It’s Not Too Late to Get Control of Your Money

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We're here to help you transform your life.

From the Ramsey Network and the Fair Winds Credit Union Studio, this is the Ramsey Show.

I'm Dave Ramsey, your host, Ken Coleman, number one best-selling author, Ramsey personality, and host of Front Row Sea, one of the biggest hits on Ramsey Network right now.

He's my co-host.

Open phones at 888-825-5225.

Brooke is in Florida.

Hey, Brooke, how are you?

Good.

How are you?

Better than I deserve.

What's up?

I need to know today

how to ask my parents for money.

I work for their business.

I manage their business.

And there's times sometimes when I don't get a paycheck from them.

I love my parents and I love the work that I do, but I just don't know how much longer I can keep my head above water.

How old are you?

30.

You run the business?

I do, yes.

How many employees?

About 15.

Okay.

Are you running payroll for the 15 people?

No,

they

I run all the time stamps and then they do it on their automated payroll.

Okay.

So you're not running the business.

You're just running some, you're running parts of the business.

You could say that, yes.

I mean, I run day-to-day all the accounts and billings and the management of all the employees.

They're just so you hire and fire these people?

I do.

Do any of them miss their paychecks?

No.

What would happen if they did?

They would quit.

They would quit.

Yeah.

So why would you not get a paycheck?

Just sometimes, like, sometimes the business does not do well.

You're not profitable.

Yes, yeah.

And we're from a small town.

We live in a small town.

And, you know, we try not to raise our prices too much.

But, you know, when it comes down to it, we do.

You're not profitable.

And the town keeps yelling at us.

Why are you not profitable?

Why is it not?

I don't, because we don't raise our prices.

I thought you were running the business.

I am, but I, I, I mean, I do

raise them a little

bit, but not to anything too crazy.

Well, honey, if you're not running a profitable business, nobody gets a paycheck.

Absolutely.

Okay.

So this isn't a mom and dad problem.

This is a you're running a business, sort of,

and the decisions that are being made to operate the business are not causing it to be profitable.

Is that right?

Yes.

And so they don't have the money to pay you,

and so they skip out on you rather than the other employees.

Correct.

Okay.

And so the fix for this is not a relational problem with your mom and dad.

The fix for this is business acumen, and it's straightening up your dad-gum act over there and decide if we're going to keep this thing open or not.

Because a business that doesn't make money is called a hobby.

Recorded.

Hello?

This call is no longer.

I have no idea what that was, but I'm not participating in it anymore.

Something about being recorded.

Yeah, it's definitely being recorded.

It's a podcast.

Okay, so it'll be on YouTube later, too, if you want to watch it.

But no, you don't have a mom and dad problem, honey.

You got a Brooke problem.

And so Brooke needs to sit down with mom and dad and go, we're running this business poorly.

I need some help with that.

Or I'm going to change some things so that this thing starts making a profit.

And if it is profitable consistently and they don't pay you, then you go do something else.

Because your mom and dad have an integrity issue then.

But that's not what's going on.

What's going on is they ask you to run the business, you're running it poorly.

Yeah, and I also think there's, we don't have the backstory here, so this is inferring a lot.

But this is probably not a very strong business.

And just laying it out as simply as, well, we're not raising prices.

That's not the only reason.

I think she needs another job because I think her finances are a mess.

She's

underneath it, she said.

So this is a situation where you may or may not be able to fix this.

And if you can't, I would do what Dave says, but if we can't fix it with a very clear strategy, dial in a few knobs here, then it's time to move on.

Yeah.

And I see this a lot with family business.

People, they get stuck in this because they feel like it's mom and dad's business.

I'm the kid.

I got to help.

And you refuse to see what you might otherwise see if you didn't work for mom and dad.

Well, the number one, I mean, a business that didn't profitable, the number one line item in a typical business of any size, but certainly a small business business with 15 employees, the largest item

in their budget is payroll.

That's correct.

They have 15 people getting paid and one not.

So I can fix that.

We'll have 13 people and one gets paid.

I mean, that's, you know, I don't lay people off around here willy-nilly.

I do all kinds of things.

We've never had a layoff in Ramsey at 35 years.

But if we're not making a profit,

we're going to make a profit.

We're going to stay open.

And if I have to cut payroll to stay open, I will.

Before I sit around and make no money,

because you're not going to stay open eventually if you don't make a profit.

This is the whole thing.

It's how it works.

It's a math thing.

So it's not an altruistic thing.

It's not socialism doesn't fix it.

Your theory about capitalism from your Communist College professor won't fix it.

None of this will fix it.

Well, the only thing to fix is you have to make money.

And so, and it has to have a bottom-line profit.

And when you've got that, then all your theories we can have a discussion about.

But no, yeah, it's not a mom and dad problem, Brooke.

It's It's you and your mom and dad need to sit down and figure out what have we got to do?

Cut expenses and increase revenues, and that's where profit comes from.

I want to create some margin in here to where I never miss a paycheck again because I can't miss any more paychecks.

I'm not okay with missing paychecks.

And if we have to, if we have for me to miss paychecks, it's saying to me that I need to go do something else.

And so I've missed my last paycheck.

We're going to sit down.

We're going to change some stuff here until this happens.

But the way you presented it may sound like it was kind of random.

It's not random at all.

They look down, the bank account's empty.

They can't pay you.

And that'd be true for the rest of them, by the way.

If they look down, the bank account's really empty, well,

how are they going to make payroll?

They can't.

So that's the next thing that's coming.

They're going to miss paychecks to other people.

And so we've got to get this thing turned around and headed in the right direction, or we need to close it.

One of the two.

Or get somebody that wants to work for free to run it because I'm not that guy.

Yeah.

I had never asked anybody to work for free at at Ramsey ever.

Yeah, because here's where this goes.

Right now she's kind of chuckling, seems like she's in good spirits, but eventually that becomes nasty resentment for mom and dad.

And to your point, they're not being bad parents here.

They're just trying to figure out how to pay everybody else, and she's the last one.

Well, they're doing a crummy job of communicating and helping to fix it.

No question.

If my kid is on my payroll

and I own the business and I can't pay my kid, That's the first thing I'm going to have a problem with, right?

We're going to be talking about this, and all of a sudden I'm going to be down in the weeds with the boots on again.

Here we go.

So, something's going to happen here.

And so,

it feels like mom and dad kind of drifted off and semi-retired.

I think you're right.

They're half-butt running this thing, and Brooke doesn't know what she's doing, and she's kind of half-butt running it.

And so, there's a lot of half-butts in this thing.

And

that's what there's nobody got control of this around the throat.

Let's grab it around the throat.

Something shake it to get it to 15 people so they can figure it out.

You got to step on on it.

Because let me tell you, business is tough.

That's why they fail all the time.

It's hard.

It's a series of hard decisions.

And you get up tomorrow and you know what it is then?

Another series of hard decisions.

It's hard.

It's tough.

Running your own business is easy.

At least you work for yourself.

That's the worst boss you'll ever have in your life.

Guy's a freaking slave driver.

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Natalie is in Tacoma, Washington.

Hi, Natalie.

How are you?

I'm good.

I can't believe I'm talking to you guys.

This is a total honor.

Well, we're honored to speak to you.

How can we help?

So this is more of a relationship and more of a family question.

So my basic question is, how do I get my brother to stop taking advantage of my parents?

So context and background is that he is 35 years old.

And essentially what his current kind of like plan plan or like lifestyle is, he just like saves up a bunch of money while he's living at home with them for free.

And then he'll like go on a trip internationally.

And then once he runs out of money, he comes back and he doesn't have anywhere to go.

So he just moves back in with my parents again.

But meanwhile, he takes advantage of them and like uses their materials for his business.

He uses their stuff.

And he's also disrespectful all at the same time.

I've talked to my parents about this.

I mostly talk to my parents about this, so I mostly get their side of the story.

But basically, I'm why have they not stopped this then?

That's what I've been trying to get them to do.

I'm asking you.

I'm asking you, what's wrong with your parents?

They will not, they love their son too much.

They won't

love.

That's not love.

Yeah, that's true.

This is giving a drunk a drink.

That's enabling.

It's not love.

100%.

And so that's what I'm wanting help with is I've talked to them about it, and I've been very straightforward and blunt with them.

And I've told them, you know, like, if you are not willing to set those boundaries, then it could cost you the relationship.

And so I guess they're not listening to me.

I'm wondering if I can talk to my brother specifically and he can coach me on how to help him.

No.

Okay.

Your brother's a parasite.

They don't listen.

100%.

Yeah.

So

he doesn't have any problems.

I know.

Your parents are the one that has a problem.

Your brother has no problems.

Life is good for your brother.

I know.

Why would he?

But your parents' job is to help him have some problems.

Yes, I agree.

So I kind of sit in this middle world and I'm wondering, and it's technically out of my control.

So I'm wondering if...

I'm wondering if there's anything that I can do to kind of help this

problem.

Well, let me flip this on you.

If I met you and I started telling you about something that was really, really bothering me, you could tell I was pretty worked up about it.

And then I said to you, but Natalie, I have no control over it.

I can't control anything about this.

What would you say to me?

I mean, I guess technically you're right.

So...

What would you tell me?

You could see I'm all stewed up about it, but I have no control over it.

What would you say to me as a good friend or a new acquaintance?

What would you say?

i guess

i'm not sure sure you would it's kind of frozen let it go let it go it's it you would just say hey you got to move on and you said you're sitting in the middle of this you're not sitting in the middle of it that's

you're a spectator you've actually put yourself emotionally in the middle you have vip seats yeah to watch this crap happen yeah but you're a spectator yep yeah so that's what that's what i'm hating is i hate watching my parents it is really painful to watch people you love do do stupid things.

Yeah.

Let me tell you what I would do in this situation.

This is like me walking in the living room and my wife and daughter are watching The Bachelor.

I just keep on walking.

I don't stop.

You know, I already know what I'm saying.

Don't get sucked in.

Well, I just know how awful that show is and how it makes me feel.

And I feel dumber every second that I watch it.

My brain cells just die progressively.

But if I sit there and I watch it and I keep griping to Stacey and Josie about it,

it's not helping me or them.

Because they're not going to stop.

They don't want that.

They don't stop.

So, yeah, the only thing I could think of is this.

Anytime I'm trying to influence someone, the only thing I can do, there's three possible angles.

Your brother's not, it's zero chance.

Okay, I would not bother with him at all.

What he needs is a good butt kicking, and you're not in a position to do that, okay?

So

he needs his butt kicked into the street and into a job and into grown-up land.

And that's what, you know, he's like, he's,

you know, Peter Pan.

He just never grew up, right?

So

failure to launch.

So now, how do you deal with mom and dad?

Number one, I would just tell mom and dad a story about one time that I was doing something and say, you know, I did this, I did this, I did this.

And, you know, when I got out on my own, I felt so much better than when you guys were supporting me.

