard of him i have he's hilarious he did a video spoofing dave sitting in seat, and I want to show it to you. Let's do it.
All right. Here we go, America.
We got Trey from Edmond, Oklahoma. How you doing, Trey? Hi, Mr.
Ramsey. How are you? Better than I deserve.
What's up? So I'm kind of debating dropping out of college. Gosh, Trey.
Well, I got to hear the story about how you befriended a few leprechauns, because apparently you found a pot of gold. Dropping out to do what? To be a content creator.
Social media influencer. I don't know if you've seen my vines.
Dads be like is kinda going viral. You know what dads be like, Trey? Dads be like providing for their family.
Dads be like saving and investing debt free. I don't know, maybe I could try to like do a comedy tour.
You know what, you are funny, Trey. You should be, because everyone in the studio laugh at him.
Brilliant, brilliant work. And lucky enough, man, that felt really close to home.
Yeah, it was a little too real. I'm glad Dave's not in the seat.
He may have taken offense, but I think he would have had a good laugh. And I think Dave likes it because we've got Trey coming on the Live Like No One Else cruise to do comedy.
Excellent. And I think he's on the line if we've got him.
Trey, are you with us? Yes. What are you doing? Oh, my gosh.
This is amazing. Good to be here.
Thanks, guys. How are we doing? We're doing great doing great good to have you do you have any financial questions for us sell the truck sell the truck i mastered it as a comedian i obviously was very financially driven to do this because that's always a good idea uh yeah what did your parents think when you were getting into comedy like was it, hey, you're going to go to college and get a real job, or were they cool with you exploring this? Well, you know, I come from a great family and a man who really taught me finances, and I got a finance degree.
So it was ingrained in me, so the whole time I was never threatening to drop out of college or anything. I was doing the videos and finishing my degree.

So they were fine with it.

Wow.

As long as I was doing that.

And I'm glad you're using your finance degree to join us to do comedy on the Live Like No One Else cruise.

That's perfect.

Let me be clear.

My finance degree, I got it, but I don't know how well I got it.

So comedy is a better fit for me.

Trey, from the outside, be honest with us. We kind of make it pretty easy, don't know how well I got it.
So, mommy's a better fit for me. Trey, from the outside, be honest with us.

We kind of make it pretty easy, don't we?

You know what's funny?

You know, you try everything as a comedian.

I was like, you know, all my friends, everyone I know, they know you guys.

I have so many friends who've gone through all y'all's curriculum.

And I was like, let's spoof Ramsey.

I feel like we teed the ball up for you.

I love you. A little bit.
A little bit. But hey, I'm with it, okay? I'm a frugal guy.
Yeah. Did you kind of grow up Ramsey? Did you know? Did you go through financial peace? What was your first sort of interaction with this Ramsey fella? My dad is like the ultra-conservative, frugal guy.

So he's so frugal, him and Ramsey would be buddies.

He's like, I already know the Ramsey stuff. He got the book used from Goodwill or from the library.

He's like, I'm not going to pay for it.

That's incredible.

He ingrained it in me, and I've had a bunch of friends go through it.

Especially where I come from, Oklahoma, church. I mean, you guys dominate.
You got people in envelopes everywhere. I went to lunch once with a buddy, and he pulled, like, a PBJ out of his pocket.
I was like, this is going too far. Not even in a baggie.
Yeah, right. Oh, my gosh.
Hey, Trey, on behalf of everybody, I just want to say in a moment when I think the debate ended the other night with if you vote this way, the world ends. If you vote this way, the world super ends.
Can I just say thank you on behalf of humanity for bringing joy and laughter into, like, just bringing some sort of joy to our world? And I don't want to get all existential, but thank you. Like, on behalf of a guy who's just two little kids, like, thank you for bringing laughter into the world.
We need it, man. Thanks, man.
That's really nice. Yeah, I mean, if something big is happening, it's just, you know, thank you for saying nice words.
But to me, the debate for me is not about the future of the country. It's just like, yes, I can make some content.
Perfect. It's like very self-show.
That's all that's at stake here. Just like, all right, how good is this Instagram reel going to do? That's incredible.
There it is. I'm grateful, man.
Well, you just wrapped your grow up tour and you filmed a standup special in Salt Lake City back in April. What can we expect from you on the Live Like No One Else cruise packed with Ramsey fans? Man, I am so excited.
You know what? Comedians everywhere know when you get booked for a gig, you know, nine times out of ten, you're like, you just got to go do what you got to do, but I am pumped to come hang with y'all and get on a cruise. Were you surprised? You're like, wait, I made fun of them like seven times.
They want me to, okay, all right. Yeah, you know, it's funny.
I've been making all these Travis and Taylor bits and stuff with Ramsey. You wonder, like, will Ramsey Dave even see this? And then if so, he's either going to love me or hate me.
Oh, no, you can hear him laughing from his office upstairs. Good, good.
And by the way, many people will be drinking the Kool-Aid on this cruise, but we've got a special Kool-Aid IV drip for those of us in the green room, so we'll get you hooked up. No, okay, perfect.
Perfect. That's amazing.
Yeah, I wrapped the tour, so I'm about to have a kid here, so I'm off the road for a couple months. Whoa.
the road. Yeah, two under two.
Well, our gift, we're going to send you Ramsey Plus for one year. We're going to send you FPU.
Good, good. So, yeah, if you've been seeing me this past year and coming on a cruise, it's going to be all new material, all new fun stuff.
I'm sure I'll have something up my sleeve, you know, specific to the Ramsey crowd.