I felt better about myself.

And so I don't think my brother feels good about himself because I think y'all are harming him.

And so you could say something.

I don't think it's going to do any good, though, because I think your parents are spineless.

Enablers are the nicest, spineless people you will ever meet.

When I have been an enabler, it's because I was too freaking chicken to deal with the deal.

Instead, I just threw money at it.

And that's enabling.

And I've done that myself.

And it's just, I'm always ashamed of myself when I do it because you don't help the people involved.

You actually hurt them.

And that's where your parents are bringing great harm to your brother because they've malformed his character in the process.

And it's their fault.

All he did was just take the path of least resistance.

That's all he did.

So the second thing I would do is ask yourself, who would they listen to?

True.

Brother that they trust, uncle that they trust, pastor that they trust,

his old army sergeant that he trusts.

I don't know.

Who would that and talk to that person and say, would you go talk to them?

Because I can't get through to them.

And then the third thing I'm going to do is I'm just going to pray.

God,

mess them up.

Mess this up.

Lord, cause a chaos over there.

Let the basement where brother lives flood, Lord.

Yes.

Break his car, Lord.

You know.

Lord, bring some problems to this situation.

Please, God.

And just pray hell down on them.

And it's just, I'm serious because that's what's going to happen.

Something is going to bust here.

And around Ramsey, even when we're working on projects, we always say, break it before it's broken.

And I'm just going to ask God, break this before it gets broken because it's going to get broken.

It's going to go sideways.

And it's going to be ugly when it does.

And it'd be better off sooner than later.

Yeah.

My guess is your parents are afraid of him.

You mentioned that he's disrespectful.

Yeah.

Physically?

He hasn't been physical with them, but he has broken stuff in the household before.

I'll call the police on him.

Yeah.

But they're more afraid, not of harm.

I think they're afraid that he's going to abandon them.

When you see parents that are enabling, and I've seen this so many times, there is a fear that the child is going to abandon them and reject them.

And so you're saying, yes.

So you've seen this.

So I'm only pointing this out because

to Dave's point, it's going to take a really special person with real, real authentic leverage in their life to get them to see that this is what's going on.

That they're actually, you know, they're terrified of it.

The best I've ever done with an enabler is to convince the enabler that they're actually doing harm because they think they're doing good.

That's right.

Well, they think they're avoiding something bad when what they're doing is creating something.

I can't put them out.

He'll be homeless.

Right.

Praise God.

Right.

Yeah.

It reminds me of the prodigal.

Don't let them eat.

Yeah.

Yeah.

It's like the Bible and stuff.

Yeah.

Let them go.

And then when they come back, have a nice rove and create a feast.

But at some point, the fear of what their life is going to turn out

or turn into has got to be bigger than the fear of them being mad at you.

And that's a really, by the way, I don't say that flippantly.

No.

That's a tough choice.

You get to ask that.

If you're raising teenagers, you have to ask that question every morning.

That's right.

You know, I have to explain to them: listen, my job here is not to be, not to make you happy.

My job here is not to be your friend.

My job here is not to be the cool dad because I didn't sign up for that one either.

My job is to raise you into a good adult so you can leave.

That's my job.

And then when you leave, you can come back when you bring grandbabies.

This is how the work world works, okay?

And so, but you cannot live in my basement and make grandbabies.

It doesn't work that way.

So you need to leave.

Otherwise, we don't get grandbabies.

And I have to train you in how to do that.

So you have to brush your teeth so you have some.

You have to take your tests and get grades so that you can get a job and make money so you can bring back grandbabies.

Yeah, this is the, there's a goal here.

It's a circle of life.

Desired future, right?

Dave, we got a lot of calls on this show where life happens.

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All right, Kayla is in Mississippi.

Hi, Kayla.

How are you?

Hey, I'm great.

Good.

How can I help?

Okay, well, it's kind of a dispute that my husband and I have had for a really long time.

And he thinks that our house and our land should be included in our net worth.

But I don't because I will never, ever, ever sell my house or my land.

I mean, no matter what happened, I would not do it.

And so he thinks it should be included in that.

And so for that reason, he has a high net worth for us.

I mean, really high.

And I don't think it's a high because I would never sell it.

Okay.

It does.

Kayla, I'm sorry, you're wrong.

Hold up.

Yeah, so I'm sorry, you lose the argument.

But here's why, okay?

Net worth is not about whether you sell it or not.

Net worth is simply what something is worth.

The definition of net worth is an accounting function.

It's a math thing, not a feeling.

Okay.

And so, and it's not a wish or an intent.

It's not what you plan to do with it.

None of that really matters.

They don't ask that question in accounting.

All they want to know is what you own

minus what you owe.

Assets minus liabilities equals net worth.

Period.

That's your net worth.

Now,

you can say, what's my liquidity, which is your argument.

Your liquidity is the money that you would cash in or use if something came up.

And in your case, you would get rid of your husband before you got rid of the land.

You made that clear.

No, I'm not quite that extreme.

Not that.

Almost.

Almost.

I mean, we're not sure at this moment, especially since you lost the argument now.

But yeah, that's it.

What's so special about this land?

It must be family land.

Well, it's the thing.

He wants to retire.

He's like, we have this huge net worth, and I want to retire.

And I'm like, we have to.

Okay, now that

net worth does not necessarily mean you can retire.

That's true.

Okay.

Because what we need to retire is we need net worth that is creating an income.

So if you're farming the land, then you would be creating an income with it.

But it's just sitting there

going up in value.

You can't eat that.

You're right.

Right.

You're right about that.

That part of the argument, you win.

Okay, so your net worth, if your net worth is too

off-center on one thing, like dirt, in your case, then you can't eat at retirement.

That won't work.

So what is the rest of your net worth, not counting the land?

It's in 401ks and North IRAs, and it's $2.7 million or thereabouts.

Well, darling, he can retire.

I don't see how because he makes like $200,000 a year.

Well, what do you think $2.7 million will create?

Well, $2.7 million at 10% is $270,000.

That's where I have the disconnect.

We've only ever saved, saved, saved, saved, and we've never taken anything out.

And so I'm like, really?

We need to check his back for the lash marks i'm telling you you but you're sweet i think i think he's smiling you're smiling the whole time this

whole time you kick him out and every morning to go to work get your butt up go to work how much is the land worth that's hilarious

it's what i'm saying what what's the land worth

oh the house and the land together will probably around 800 000.

oh well that's not even the larger part of your net worth then huh interesting no so how old is your husband

no matter whatever happens i'm never leaving here i i we We got that.

Okay.

We got that early.

Don't switch.

So did he, by the way.

So the question is this.

How old is he?

62.

6'2?

62, that's right.

Okay.

So sit down with your financial advisor and ask them if

it's him.

Okay.

Yes.

Well, maybe you need to get one that'll help you guys both look at this and say, because if I were your financial advisor, I could show you how you could invest that money in some decent gross stock mutual funds, which I got a feeling he's already done,

and it would create 10 to 12% rate of return.

And so you would make $200,000, $200,000 without even touching the nest egg.

Without even touching the 2.7.

See, if 2.7 makes 10, that's $270,000 without touching the 2.7 every year, right?

Yes.

Okay.

See, that's without touching the nest egg.

And

he's he's 62.

And, you know, if anything really goes wrong, you could sell the farm.

No, I'm kidding.

I couldn't resist.

Yeah.

Yeah.

It's too easy.

He's an underhand pitch.

It's a t-ball.

Never, ever, ever.

Ever.

Ever.

Ever.

No matter what happens.

Ever.

Nuclear apocalypse.

Guarantee you, Kayla's on the farm.

You farm have done a wonderful job together because you're fun and you're focused and you don't spend money, you save money.

And he's done a wonderful job if he's been the one managing this, growing it at 62 to have 2.7 plus an 800,000.

So you're net worth 3.5.

Way to go, Mississippi.

I love it.

I'm proud of you.

You did great.

Now,

if he wants to retire, he can afford to retire.

For sure.

I don't think he had much choice.

I think Caleb made that poor guy save and invest, which is good, which is good.

Good for him.

Well, that way they don't have to sell the land.

I thought it was going to be some like massive tract of land worth millions of dollars.

I thought they had 2.7 lands worth 20 million or something.

Yeah, I thought it was 800 grand.

It's not even the biggest per part.

Might be a price you would consider.

But she does make, I'll tell you, the conversation is a good point for everybody listening, though.

Okay.

When you have to have enough of your net worth tied up in income-producing assets to be able to live off of that income.

In their case, it's a very simple formula, 2.7, 10%, 270, right?

But let's say you had 2.7 and it was in real estate that was generating rents.

Are the net rents, net of all the expenses, enough to live on?

And are you okay with that?

And those of you that are small business people, you need to have assets outside of, and in addition to your small business when you retire,

no, that's my retirement.

No, that's not your retirement.

That retirement has to be done.

Then you're going to put your kids in debt when they try to take it over from you because they got to buy the old man out because the old man hasn't saved any stinking money so you need some stinking money you need to have invested and create income producing assets that you can live off of at retirement so one of the guys i was ran through my head one of the guys we found was worth 12 million dollars in the uh when we did the millionaire study yeah for the millionaire next or not millionaire next that's tom stanley's book my book baby steps millionaire right and so um with that study one of the guys he was was one of the, he was an unusual millionaire, and that's why I remember him.

He bought a track of farmland.

He was a farmer in Kansas for cash.

And then the next year he bought another track.

And then the next year he bought another track.

And then the next year he bought another track.

He had $12 million in dirt.

Oof.

Dirt.

Oof.

And if he's not farming it, it doesn't create an income.

It goes up in value probably because it's apparently good dirt, right?

And he's been doing that.

But if you've got it all tied up in dirt, you know, we had a family one time we were coaching in entree leadership.

They were third generation and they started with like 500,000 acres in

New Mexico.

And it was part of a land grant thing three generations ago.

And every generation they had to sell off blocks of it to pay the estate taxes.

And now we're down to the third or the fourth generation and they're all trying to live off of this land only it it doesn't create an income.

But they have this massive net worth, to Kayla's point.

She makes a good point, but no income.

And they sat and argued.

It's what they did

about what to do next.

Because basically, the thing, between someone trying to eat and the federal government taking estate taxes every generation,

the half a million acres had been disbanded and was gradually eroding

for those things because nobody ever bothered to create an income.

You got to create an income and you got to do that.

So she makes a great point on that, and she has a lot of fun.

That's great.

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Andrew is in Washington.

Hi, Andrew.

How are you?

Hey, what's going on, guys?

Better than we deserve, sir.

How can we help?

So I just got married in August, and my wife and I are looking at buying our first home.

And right now, we're putting, you know, doing what you guys say, putting 15% of our income into retirement.

And because a home is an appreciating asset, would it be okay, with the exception of the 401k because we get matched, would it be okay to pause contributions to retirement and to put that towards a down payment on-house?

Yes, but not because it's an appreciating asset.

I assume you're out of debt, everything at this point.

My wife has about 10K in student loan debt, which we're planning to pay off hopefully by the end of the year.

Okay.

And do you have an emergency fund of three to six months of expenses?

Yes.

Okay.

All right.

Well, you only got part of the Ramsey message then.

So let me kind of of fill in the gaps, okay?

Baby step one is you save $1,000.

Anything above $1,000 that you have, you apply to consumer debt, and you lean on consumer debt, anything except a mortgage, until you are 100% debt-free.

When you are, then baby step three is you build an emergency fund of three to six months of expenses.

Only then do you start investing for retirement.

So you would stop investing for retirement today.

You would take your emergency fund and pay off your $10,000 today.

Okay.

And then your first goal is to rebuild the emergency fund to three to six months of household expenses.

Then,

if we want to do a house down payment, we start saving for a house down payment.

And I'll give you the nuances to that that kind of weaves back to your question now that I cleaned it up.

Okay.

All right.

So

at that point, let's revisit where we are at that point.

You're 100% debt-free.

You have an emergency fund, and we have not yet restarted the 15% baby step four going into retirement.

You with me now?

Yes.

Okay, when you're there, and you should be there like by Friday.

I mean, I don't know how quick it's going to take you to build that emergency fund back up, but it might be three Fridays from now, but you're going to get there real fast, okay?

I don't know.

How much is in your savings?

Not counting retirement.

With retirement?

Not counting retirement.

Gotcha.

Probably like 15 grand.

Okay, good.

Yeah, so you're debt-free with $5,000 in the bank today.

Did I understand that right?

Okay.

Okay.

And then you build that to three to six months of expenses.

What's your household income?

About $120 a year.

Cool.

What do you think your monthly expenses to exist are?

Probably in the

$2,000 to $2,500 range.

I think that's probably right.

So let's call your emergency fund $10,000 minimum.

Okay.

You could call it $15,000 if you want to, but for purposes of arguing how.

So we got to put $5,000 back into there.

Then we've got a $10,000 emergency fund or a little more if you wanted to do that.

And we're debt-free.

Once you're there, then you have the question of do I save for a down payment versus putting money into my 401k.

Now, people, and that's what we call baby step 3B because the 15% going into your 401k is baby step four.

Is this all tracking?

Okay.

Yes.

Okay, good.

Now,

so at baby step 3B, anything in there is permissible.

You could do zero into retirement, even if there's a match.

You could ignore your retirement for up to three years, build a huge down payment and buy a house, then start baby step four.

That's one end of the spectrum.

The other end of the spectrum is sometimes people put 15% away, and while they're doing that with no payments,

they still save for their down payment.

That's the other end of the spectrum.

Or you could land in the middle and take your match

and then save for your down payment above the match, right?

Which is kind of the way you were leaning, the way you phrased the question.

Yes.

Yeah.

And that's okay.

Any one of those is okay, but just don't do nothing for retirement longer than three years.

Okay.

Longer than three years.

Got it.

Yeah.

Yeah.

So even if you do 3% in there,

let's get that down payment saved up pretty quick.

Now, when you're doing the house,

it'd be great.

It's probably very hard to do on your first house.

And you guys are in your early 20s, aren't you?

We're 28.

Oh, I'm mid-20s.

Okay, late 20s.

Okay.

Good.

So on your first house, it's very difficult to do this.

But if you can put down 20%,

you avoid what's called PMI, which is private mortgage insurance.

Yes.

And that's $75 a month per $100,000 borrowed.

So you start talking about, you know, we're going to do a $400,000 mortgage, you suddenly got $300

a month in PMI only.

And it's nothing more than foreclosure insurance that protects the mortgage company if they foreclose on you.

It benefits you in no way.

And they don't charge that to you if you put down 20% or more because they're not at risk.

They think they've got enough equity coverage.

So if you can put down that much, it saves you a ton of money.

But sometimes people really want to get a house.

They want to get a house and they're moving fast.

That's okay.

We're fine with that, especially on the first house.

And then while you're doing that, no more than a 15-year mortgage, no more than a fourth of your take-home pay on a fixed-rate 15-year mortgage.

And that's the whole schmear right there on your question.

More than you asked for, but you're tracking and you're really thinking about it.

You're being intentional.

I think you're going to do great, Andrew.

You can tell by the way he's asking the question.

Yeah, he's very thoughtful.

The only thing I would say to you, and you didn't say anything

that would make me think you're going to do this, but be careful of the temptation to overbuy that first house, house, you know, because everybody kind of wants that bigger house, a little bit better.

You just got married in August.

So, while you're saving, also keep some discipline in mind that this is not our forever house.

Don't get sucked into buying in a place that's too much of a stretch.

I cannot tell you how many calls we take on this show where somebody just overbought and they're like, now what do we do?

Because we're three months in and the high has worn off and we are upside down and we just cannot afford this.

So, be very, very careful on what you buy as a new couple first house.

Yeah.

Forever house is code for I just bought more than I should have.

Yeah.

That's what it's code for

because there is no forever house.

I'm 65.

There's no forever house.

The only forever house is heaven.

Okay.

That's it.

The one Jesus, the mansion Jesus is building, that's my forever house.

The rest of them, they ain't got a mortgage and there's no property tax on that.

So that's it.

So you just, you buy what you can afford because you're going to move.

You are going going to move.

The average house sells every 5.5 years in America.

I'm sorry, 6.5 years.

The average mortgage pays off every 5.5 years.

Except for our friend in Mississippi we talked to earlier.

She's not moving.

She's not moving.

Everybody else.

Everybody else.

She's just moving.

She's bringing the average up.

She's bringing the average.

Kayla.

Kayla's bringing the average.

Good memory, Kayla.

That's right.

Everyone else, though.

She's bringing the average up.

But I mean, Sharon and I have averaged, I think, about 14 years

per forever house.

So if you want to know how long forever is, it's somewhere around 14 years.

I asked you, too.

I was like, because I loved your other house.

Selfishly speaking, it was the greatest place in the world to hang out on a Tennessee evening.

Overlook.

It was just, I selfishly.

I was on a big hill and the sunsets were off the chain.

And I didn't want you to move, but you didn't ask me.

Yeah, well, you weren't paying the bills up there.

That's right.

Well, I said to you, I go,

what are you doing?

You go, we need a new project.

That's what you said.

You're a little boy.

I go, man.

You've been there 14 years.

It's been forever.

He had too many great sunsets, apparently.

So that'll tell you.

This actually proves your point.

You're like,

as majestic as that location was, you were.

I thought I would die in that house when I built it.

See?

I actually did.

I thought it was my forever house.

I never say that because I hate that phrase, but

I actually thought we'd own it.

But it was just, it was a ridiculous property and there was a chance to get a ridiculous price.

And sold to the man with the bigger checkbook.

You did.

And so, there we go.

If only you were as strong as Kayla, you would have held firm.

And I'd still be up there enjoying those sunsets.

That's true.

Not to be there.

You could probably go up there now, but you might get arrested.

I knock on the door.

Hey, would you mind?

Hey, no, don't even knock on the door.

Just let him come home, find you on the back porch.

Hey, don't worry about it.

I'm checking the sunset out here.

He used to own it.

I used to come by here all the time.

I just wanted to see it one more time before I went to jail.

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Welcome back to the Ramsey Show in the Fair Wins Credit Union Studio with Ken Coleman, number one best-selling author and host of the front row seat, as my co-host.

I'm Dave Ramsey.

Ryan is in Nashville.

Hey, Ryan, how are you?

Good, Dave.

How are you doing?

Better than I deserve.

What's up?

Well, I had a question about retirement and 401ks.

I am new into a Roth IRA.

I'll be 50 next year.

And I can only contribute so much to that.

And on my wife's 401k, we're maxing out what she can do a year on that.

And then there's a rollover IRA from previous employment that we have.

So we've got the three things working for us, but I can only contribute, you know, just that $7,000 a year.

And I would just like to know what you think other ways for me to try to make my money work for me down the road so I can have more retirement.

Yeah, you can bump it to $8,000 at $50,000.

And you can also do a spousal Roth for your wife as well.

Are you doing both of those?

So we can do that if she has a 401k plus she has a rollover IRA?

Yes.

And what's that called?

I'm sorry?

Just a Roth IRA.

She can just do a Roth.

She can do one too.

She can do a Roth.

Yep.

Even if she's not working on it, she could do one, but she's working in this case.

So make sure, is her 401k a Roth?

No, I don't believe.

Well, yes, it is.

It is.

Okay.

All right.

Because if they match, the portion they match is not Roth, but make sure it's not traditional.

Is the rollover Roth, is the rollover IRA, has it been converted to Roth?

I don't think it's been converted.

It's just a rollover.

Okay.

If you convert it, it'll make the taxes on the amount come due.

What's the amount in there?

The amount on the rollover currently is probably about $75,000.

Okay.

So you would have about $15,000 or $20,000 in taxes, probably $15,000.

So if you've got an extra $15,000 to invest in retirement, I would roll that to a Roth and pay that $15,000 in taxes and call that investing.

Here's why.

Because from this point forward, it will grow completely tax-free.

Okay.

So that paying those taxes now is like investing into a retirement.

So if you're looking for more money to throw at something, the first thing is you bump them to eight, you do a

spousal, make sure her 401k is Roth, if it's not already, and then take that rollover and talk to your tax person, figure out what your taxes are going to be before you do it.

Make sure you've got that much in extra cash to pay your tax bill next year when April rolls around, because you're going to have an extra, whatever it is, 15 grand or so,

on that,

and then roll that 75, because that 75 in seven years will be 150,

and in seven more years will be 300, and in seven more years will be 600, and all of that will be tax-free if it's Roth.

It won't be the way it is now.

It's going to grow, and all of it be taxable at ordinary income.

So you do want to move that at some point.

But if you're looking for extra ways to put money towards retirement, that's the ways you can do it.

Matt's in Tennessee.

Hey, Matt, how are you?

I'm doing great, guys.

I'm so excited to be on the show.

Thanks for taking my call.

My pleasure.

How can we help?

Well, my wife and I have been weighing the decision of making her a stay-at-home mom.

And I just want to make sure we're not letting emotion

blind us from making

bad decision financially.

Cool.

Good for you.

How many babies you got?

We have two.

They're both under three.

Awesome.

Yeah, you got your hands full.

Never a quiet moment at your house.

Yes.

Okay, so

yeah, it's great.

I just kept the grandbabies last week that Sharon and I did that are that age.

And so

I know what I'm talking about for just a moment there.

But I can hand them back when they're broke.

You can't.

So this one's got something wrong with it.

You don't need to work on this one, yeah.

But anyway,

what does she make?

She makes 95 gross.

And what do you make?

I make,

I'll be on track to make

over $150.