Please make fun of them.

They are just dying for it.

All the rice and bean jokes, all the frugality, all the Dave cars,

and make fun of Dave especially, and we'll make sure he's in the room for it.

Absolutely.

Hey, man, we wish you the best.

Congratulations.

Hope everything goes well with your new kid,

and thank you for bringing some light and levity into a world that desperately

needs it, man.

We're grateful.

Can't wait to hang out this spring.

We're going to Can't wait to hang out this spring. Really grateful for the honor of doing the cruise, so I can't wait.
You bet. We are pumped.
All right, Trey Kennedy, go follow him. Join the three million on Instagram who have chosen to do so.
Trey Kennedy, live like no one else cruise. He'll be doing comedy with some other comedians as well.

March 22nd through the 29th, RamseySolutions.com slash Cruz is the place to go.

We've got some cabins left before it sells out.

All right, John.

This is my contractually obligated announcement that this hour,

we've got some hot calls coming up.

You excited about it? Hot calls? Well, the board is filled up. We got Nicholas.
We got Jasper. We got Dan.
San Antonio, Charlotte, Alberta. And I got to know, before we jump on here, what's the over-under that we get a call about a horse? Well, we've got a call from Texas and a call from Canada, so I think the over-under is quite a strong possibility.
Pretty high. Yeah.
All right. Those are two horsey regions.
That's not a word. Okay.
Yeah, that wasn't good. Not a word at all, but we'll get there.
That wasn't good. Well, I don't know if we have time for one more call, do we? He's a little tight.
Producer James says, too tight. Okay, let's get to a social question, John.
Do you have those with you? I got one here. This one's from Kean on Twitter.
Kean? Recently sold my house. We don't know.
Recently sold my house. I got a new home under construction.
Do I take the profit from the recent sale, pay down my construction loan with a very low interest rate, or do I take that cash and invest it into the market? When people sell a house, they feel like they just won the lottery and they forget that that money should be used to put into the next home.

It's like people who total a car

and they get a check

and they think they won something.

They're like, no, you have to go get another car.

Yes.

You need a car.

Yes.

And you don't need a much nicer car

with a bigger loan.

Right.

So absolutely keen, if you will,

I would take the profit from the sale

and pay down your mortgage,

the construction loan. That's the goal.
The goal is to become totally debt-free mortgage and everything.

It's not only but anything.

That's it. So we'll do our investing separately.
Let's not try to combine the two and take home

money and put it into the market. That puts this hour of The Ramsey Show in the books.
Thank you

to Dr. John Deloney.
Thanks to Trey Kennedy for joining us at the end of that hour. That was fun.

And to all the folks in the booth keeping the show afloat, we'll be back with you before you know it, America. This is The Ramsey Show.
From Ramsey Network, this is The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Camel, joined by bestselling author Dr.
John Bologna. Give us a call at 888-825-5225, and we'll help you take the right next step for your life and your money.
Nicholas is going to kick us off in the great city of San Antonio, Texas. What is going on, Nicholas? Hey, guys.
How are you doing? Doing well. Cool, cool.
How can we help? I had a question about a horse. Oh, no! Yeah! no yeah there's no way really please tell me you're joking no no i don't oh man i was about to earn 100 bucks george bet me off air that was gonna be awesome next caller please no my real question is about um trying to get into a house my wife and i $57,000 a year household income, so pretty small

income for the two of us, but we need to move somewhere. We have to get close to health care so we can get another AV on the way.
We have about $28,000 in debt. That's about $18,000 for a car loan and $10,000 for student loans.

And my wife has great credit because she's been paying her student loans for a while. I have no credit.
I've never had any debt, never had any utility bills in my name. So I've got no credit at all.
We're trying to figure out how can we afford a new place to live with our current duration and how do we get to where we need to go with some speed. What's the issue with renting? Well, I don't know that we could, I don't know what we would get with how much I can afford to put in each month.

We were looking more towards putting that money toward equity than towards...

Well, here's the deal.

If you can't afford rent, you definitely can't afford to be a homeowner.