Okay, cool.

If you want to be really, really sure,

an easy way to do it would be just live on your check for three months and bank hers.

Yes, sir.

We've been doing that.

Oh, you have?

Okay.

I mean, minus daycare.

If you got daycare, you could take daycare out of hers, because you won't have that.

Yes.

But if you just practice, so

you've already proven to yourself you can do this.

I guess so.

But I mean, I guess we're just a little nervous to take that leap of faith.

It's not a leap of faith.

You've proven it.

It's a step.

It's a step.

It's not a leap.

Yes, sir.

How much margin do you have?

A leap is I have no idea, and I've never even looked at the math.

That's a leap.

This is true.

Yeah, so you're done great, man.

So what does she do for a living?

She's a nurse auditor for Humana.

Is she a nurse by trade?

Yes, sir.

Okay.

I think Ken and I would both recommend that she do enough of something to keep her certs alive while she's at home.

Yep.

We've both talked about that as well.

We want to keep

her license up to date.

Absolutely.

Absolutely.

And you'll be amazed at what she could pick up as just little side things here or there that make a lot of money.

She's got like the perfect career to do what you're talking about doing.

I couldn't agree more.

I mean, she could pick up, if y'all got in a pinch or something, she could pick up weekends in the ER and make almost as much as she's making now.

This is true.

Be very uncomfortable, and I'm not recommending doing that.

And you don't have to because you've already proven we can live on your income.

So, yeah, just do it, man.

Do it.

This is what the this is you, this is why you manage money to get to live the life you want to live.

And you guys want her to be home, and she's doing nothing wrong and everything right by doing that.

Yeah, my question is:

as Dave was walking you through this, you just you still seemed unsure.

Is that because you're worried about some big giant expense coming out of nowhere from the giant in the sky, or you are too tight on just your income?

No, No, that's a good question.

We're not too tight on my income.

What makes me nervous, Ken, is I started this job in June,

and it's a phenomenal job.

It provides very well.

It's given us a great financial bump.

I guess it just makes me nervous to

solely rely on my job

being in it for such a short period of time.

What do you do?

I'm in medical sales.

Oh, dude.

You land another one.

You can land backwards on your head and make $150 in that in the next job.

If these people lose their minds, you can get another job doing this.

Once you've done medical sales, you're so qualified.

It's unbelievable.

You both have selected excellent careers.

You'll be making $250 in three years, dude.

Yes, sir.

If everything goes well and I stay on plan, I should track to make over 200.

Yeah, absolutely.

Well, the good thing coming off a decision like this is you're going to be extra motivated.

And I appreciate you sharing the fear.

And I didn't need to know.

I wanted you to hear yourself say it.

And so what you need to do now is go, okay, if this makes me a little nervous, is there any evidence that it should make me nervous?

And in this case, the answer is no.

And then to Dave's point,

you can crush it, man.

So go crush it.

And here's the other thing.

You guys can decide, okay, we're going to stack up a little extra money, just a little rest easy money.

No, we're not saying you have to do that, but you can to kind of ease yourself into this.

You guys get to decide how and when you make this transition.

And everything goes sideways.

She walks down there and picks up a nursing job.

I mean, if you lost your job, she picks up a nursing job.

Y'all can eat.

It's okay.

It's not like it's permanent.

You keep those certs, though.

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Dylan is in Idaho.

Hi, Dylan.

How are you?

Doing well.

How are you, Dave?

Better than I deserve.

What's up?

So my wife and I are in a little bit of a pickle.

We are trying to get financially smart and get out of debt.

We have two vehicles that are financed, and

we

owe more than

they're worth, I guess, at least on one of them.

The other one we could probably break even with, but we don't quite have the cash or the capital to then buy

something cheaper in cash.

Okay, on that one, the one that's break-even, what's the payment?

$120,000 a month.

Okay, for what?

82 years?

What kind of car is this?

It's a 2014 Volkswagen Jetta.

And what do you owe on it?

$66,000, I think.

Okay, I'm sorry.

You owe

$6,600?

Right.

Yep, $6,600.

Oh, okay.

I'm just, God, I'm mighty.

All All right.

My math brain was about to explode.

$66,000.

Sorry.

Yeah, no, not quite.

Thank God.

So $6,600 you owe on the $120 a month.

And what do you owe on the other car?

We owe $14,900.

And what is it worth?

It's worth probably $11,000.

Okay.

And so what do you guys make?

I make about,

I guess it kind of varies month to month, but it's usually around sixty five hundred, seven thousand a month.

What do you do?

I do line work, and then I um I also have a I work for a farmer on the weekends.

Okay.

And what's your wife do?

She's a stay-at-home mom.

Oh, how many kids?

Just one, eight months old.

Oh.

And what did she do before?

She was in the medical industry, CNA, medical assistant,

lobotomy.

Okay.

All right.

Wow.

All right.

Those cars are not

killing me because you hardly owe anything on them and neither one of them are expensive cars.

In other words, like 20 grand sets you free, my man.

Sure, yeah.

And so I just, I think instead of worrying about selling the cars, I think I just get 20 grand.

So you're making about 70

and

or a little better than that gross.

And we need 20, and you're working.

What are you getting paid on the farm gig on the side?

It's 25 an hour.

And

if I work

consistently every weekend, it's

750 twice a month, 750 every other month.

Yeah.

Okay.

Good.

Or sorry, excuse me, every other week.

Sorry.

Yeah.

Yeah.

That's about that's good.

So you're getting a lot of hours.

That's good.

Can you get more with him?

I potentially could.

He doesn't run on Sundays, and so I have three-day weekends with my main job, and so I do Saturdays and Mondays with him.

Okay, that's good.

So I guess I could work more hours in the day, but as far as getting another day in, I

don't really have that out.

Here's where we're going, okay?

The hole that you're in with the two cars is not huge.

It's a good-sized hole, but it's not massive.

You didn't call me up with $66,000.

You call me up with $6,600.

Okay, making $70,000 plus $25 an hour on the weekends.

And there's a potential for her to do some remote work while the baby's sleeping at home with the CNA, a lot of potential for that.

And she could add...

Nine months, if I heard the numbers right, nine months, you're paying off that $6,600.

Yeah, if you guys lean in and don't go out to eat and don't go on vacation and sell so much stuff that the kid thinks it's next.

And so, you know, you just get, you just get real scorched earth on your life, and 100% goes towards her car, and you get it paid off, and then 100% goes towards your car, and we get it paid off.

I mean, do you have any money in savings?

We've got like $1,000 right now.

Okay, so you got your baby step one going.

Very good, Dylan.

Right.

And you guys are in your early 20s?

Yep, I'm 24.

She's 21.

Yeah, perfect.

Okay.

Well,

I got to tell you, I'm not thrilled and you're not either with these cars, but I talked to a lot of people that got it a lot worse than you, man.

Yes.

So

I think you dig straight out of these and keep them.

Okay.

And let's try to be debt-free.

So you need about $2,000 a month and you'd be free in 10 months.

So squeezing out of your budget and adding an hour or two to her day, an hour or two to your day here and there, and living on nothing and throwing $2,000 a month out of your budget, a detailed budget on every dollar.

And I'll give you a year's worth and get you started here, okay, with every dollar.

So you can get in there and it'll cut the new Every Dollar will coach you up and show you what to do next.

But it's going to lead you right through what I'm talking about.

Let's get those cars paid off as fast as possible.

I think with the math you're giving me, Dylan, I'm keeping them and I'm going to pay them off.

I agree.

I love that because he's going to learn something.

And by the way, I want to say this about every dollar to you, Dylan, and to our entire audience.

This new Every Dollar is way, way, way more than a budgeting app.

I mean, mean, this is literally coaching you through every one of the baby steps.

It is so incredible.

Dylan, you're going to love this because you're now in this journey.

And if you walk this out, like Dave said, and let Every Dollar be your coach and guide you through, because that's what this is now, you're going to come out on the other side way ahead of everybody else.

And I'm a fan, Dave, of young couples paying off cars and driving them until you have to replace them.

Yeah, and then pay cash for the new one.

That's what I love.

The next one.

Yeah, because it teaches you to delay gratification.

Yeah.

Which is hard for American couples to do.

Yeah, but they, man, they're perfect to do that because they're not, again, they didn't call me up 66,000, which most people do.

Although for a half second, you thought it was there.

Oh, I did.

I was reaching for the Tumbs.

There's a Volkswagen Jeddah out there for $66,000 somewhere, I promise you.

So, yeah, that's just, man, I felt bad for him.

But, I mean,

this is doable.

This is very doable.

And

what do you think the average household has?

Because you said something that we skip over too much, and I'm going to bring the audience back to what you said.

The idea of selling, they think it's a one-liner, but it's not.

Selling so much stuff the kid thinks they're next.

What do you think an average household in America has in their house worth of stuff that they could sell?

Any kind of guess?

You know, that couple's not been married long.

Yeah, they don't have a ton of stuff.

So they're not as much.

But I mean, Americans, we collect crap so much that we get a storage bin and pay rent on a storage bin for the crap we haven't touched in five years.

I mean, we're unbelievable.

We are the biggest bunch of hoarders on the planet.

So, yeah, you got enough crap that you could put on,

what is it, Facebook Marketplace or whatever, anything.

Just put it out there and get that stuff sold.

I don't know.

But I think the longer you've been married, the bigger the accumulation.

I bet it's close to two grand.

Oh, easy.

Easy.

Yeah, you can get your baby step one, your $1,000 in one weekend of garage selling.

Yeah.

For sure, most of you.

And then, in addition to that, you start popping the other stuff on.

But people will buy stuff.

I mean, I talked to a lady, God, it's a couple of years back, but

eBay was the thing for a long time, right?

Everybody's popping stuff on eBay, which is still fine.

It's still not a bad place to sell stuff.

Facebook Marketplace, pretty much competing with it.

But this woman was going to garage sales and buying children's clothing for a dime and a nickel and a quarter

and then reselling it for $3

on eBay to the tune of like $10,000 a month income.

We can get out of debt fast with that.

I mean, it's just, but you talk about crap we all have.

I mean,

you know, and this is all like, you know, this is this clothes.

I mean, you think about a four-year-old, how much they wear out clothing.

They don't, they don't, they grow so fast that they don't, they wear it three times and they can't get in it anymore.

And you, God, how do you think george camel has that snappy outfit he's buying middle schoolers kids clothing and he can wear it he's repurposing it

he's not here to defend himself that's terrible

he'll get me back that's going to cost you i know he'll get me back that's going to cost you you broadcast that over the live microphone can that was

not back in the coffee shop he looks good in oshkosh dave you know he does hey gently experienced clothing there is nothing wrong with a lot of us grew up with experienced clothing.

Oh man, nothing gentle about mine.

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A couple of years ago, I got tired of hearing all the

people say that opportunity in America is dead

and you might as well give up.

The little man can't get ahead.

The deck is stacked against you.

Capitalism didn't work.

It's a scam.

And I guess that just came from the college, the Communist College professors.

I don't know because I don't know where it came from.

It didn't come out here in the real world because out here in the real world, people are leaving the cave, killing it, and dragging it home every day.

I don't hear a lot of whining out here in the real world.

It's mainly in think tanks and

in social media by people who live in their mother's basement.

That's about the only place I hear that capitalism is really dead because it's actually the best time in human history to be alive.

It's easier to build wealth now than at any time in history.

Your health is better.

Your access to information is quicker.

Your ability to launch into a new thing, the training is unbelievably fast, everything about it.

So we did the largest study of millionaires ever done in North America at that time just to find out where millionaires really came from.

And we found that 89% of them, that's 9 out of 10, are not millionaires because of inherited wealth.

So if your broke brother-in-law doesn't agree with that, this is data.

It's a fact.

He's what's known as wrong.

So that's it.

That's a fact.

It's a statistical fact.

We did a study of people that was over double what it needed to be in size to be statistically significant.

We know about research.

We have a department that does Ramsey research and we had an outside firm look over our shoulder because we knew the lefties would go crazy when we discovered that capitalism was alive and well.

And so we had to, you know, we had to go, no, you're just, I'm sorry, you're wrong, darling.

I'm sorry, you're wrong, darling.

You don't know.

Once again, you don't know.

This is where it really happens.

So we started also interviewing actual millionaires on the air and have continued that.

We call them baby steps millionaires because a lot of them have followed our baby steps to get there.

Not all of them, but a lot of them have.

And so we get to talk to them occasionally.

Jennifer is in Fort Worth, Texas.

Jennifer, what is your net worth?

$1.5 million, which still blows my mind to say out loud.

I love it.

I'm so glad you said it out loud here.

I'm proud of you.

So what's the mix on that?

How many dollars of retirement, house, that kind of stuff?

Give me the breakdown by category.

The bulk of it is in my husband's 401k.

it just rolled over a million dollars i've got a little bit along the way but i mostly have been self-employed so most of our retirement is in his nest egg we've got three hundred and fifty thousand in home equity and then the rest of it's in non-retirement you know emergency fund cars savings accounts that kind of thing very cool how old are you we i'm almost 52.

my husband just turned 52 so yeah and what

just a minute i know based on what you've already based on what you told me about how it's mixed up, I know the answer to the question, but I'm going to ask you anyway, how much of this was inherited money?

Not one single penny.

Zero, precisely.

Nothing.

We grew up dirt poor, and we have been working for a lot of years.

And, of course, last month was our 10-year anniversary of coming in, doing our debt-free screen live on air with you.

Oh, wow.

Yeah.

And now you're worth $1.5 million.

I'm like, oh, let me hold on to something.

I like it.

I like it.

I like it.

Very cool.

So

how long y'all been married?

30 years.

Okay.

And during that 30 years, what's the range of your income, lowest year to highest year?

The very first year we were married, we were still college students.

So I think we might have managed to eke out $15,000 that year.

When we got our first grown-up jobs, we were about 60.

And this year, we're rolling over 300,000.

Cool.

And what are your careers?

My husband's an engineer, which, you know, goes with the territory.

And then I'm a psychologist.

I've been in private practice for a lot of years, but now I'm a college professor.

Ah, very cool.

Very cool.

And what was his GPA?

Do you know?

He was right about 3.5.

Okay.

And what was yours?

Undergrad was 3.14.

My grad was 3.65.

Okay.

Perfect.

Okay.

Good.

Good.

And what do you drive?

So

my husband's in a 2022 RAV4 Toyota.

I have the Dave car, which I love because we have no payments, but it is a nice little sporty car.

Lexus UX200F Sport 2019 red leather seats.

All right.

It's the bonus for being debt-free.

I like it.

I like it.

Well, you both got decent cars because a lot of times when I talk to millionaires, I have to tell them to go buy a car.

And

you're in pretty good shape on your cars.

Good.

That was part of our problem is I like new cars and shiny things a little bit too much back in the day.

So now we drive them with no payments.

Very cool.

Very proud of you.

Oh, man.

What do you tell people if they're out there listening and they're the

you guys are 52.

You've been married 30 years and they're just getting started.

So they're 22,

23.

Can they still be a millionaire today in America?

Oh, absolutely.

Why?

The biggest piece of advice that I'm going to tell them as well is don't hide your journey from your kids.

One of our biggest goals was to change our family tree.

And in fact, we made shirts to that effect when we came 10 years ago.

Our kids journeyed alongside us.

We did the smart money, smart kids, you know, with the kids.

During COVID, we did, you know, the homeschool personal science material with our older two who were 13 and 15 at that point.

I'll never forget my 15-year-old saying credit cards are stupid.

She is going to be 21 this week.

She's a college student.

Our middle one's a college student.

They are both going nearly 100% scholarship.

They'll be debt-free walking out with their degrees instead of the six-figure student loan that I had.

It's important that you know what your priorities are, right?

And so we actually don't even own all the house we could afford.

Our house, we still have a bit of a mortgage, but it's like 15% of our income so that we can, you know, travel and enjoy life and help our kids with the rest of their tuition.

And our youngest is in a Christian school because those things are our priorities.

And being intentional, and you talk about that, I know a lot.

Amen.

It is important about why you're doing what you're doing and not just the next shiny thing, which, I mean, that took us a while because my husband and I neither want our savers.

But we're showing pictures of you guys on YouTube in Hawaii and everywhere else.

So it isn't like you lived in a cave and collected lent and only came out on triple coupon Thursday.

The Hawaii trip, every about three years or so, we try to take a super, super nice vacation.

And the Hawaii trip was a reschedule.

It got canceled initially because of COVID.

And then both of our HCA units went out and then our water heaters exploded.

And then we had to have the foundation on the house level.

And I just stomped my feet and said, stop taking my Hawaii fund because we kept having to raid the vacation fund to fix the house.

And then we finally saved up again and we were able to take that trip this last January with the kids and had an amazing

but now you're 52

with a $300,000 income

and you are worth $1.5 million.

I'm so proud of you.

Way to go, kiddo.

Very cool.

You know, one of the things you hear in this, and I want to make sure everybody catches it, is there's an unbelievable discipline, but don't miss that what fuels the discipline is a vision for their future life.

And it was so fun to see the picture 10 years ago in our old building.

Yeah, the old building.

Remember that spot so very well.

And there they are.

Kids are little at that time.

They're elementary.

And now we get to hear this call on the other side of that.

And you heard what I love about what she shared there, Dave, was HVACs going out, house foundation, stuff that would break people who are broke, break them in every way.

And they weathered it.

got on the other side of it and now they're on their way to crushing.

So this is the real story that you don't hear in those clickable articles or in the TikToks and the Instagrams because there's so much more to this story.

So really heartening and really inspiring to hear this call.

Yeah, as we did that study of millionaires, the thing she was referencing was the top five career choices of millionaires.

The most often that appeared to be millionaires, engineer, and her husband's engineer.

So very interesting.

Number two was accountant.

Number three was business executive.

Number four was teacher.

Number three was teacher.

I'm sorry.

Number four was business executive.

Number five was

lawyer.

Medical doctor didn't even make the top five.

They were number six because they're notoriously bad with money.

And so, but incredible, incredible stuff.

Why do we tell you guys all this?

So remind you, you can do it.

You can do it.

You, talking to you.

You.

You got to make choices.

And then you can win.

Big news, you just heard, I'm sure, the Fed cut rates for the first time all year.

The 15-year fixed rate, mortgages have dropped to the lowest we've seen in 11 months.

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This is a good time to buy.

House prices have been holding pretty steady.

They've gone up a little, but not like they're going to.

If we see these rates drop on down, market heats back up, you're going to see the house prices take off again.

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Alexis is in Oklahoma.

Hi, Alexis.

How are you?

Good, Dave.

How are you?

Better than I deserve.

How can we help?

Well, my husband and I are about, with credit cards and student loans combined, about $25,498.96 in debt.

He's the only one currently working.

I am a stay-at-home mom to three little ones, and I'm going to school.

So things are tight here.

And busy.

How old are the little ones?

Four, two and a half, and 10 months.

And why are you going to school?

I'm going to school to be a teacher just to finish my degree.

Yeah.

To be a teacher.

Yeah.

Okay.

I know.

No, there's nothing wrong with being a teacher.

Yeah.

I'm just confused.

You have three little ones and you're a stay-at-home mom.

And you're going to quit doing that and go be a teacher?

Maybe.

My grandma, she passed away from cancer a while ago, and she just really wanted to see me graduate.

So I'm kind of doing it for her.

Well, that's great for her, but you're broke.

Yeah, I know.

And you can still do it later, but right now, how much does this cost you?

You can give us real numbers on this degree.

How much does it cost?

Well, right now I'm getting FAFSFA financial aid, and

I have a scholarship to where

I get

$1,500 split each semester.

So my semester is probably about $6,000, a little bit more each semester.

And then after I graduate and I get a teaching position, they'll pay me $4,000 for five years.

Yeah.

And I'm a junior.

Okay.

So,

yeah.

But you're going to graduate with no apparent use because you're going to stay home and keep it with the kids.

Possibly, yeah.

The only reason they're doing this is grandma has nothing to do with your life.

Yeah.

Yeah, I know.

And

I mean, I don't want you to not get the degree, but you called me up broke and stuck.

I know.

And you're going to school for a degree that you're not going to use.

Yeah.

Okay.

Anyway, so what's your husband make?

He makes two thousand four hundred and ninety three dollars and fifty two cents a month.

Good Lord, what does he do?

He's an apprentice for uh an electrician, but he's currently taking like the test to become a journeysman so he can make more.

When?

Um, he takes it again November 1st.

He took it uh last week and I missed it by two points.

Okay.

So when he goes to Journeyman, as soon as he passes his test, November the 1st, so another month,

what will he be making then?

Right now he makes about $19

an hour.

I think it'd probably go up to more dollars.

And then whenever he gets his full, this is just his limited, I think he could go up to $40 depending on where he worked.

Man,

his job sucks.

Yeah.

It's horrible.

You can make that at Target without passing a test.

If you can fog up a mirror, you can make that a target.

That's the only test they've got.

But this is for sure what he wants to do long term, correct?

Yes.

Yes.

Well, that's part of the process.

That's the part goal.

Yeah, no, I listen.

That's the only way to do it.

But he's got to bring in some more income while he's doing that.

We're not just going to keep

starving $100.

You're starving today.

Yeah.

And you need to pause this education plan if possible.

I don't know if if you can even do it right now.

You're already committed for the six grand, right?

Yeah.

Yeah.

Okay.

As soon as this semester is over, you push pause.

Yeah.

Okay.

Until you get your family upright.

Because y'all are starving to death because you're not working.