And so that's the worry here is it's not apples to apples.

If you go, well, we could get a mortgage for $1,500 and live in a shack that needs to be renovated versus rent. Rent is the most you'll pay.
And that mortgage is just the beginning. When you factor in maintenance, repairs, the HOA, the PMI, all the things that you might encounter.
So I would tell you right now, you're not in a place to buy a home. I want to get you in a place to buy a home.
And what that looks like is knocking out the $28,000 in debt, getting our income up, getting an emergency fund, and then saving up a down payment and stepping into home ownership. So how long would that take? I don't know.
Currently, we're on track to pay off our debts, but only at the minimum payments. But we can step it up.
I mean, minimum payments, you're talking a 20-year payoff plan. I'm talking like a two-year payoff plan.
What would it take to pay off $28,000 in less than two years? We could do it. If we keep saving the way we do and...
How much are you saving a month? Well, right now we have a poor sampling. We're going through a house claim and paying for repairs for a house that we're living in now.
So you're cash flowing repairs? I'm sorry? Are you cash flowing the repairs? I'm not sure what that means. I'm sorry.
Are you paying cash for this or are you going into debt for the repairs? We're paying cash. Okay, good.
So my thing is making 57, it's going to be hard to pay off 28. And so that's where I think we need to get the income up.
What are you two doing for work? I work in insurance. My wife stays at home.
We have a baby. Okay.
So it's just your income? Yeah, just mine. Okay.
So what does it look like to get your income up in the insurance world if you choose to stay there? I'm on track for that. I'm on my way to some promotions.

I finish some training in the next few months.

That will hopefully bring with it some more pay.

I don't know how much.

I, if it were for me to make something substantially more,

I would just need a few more years at my job.

But I have no clear timeline as to when that might happen.

Can you do extra jobs on the side when you're not doing insurance?

Gosh, I

don't see how.

It's

a pretty demanding

job.

How many hours are you working?

Well, it's not just the hours

of job, it's the hours spent doing training and learning on the side. So it's already quite a bit invested other than the job itself.
Okay. Yeah.
Well, here's the spark notes of the call here. You're asking about improving credit, buying a house.
I would not worry about improving your credit right now. I would worry about getting rid of this debt and getting a foundation with an emergency fund.
That is the best thing you can do. And the credit score is not a great scoreboard for how we're doing financially.
Because you can have a great credit score and still be in a place where you'll be a broke homeowner. And I'd rather see you step into this next chapter as a homeowner making good money.
And if she wants to stay at home, that's great. We just need to figure out how to get all the things we want in a way that doesn't destroy our life.
The tricky part for us, though, is that we can't have another baby until we move. And we really want another baby.
I know, but Nicholas, here's what you're not hearing. You don't have a home problem.
You have a math problem. You get what I'm saying? You don't make enough money.
That's me being a jerk. They're saying it that way, but you don't make enough money.
And George and I would not love you as just a fellow dad. We're both dads.
If we said, hey, the best thing for your family is for y'all to artificially inflate your value to a bank, which is all a credit score is. Did you know if I gave you $10 million in cash right now, your credit score would still be zero? It has nothing to do with how much money you have.
It has to do with how well you've been a boyfriend to debt. That's it.
And so what George is telling you, what I'm telling you is your house needs to have more money which means if we really want to be a one income family you my brother have to say i got to make more money somehow if y'all really want to have a house so you can have a second kid then your wife's gonna have to say okay i need to be a part of bringing in extra dollars and cents and we have this dream of being a homeowner and being a stay-at-home mom, okay, cool, then the lion's share, the bulk, or all of the money earning comes from you. But there's a math problem here.
And just because there's all these different exit routes into all of these awful traps that George writes about in his book, it doesn't mean that it's safe or it's smart or it's wise. And brother, listen to me.
I've been in a home with a toddler and another baby on the way that I can't afford because I owed a hundred grand of student loans. And I'm telling you right now, I was a nightmare.
I couldn't breathe, dude. And I became an anxious mess.
And so when we sold our house and we moved into a tiny, tiny, tiny little dorm apartment, I actually had more peace. I was a better dad there.
Okay? And so I get how you feel trapped, but it's a math problem that I want you and your wife to tackle. It's not a credit problem.
It's not a finding the right bank problem. It's not.
This is a math problem, dude. And it's a math plus values problem, actually.
Want to be a stay-at-home mom? Want to have more than one kid? Want to have every kid have his own room? Cool. Then we got to make that much money.
You get what I'm saying? Yeah. Yeah, I was printing some numbers, and even with the math that I was doing, we would have...
The only thing that we could have tried to pay for where the mortgage was the absolute keep it happy confined that's right which is going to be a nightmare house that you're going to have to sell because you're going we can't afford the hundred thousand repairs that this thing needs to make it livable don't do it man don't do it it's going to be a vortex of pain my friend please don't do this this is the ramsey show. You know, one of the first things I discovered working in the financial world is how absolutely devastating it is when the breadwinner of a family dies and there's too little life insurance or none at all.
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This is The Ramsey Show. It's a show where we talk about you to you, about your life and your money.
Give us a call at 888-825-5225. I'm George Camel, joined by Dr.
John Deloney. And next up, we've got Kim in Chicago.
What's happening, Kim? Hi there. I am married.
And before we got married, I knew my husband had some student loans. And then after we got married, I found out about some credit card debt he had as well.
And I listened to the show occasionally and I offered to pay off his debt. Like I know I married him and his debt and it's my debt.
I offered to pay that off for him. He declined.
And I'm just saying like he would feel guilty if he, if I did that and he would feel like he owed me the money. But if he just pays like the minimum payment towards it and he doesn't have that guilty feeling of owing like the credit card companies.
Um, and in general, like he's the spender and I'm the saver. And so like he pays the minimum payments and then spends the rest.
So my question, two parts is like any tips on how to talk to him about that? Because like we, it doesn't like really end well when we try to talk about it. And then also like, okay, assuming like his habits don't change and like I love him and I'm not trying to change him.
Like what can my strategy be with my income and my savings separate from that? First of all, I think ego has destroyed more marriages and more business relationships. It's just so stupid.