The time you're spending going to school, you can spend tutoring at $40 an hour.

And he's got to take some weekend hustles where he's making 30 or 40 bucks an hour because he's getting screwed during his day job until he gets out of this journeyman stuff.

Yeah, he did that this weekend.

He made about $400 extra this weekend.

Good.

Like every weekend, starting now, ready, set, go.

He has three little babies and $25,000 in debt, and he's making nothing.

You guys are below the poverty level.

And it's because of your income choices.

It's not because you're lazy.

But you have three kids in Oklahoma.

You're below the poverty level.

Yes.

On his day job.

That's how bad his job is.

Yes.

And thankfully our house is paid off, so we don't have a mortgage.

How did that happen?

My grandfather saw that we were

suffering, so he offered to pay off it.

But it's like I am slowly paying him whenever we can.

Oh, so it's not paid off?

No.

Or it's either that or my inheritance if he passes away before.

Okay.

Well, he said, don't worry about it, so I'm not.

Yeah.

I'll just

let the payment occur at death.

Yeah, you guys have an income problem, hon.

That's your problem.

And so once you solve your income problem, you're going to solve all the other problems.

And that's where all your stress is coming from.

And it's a math thing.

It's not saying you're doing something wrong or you're lazy or anything like that.

You got three little babies and you're trying to go to school.

I'd have three little babies and I'd be tutoring.

And he needs to be working weekends and everything he can get his hands on.

And if he doesn't step up into something pretty quick in the trades at 30 bucks an hour, he needs to go a different route.

Because, you know, 30 bucks an hour is a minimum to be moving around in the trades right now, not 19 an hour, and you get a 50 cent raise if you pass a test.

Give me a break.

That's asinine in today's world.

So, I mean, you can, because you can walk over to FedEx and throw boxes, man, I mean, and make, what, 2022, right?

Yeah, yeah.

I mean, he can definitely

be making more.

What I don't know in that particular neck of the woods is what is the standard process for moving into that journeyman role.

Each state is different, each local economy is different on that.

So I'm not sure.

Well, what he's doing is he's running down the union path.

Probably.

But he could take the same stuff he's already been doing and go over there and wire houses residentially with a guy across the street that is an electrician, get his electrician's license and make 30 bucks.

That's right.

That's right.

And so

I'm not going to lay in this union thing for very long if it doesn't start paying off.

He could be making more than 400 even on a weekend.

I mean, he needs to be doing that up in this income.

And seriously, we need to

either get the income up there or pick a different track with the trade that he's in.

Yeah.

Because there's just not enough money there.

And it's not a union thing, non-union thing.

It's a math thing.

If the union's not paying whatever else is paying, then the union don't get the deal.

It's that simple.

And so it's supposed to be there for you, but it doesn't always work that way.

So, wow.

Wow.

Ouch.

You know, listen, I don't,

this,

I'm not trying to be controversial, but, and here's another thing.

Like, I,

all right, I'm not going to qualify, Dave.

You may not even like this, but I'm going to say it.

I think you got to be responsible as a young couple.

Um, if you aren't earning the income to be able to provide for three little kids, then that's got to be, you got to be smart about that.

And let's let's hold off on the kids until we can actually take care of them.

Because it is, it is, to me, inexcusable to have three little ones and be below the poverty line in the United States.

I think there's got to be, and I'm not picking on, I'm just saying you got to be responsible.

And that may be a controversial take, but

you've got to be able to take care of the people you bring into this world and think of that ahead of time.

Think of that.

Not just, hey, let's go.

Let's do this.

Let's start a family.

And then not have a plan to take care of them.

Yeah.

But the difference is one or two phone calls and the whole thing changes.

i agree in terms of income but i'm saying get some urgency if you've done that and you can take care of them then nothing else matters yeah take care of those your obligation is not to your employer

your obligation is to your family yes if your employer is not cutting the mustard with their pay scale time to change And so I don't care that that, you know, that pisses you off if you're union, then just get pissed off.

If it pisses you off if you're non-union, then it's fine.

Just get pissed off.

That's fine.

But the deal is this.

You got one.

Job one.

Like Ken said, job one.

What's up, guys?

George Camel here.

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That's fpu.com/slash/lead.

Welcome back to the Ramsey Show in the Fair Wins Credit Union Studio.

I'm Dave Ramsey, your host, Ken Coleman, Ramsey Personality, number one best-selling author, is my co-host today.

Thank you for being with us.

888-825-5225 is the number.

Melissa is in Florida.

Hi, Melissa.

How are you?

Hi, good.

How are you guys?

Better than we deserve.

How can we help?

So

basically, I am in baby step four, five, and six.

I just recently paid off my last debt.

The problem is, is that I've done step one through three twice now.

And the first time I did it, I ended up getting another car loan.

And then, of course, I had to restart again.

So you fucked the class.

I did.

I did.

But you know what?

I learned and I moved on.

Okay, glad.

And

I'm in it again.

Good.

So now I have this

fear

that I'm going to go back again.

So I'm really kind of struggling how to plan my budget to include those things.

Because last time

we had just paid off a car, it got totaled, rear-ended, and totaled.

totaled, and then we had no car.

Why, you didn't have insurance?

We did, but you just didn't like the amount that the insurance gave you, and you wanted a better car.

Yeah, that was.

So it's not the rec's fault.

No, it's not.

Okay.

No.

So the car was worth more to us than the insurance company, and

we ended up with not enough to replace what we had.

So we needed to do that.

Not true.

Not true.

No, no, no, no, no.

You got to quit telling yourself lies.

Okay.

The insurance company pays market value for a car.

If they don't, you should sue them.

When a car gets total, they write you a check for what the car is worth, which means, by definition, you could go buy that car with that amount of money.

That's the definition of market value.

And so they did give you enough to buy that car.

You just didn't want it.

Oh, well, yeah.

I mean,

I couldn't go out and buy that same exact car.

Yes, you could.

That's market value.

If you didn't, you should have sued your insurance company.

Okay.

You understand?

They're supposed to give you market value for the car when you total it.

That's what the insurance policy is for.

You understand?

Yes, I do understand now.

Okay.

Now that you told me that, I never thought about it that way.

I just assumed this is the situation we're in, and I just

didn't think of it.

What are you so afraid of?

This is all mindset stuff.

What are you afraid of happening again that you're going to somehow fall back into it?

What is the fear?

Probably my

ability to make decisions.

Are you single?

No.

I thought you said we.

Yeah, okay.

So where was your husband during all of this?

We were doing it together.

Uh-huh.

Okay, so I'm afraid about our ability to make decisions then.

Yeah, maybe.

Okay.

I make a bulk of the money choices.

So

I do include him, of course, but he's more like, oh, you're better at it.

You do it.

So I have control over everything, I think.

Okay.

So let me tell you when you will never go back in debt again.

When you decide that you will do anything

to never go back in debt again.

When you decide I'm going to live on less than I make for the rest of my life,

and no matter what happens, no matter what we make, no matter what the circumstance, no matter what the tragedy, no matter what the drama, we are going to live on less than we make.

We are never going into debt again.

That's a principle-based decision.

It's not a math thing.

Because 100% of the time that you make that decision, your transmission is going to go out next week.

And God says, this is a test.

Like the emergency broadcast system.

You remember that?

This is a test.

Yeah, and you're going to flunk the test if you don't have this drawn.

You know, it's pinky swear spit shake.

It's, it's, you know,

we're doing a contract here with ourselves for our own good.

And you've got to decide that that's more important than

a little better car.

That's more important than no matter what comes at us, we don't borrow money.

That's what Ramsey say.

And you've got to get to where you say that.

And then you go, okay, something came at us.

We can't borrow money because we don't borrow money anymore.

So now what are we going going to do since this thing came at us and we don't borrow money?

How are we going to fix it?

Because we don't borrow money.

And you've got to get to where that's the way you're responding as a mindset to life as it comes at you, whether it's opportunities or the other ones.

I had a guy bring me a deal the other day that was several hundred million dollars more than I have.

And he goes, well, you could just leverage.

And I'm like, dude, who do you think you're having lunch with?

I mean, really?

You've got to be kidding me.

What planet are you on that you think I'm going going to borrow money for any opportunity or any threat?

There's not anything I want bad enough to do that.

And when you kind of get that going down inside of you, that's the only thing that'll, there's no, there's no fail-safe.

There's no amount of cash that'll keep you from borrowing money.

Because some opportunity will come along.

You'll get greedy.

Oh, I've got to be in on that.

FOMO, right?

Oh, I got to get that.

I got to get that.

That's a sweet deal right there.

I don't want to miss out on that.

Or you'll feel like you're pressured or I was forced or something bad happened.

I totaled a car.

And then there we go again.

Yeah, the tone that I hear from you is you just don't trust yourself.

And I just don't know why.

And I think there's probably something deeper there, but you've proven it twice now that you could work this process.

Now you fell.

You mentioned that you fell.

You got back up.

And now here you are back in four, five, and six.

But the issue is the very nature of your question implies to me that

you just don't believe that you have any agency, that you can't do it.

And your life says otherwise.

Now, I don't know what's going on way back.

Might be worth digging in a little bit.

But this idea that I'm going to call Dave and Ken, and how do I make sure I don't do this again?

We don't have any magical answer because for us, we've made this big decision, as our friend John Maxwell said, make the big decisions early and spend the rest of your life managing that decision.

So at this point, you got to say, am I serious about this decision?

And then do I believe with great conviction that I can manage this decision the rest of my life?

Same thing with marriage, saying, I'm not going to get a divorce no matter what.

Come hell high water.

We're going to figure it out.

I'm going to be healthy with my weight.

Whatever it is.

Youth ministry, we used to say it, and then I said it to my kids when they were teenagers too.

Like, the time to decide whether you're going to have sex before marriage is not in the back seat.

That is completely correct.

You got to decide like months before the back seat.

Because if you don't decide before you get in the back seat, you're going to have sex.

100% chance.

Okay?

There's 100% chance.

Man's been doing that since time began.

If you're going to say, I'm not having sex before I get married, then you have to decide that and stand on that long before the heat gets turned up.

And so you've got to decide before the heat gets turned up, I'm not borrowing money.

I'm going to live on less than I make.

And by the way, your husband needs to step up.

You're better at this.

How about the two of us are better at this than one of us by ourselves?

Larry Burquette said, used to say, if two people just alike get married, one of you is unnecessary.

You need to be working together on this and bringing both your strengths and weaknesses to these decisions and you'll make better decisions.

In the multitude of counsel, there's safety.

You work your butt off for your money, but your money's never going to return the favor if all you do is hope for the best.

If you're ready to learn how to make your money work for you, check out the Smart Vestor program.

Smart can help you find advisors who specialize in retirement planning, charitable giving, advanced investing strategies, and more.

Whatever your goals, your pro will take the time to explain your options so you never have to invest in anything you don't understand.