And so on behalf of all of us, I'm sorry that your husband's precious little ego, it's going to make me feel bad, is more important that he nurture and care for than your marriage. I'm sorry.
Here's the deal. That's going to show up everywhere.
It's not just going to be in your finances. And so I think the credit card thing is a proxy war right now for, because it's going to come up with how many kids and the size of your house.
And I want to buy, I got to get this new car, because I don't want to be the guy in the car, because it'll make me feel bad. And so it's just going to be ego, ego, ego, ego.
I think the conversation you'll have to have is, um, are you going to put our marriage ahead of your ego? Cause if you're not, then you're going to, you are right. And already looking down the road and be like, I'm going to have to do some things to protect myself because this is going to go South.
I think you're right to do that. And what you're talking about early on is it was, we call it financial infidelity, but was he hiding money from you or hiding debt? Um, just like I had seen his credit score and I had, I knew he had student loans and the amount on that, but yeah, after when we applied for our home loan, I became like seeing his credit report like next to mine i was like wait what's this and then it came out what was it was he buying um he said it was over like you know years like traveling or things he he's a spender like he just has he buys he spend any of this money while you were married? No, I mean, I found out about five months after we were married.
So he has not gotten any further into credit card debt since you've been married. Can you tell me that with full certainty? I do not know that with full certainty.
I know that I know his current amount of is $21,000, I believe, and that's less than it was last summer when I saw it. And his grand plan is to make minimum payments and spend the rest.
That makes him feel better. Like, man, I wish I hadn't have done this for so long.
Y'all are headed in a, like, y'all need to cut this off at the pass. You guys are in different worlds with your financial values and where you want to go.
He doesn't want to go anywhere. And he's in a tiny prison that he's created and you are willing to post bail.
And he's saying, no, I'm going to do my time in here in here I did what I did I should do the time

and you're giving him a get out of jail free card as his wife but it's not even that it's a hey I want to build something new together and this thing's holding us back can I I'm holding these uh I'm holding these bolt cutters can I just cut this chain and he's like well that would make me feel bad because I have muscles and so I'd rather just be attached to this chain where else does this ego show up

in your marriage

I have muscles and so I'd rather just be attached to this chain where else where else does this ego show up in your marriage I don't know I mean we have a pretty good marriage I think this is one of the but but I didn't really prepare here's the big red flag you are already preparing to create your own world inside of your marriage and this is how it happens happens. It happens with, she's always so mean to me, I'm just going to come home about 30 or 45 minutes later.
I don't know how to, every time I'm around our newborn, I'm just, it's a failure factory, I'm going to go stay at work. It's when people inside of a marriage start creating their own little mini universes that you end up just by degrees a thousand miles apart from each other.
And so the fact that you're asking this question, that's why, A, I just have a personal, I cannot stand male egos that would rather blow up a marriage than just say, I'm sorry, I screwed this up. Thank you for being a person who's responsible for it.
Let's move on. I hate that with all my guts because it's so stupid.
So sick of egos. Okay.
So that's my bias. That's my drama.
I'm bringing to this call. Okay.
Not, not on you, but the bigger picture is I'm hearing you love this guy. Want to solve this guy? Just be, you're just like a practical problem solver and you're already starting to create, okay, what kind of spaceship do I need to build inside of this bigger ship so that I can stay safe? And I want you to hear me say that's a big red flag.
The bigger conversation is, hey, we've gotten off on the wrong foot. We've been married for a few months.
We have a great marriage. We love each other.
We're great friends, right? But already, I feel it's starting to separate. We've got to be on the same page when it comes to money.
We've got to be on the same page about telling the truth to each other. Can we recommit? I'm in if you're in.
Do you get what I'm saying there? Mm-hmm. And that is a different conversation than the proxy war, which is, hey, I'll just pay the minimums, but I want to pay it off.
That ends up being a, a look, look over here, look over here to the actual issue, which is my ego is more like massaging. My ego is more important than us getting on the same page.
Do you get that? Yeah. Okay.
And so I, I think it comes down with you sitting down and having a direct hard conversation, but using the word I to lead that conversation, which is I don't feel like we've gotten off on the right foot. I feel like we're already building two separate worlds in the same house and I don't want to do that.
I love you too much. We get along too well.
Our friendship is too strong for this. Can we control alt delete? What do you mean?

Dude, you brought in credit cards to this marriage that I didn't even know about.

And then you won't even let me take care of it

because you want to have my money and your money.

I want to have our money.

Because I want to have our kids.

I want to have our house.

I want to have our marriage.

And so let's just control alt delete it.

Can we just put that to bed?

And if he won't have that conversation,

you don't need to go see a marriage counselor.

Because you're just setting the stage for a long-term challenge here. Yeah.
And that's, I mean, yeah, I've tried to have that conversation. But, yeah, it just ended with, like, well, it's my money, so I'll, like, I saved it, so I spent it on something else.
You know, like I kind of said. How long is this going to be my money and my problem? When is it going to be we and our? Yeah.
Hey, this is our money. We pay the bills together.
We set goals together. We build wealth together.
It's our home. It's our life.
It's our kids. You see what I'm saying? Would he go through Financial Peace University if we sent it to you? Would he actually watch all nine lessons with you, have the hard hard conversations and not just cower down and go, ooh, it's making me feel bad? You think he would do it? I have hope he would.
We're going to send it to you. That to me is, this is the Hail Mary of like, if he's willing to watch this, I think we can do the convincing.
And Dave is a great salesman to get you fired up about your own mistakes and go, hey, let's move forward from this. But let's not make minimum payments and pay 22% APR on our mistake and never pay this off and never make progress because that's going to drag you down too.
And you're a part of this marriage last time I checked. So hang on the line, Kim.
We're going to send you Financial Peace University. Watch all nine lessons, have the hard conversation, get on a plan together, and maybe you can pull him out of this mire that he's created for himself.
This is The Ramsey Show. Hey guys, good news.
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Welcome back to the Ramsey Show. I'm George Camel, joined by Dr.
John Deloney. Open phones at 888-825-5225.
You know, John, for several years here at Ramsey, I've been trying to uncover and expose a lot of the money traps that are out there. We did a podcast called Borrowed Future that we then turned into a documentary uncovering the student loan crisis.
I did a podcast called The Fine Print where I exposed all kinds of money traps out there. And so anytime we get a big one, I feel like we need to let the people know out there what's going on, what they need to know.
And of course, to stay away from this because I don't want them to be the next victim. And so we were made aware of this one and ProPublica just broke this story.
And it's about this company called Exeter Finance. They're one of the largest auto lenders in the nation.
And they specialize in high interest loans to people with histories of not paying bills or defaulting on debt. So this is subprime lending.
Subprime lending, their company is designed to overcharge people who struggle with um with being able to pay their bills and they wrap it up in this bow we're here to help you yeah life wrap the other banks don't love you as much as we do right and other banks are saying hey you guys can't afford this um you need to find other alternatives and they're like no no no, no, no, we'll take you. We'll take your business and we're going to bleed you dry.
And there's a lot of scummy companies, lenders out there. This one might take the cake.
They might take scum of the year for what they're doing to people here. And we're going to get into some of the details.
But this company has more than 500,000 active loans and they have a partnership agreement with CarMax, which is the country's largest used car retailer, and they act like they are the provider of second chances. Literally, on their website, it says, we're here to help, except their practices often do the opposite.
ProPublica says, when the company allows a borrower to skip payments, so they go, hey, I can't make the payment. They go, oh, we'll give you an extension.
Go ahead and just skip that one. And they go, oh my gosh, really? Thank you.
That's what's happening. Well, what happens is it typically adds thousands of dollars in new interest charges to the customer's debt.
And dozens of customers told ProPublica that Exeter did not tell them about the added costs. So they'll say, absolutely, here's an extension, skip the payment, end sentence.
They don't say, and by the way, this is going to add $2,400 as a balloon payment at the end of the loan. I think that's the biggest catch as I read through this.
It's not even, hey, you know what? My mom's got cancer. I got a kid who's very, very sick.
Hey, don't worry about it. Don't worry about it.
And there are companies that will do that, right? That will say, we're going to note this. We're going to add add two months to the backend of your loan.
So you said, we said it was going to be done in May of 2027. You know, it's going to be made done in July of 2027.
We understand, right? That does happen. And they say, no, no, that's super cool.
We're just going to charge you thousands of dollars in interest and fees for that. And by the way, you're going to owe us as your last payment.
And that's where this thing got really gross to me is you make your payment. They think you're a hero.
You just saved my life. Thank God I can get my kid the medicine they need.
I can go see my mom in the hospital. Thank you.
And then you get all the way. You make the payment, make the payment, make the payment for the next two years, three years, and then your very last payment.
Hey, you owe us $6,000. Remember that time four years ago that you had a crisis? You owe us $2,700 right now.
And guess what happens when you're already broke and financially destitute? You can't pay, which means they repo the car. So they win.
And that's the whole setup, which is why this is gross, is, hey, we're going to charge somebody who we know can't make the payment. We're going to be graceful the whole way.
And you're going to keep paying in payments. You're going to pay us two or three or four times the value of the car.
the way it's already a loan at 25 percent interest and then we're just going to take the car at the end so we don't even have to have a great loan because we're going to get the car and then we're going to resell it at our we're here to help lot right oh it's disgusting i i ate it it's it's just preying on hurting people and it it it's it breaks my heart is what it does it's just that's just that I can't fathom that this is how people in the world operate. Yeah, and I'm glad there's folks like ProPublica out there trying to expose this filth.
So they try to make their final payment. They're faced with this huge surprise bill they often can't afford to pay.
Exeter then repos the car, sends the bill to a debt collector. And in some cases, the company makes more money on loans that default than on ones in which borrowers pay on time.
Is that because they sell the car at the end? They're making money everywhere from the person with the fees from the repo, and at first blush, their portfolio looks dire. Majority of its loans, more than 200,000 of them, are at least three payments behind schedule.
A degree of delinquency that is roughly twice that of any other subprime lender in the data. That's crazy.
Many companies would be preparing to count those loans as losses, send them to a collection agency and repo the cars, but Exeter has turned what would have otherwise been a financial crisis into a profit center. The article says each time the company grants an extension, it resets the clock and reclassifies the loan as being, quote, on schedule.
And Pro Publica found that they've done this as many as 12 times over the course of a 72-month loan. So borrowers continue to make payments in hopes of catching up, and the records show that many customers paid the equivalent of the full loan or more only to see their cars repoed.
So they took out a $15,000 loan, they had paid $15,000, and it's still the car is taken away. Oh, and even better, a collection company then comes back after you for the repo payment.
I mean, not for the repo payment, for the balloon payment. Keeping you in a cycle.
So you're in it forever. Or just poverty.
For eternity, yeah. And this company, Exeter, has always specialized in the subprime market.
But in the late 2010s, the company specifically decided, we're going to go after customers with really poor credit more aggressively than we have in the past. So it accepted borrowers with even lower credit scores.
This is reminding me of the subprime housing crisis, John. They lent them way more money, as much as 50 grand per loan, and gave them longer to repay it.
And some agreed to schedule stretching longer than six years, making the loans more costly. So let me just say, these people did sign on the dotted line.
Yes, they were desperate. Yes, they deserve better.
They didn't deserve to be preyed upon. But they knew, hey, all right, I'll take on this seven-year loan at 25% interest.
And here's an example. There was a disabled veteran, Don, who was living in Louisiana.
In 2015, Exeter lent him $15,600 to buy a seven-year-old GMC envoy. Over the next seven years, the company granted him