Head to ramseysolutions.com/slash SmartVestor to get connected.

Ramsey Solutions is a paid non-client promoter of participating pros.

Learn more at ramseysolutions.com/slash SmartVestor.

Ramsey show question of the day is brought to you by YReFi.

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Might not be in all states.

Today's question comes from Brett in Texas.

I've worked for a large fire department for five years.

I love my job, but the department is having a lot of issues right now.

Our pension is apparently over $1 billion underfunded.

The city takes 13% of my paycheck for my pension and they do not, excuse me, and they do match those funds.

I don't have a say in how the money is managed or used.

Is a poorly managed pension a good enough reason to consider leaving?

I had always dreamed of making my career here, but with the pension and a few smaller issues, I'm left wondering if I'm currently a passenger on a sinking ship or if I should get to the lifeboats while I still have time.

Dave, I have to bring you in here.

I think it's enough.

My answer would be, yeah, it's enough to leave if you feel like the whole thing is a mess, which it sounds like it is.

But does he have the option on the city taking?

Can he opt out of that or not?

No, that's what I thought.

So he's stuck.

It's not the pension going down that bothers me.

It's the 13% of your income they make you put into something that's going down.

That concerns me.

So in order to keep this job, you have to take 13% of your income into the middle of the floor and burn it every week.

Yeah.

And hope that it's there.

That's what he's saying, right?

So no, thank you, because 13% of your income invested in a 401k will make you a millionaire.

And this won't.

So sorry, man.

Yeah, you got to go to a different fire department.

That one's not run well enough to keep you around.

And a billion underfunded?

Feels like that should be a news story.

That's a lot.

Sounds like

Illinois or Chicago.

Do you have any sense of how that happens?

Yeah, you do too.

That's what I said.

This poor management, yeah.

Well, I think it's almost devious, is what I'm saying.

Yeah, there might even be some.

I don't know if that's a old shock or a...

Wait a minute.

He's not in Chicago.

He says he's in Texas.

Texas, yeah.

We're in the crap in Texas is something around that poorly.

It just feels like somebody

doing something.

That's a major metro area for it to be that far, a billion.

I mean, you don't get that in

the little suburb, but you're probably, yeah, you're probably just moving to a different fire department.

But man, that's the thing.

Golly.

Yeah.

Wowzer.

That stinks.

Cindy is with us in California.

Hi, Cindy.

How are you?

Hi, how are you?

Better than I deserve.

How can I help?

Well,

me and my husband are at odds with some money that we received.

And

we are in babysit four-ish.

We just started putting more money into my Roth IRA, like the one I have at work.

And then

we're going to max it out yearly.

We have $285,000 left of this money.

And we just need to pay off our house.

Okay, good.

It's $260,000.

Great.

Great.

But he's laughing, mind you.

The thing is, is that he wants to invest it because we're really not set up good for retirement, which on some level I agree with.

But wouldn't it be best to have the house paid off?

How old are you guys?

I'm fifty eight.

He's fifty six.

Okay.

And y how much do you have in retirement?

Probably

$60,000.

Wow.

I guess.

Yeah, we're not really.

Well.

What's your household income?

Well, his is $115,000 that's his pension.

He has a pension at $58,000.

56.

And so what's his income?

Does he work?

No.

Why?

Because

he recently had some extreme medical issues and he had to repair early.

So, and

it's

going to make it.

Yes.

With the grace of God, yes.

Yes.

Yes.

Is he going to be able to work in the future?

Not really.

Why?

But,

well,

because

right now we have to wait about a year.

It was a double lung transplant.

Okay.

Well, that makes sense.

So, yeah, so that's pretty severe.

I said that's pretty severe.

Yeah, yeah, yeah.

So what do you make?

About $48,000.

And how much life insurance do you have on him?

I think I get $100,000.

$100,000 or $800,000?

$100,000.

Okay.

All All right.

So if he passes away financially, you're in really bad shape.

Does the pension survive him?

Do you get it if he dies?

Yes.

Yes.

Oh, then you're not in really bad shape.

Okay.

No, see, and I see, like, I don't plan to retire anytime soon.

Oh, you can't.

You know where we live.

I mean, it's horrible.

California money is like our insurance bills are ridiculous.

So, but that's why I wanted to get rid of it.

But our house payment is $12.47 a month, and it's at 3.1025.

What's your house worth?

$4.60.

And we owe two.

The last statement said $2.60.

Where in California are you?

I go up north.

Oh, okay.

But we're also in fire country.

So that is another huge ginormous.

Are your family around you?

Why are you there?

Yes.

Yeah.

No, and we are married to the hospital we went to and so we're

we wanted to originally move

but we had different plans but now all right so the answer to your question overall is that you are better off if he lives or if he dies with a house paid off

You're better off going into retirement with the house paid off because there's two things you need going into retirement.

A large nest egg.

In this case, you have a pension and $60,000.

And you're going to start putting an old house payment now that you don't have anymore into

your 401ks and Roth IRAs.

And you're going to start to grow those rapidly from this point forward because you don't have a house payment anymore.

But when you go into retirement, you do not need to still be owing $200,000 on a house when you've got the ability to pay it off.

And the number of millionaires that we have interviewed that said the way we made, the way we got rich, the way we caught up on our retirement investing was we didn't pay off our house and instead invested the money and that made us rich.

The number of millionaires that said that was precisely zero.

No one does that that has money.

Right.

The people that have money get out of debt and use the increased cash flow because they don't have a house payment anymore to build wealth with.

And that's what you guys should be doing in the middle of all this.

Wow, have you got your hands full?

Yeah, I don't.

I don't know what you say there.

I hope with his lung, double lung transplant, the hope that on the other side of this, he can do some work.

Because, again, it's all about catch-up at this point.

Yeah, you just need income.

Yeah.

But with no house payment and her income and his pension.

And he's got a lot of house off, yeah.

In his his pension, you can go ahead and start making some progress.

And then hopefully, as young as he is, he's going to be able to add to, you know, collect his pension and make more

doing something.

Obviously, he's not going to be doing some extreme physical thing.

Am I crazy to be a person who goes, look, I don't care how much family is around us.

If I'm making a comment like that about how expensive a state is, I'm going, what's three, four hours away where we can dramatically change our living expenses?

I get being close to family, and I'm not sure.

She said they're married at the hospital, too.

I didn't understand that.

I mean, the lung transplant, they're tied in.

That's their medical community.

It's got to be there for a while.

For a while.

But in general,

I'm going to make changes to my life to reset if I have to.

I don't care how close family is to me.

No, that's what people have done.

That's why millions and millions and millions of people have moved in America.

And I think they all moved to my neighborhood.

But,

yep, yep, yep, yep.

No income tax.

Do you make them sign

a statement of living?

Well, I'm trying to get a law passed in Tennessee that you can't vote until you go through a proper voting class on how to vote properly.

But nobody's buying off on that.

So

I don't think I'm going to get elected.

Because you're a native Tennessean, so I don't think I'm going to get elected.

You're one of the few in Nashville.

You could do your own course.

Yeah.

This is proper voting.

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They end up doing everything poorly.

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Jim's in San Diego.

Hi, Jim.

How are you?

Hi, Dave.

Honored to speak with you and Ken.

Thank you for having me on.

Certainly.

How can we help?

So I've got a question for you.

My wife and I are very blessed.

We are both 30 years old, been married a little over a year.

We've got about $800,000 in non-qualified assets and another $400,000 in qualified assets.

And we're going to be getting an inheritance of a million dollars.

And we're looking to spend it on, it's a little less than a million, but for rounding purposes.

We're looking to spend it on a house and use that million as a down payment and get about either a $600,000 loan.

I'm uncomfortable with any kind of loans.

The last that I had, or that we both had, was actually my student loans, which I paid off at this point.

And I'm apprehensive about getting a mortgage, especially a $600,000 mortgage.

And the question is, do we take the $800,000 and apply that to the $600,000 mortgage and pay off the house in cash with $200,000 remaining in brokerages and bank accounts?

Or do we use that $800,000

in the brokerages and bank accounts and use the dividends and

basically liquidate some of the assets every year?

What do you make?

Both of us combined are about $200,000 in salary and with another $120,000 to $160,000 in bonuses and commissions.

So right now we're living well underneath the $200,000.

But you make $350,000, and that's where you got the $800,000, is you saved like crazy.

Yes.

Okay.

So you're maniac savers.

Way to go.

That's cool.

And you're risk averse, so you're avoiding debt and you're saving both.

That's pushing you.

And you're doing really well with your careers.

Way to go, man.

Congratulations.

Such choices to have to make.

So the house you're living in, what's it worth?

We're thinking it's going to be old.

No, the house you live in today.

Where do you live today?

Oh,

we're renting right now.

Yeah, what's it worth?

It's about $2,900 a month is our rent.

Yeah, what's the house that you're renting worth?

Oh, it's an apartment.

Oh, okay.

So you're renting an apartment that's $2,900 a month.

Okay.

And you've still been able to, with a $36,000 a year rent bill, been able to save hundreds of thousands a year.

Yes.

Pretty incredible.

I mean, what could you do if you didn't have a monthly housing cost?

Wow.

So you're moving from an apartment to a million six, but a million six in San Diego is no palace.

It's a nice house, but it's not a palace.

Yes.

Correct.

It's not a million six in Abilene.

It's a million six in San Diego.

So,

but again, it's a nice house.

I mean, it's probably the average, I think the median now is about $600 or $700 in San Diego, and the median nationally is $422.

Yes.

That's probably - so you're about double or a little over double the median in the area.

Hmm.

Okay, very interesting.

So, well, the way we look at it is simple.

In your situation, I would not buy the house unless I paid cash for it.

Okay.

And the reason is very simple.

There's multiple reasons, but

the first one that comes to mind is you'll take the increased cash flow and grow the money back in no time.

Okay.

Okay.

And because it's just the way you're wired.

Number two,

the damage

that having a mortgage does to anyone is multiplied when we talk about you because of the way you're wired.

If most people felt like they put 300 pounds on their shoulders doing this, you're going to feel like you put a thousand pounds on your shoulders.

Yes.

And it's going to start affecting everything negatively.

Okay.

And in ways that are not necessarily

directly attributable.

Okay.

Here's what I mean by that.

Okay.

One of the things I've discovered in my business career and watching people over these years with their careers in general is people make much

more

positive career decisions when they're not forced into it to make a payment.

And so they don't stay in negative toxic environments.

Instead, they move to better environments.

And so people that live debt-free end up prospering in their careers more because they can say, take this job and shove it.

Gotcha.

Okay.

And you're going to be like the multiples of that because you're like the ultimate I hate debt saving nerd guy, and I love you for that.

But debt would do more damage to your spirit than other people's, is what I'm saying.

Because of who.

I feel that, yeah.

Yeah, because of who you are.

My wife and I are very risk averse on the.