12 extensions by phone. And each time the agent assured him he was current.
Well, in September

of 2022, this is seven years later, he had paid Exeter $29,000. Remember, they lent him $15,600.

He had paid $29,000, $819,000 more than his loan contract outlined. And the company told him he

still owed more than $9,000 on top of that. And so when he couldn't pay, they repo the envoy after he can't make the balloon payment.
And now the collections company is pursuing him for the 5,800 bucks he still owes. Oh my goodness.
I can't wrap my brain around this. And John, they've got a calculator on this article that I believe everyone should go check out.
Hold on.

I want to make sure we say this.

This show, I think, is we have beaten the drum from day one about personal responsibility.

You got to take ownership, right?

And the one thing that I have always applauded, all of us, behind closed doors, on the show,

is we do also understand, which is why the show exists. There are people that don't know, right? Um, I would, I spent 20 years working in universities.
There were students that I met thousands and thousands of them. They did not understand there was even an option of not going to school with student loans because it's what their guidance counselors, their parents, their grandparents, their friends, their church members, that's the ecosystem they lived in.
So they signed the dotted line. And so I do want to highlight, yes, people have personal responsibility and there is an entire swath of this country that does not know you can get a car without a loan.
Like that has never even entered into their mind. And that's what the show is about, right?

It's telling people there's other ways to do this.

And so there is personal responsibility and there's just flat out predators, right?

That go looking for people who don't understand or in a pinch have sick kids who have just lost their job and they go, yeah, yeah, yeah.

We'll help you.

Come, come, come here.

Come behind the building.

We'll help you.

No one else is willing to.

We stepped in.

That's right.

And we will destroy your life. We owe over a depreciating asset, right? And here's what this really is.
This is car loan deferment. We're talking about extensions.
It's the same exact thing. There is no difference between a deferment and an extension.
You're just pushing one or more loan payments to a later date. And so the reason this is working this way, John, most car loans use a daily simple interest calculation.
So you make a car payment once per month and you owe a little bit of that per interest. And over time, more of it goes toward the principal versus the interest.
Well, in these situations, they were basically making interest only payments and they were not touching the principal, which means their loan balance was not moving at all. And they had no idea because the agents weren't clear.
The customer service reps were incentivized to get them off the phone quick. Don't give them all the information.
And so you guys go check out this full article. It was eye-opening to read.
It was heartbreaking. And I believe everyone should go read it.
So we're going to link this ProPublica article in the show notes, in the description, wherever you're watching. They've got a calculator on that site to see just how bad these fees can be.
And I pray that anyone you know stays away from this. This is the new payday lender, and this could happen to your cousin who just walked over to the CarMax next door.
So share this, spread the word, and let's take these scummy companies down. This is The Ramsey Show.
I talk to people every day who want to know how to do better in two areas, money and relationships. That's why I'm pumped to bring the money and relationships tour to a city near you.
Join me and Dr. John Deloney for a night that will challenge the way you think about this stuff and possibly change how you live forever.
Starting April 21st, we'll be in Louisville, then on to Durham, Atlanta, Phoenix, Fort Worth, and Kansas City. Grab your tickets at RamseySolutions.com slash tour before they're gone.
Welcome back to the Ramsey Show. I'm George Campbell, joined by my good friend, Dr.
John Deloney. Give us a call at 888-825-5225, and we will be about the business of helping you out with your life and your money.
All right, John, let's get to the phones. Dan joins us up next in Alberta, Canada.
Dan, how can we help today? Hey, thanks for taking my call. Sure.
My question is, how would you recommend preparing for a large salary increase in two years, and should we change our debt strategy now with this in mind? We've about $120,000 in debt with a combined income of $250,000. We're making progress on the debt once we made a plan and started tackling it together, though we do know there is more of a go-room.
But my wife, she's going to finish residency in about two years. That's where most of the debt came from.
And we can expect her income to go up dramatically afterwards.

We also have our first baby coming soon, so that's causing extra stress because we know we won't have much family support with child care.

And we go back and forth about balancing intensity versus comfort

with our current plan.

I'm also kind of considering a career change, but it would involve a pay cut,

so I'm thinking it's better just tough it out for the next two years.

And we just aren't sure what is best in this situation

and would appreciate your advice.

Thank you. considering a career change, but it would involve a pay cut, so I'm thinking it's better just tough it out for the next two years.
And we just aren't sure what is best in this situation and would appreciate your advice. Wow.
Okay, we've got a lot going on all at once, don't we? I live out on some acreage outside of Nashville, Tennessee, and I've got chickens. And actually, we just got rid of our last chickens.
There was a hawk that took most of them. Anyway, but the number of times that I had 10 chickens and I went out to get 10 eggs and there was only six was every single day.
And I got a ringside seat to that old don't count your chickens before they hatch. And it's real easy to be at home and to say, hey, when this happens in two years, and I just imagine the number of people in 2018 that we're making plans for in two years and the number of people who are making plans in 2021 for in two years.
Do you know what I'm saying? Yeah. I would stay as steady as a drum beat, um, as a metronome and just keep doing what you're doing.
And if it all works out exactly the way y'all want it. Amazing.
That'd be so great. And you'll be able to just take this extra income and just start mowing down what you got left.
But the alternative is there's a big swing in X, Y, and Z. The Canadian government hasn't been super, super stable in the last few years, right? So who knows two years from now? I just would hate for y'all to make some plan based on some future salary that may or may not happen.
It probably will. It probably will.
She's going to med school, right? She's finishing up med school? Yeah, two years and then she's a surgeon. Exactly.
We think so. But also it wouldn't surprise me if there was some sort of legislation passed to cap the insane salaries of medical professionals in Canada.
That wouldn't surprise me one bit. And let's do it at the average of the average working class because we're all the same.
And that wouldn't surprise me one bit to see that bill try to get pushed through. And you either.
Will it happen? Probably not. But man, my recommendation, George, is just keep hammering away at this thing.
What do you think? Well, you said we have a current plan that we're sort of comfortable with and then there's the like gazelle intense napelle Intense Napalm option. So walk me through what that looks like.
Like, at your current pace, when will you pay off this $120,000? A year and a half, maybe two years at most. Okay.
Depending on how the, like, mat leave goes. And what's timeline for baby? Early next year.
Okay. So usually what we say when it comes to babies is you're in stork mode, which means this is your permission to pause the baby steps and stack up cash.
Now, you guys making a crazy amount of money, I would guess that you can stack up enough cash to make sure you get through this mom and baby come home safe and we can push play on the baby steps again and apply that money to the debt. Is that the case? Yeah.
So how much money do you have in savings right now? Outside of like retirement stuff that I had from before, I think she has maybe $3,000 and then I have about like three. Most of the stuff is going to the debt.
Okay. So what would it look like to say, hey, let's pause.
We're going to stack up, you know, 10, 15 grand, and then we're going to hit play after that. How long would that take you? Yeah.
Making 250. Yeah.
I mean, to the end of the year maybe, or, you know, probably right when the baby comes. And so that's what, I would do that knowing that, hey, when the baby's here, mom's home, let's just push play.
And that kind of, it couches both. Number one, it keeps your intensity up, but it also gives you the comfort of, okay, we're not going to bring a baby into this world with a thousand bucks in the bank, not knowing what could happen.
Yeah. And I think right now, there's a lot of emotions that fly around when a baby's on the way.
And I don't want that to cloud your long-term plan of, we're getting out of this debt. I also want you to find a new job.
What are you thinking about doing? I don't know, really. This is like a 10-year plan we're on with our med school and residency, and I kind of fell into this thing.
It's obviously going very well salary-wise, but I work from home not really enjoying that too much and need to try to find something more in person. But it would definitely be a big cut.
I love the idea. Well, A, I wouldn't necessarily start there.
It might end up with a cut, but I wouldn't let that be your first entry into the potential new workforce. But man, you got 24 months.
Imagine a 24 month, I can get retrained, I can take some evening classes. Both me and my wife finished grad school holding babies on a boppy.
Both of us did. So you can start right can start right now imagining a future that the plane lands in 24 months.
Your wife gets her full-time gig as a surgeon. You can start making a jillion dollars and then you are able to launch right into this thing you've been prepping for.
I love some sort of, so I love grad school, man, because it's got a deadline on it. You kind of know, and I feel like you can set that up for yourself right now.
I got 24 months to dream, to plan, to have coffee with people, to ask ideas, to get new ideas, to like all that. I think you got plenty of time to do that, but I'd be really intentional about it.
Yeah. Chin up, my man.
You got a baby on the way. That's exciting.
Your wife's about to finish and get into residency and be a surgeon, her dream. And so I think there's a lot going on and it feels overwhelming right now.
But if you just parse it out, okay, are we doing good over here? We've got this goal. Yes, we got the emergency fund.
All right. How's she doing school? I can focus on looking at what my job is going to entail over the next five years.
I think that'll give you some peace versus feeling it all at once. And you and I, I want to call this out.
You and I both have been through this, George. Our wives come in and say, guess what? We're pregnant.
And I don't know if you're like me, but I immediately went to hooray and oh no, and this is amazing. And how are we going to do this? What's going to happen? And there becomes this flurry of, I need to go do something, but there's not a lot to be done in the first X, Y, and then you start, right? And you're largely unhelpful.
I have a bad habit of creating problems that I then need to solve in moments when there's big life changes on the horizon and it's hard to have the discipline to stay in peace. I did this recently.
I'm about to hit a milestone on my YouTube show. I can't do anything to push it.
So I just created a spreadsheet so every day I can get up and black out a tab. But it gives me a thing that I did.
It gets it out of your brain. So I can go on to the next thing.
So don't do something with that nervous energy that you're going to regret two years from now. It's just stay in the course and stay in the course and stay in the course.
That's very smart. Well, hey, before we end this hour, let me let everyone know we've got a free webinar that I'll be leading on Monday, September 16th, 1 p.m.
Eastern, 12 p.m. Central Time on how to break the paycheck-to-paycheck cycle in 90 days, how to find margin in your budget, even if you're out of debt.
Hey, how do I find $1,000 that's sitting around? We're going to show you some really unique and practical ways to create that margin, to save more, to spend less, to find more room, to attack your financial goals. So join us.
I'll be walking you through it using EveryDollar on Monday, September 16th. Here's how to sign up.
Go to everydollar.com slash webinar, W-E-B-I-N-A-R, everydollar.com slash webinar. Save your spot.
It's completely free. It's virtual.
You can join. You can watch the replay later.
But if you don't sign up, we can't send you the replay. Everydollar.com slash webinar this Monday, 1 p.m.
Eastern time. It's going to be a good time.
Can't wait. All right.
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