Yeah, she is, but she's not anywhere near like you.

I mean, you're off.

You're off the chain.

You're off the chain.

In a good way.

It's nothing.

I think it's awesome.

I am too now, but it took me a while to get there.

But, I mean, you know, you're there.

And it's caused.

Look at the cause and effect of that.

I mean, you guys made $350,000.

You live in freaking Southern California, one of the most expensive areas in the world, and you've banked 800 grand

instead of spending it all.

I mean, you guys are incredible.

That skill set sets you up to be, I mean, you're going to have 10 or 20 million dollars in a decade.

It's crazy how much money you're going to have.

I would just say very simply, trust your gut.

It's so obvious to us where you and your wife stand, you more than her, sure, but you will regret this if you take a mortgage out.

You could feel it all over you, and you just don't want to feel that.

You'll be fine.

I think your $350 will turn into $450 income faster by not having a mortgage than if you took one out.

It's going to affect your income, and people don't think about that.

I think it'd affect his every, you nailed it.

I think it'll affect his overall mental health.

That's what I mean.

He's just not going to do well with that, which is great.

Yeah.

I mean, I have no idea.

We haven't been able to get any good research, and we've not done the research to tie all the way back for the rest of you folks, not for him, but for all of us,

the tie between

actual physical illness and debt levels.

Yeah, I would love to see that.

Because, I mean, the so, I mean,

what if you could actually figure out that a certain number of heart attacks out of a thousand heart attacks are caused by financial stress.

Then we could say that debt actually has a cost, a medical cost, because you have to pay for the hospital when you have a heart attack, right?

And you've shortened your lifespan.

Why?

Because you're carrying so much debt and there's hypertension.

I mean, hypertension is number two right now.

High blood pressure, right?

It's up there, right?

Heart attacks, right?

But so we don't have any actual data to back that up.

But what if you went through all the heart attacks and you pulled out the debt levels versus those of us that not had a heart attack and and had no debt and see what the actual correlations are.

It's got to be there, y'all.

Common sense tells you it's there.

And then so then you factor in, okay, well, I'm making, I got a mortgage of 4% and I invested it at 4.5%.

I'm making a spread.

No,

not with a heart attack adjustment.

You're not.

That would change the math, wouldn't it, Ken?

Yeah, it really would.

It would be different.

But nobody talks about that kind of stuff.

Oh, wait a minute.

The percentage, number one cause of divorce in North America today?

Money fights, money problems.

You know who has money fights and money problems?

Broke people.

More than rich people.

Rich people don't fight about money nearly as much as poor people do.

Broke people.

I mean, Sharon and I about killed each other when we went broke.

I mean, she's from the hills of East Tennessee, frying pan throwing there's an Olympic event.

It's like, even the German judge gave her a 9.9.

I mean, come on.

It's like, God.

So, yeah, I mean,

it's no fun.

No fun.

So, I mean, what if the cost of a lost marriage due to financial stress was factored into your little formula where you thought you were making money with borrowed money?

Oh, it would kind of dissipate that, wouldn't it?

Oh, yeah, put the heart attack and the divorce factor on there kind of does away with the whole idea that borrowing money is really smart.

Our scripture of the day, Ecclesiastes 3, 1 and 2, there is a time for everything and a season for every activity under the heavens, a time to be born and a time to die, a time to plant and a time to uproot.

Rosa Park said, today's mighty oak is just yesterday's nut that held its ground.

That's good.

That's fun.

All right.

Devin is in Ohio.

Hi, Devin.

How are you?

Good, good.

How are you guys?

Better than we deserve, sir.

How can we help?

So just really have a couple questions here.

I'll just kind of give you a rundown of what I got as far as debt-wise and everything else here.

So my total debt's about $182,000.

$138,000 of that is in my mortgage for my house.

I have 43 acres.

It's a nice piece of property.

The other debt is my service truck that I use for work.

It's $43,000.

So with that being said, I have some other equipment as well.

I got like dozers, excavators, pickup trucks.

Those are all paid for in cash.

That's going to equivalent to about $95,000.

If I sold all that, that's what I would have in cash.

Also have a rental house that's 100% paid for.

And I have about $30,000 in savings.

Okay.

And what's the rental house worth?

Probably

lower $200.

Just recently...

What's your house in 43 worth?

Lower 400s.

Okay.

Good for you.

Well done, sir.

What kind of service work do you do in the truck?

Field mechanic.

I traveled for the last four, four and a half years for a stabilization company and found a job closer to home.

But basically they're leasing my truck off of me now.

So kind of pay upgrade, if you will.

Okay.

And so

you're turning a wrench on what?

Just different types of equipment, excavators, dozers, you name it.

I fix them.

Okay, heavy equipment.

Okay, cool.

Good for you.

And thus you've run into some bargains and bought some, and you've got 43 acres to play on it with.

Always looking for a deal.

What's your income?

Anywhere from $130,000 to $145,000 a year.

All right.

And your question's what, sir?

So basically I have this debt.

I would like to get my truck service truck paid off.

Good.

It's technically in my name, but I'd like to get it switched over to my business name.

That way that is in my business.

Yeah, but you're not going to get the loan.

You can get the truck turned over, but not the loan.

Right, correct.

Yeah.

All right.

You got to pay it off.

I agree.

Okay.

What else?

My next thing is when I sell this equipment and my pickup trucks and stuff that I've paid for cash for over the last five years, should I take that money and pay the rest of my house off, or should I invest that money into some more real estate?

Yeah, good question.

Okay.

Well, if I'm in your shoes,

I'm going to sell the $90,000 worth of equipment and pay off the truck and pay towards the house, and that gets me down to less than $100 on your home.

Agreed?

Yeah.

Okay.

And

then I would look at it and say, all right, how old are you?

24.

I'll be 25 Friday.

Way to go, dude.

That's super impressive.

I thought you were going to tell me 34 with these numbers.

You've done really well.

I do.

Well done, young man.

Well done.

All right.

That's impressive.

That does change.

That calms my answer a little bit.

Okay.

Yeah.

Because you've got lots of time.

Okay.

And so I don't want to stay in debt and wallow around in it because you're young.

I don't mean that.

But I would sell the equipment because you're going to run into other equipment.

You're always going to be able to buy a piece of equipment for five grand, turn it for $10.

You're going to run into that, and you know the equipment because you turn a wrench on it, so you know what it is.

But you're going to run into a bargain here or there.

And so you're always going to do a little what we call horse trading, right?

Yep.

No horses involved, but you know what I'm talking about.

So yeah.

So anyway, the

that and that's going to always be a part of your income because of the way you work.

So yeah, I would sell the equipment, pay off your truck, pay down the mortgage, and then I would just begin to say, all right, out of my $130,000 with no truck payment,

how can I begin to attack that $100,000 and when could I be done with it?

I mean, you could be done with it in like three years if you watch what you're doing, right?

Yeah.

And you'd be 100% debt-free with a paid-for $400,000 house, a paid-for rental house of $200,000.

That's $600,000.

And then

you start your long-term investing and your Roth IRAs and some good gross stock mutual funds.

You sit down with a good Smart Vestor Pro.

And, dude, you're going to, you know, you're going to be a millionaire by the time you're probably 28.

That'd be sweet.

That's where you're headed.

If you follow just that basic idea there.

And, you know, when you make some extra money, don't blow it.

Let's just chunk it on the house.

Let's get the house done.

Because here's the thing.

We're talking about this a minute ago before we picked up with you that

You're going to make different decisions on which clients you want and you're going to make more money in your business when you don't have a single debt.

Your business is going to flourish because you're clean and there's no pressure.

You know, you know what I'm talking about when you know that

certain customers are not worth

the juice ain't worth the squeeze.

Right.

You know, some of them are such butts, they're not worth working with for any amount of money.

Yeah, the way I have it set up right now is I'm technically in the union, so the company that I'm working for pays all my

pension and health and all that.

I have about $40,000 in my pension right now.

That's a good start, but I want you to have independent IRAs also.

Yeah, okay.

I want you to have Roth IRAs going in addition to that.

Not just the union pension.

But son, I mean, sir, you have done an incredible job.

I'm very proud of where you are.

And here's the other thing that I know, the other reason I know you're going to be successful, not only that you've made the progress you've made to be where you are at 24, but also the way you're asking these questions you're being you're paying attention you're being very intentional right

and you're making good this you know some of the stuff you suggested before I even started there was just things I was going to suggest real quick question how old were you when you got started Devin

in this work

in the heavy equipment industry working on it I went through a four-year apprenticeship program So I didn't make the money I'm making now the last two years.

So I would say the last two years I started making $100,000.

Yeah, how old were you when you started the program?

Were you 20?

Were you 18, 19?

Yeah, I was 20, yep.

Yeah, I just, and the reason I did that is because, again, this is, you're going to start seeing more and more of these stories in the United States.

Young guys that are skipping the college route and going into this kind of a deal, and we're talking about a dude who's not only going to be a millionaire, he's probably going to be a very successful small business person.

Already is.

Yeah.

Well, I'm talking about.

He's not a millionaire, but he's already a successful small business person.

But I'm talking about where he's got a team.

He's going to make $130,000, $140,000, $150,000, $160,000.

And he's 24 years old.

And he turns a wrench on heavy equipment.

Yeah.

That's exactly right.

That's a whole lot smarter than spending $250,000 to get a degree in left-handed puppetry and then being a barista.

Kid's 24 years old, and he's got a house, a rental property that he owns cash.

Yeah.

I'm just pointing this out because I'm so tired of the drivel

coming from all all the complainers about how no one can win today.

Oh, yeah, capitalism is dead.

Well, don't tell Devin.

Okay.

He's a poster child.

Don't tell Devin.

Don't tell Devin you can't get ahead in America.

Don't tell Devin all the opportunities used up.

Don't tell him that the deck is stacked, that there are systemic problems with the economy.

Don't you understand?

And by the way, he paid his dues.

I hope everybody heard that part too.

He wasn't making this kind of money until, so it takes time.

Yeah.

Some of y'all need to look up what he's got on his hand.

It's called a callus.

Y'all need to look that up.

It'll be good for you.

Yeah.

So, wow, that's impressive.

It's great.

It's a great story.

It's not glamorous work either.

I don't get it.

I mean, our buddy Mike Rowe right now is doing the...

Mike Rowe would be doing the Trump dance right this second.

That's right.

But that's it.

Yeah.

This is Mike's guy.

That's right.

And I agree with him.

I agree with him.

It's not for everybody.

No.

But this idea that, you know,

You need to become a teacher because your grandmother said to.

No, maybe not.

Maybe that's a bad idea.

Maybe you need to become a teacher because we need great teachers, and you're going to go into the classroom and actually teach after you get through your degree in teaching.

There's a reason to become a teacher.

Oh, let's think about that for a minute.

That puts this Hour of the Ramsey Show in the books, and we'll be back with you before you know it.

In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.